Ambiq's Q2 Earnings Surpass Estimates, Revenues Rise Y/Y

Ambiq Benefits From Accelerating Edge AI Demand

Ambiq's second-quarter performance was driven by a sharp increase in demand for edge AI, with net sales marking the company's fifth consecutive quarter of sequential growth. Management said demand accelerated across customers, end markets and products, supported by healthy end-user demand, positive responses to recent customer launches and the continued ramp of a large new customer. Apollo II and Apollo IV posted double-digit growth, while Apollo V sales more than doubled year over year.

The company also indicated that demand remains stronger than expected. With lean channel inventories and continued expedite requests, management believes the growth reflects underlying end-market consumption rather than inventory replenishment. Orders continue to exceed initial forecasts, while customer demand is expected to strengthen further in the second half of 2026.

Ambiq's Margin Expansion Strengthens Profitability Profile

Ambiq's non-GAAP gross profit increased 109.3% year over year to $16 million, while non-GAAP gross margin expanded 450 basis points to 47.2%. The improvement was driven by a favorable product mix, greater Edge AI enablement and manufacturing efficiencies.

Management also highlighted progress in pricing and manufacturing costs. The company has continued to price products to capture the value provided to customers, while yield improvements and shorter testing times have helped reduce manufacturing costs as products move into higher-volume production.

Non-GAAP research and development expenses increased 55.5% year over year to $11.2 million, primarily due to intellectual property licensing, higher compensation and contractor costs. Non-GAAP SG&A expenses rose 23.7% to $8.2 million, largely reflecting higher sales compensation and public-company costs. Despite increased investments, non-GAAP net loss narrowed to $1.8 million from $5.9 million in the year-ago quarter.

Ambiq Expands Edge AI Portfolio and End-Market Reach

Ambiq is broadening its Edge AI opportunity through new hardware and software offerings. The company recently introduced the Apollo 330 Plus and Apollo 510 Light SoC families, both of which are seeing strong customer demand and backlog tied to next-generation product roadmaps. The products are expected to begin contributing revenues in the third quarter, with initial customer devices expected to reach the market early next year.

The company has also expanded its AI software portfolio with HeliaCORE, compressionKIT and Helia Profiler. These tools are designed to help customers accelerate production deployments, improve power efficiency, reduce memory requirements and lower system costs.

Ambiq is seeing increasing opportunities beyond wearables, including medical, industrial and smart home and building applications. Management expects revenues from these markets to more than double in 2026. The earnings presentation also highlights Apollo-based solutions and new software tools aimed at expanding Ambiq's presence across personal devices, industrial edge, smart home and buildings, and medical and healthcare markets.

Ambiq’s Balance Sheet

Ambiq ended the quarter with $366.8 million in cash and cash equivalents and no debt. The balance sheet was strengthened by approximately $168 million in net proceeds from its June follow-on offering, while the company said its two offerings in 2026 have raised approximately $243 million in net proceeds to support working capital, sales and marketing, and product development.

Ambiq Guides for Strong Q3 Growth

For the third quarter of 2026, Ambiq expects net sales between $36 million and $37 million, representing the sixth consecutive quarter of sequential growth. The company expects non-GAAP gross margin of 46.5-47.5%, non-GAAP operating expenses of $24-$25 million and a non-GAAP loss per share of 12-20 cents.

For full-year 2026, Ambiq expects approximately $135 million in net sales, with second-half revenues expected to more than double year over year despite supply constraints. The company now expects modest year-over-year improvement in full-year non-GAAP gross margin and operating expenses of approximately $85 million, including $7-$10 million of planned intellectual-property investments.

Zacks Rank and Stocks to Consider

Currently, AMBQ carries Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Lumentum LITE, Applied Materials AMAT and Analog Devices ADI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Shares of Lumentum have surged 141.5% year to date. The Zacks Consensus Estimate for LITE’s fiscal 2026 earnings is pegged at $8.19 per share, up by 5 cents over the past 30 days, indicating an increase of 297.6% year over year.

Shares of Applied Materials have jumped 109.8% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 3 cents over the past seven days, indicating a rise of 29.2% year over year.

Analog Devices shares have surged 43.8% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 33.9% year over year.

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