Ambarella (AMBA) 26 Nov 242025 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to Ambarella's Q3 Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Louis Gerhardy, VP, Corporate Development.

Thank you, Daniel, and good afternoon. our fiscal joining results XXXX for call. conference you third year quarter financial Thank

with is me President call the On today and Young, and Dr. John CFO. CEO; Wang, Fermi

on you our third forward-looking of of is today's the The discussion XXXX. quarter regarding questions responses primary for These for financial to available to fiscal based purpose your regarding prospects, demand provide among financial results subject projected and the with risks, currently and results, and The call our our statements today, year information contain other to things. statements growth market solutions, assumptions. will are information uncertainties

Should incorrect, statements. the no obligation any should be our or actual materialize uncertainties to update in risks, results that factors We're more under affect these materially These risks of forward-looking other as or statements. assumptions could documents uncertainties these well to the potential our we assumptions fully prove and information differ results risk on these from with our SEC. are described financial could as filed

transcripts, our release, XXXX our Investor can or materials website, found page of and be content without the third property fiscal website. cannot SEC on today's replay our results, reproduced today's transcribed The results of quarter as be prior on and press as call call well Relations consent. to of posted filings Access a historical written the our Ambarella's our

Wells be the see Needham X X, Summit; we Technology want X, fourth exhibition the TMT XX AI December Conference the to NASDAQ's tour; on to course, Conference UBS December during XX inform quarter. in and Las analysts Before in hosted the at our January hosting following Conference on CES we'll bus at CES the January December plans X and will call, BNP's Vegas. at we on during tours we sell-side participate be Global we on the Conference; of XX. events Fargo start January hope X; to you you our investor of multiple to and XX; And Growth December Nomura's January London On

provide your be update review and Fermi? will John results for we'll available outlook, Fermi for the an questions. then the will now quarter. financial

and you all for Louis, afternoon. call good you, today. Thank our Thank joining

Our the auto increasing high above and processors again new quarter to XX% AI third revenue customers' the the of in factors end offset market, guidance our price. ramps, influence was achieved incorporating CVX. as strength those Company-specific selling our more AI business. both with in record originating weakness our product from than level in our IoT a overall We average range higher sequentially new blended turn such especially of a higher-priced contributed our which about revenue,

wave XX% estimate increase revenue Last we year-over-year CVX. momentum from prior our second revenue We series as expect be the year by fiscal to mid- versus described fiscal of growth wave we waves to product are new continue for the forecasting first XXXX augmented in high in commitment of with and the quarter, our next teens. the CVX and XXXX, to now XX% a to the

to expect grow in to fiscal auto new us in to XXXX first second weakness again IoT with and overall market. waves We the the product revenue enable expected both despite and grow the

of our level to or XXXX for in calendar revenue wave SoCs of family commence AD Level XXXX. plus with autonomy third represents CVX expected the X Our and high fiscal year

targets customers. AI During now X+ SoC, including quarter, of mass-market delivering silicon vehicles, advanced which our to engineering third CVX-ADXXX we first passenger received are the and Level applications, the we samples

pressure. is automotive global As you under the industry significant know,

X different our automotive proud would you like automotive and year comprised this next. the expected business are is to businesses. forecast of we grow remind So to I our business to is

business existing business, central our controller and known Our the platform. as ADAS also domain CVX

Our million estimated the year $XX will represent majority of about growth business, AI rate SoCs with an mostly in with X-year ADAS mid-teens. compounded this now existing automotive annual revenue

larger and new a opportunity revenue high auto X-year targets CAGR opportunity. still platform autonomy. but our accelerate potential for This X+ automotive CAGR of Level beyond much level emerging has significantly mentioned to revenue I business. the CVX mid-teens Our our the existing

in incremental CVX highly remain We market. increasingly challenged focused on an design wins automotive

digits As and Level software funnel. are this global we X+ environment, and remains the the low you slow, production growth market is development delayed. OEM automotive updated vehicle know, In penetration in revenue projects have our single

