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01/11 11:00
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presented mixed signals: a strategic shift away from China led to reduced sales there, but overall revenue increased sequentially. Gross profit improved YoY, but operating expenses rose sequentially. The Q&A revealed optimism about edge AI growth and a stable gross margin outlook, yet management's vague responses on key metrics and timelines dampened sentiment. Despite some positive financial metrics, the lack of clear guidance and ongoing losses suggest a neutral stock price movement over the next two weeks.
Revenue $17.9 million in Q2 2025, compared to $15.7 million in Q1 2025 and $20.3 million in Q2 2024. The sequential increase was driven by increased customer demand and favorable product mix. The year-over-year decrease was due to the strategic decision to diversify revenue toward higher-value opportunities outside of China.
Net Sales to Mainland China 11.5% in Q2 2025 compared to 42% in Q2 2024. This significant reduction reflects the company's strategic shift to prioritize geographies outside of China.
Non-GAAP Gross Profit $7.6 million or 42.7% of revenue in Q2 2025, compared to $7.4 million or 47.1% in Q1 2025 and $6.7 million or 32.9% in Q2 2024. The year-over-year increase was due to a more favorable product and customer mix.
Non-GAAP Operating Expenses $13.8 million in Q2 2025, compared to $13.1 million in Q1 2025 and $14.4 million in Q2 2024. The slight year-over-year decrease reflects controlled spending while focusing on strategic initiatives.
Research and Development Expenses $7.3 million in Q2 2025, consistent with Q2 2024 and slightly up from $7 million in Q1 2025. This reflects ongoing investment in technical capabilities and product development.
SG&A Expenses $6.5 million in Q2 2025, compared to $6.2 million in Q1 2025 and $7.1 million in Q2 2024. The year-over-year decrease reflects cost management efforts.
Total Other Income $315,000 in Q2 2025, compared to $461,000 in Q1 2025 and $337,000 in Q2 2024. The year-over-year decrease was due to lower interest income from cash reserves.
Net Loss $8.5 million or $18.90 per share in Q2 2025, compared to $8.3 million or $18.96 per share in Q1 2025 and $10.6 million or $34.59 per share in Q2 2024. The year-over-year improvement reflects reduced losses due to strategic shifts.
Non-GAAP Net Loss $5.9 million in Q2 2025, compared to $5.2 million in Q1 2025 and $7.4 million in Q2 2024. The year-over-year improvement reflects better cost management and strategic focus.
Cash and Cash Equivalents $47.5 million at the end of Q2 2025.
SPOT platform: Ambiq's Sub-threshold Power Optimized Technology (SPOT) platform significantly reduces system power consumption, enabling devices to run AI locally without sacrificing battery life. It serves as the foundation for the Apollo SoC family.
Apollo SoC family: The Apollo family has been expanded with the Apollo510B wireless SoC, featuring advanced AI compute capabilities, a Cortex-M55 coprocessor, and Bluetooth Low Energy 5.4 radio. It targets applications like wearables, AI glasses, and smart locks.
Atomic product line: A new product line under development, designed for high-performance and low-power AI applications at the edge. It includes a Neural Processing Unit (NPU) for AI acceleration and targets demanding compute requirements, especially for vision.
Geographic diversification: Ambiq has significantly reduced its sales reliance on Mainland China, with sales to the region dropping from 42% in Q2 2024 to 11.5% in Q2 2025. The company is prioritizing other geographies as demand for edge AI grows globally.
New customer acquisition: Ambiq has secured new customers, including Whoop, which uses Apollo SoCs in its fitness trackers. The Whoop 5.0 and Whoop energy products offer advanced health monitoring with extended battery life.
Revenue growth: Q2 2025 revenue increased to $17.9 million from $15.7 million in Q1 2025, driven by increased customer demand and favorable product mix.
Gross profit improvement: Non-GAAP gross profit for Q2 2025 was $7.6 million (42.7% of revenue), up from $6.7 million (32.9% of revenue) in Q2 2024, due to a favorable product and customer mix.
