Slides
Page 1
AMBARELLA.COM COPYRIGHT AMBARELLA 2025AMBARELLA.COM COPYRIGHT AMBARELLA 2025 Morgan Stanley Technology, Media & Telecom Conference March 3, 2025 Fermi Wang, CEOJohn Young, CFOLouis Gerhardy, VP Corporate Development AMBARELLA.COM COPYRIGHT AMBARELLA 2025 The Palace Hotel, San Francisco
Page 2
AMBARELLA.COM COPYRIGHT AMBARELLA 2025 AMBARELLA.COM COPYRIGHT AMBARELLA 2025 This presentation contains forward-looking statements that are subject to many risks and uncertainties. All statements made in this presentation other than statements of historical facts are forward-looking statements, including, without limitation, statements regarding Ambarella’s strategy, future operations, financial targets, future revenues, projected costs, prospects, plans and objectives for future operations, future product introductions, future rate of our revenue growth, the size of markets addressed by the company's solutions and the growth rate of those markets, technology trends, our ability to address market and customer demands and to timely develop new or enhanced solutions to meet those demands, our ability to achieve design wins, our ability to build and deliver products to customers, and our ability to retain and expand our customer and partner relationships. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "would," "expects," "plans," "anticipates," "believes," "estimates," "projects," "predicts," "potential," or the negative of those terms, and similar expressions and comparable terminology intended to identify forward-looking statements. We have based forward-looking statements largely on our estimates of our financial results and our current expectations and projections about future events, markets and financial trends that we believe may affect our financial condition, results of operations, business strategy, short term and long-term business operations and objectives, and financial needs as of the date of this presentation. Although these forward-looking statements are based upon information available at the time the statements are made and reflect management’s good faith beliefs, forward-looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from anticipated future results. Important factors that could cause actual results to differ materially from expectations are disclosed in Ambarella's annual reports on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission (the “SEC”), particularly in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We do not undertake to update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by applicable law. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Before you invest, you should read the annual and quarterly reports and other documents Ambarella has filed with the SEC for more complete information about the company and its ordinary shares. Additional information will also be set forth in Ambarella's future quarterly and annual reports and other filings made with the SEC from time to time. You may access these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Forward-Looking Statements 2
Page 3
AMBARELLA.COM COPYRIGHT AMBARELLA 20253 Santa Clara, CA Company HQDetroitParmaVisLabShanghaiSeoulTokyoHsinchuShenzhen DaytonMunich HEADCOUNT940+ 2004Ambarella founded 2012IPO, NASDAQ: AMBA 2021Acquisition of 2015Acquisition of 2024 >30M AI SoCs shipped cumulatively Ambarella OverviewAdvanced edge deep learning AI inference hardware and software Founded on the premise that video is a unique type of data requiring an optimized SoC architecture•Ambarella’s deep neural network AI inference processor integrated with a state- of-the-art video & radar perception yields highly optimized domain controller SoCs•VisLab, a pioneer in CV and autonomous driving software, acquired in 2015•Oculii, a pioneer in high-definition radar perception technology, acquired in 2021World-class engineering team •~525 software, algorithm and image processing engineers globally•2nm in development, 5nm ~20% revenue, 10nm ~50% of revenue•>10yrs of flawless VLSI execution with step “A” silicon into productionEdge AI revenue driven by computer vision today and advanced networks, including GenAI, are enabled with our 3rd generation products sampling today •Low-power and high-performance SoCs for auto and IoT markets•Scalable family allows SW to be reused across a customer’s portfolioSignificant R&D investment funded by operations and strong balance sheet•>$1.2 billion cumulative R&D investment into AI•$250 million net cash; no debt; 16 consecutive years of positive free cash flow AI revenue contribution begins AI R&D investment begins 3