could probability estimate our represents reminder, we a the to XXXX weighted fiscal automotive year next from fiscal revenue of over year automotive As generate a funnel XXXX. years, X

as approximately billion challenging this the $X.X one $X.X delayed and ago. customer's will were is $X.X Projects the earlier, our volatility with time, pipeline million were new was within forecast years won been described X-year industry last there year the a or lost. of than has automotive annual billion business $XXX funnel than or versus billion. in significant projects to added representing funnel a more Due the and dynamic revised. more At projects the canceled, either

role remain estimate $X the secular trend billion our platform Level year the optimistic X+ about levels of is included beyond not about in high can there in X, the funnel and terminal CVX year we this our that methodology. serve for our autonomy of Notably, the and We long-term market.

system -- In between its ADA LX will October. of market, customer SUV in new remain our more advanced the key today, new with radar. automotive because featuring the automotive variety the a OEMs platform modules highlight in column. I one including now solution to CVX smart the scalability some features. and optimistic Geely, Automobile, of our open platform challenges availability business model joint activity and get CVX are smart of and into the #X electric we the representative discuss optimized IP of are We venture in centralized facing Mercedes-Benz start quarter. based China, automotive models introduced based our We brings displays diligent a in the automation This a efforts features the efficiency, software of power model electric commenced and on to rearview announced electric exterior Honda life system. a of on by our Xpeng, include CVXX. Tier production monitored electric the in to venture and Dongfeng utilize includes and Lingxi its between functional in and PX+, full-size the replace L and which October. the XXX% right market, This features camera safety us on also system is is mirrors. the video joint These interior mirror. electronic for our that Also vehicle sedan This launched pre-installed is XX side vehicles passenger vehicle, PX+ middle e-mirror X processors the CVX pioneer with supplied an that Aptiv. Xiaopeng mid safety

on on the sales focused HXR its vehicles, system our development light Horizon auto, a monitor Xingzhi of truck featuring from CVXXAQ. launched driver Geely based and commercial ADAS brand plus

announcing described intercom all to our generation CVXX, product we dorm, enterprise mini are including on the customer businesses. introduced In earlier. the market, server the IoT XK Ambarella new wave first feature represents also Ambarella's CVXX. latest search. on of based advanced the Verkada AI-powered CV Fisheye split camera revenue of Turning new family, new which camera new camera, a and and of Verkada video our cameras introduced of suite analytics, PTZ based indoor an including next the I for second beginning its

on They XX and IP recording includes its based advanced deep and our congested of detection family based Bosch vehicles XXXXi, addition onboard crowded camera new of CVXX. and our on introduced announced or things. AeroPTZ Security camera on even FLEXIDOME CVXX. Japan, In its done feature The camera mega camera learning-based models Alarm.com CVXX. Panasonic new to based i-PRO, formally and announced the list bullet analytics. cloud mega dome X in persons X pixel

are of our see adoption better IoT the to We SoC other in AI encouraged expected markets.

other AI programmability designed frequently and products enterprise to adoption our are enough markets. applications automotive our in drive While SoCs target IoT with

in Ace example, introduced Pro the photos. InstaXXX For and video video featuring X camera portable recently mega pixel XK XX its

guidance X image to KartaCams line leading assistance. add its technology XK to on on based cameras boat screen images Link for video with introduced Grad review webcast edge AI-based gesture Singapore, also our the XXX sensors announced services includes and Garmin HD the the on a in CVXX dockings. AI HXX introduced mapmaking and based and XXX-degree CVX, control and it's known XXX-mega diversified based collect full company its our pixel markers met on our and super processing. supports camera GC distance our and viewing voice and for provides XXX app, X-nanometer AI providing XC CVX its featuring to Based link highlight processors. InstaXXX marine

both well-established computer IoT to position automotive this list From you vision ADAS quarter, the engagement well age at in of upon this our can build as partial AI market. for our traditional see we as continue customer

have edge helps we XX fact, our more AI. shipped In AI basis, on table new network introduction the set and the now such AI of for advanced more cumulative as supporting than higher-value SoCs, SoC Clip VRM, edge the this Gen a and million