IPO proceeds utilization: Ambiq completed its IPO, raising $97.2 million in net proceeds. The funds will support market expansion, product development, and the development of the SPOT platform for IP licensing.
SPOT platform licensing: Plans to develop the SPOT platform into an IP and chip development platform for licensing to third parties, targeting markets like data centers and automotive AI processing over the next 3-5 years.
Revenue Diversification: The company has significantly reduced its reliance on sales to Mainland China, which now accounts for only 11.5% of net sales compared to 42% in the same quarter of 2024. While this diversification reduces geopolitical risks, it also presents challenges in penetrating new markets and geographies, which may take time and resources to establish.
Profitability Challenges: Despite revenue growth, the company reported a net loss of $8.5 million for the second quarter of 2025. Non-GAAP gross profit margin also declined sequentially from 47.1% to 42.7%, indicating potential challenges in maintaining profitability.
R&D and Operating Expenses: The company is scaling its R&D and go-to-market capabilities, leading to increased operating expenses. Non-GAAP operating expenses rose to $13.8 million in Q2 2025, up from $13.1 million in the prior quarter. This could strain financial resources if revenue growth does not keep pace.
Market Competition: The company operates in a highly competitive semiconductor market, particularly in the edge AI space. The need to continuously innovate and launch new products like the Apollo and Atomic families adds pressure to maintain technological leadership.
Strategic Execution Risks: The company’s ambitious plans to expand into new markets, develop new product lines, and establish an IP licensing model for its SPOT platform involve significant execution risks. Delays or failures in these initiatives could impact long-term growth.
Economic and Geopolitical Risks: The shift away from Mainland China sales reduces exposure to geopolitical risks but also limits access to a large market. Additionally, global economic uncertainties could impact customer demand and supply chain stability.
Expansion into new markets and geographies: Ambiq plans to expand its sales and support resources to enable new customers and fuel revenue and margin growth. The company is prioritizing sales efforts towards geographies outside of Mainland China, with a significant reduction in sales concentration in China from 66% in 2023 to 11.5% in Q2 2025.
Product development and innovation: Ambiq is scaling its R&D and go-to-market capabilities to capture edge AI opportunities. The company plans to expand its Apollo family and introduce the new Atomic product line, targeting high-performance and low-power AI applications. The Atomic family will feature a Neural Processing Unit (NPU) for advanced AI acceleration.
SPOT platform licensing: Ambiq intends to develop its SPOT platform into an IP and chip development platform for licensing to third parties over the next 3 to 5 years. This initiative targets specialized applications requiring power efficiency, such as data centers and automotive AI processing.
Revenue guidance for Q3 2025: Ambiq expects revenue to be in the range of $17.5 million to $18 million.
Non-GAAP loss per share for Q3 2025: The company projects a non-GAAP loss per share between $0.35 and $0.28, based on a weighted average post-IPO share count of approximately 18.2 million shares.
Geographic sales mix: Ambiq anticipates the reduced sales concentration in Mainland China to continue in 2025 and beyond, aligning with its strategic shift towards other geographies.
The selected topic was not discussed during the call.
The earnings call reveals several negative factors: decreased margins, increased costs, and a decline in net earnings. The Q&A highlights uncertainties in North America and lack of clarity on growth potential. Despite some growth prospects in South America, the lack of positive guidance and weak performance in the U.S. contribute to a negative sentiment. Additionally, the management's evasive responses to critical questions further undermine confidence.
The earnings call presented mixed signals: a strategic shift away from China led to reduced sales there, but overall revenue increased sequentially. Gross profit improved YoY, but operating expenses rose sequentially. The Q&A revealed optimism about edge AI growth and a stable gross margin outlook, yet management's vague responses on key metrics and timelines dampened sentiment. Despite some positive financial metrics, the lack of clear guidance and ongoing losses suggest a neutral stock price movement over the next two weeks.
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