Ambarella reported second-quarter fiscal 2027 results on 3 September showing $108.1m of revenue, up 13.2% from $95.5m, on what its chief executive called record edge-AI revenue. Two numbers in the same release complicate that reading.
A profit and a loss in one quarter
The quarter carries a GAAP net loss of $6.7m, or $0.15 per diluted share, alongside non-GAAP net income of $8.2m, or $0.18. The $14.9m swing between them is stock compensation and amortisation. The loss did narrow substantially — the same quarter a year earlier was a $20.0m GAAP loss at $0.47 per share — but headlines reporting a beat are quoting the non-GAAP figure.
Record revenue, falling margin
Gross margin went the wrong way on both measures at once. GAAP gross margin was 57.7% against 58.9% a year earlier; non-GAAP was 59.3% against 60.5%. Across six months the pattern holds — 58.0% GAAP against 59.4%. Record top line is not record economics, and what sits between the two is component cost.
Where the growth came from
The CEO's quote attributes it to silicon, not to a software attach: "Our edge AI revenue reached record levels in Q2, with balanced sequential growth in Auto and IoT markets with very strong growth from our 5nm CV75 and CV72 AI SoCs." Cash, equivalents and marketable securities stood at $272.3m, down from $277.8m the prior quarter and up from $261.2m a year before.
What the received framing gets wrong
Two things. "Edge AI revenue" is a company-defined category, not a reported segment, so the record cannot be checked against a segment line. And the third-quarter outlook is a range of $115.0m to $124.0m — $9m wide, with non-GAAP gross margin guided to 59.0–60.0%. Quoting the top of that as the guide misreads it; the width of the range is itself the signal about component supply. The stock fell on the print despite the revenue growth.