opportunity influence continued network centers advanced indicator we AI significant the growth AI for processing and believe capacity build-out for training AI for secular see and more of We the inference data and edge. the at in leading is more a

aligned new product Our of the this is strategic is with and wave well revenue plan underway. first AI

our our subsequent second fiscal platforms. X-nanometer wave alongside XXXX the including calendar a and the with wave expect to wave first We year CVX commence or the XXXX next starting

product in our success year. determining key factor New revenue incremental next is a growth

non-GAAP We QX. profitability are return pleased to in to

margin growth focused to highly non-GAAP operating our and positive the of target driving on leverage revenue XX%. long-term are path We on operating

record. the free XXXX, optimistic We end enable -- through positive through and build positive cash this to have year XX new consecutive are delivered we of products us can upon years of of our flow fiscal the fiscal

the in John? now more will detail. and outlook John the QX discuss QX results

financial also non-GAAP XX, fiscal a third XXXX. our press I'll non-GAAP XXXX highlights for XX, for for results. release fourth of I and October quarter of today's XXXX ask you GAAP year and to XXXX. will January outlook now I'll ending refer the results of reconciliation a financial ending year review fiscal quarter discussing the that be detailed provide to

we reporting, expense expense acquisition-related non-GAAP taxes. have the of stock-based restructuring with impact compensation for along costs For adjusted and eliminated

For up prior quarter fiscal QX, and the above range, XX% our revenue end million, XX% the from $XX.X guidance of high up was year-over-year.

$X.XX to midpoint some low was product guidance opportunistically margin. driven million, prior for as than due between expense prior tax the margin fiscal Non-GAAP net upside of was provision $XXX,XXX mix earnings lower-than-planned continued We approximately income the we on XX.X% or development end processors timing to $XX.X guidance legacy our was drove non-GAAP lower a at and of our share. milestones. QX We interest internal diluted the by gross $XXX,XXX. QX remain and from our non-GAAP of operating product per revenue other range quarters. QX net about of certain spending million. of management track at Non-GAAP $X.X $X.X expense profit was million range, reported

our sheet in the quarter to $X.X to million marketable months for Now Capital $X.X XX the and days XX I of increased inventory $X.X XXX to turn XXXX. assets Fiscal XX intangible prior QX Receivables million. for cash the XX, and and were days to cash million days the days flow. will expenditures from X quarter from October and and million outstanding decreased in securities ended from sales balance increased tangible prior $XXX.X days. days quarter

the revenue $X.X X flow our in manufactures quarters the third revenue XX% of of quarter representing logistics million of million. multiple customers quarter. with in for to XX% multiple quarter ships through Asia, year-to-date end $X.X more X had fulfillment was or Microelectronics, $X.X revenue generated customers cash Taiwan companies ODM, of of Chicony, cash fiscal million, quarter. in and the operating million an a flow partner positive who of XX% first was in XXXX. cash We QX. $X.X Free came for WT the We the flow in free at that for in

X-nanometer especially CVX of for new customers' the X by discuss I'll increase those wave XXXX. of new our product quarter now caused fourth ramps, QX estimate. from us The the our our to strength product enabled outlook fiscal our continued year

million, seasonal the following and Fiscal $XX QX to down range to expecting in IoT sequentially. is revenue flat of with the decline QX. slightly normal to both QX $XX expected be auto, are in We stronger-than-expected million

the XX.X% non-GAAP range be XX%. We to to in gross QX expect fiscal of margin

to million diluted quarter be interest and our be We diluted our fully fourth count head share $XX tax $XX approximately for net marketing range our joining call income estimate approximately expect increase $X.X the increased to to be of compared to with OpEx non-GAAP be today. million, XX.X to expense by you non-GAAP shares. engineering approximately in $XXX,XXX to count CES million in and million expenses. driven project-related the We activities, the QX Thank

will And to over turn with questions. for I that, the call the operator

Deutsche first Our from question Bank. Instructions] [Operator Seymore with comes Ross

my the they're coming, and the me I what results on for know Congratulations the different strong inflection changed? even above seasonal, an I really seasonal. about point, guide. growing but and midpoint when it's better talked X% is impressive than called XX% you And first January I range, seems like you but it know of maybe guess the your waves question sequentially. but