Page 4
AMBARELLA.COM COPYRIGHT AMBARELLA 2025AMBARELLA.COM Edge AI Inference the Foundation for Our GrowthSuccessfully leveraging perception heritage into multiple high value deep learning AI inference applications Partially Automated Fully Automated Human Viewing 50% Advanced AI Networks Video Processor Computer Vision Edge AI Inference % Total Revenue Advanced AI Networks including GenAIAutomotive Central Domain Controllers (3rd generation AI inference e.g., Transformer and CNN networks) 2nd generation AI inference e.g., CNN AI networks AMBARELLA.COM COPYRIGHT AMBARELLA 2025 ~70% F2025 revenue edge AI 0% 4
Page 5
AMBARELLA.COM COPYRIGHT AMBARELLA 2025 AMBARELLA.COM COPYRIGHT AMBARELLA 2025 Edge AI Demands a Fundamentally Unique Processing Architecture Higher levels of efficiency and new capabilities enabled with edge AIEdge AI enables:•Privacy and security•Realtime processing•Reduce network bandwidth requirement•Low power consumption•Synergies between cloud and edge AI processing – AI processing throughout the network hierarchy 5
Page 6
AMBARELLA.COM COPYRIGHT AMBARELLA 2025AMBARELLA.COM COPYRIGHT AMBARELLA 2024 “Algorithm First” ApproachProgrammable AI Platform with Optimized Acceleration Ambarella’s “Algorithm First” ApproachDifferentiated approach enables superior efficiency and scalability Image Processing & Compression CVflow® - Superior AI Performance Per Watt 17 years of Image Processing and Compression Experience Superior Image QualityAI-based Computer Vision & Radar Processing CVflow - Deep Neural Network AI processor Radar Processing Oculii Patented Adaptive AI Radar Algorithms 25 years of Autonomous Driving Experience AutonomousDriving AMBARELLA.COM COPYRIGHT AMBARELLA 2025 6
Page 7
AMBARELLA.COM COPYRIGHT AMBARELLA 2024 AMBARELLA.COM COPYRIGHT AMBARELLA 2025 AI Inference SoCs 3rd generation; AI(e.g., Transformer and CNN AI networks) Video Processors (e.g. Human Viewing) CV3-AD family of central domain controllers 2nd generation; AI (e.g., CNN AI networks) 2024S~6x CV22 AI ✓2024S~13x CV22 AI ✓2024S~27x CV22 AI ✓2023S~80x CV22 AI ✓ 2022S~160x CV22 AI ✓ Feb 2021P¼ of CV22 AI Jul 2019P½ of CV22 AI Dec 2018PBaseline (CVflow DNN AI)Apr 2021P Aug 2019P4x CV22 AI Apr 2021P2x CV22 AI2022P3.5x CV22 AI ✓ 5nm Samsung 10nm Samsung 2024S~1.5x CV22 AI ✓ “New Products” ✓20xx = Calendar YearP = ProductionS = Sample Scalable Deep Learning AI Inference Processor ProductsIntegrated SoC (AI accelerator + perception processing) offers superior AI performance per Watt C2025S~27x CV22 AI ✓ NEW: 1st 2nm SoC not depicted ASP double digits to triple digits ASP range $10 to $75 ASP range single digits 7
Page 8
AMBARELLA.COM COPYRIGHT AMBARELLA 2025 •F2025 revenue was ~30% Auto and ~70% AIoT•F2028 revenue SAM estimate ~70% Auto and ~30% AIoT•We are focused on edge AI applications, including both edge endpoints and edge infrastructure systems (e.g., AI box, edge server)•We address the megatrends of security, safety, and automation•Key driver is to enable electronic systems to perceive the world and make intelligent decisions; human viewing business expected to decline as a proportion of revenue •AI has triggered new product cycles in existing edge markets and opened entirely new opportunities in the auto and edge markets•Advanced AI networks, including GenAI, are expected to be an important new product cycle Large and Growing MarketsServiceable market (“SAM”) revenue CAGR in the high teens $- $2,500 $5,000 $7,500 $10,000Ambarella’s Serviceable Market (K) Edge AI Markets F2024F2028Source: Ambarella, ABI, Gartner, IHS, Strategy Analytics, TSR Auto SAM AIoT SAMAuto RadarL4/L5 L2+ Front ADAS In-cabin, emirror, recorders Enterprise/Public Security RoboticsOther Smart HomeId/Access SAM estimates do not include autonomous driving software, advanced networks nor Generative AI (“GenAI”) AMBARELLA.COM COPYRIGHT AMBARELLA 20258
Page 9
AMBARELLA.COM COPYRIGHT AMBARELLA 2025AMBARELLA.COM COPYRIGHT AMBARELLA 2024 Automotive Applications ~30% of fiscal 2025 revenue VisualizationHuman Viewing + RecordingADASSensing + Viewing + RecordingAutonomous DrivingPart-time Full-Time Application Dataloggers, Drive Recorders (pre-install, dealer-fit, aftermarket)Front ADAS (front facing camera L0 to L2)Other ADAS (emirror, in-cabin (DMS, OMS) access, personalization)L2+L4C2023 market penetration (% of new vehicles produced globally)~15%~70%~1% other~4% emirror~15% in-cabin~3%~0.1% C2023 à C2027 Ambarella SAM*$275M à $400M$1.6M à $1.3B$200M à $500M$500M à $2.5B$200M à $900M Products Ambarella ProcessorsHuman Viewing2nd Generation AI3rd Generation AI Other Ambarella Products CV3-AD Platform includes:CV3-AD SoCs•4D radar perception SW•End-to-end AI SW Stack AMBARELLA.COM COPYRIGHT AMBARELLA 2024 *does not include SW stack Goal: Intersect at L2+ with CV3 Majority of our F2024 Auto Revenue in ADAS 9
