Ambarella Surpasses Expectations in Q4 2025 with Record AI Revenue and Strong Outlook for Fiscal 2026
Ambarella, a leading provider of edge AI solutions, has announced its fourth quarter and full fiscal year 2025 financial results, exceeding expectations and showcasing strong growth. The company's record-breaking revenue in Q4 2025 was led by its 5-nanometer SoC products, with new product revenue from the CV5 family driving the charge.
During the earnings conference call on February 26, Ambarella's President and CEO, Dr. Fermi Wang, highlighted the company's achievements in the last year, including record AI revenue for Q4 and the full fiscal year 2025. The company's Edge AI strategy has become a significant contributor to its revenue, accounting for about 70% of total revenue.
Ambarella's Q4 2025 revenue increased by 2% sequentially, exceeding the high end of the company's guidance range by 5%. The fiscal year 2025 saw a 26% year-over-year increase in revenue, with both units and average selling price rising. This strong performance is attributed to the digestion of excess inventory by customers in the first half of the year, followed by secular growth of Ambarella's Edge AI strategy in the second half.
The company also executed on its R&D priorities, realizing revenue growth from the CV5 and CV7 new product families. These emerging opportunities include expansion into markets such as fleet management, ADAS, automotive e-mirrors, in-cabin systems, next-generation access control, advanced video conferencing, and portable consumer electronics.
Looking ahead to fiscal year 2026, Ambarella anticipates mid- to high teens revenue growth despite the higher base of Q4 2025. While uncertainty related to government policy decisions has led to conservatism in the company's outlook for the second half of fiscal 2026, it does not expect to be directly impacted by tariffs.
The recent breakthroughs with more powerful, efficient, and open-sourced reasoning models in the AI market are also exciting developments for Ambarella. These advancements have significant implications for the company's Edge AI solutions and its ability to capitalize on emerging trends in the industry.
Ambarella's strong financial performance is reflected in its 16th consecutive year of positive free cash flow, demonstrating the company's commitment to delivering value to its shareholders. The company's success in commercializing its AI investment has also led to growth in new markets and expansion of its revenue streams.
The outlook for Ambarella remains optimistic, with the company poised to capitalize on emerging trends in the Edge AI market. As the demand for more powerful and efficient AI solutions continues to grow, Ambarella is well-positioned to lead the charge in this rapidly evolving industry.