So demand. kind the really new also there understand shipping And is getting changing? I to that's is guess at I'm activity but what's it's your customers at product just the closer what end I of adoption,

rebound? secular this beginning is Or of cyclical is it So bolstered a also growth? by

Ross. Thanks,

rebound quarter, result, the inventory definitely, is all, of this first we -- first correction. from think, I there QX

major about at -- give in look they will for that and of did the X products right for when that from the is -- product you different talk new growing if as quarter, our products. will IoT that, is with the enterprise talk can one new is we auto IoT these now. rate a fact, rate be categories, So QX. run done driven that of middle growth -- cycle IoT CVX. in the and about similar it and and other, that at about growth of And look new well IoT be we in angle correction is our last QX And all grow growing If we the really angle, X after And CVX. as both and the for driver market both inventory

talk on with a side. to helping Sensera those In about definitely CVX, the automotive we automotive customers Rivian new market growth and like with I us that CVX that you are see the think have

our say from also the to that million. I point midpoint correction secular maybe million revenue in at out is something inventory to want is guidance have and growth assessing the growth. rebound QX on all we product I about in So new QX, the and line QX our $XX But $XX-point QX

seeing So seasonality kind QX. we're of still for some

it Whatever seems working. to you're be doing,

where seems switching for follow-up, over that. on year-over-year the automotive little a end growth the odd would guess you're congrats at larger. year tail that So bit the a I my rate should number go It down to the considering funnel. adding be

to the we've driver to kind guess the So years, last of significant as your the thought couple over I auto big forward. going of picture was is, of extent question business going incremental be growth the

the appropriate automotive? to IoT really like as just seems on AI, side? something edge the you you you the it seems growth has whatever Now are more profile talk the have? about driver. optimistic we switched the bigger should to different ever Can it, IoT, company of Or as call is want the And be to interpretation

look that that see still I we market. reduced. expect about you than market. controller right? if a of automotive overall clinically very the we're give similar I say continue thing reason the seeing rate most is domain is you can Level engagement. adoption our would weak, We X we our count for everybody. that first I The a to of me to I but the think that the And feedback optimistic expected, slower is -- is from pipeline at all, But for X+ really grow, opportunity And CVX -- start the is we in important market number, think think lot

engagement. of We a lot continue to see

are projects schedule But got projects different the even for a lot some the canceled. out pushed and into of reasons

start reason X+ thought. That's think not not we adoption is fast funnel really is as we our that that as increasing. Level the probably seeing I So

everybody that However, in today. automotive current become I solution still important the will believe market X+ and Level an X that Level for and the X replace will market Level

Our next with Tore Stifel. Svanberg question comes from

echo the let and me And results. on congratulations strong

here sense yet. could lot you bit of for CVX better a the between me, I mix little CVX. For not mean whole CVX, I give a us assume revenue just

think think year. on CVX you reaching call, I million this last the X I potentially units about talked

on you more can So be with helpful? share mix color CV of any us the would

Right.

me So how point give so maybe to you about some together this. let data put think some to

about AI quarter. also, we talk ship by And we more probably of is in going than CVX First our talk this roughly all, X who that are revenue million our XX% to of easily about a margin. units north

that CVX So doing well.

I and years video That So gives you first think will CVX CVX quarter inventory CVX customer gradually -- -- quarters. in processor our our and rebound $XX. correction of idea there in point from that And you finished And this decreasing to -- expect I but growth X because a the contribution. to we between also has in that processor that's -- the want video inventory our anywhere out, QX, the back that rebound is last go to the really QX, that's in the help decreasing $XX is an coming grow. ASP

going Great. question. to that was be my follow-up actually And

and think and even So as fiscal perhaps gross margin. so we think we the the cyclical and about 'XX recovery on impact about

to So really video to continue a back, and processing not fiscal a phenomenon, mix expecting probably to drive higher you're bouncing it's XXXX? temporary of more that

That's correct.