Page 10
AMBARELLA.COM COPYRIGHT AMBARELLA 2025AMBARELLA.COM COPYRIGHT AMBARELLA 2024 Edge AI – Multiple Emerging AI Applications ~70% of fiscal 2025 revenue •Historically camera-based human viewing•2nd gen AI SoCs now a majority of revenue and typically process CNN networks, enabling machine sensing + human viewing à ~CV2 ASP 2x video processor ASP•3rd gen AI SoCs add transformer network processing support. Expected to enable entirely new applications, potentially expanding SAM deeper into the network à further increase in ASP anticipated•Enterprise currently the largest security market•Global installed base in C2023 estimated to be 1.1 billion cameras with <10% based on embedded deep learning SoCs•Installed base growing low single digits Y/Y (AI a key driver)•Annual unit demand heavily influenced by replacement units (AI a key driver)•Consistent with our revenue, we estimate a majority of the installed base is represented by enterprise + public capital expenditures, the balance home spending•Other AIoT includes emerging advanced AI networks (e.g. CLIP , VLM, LLM, GenAI, multi-modal) and legacy•2nd gen and 3rd gen AI SoCs are enabling entirely new applications, including access control, consumer cameras, fixed and mobile robotics and virtual reality•GenAI represents both a new product cycle and an extension into new markets as larger models can be condensed into smaller, more efficient models at the edge•N1 serves the “missing middle” for 3B to 50B parameter models such as Llama-v2, Gemma, Phi-2 and CLIP in network infrastructure HW•CV7 family addresses <3B parameter models including within an endpoint AMBARELLA.COM COPYRIGHT AMBARELLA 2025 10 Total Edge AI Revenue~70% of fiscal 2025 revenue “Security” ~60% of total edge AI revenue in fiscal 2025 Enterprise & Public “Security” Other IoT ~40% Home “Security”•Access control•Body cameras•Aerial drones•Industrial•Medical•Portable video•Robotics•Fixed•Mobile•Body cameras•VR•Video conferencing
Page 11
AMBARELLA.COM COPYRIGHT AMBARELLA 2025AMBARELLA.COM COPYRIGHT AMBARELLA 2024 Q1 (April) F2026 Outlook and Q4 (January) F2025 RecapData from Q4 F20025 earnings conference call on February 26, 2025Q1 F2026 (April, 2025) Outlook•Our Q1 revenue guidance is $81.0M to $87.0M (consensus estimate ~$74.3M on February 25th); at $84.0M midpoint, IoT expected to be up sequentially and Auto expected to be slightly down sequentially•For F2026, we expect total revenue growth in the mid to high teens (~$333M midpoint). Consensus estimate on February 25th was $322.6M or up 16%)•Q1 non-GAAP gross margin estimated to be 61.0% to 62.5% (consensus 62.0%) with non-GAAP operating expense $50.0M to $53.0M (consensus $51.7M) Q4 F2025 (January, 2025) Results•Revenue of $84.0M was above the high-end of our guidance range of $76.0M to $80.0M (consensus estimate ~$78.1M)•Non-GAAP gross margin was 62.0% versus the consensus estimate of 62.3% and non-GAAP operating expense was $48.7M (consensus $50.6M)•Non-GAAP earnings per share were $0.11 versus the consensus estimate for a loss per share of ($0.02)Multi-year transformation underway; geopolitical risks remain elevated•AI is becoming pervasive, we are embedding it in all our new products and we have growing evidence of market acceptance•We see a wide variety of risks outstanding, including geopolitical and supply chain factors. These risks include*:•potential export regulations on advanced technologies•market share shifts between our customers•the evolution of new markets and rates of adoption of new technologies•supply chain issues such as long lead times, shortages of materials, components, electricity and manufacturing capacity, the sell-out from our customers own sales channels and adverse weather conditions•changes to government policies, for example tariffs and/or the Entity List•the risk customers in China continue to take actions to reduce their dependence on components they believe could be subject to new export controls, including the creation of dual China/non-China supply chains*Potential risk factors that could affect our financial results are more fully described in the documents that we file with the SEC, including annual reports on Form 10-K and quarterly reports on Form 10-Q.AMBARELLA.COM COPYRIGHT AMBARELLA 20251111
Page 12
AMBARELLA.COM COPYRIGHT AMBARELLA 2025 www.ambarella.com COPYRIGHT AMBARELLA 2025 Thank you!lgerhardy@ambarella.comVP, Corporate Development