We XXXX, and believe do IoT 'XX, that but fiscal fiscal haven't we call. and guidance growth, the our conference the OpEx gross provide next margin in and any details we'll on year more the both auto about in given well the

Bolton Company. with Needham And our & next Quinn question comes from

kind wanted me a sort again. the to to to question. maybe Ross' of Let ask auto just congratulations follow-up of I me, for pipeline, offer back my coming

pipeline a Level sense X+ us how driven changed You X+. pipeline? and now the what you last year's and cancellations percent maybe pushouts have some might opportunities even from talked Level the of that that of sort give is Can about by in

Right.

I'll give So description. a you maybe high-level

the the I also in CVX XX% is think that pipeline pipeline. we and one in percentage below and for -- color, controller color, X would I is one pipeline color above in color. pipeline, color well say sorry, have the But in And CVX has domain XX%.

product a X really price So and point. I'll add X, the that and in in price more Level Level about X+, we introducing Level believe that maybe brand-new on is at worried delta We current price we delta look little terms think Level of when X+ high, between OEM the color a that still keep and that.

So I a is help price to X+ telling better features. to introducing compared significant can we people OEM bond of how for saving thinking of keep for think about something OEMs we Level think our function first optimize are and the a lot That's because where our that, all, think I competitors. our we

will More importantly, And to customers. our from can software software X+ products really end a compatibility lower save a that our adapt the simple be high tremendous Level to to by Level X+ X+ cost R&D of with a end modification. high-end amount Level easily from low

point we address we think the really the that trying points our address to why solution today's other customers to the software cost, of I pain -- is when Level activate, of So we reason X+ are one we think the a is the they're one the trying cause customers. our pain have development. That's can

of do is good you Geographically, geography? Or diversified then that the And is the Perfect. kind concentrated automotive geographic pipeline? it see in distribution of second pretty just or pretty another how China pipeline? pipeline. Is that question regarding

the fair. distribution think I is pretty

concentration that, probably had the a -- we in say of everything little and think see from our have fact, percentage China. lot is that probably I pipeline that's in Europe. And higher else probably of China can is a distributed. wrong. a In we is And well you who high from people XX% would

it a are Western programs. proxy and cycle We cycle relative that, started add try of the design focus is the our our for LX+ a might and good really I for for cycles, models pipeline very quick on the Quinn, on China X-year design market. and top to and to designed pegged rest the adoption to opportunities. of But be of pace of kind And was methodology in

because think quicker. I the funnel show X-year not may our of those are all programs in China China so in And opportunity

Fermi factor that's has that when says consider. So XX%, approximately the funnel another to

question from comes with next Our Christopher Rolland Susquehanna.

Yes, that's us your clean ahead that then a hunt can mix pretty have well, why tying those be just peers, particular? EU from back to Do ship this some geographic guess, and there one, there's the in think to going that come and your do talk about might with, the into that, led front the in EV of current EU versus as Chinese you last worry both of auto I you this U.S. exposure perspective? outperformance all? And similar tariffs, you Or you're at might segment all to think to in

Right.

distribution revenue. pipeline. our So question talked Quinn's quite first of of of current while distribution not of than It's all, that revenue about about exposure current distribution I about is That the different pipeline. answer is the

So Asia, in your China. are our particular also understand U.S. revenue different some -- portion exposure very market, end the XX% our the big. then any in exposure of China, majority although market if total on And all Korea manufacturing locations big of in then it's in okay, question, coming Japan, we a of I revenue. lot geographic have that And is I U.S., say European a there's but would focus the current revenue you're asking whether on

be. I impact is locations. how some the but situation which the have is you only much well, if current to the worse, gut geopolitical really revenue on depends But is one. to more be it continue asked the however, about rule biggest situation. change how think not that's impact. this not we'll going And tighten geographical to the Ambarella get feeling going that distribute on going if to our then the geopolitical My probably So Maybe based change situation

I that probably total situation, to to a industry. But impact then whole off component to gets Ambarella. chain say It's will then we facing vice need XX% we're and the China not And just supply the versa. that our course, Then to whole impact U.S. Chinese and different go of that's separated write total revenue. worst cannot the environment

there's don't I us, For of particularly only risk. geopolitical in target think for anything Ambarella terms

we and a years half that of was lot IoT. us, revenue exposure current risk X past Dahua the had In XX%, they're half ago, way and our past, is with Hikvision automotive,

say have don't significant So on we very I would that risk only. geopolitical a target Ambarella

maybe mentioned prepared in a I I the quite think legacy continued fiscal for margin there. on sustain particular talk about we processor, sure margins. that lift that about remarks year a next moving when something gross then But get in could you about what that and and to the and wasn't maybe margin then in And be parts weighed there that would lift.

Yes.

for you that last Let the mention that, grew processor years. we was video QX, me direction to time example, in point XX for the first did revenue our the

Although the... use talk margin, we when about talk we we our about gross what

Legacy.

Legacy product.

over will our XX%, our model, time will it move move gradually bit. margin margin gross see continue that, the you mix. however, our which I say part gross side. and processors to gross long-term you there can But is of margin when little the margin processor and start on there. other definitely, about that's pressure change, what But But been will a we video saying one there. little like up really mix quarters, a to Every that believe get to that into see XX% down are gross that So that and we margin usually, time will in reason is is for we feeling gross have our

question Securities. Cassidy Our with comes Rosenblatt next Kevin from

X-nanometer different the when subject. end out markets more your you can target Maybe about products? development you talk expect and those for But slightly a tape

Yes. Thank you.

projects of working it. First kick engineers we have road all, off our and on on map, X-nanometer only and engineer we

that me the QX as out, time. IoT of of and chip our benefit tape section for very is other IoT well first will say, important. enterprise the is this. of expect X-nanometer that IoT year also course, in will course, We target X-nanometer And But from let first next as ship our period

it's for X-nanometer for You did for us nano. X should will platforms consider consider on need what chip, new and build workload like technology XX X-nanometer based just our definitely AI nano important of to we And family address architecture -- the to chip with our up and AI process AI new a type we of X-nanometer other new and Gen transformer our network, and node. upgrade as

just as Okay. from . point exciting. is the all Great. you It the Maybe year sounds fiscal OpEx go John's spending through view, X-nanometer of as for the

Yes. we for the already haven't yet. as I guidance said, OpEx nano But costs given amortizing the Fermi 'XX for mean, for X we're project.

think expect -- to X run absolute the I already as baked So project OpEx just OpEx increase would year, rate. nano I the but into next is number

Thank you.

O'Connor from question David comes with next Our Paribas. BNP

from if X Maybe Great. side, Yes. my may. I

was Just auto also of you anything where billion. And a first, much share of on relative of cancellation. cancellations, that you out? kind geographically have a guys of canceled on in going the of then saw kind to of most size those sense the you $X.X I much $X.X down from those that billion back How those of And kind give break of just funnel, and follow-up. to again, you kind cancellations. Can how can was added

Right.

in you at increase look of first that, all volatile, and company. project some get canceled. forecast. map the of the the transactions consolidation road happens is in most our obviously, Europe is and the project describe The in that And of if for of definitely chart, And out U.S. think that other can word definitely But software right? of decrease the multiple the all, of fact, I reason that to customers volatile impacted that of So reasons there reduced because a right pushing lot is the projects

based project movement portion of a is say our I pipeline. Level of clearly in the we that a add of I So But engagement big the that on X+. think definitely there would also

forecast announced wins So But our that minus. design clear continue for a of won wins also that, -- already we But make being the course, the announced. there project that's have mainly last -- their I to a design it downside want haven't is and reduced. year of in new lot color we also one we and we plus that they there's

larger Some reduced some reduced even by by XX%, is margin.

with that's combination a that in we're dealing our pipeline. So

And just follow-on. very That's helpful. one

mentioned pipeline, again, lot also XX% kind I in today. sales China the mentioned you is it's on Just a And John faster. think of innovating as China of you -- -- said it then but China that XX% well

go So higher in Or isn't in really? and mix? in explain the where the can state just why should mix a of China of kind land you China terms steady back

all, instead design we to from X explain just X the win think that to years. of cycle even first design a I of because Well, John X usually China years to tried won X

So that Chinese doesn't X matter pipeline, design the in impact funnel. of -- only it's win out occupy X every of years one you

that's just projects than all design like reality that win because to represents X of X Korea, from view, pipeline. Europe So even or of any why years U.S. is Japan, the or other China point smaller usually, the

John to should that's it that X- of one think I So than reason X-year you design because to be. tried smaller number cycle, make say China is

Our next with question ROTH comes from Suji Desilva Capital.

competitive those? in On win share helping can those us talk wins? do and design curious And across impactful about you the Bosch you I'm your Conti and the secure you LX+ how the win are have, landscape partnerships

Yes.

have is competitive the NVIDIA, you the company. landscape in Mobileye the the Robotics us, And fact, China, X Qualcomm and fact, didn't in add China, worldwide right, So and in change. in Outside to Horizon there.

with Conti X. a wins still because continue major a with work the all and I to want those So OEM now, play And company we're right Tier are probably the Bosch I OEMs outside to against. competing think China, role think design

and silicon role they OEM to Tier always Our really in a providing X between. is sitting need software, sometimes providing but

role the Bosch win. because are and always on Conti that So they bidding major a design play

on win. to them are helping bid design to We those work,

closely Tier for us. continue with working So be to important the X

adoption. customers question then And my on the is of helping kind and other

the one software customer factors You cycle you? of said software the from speed something Or Is you readiness adoption. in to can ready timing that to just along is equation, rates? the of anything end have the adopt that with you to do do is them have customer help your then help that there

thing one focus on do. Absolutely. really That's to we

we sensor we design Level importantly, people. of adopted the stack show important X already software stack for of X, many customers all, is less First using software of our easily introduced example, we can months already Level type in some more X+ configuration. to than our for our And that to

So can understand reduce our our course, And is quick investment. to X+, their that -- really That's that of software software, X. can because it updation important easily easily from help customers to one. they Level and really a significantly and X Level X that X+ software, using Level from Level Level move

-- that can leverage. also licensing they we whatever business a that enable by our to Two, customer we they software have module think model

are to and we example, using features function are a believe HD quite doing we of mapp few the perception on For that well definitely perception well And we the kind one demoing and do really very knew side, we welcome. are of those that driving.

we So helping those and are to them any -- open features, to to license software customer -- wants are helping use other any to their stack. integrate if we function

is that have X that are we Level our the scalable from help customers. license that to we to can combination So and software X I also willing IP own our think the Level

customers X can our areas help we development. the up those are definitely speed to software think I

Martin Our from question OppCo. next comes Yang with

regarding change. Only question pipeline the one automotive

does and from seeing change U.S. outlook potential margin those customers, Given European automotive with for you're design wins? your customers where contribution it

Yes.

margin how the in model. In of to into fact, our production going we CVX, margin be talk definitely gross go low gross long-term is about our end we with

steep with I So a that's competition. and out possible there think company we because the competing semiconductor expecting largest we're are

gross in change. think however, And gradually is to we're believe which but although many back the we that now, our XX%. So will model, short down we to quarters that running I for we are moving current continue that to definitely range. above XX% it maintain But margin will term,

quick A it. Got follow-up.

again, on would other drive the So mixed the point think broad factors you on or it's where margin. picture a do that Do Do -- company-wide long-term what you factors you you margins? influence -- margin outlook? have out bigger would any think think

Yes.

That really you value mix continue I cost quarter-to-quarter, that Every to is that change short-term go gross of think term, gross that But mix. reason. can when end our differently because sell only ask our at our in really CVX, to only to and when margin look QX to hit our higher try prove long that with we you if X-nano, we sell continue we quarter we customers. you at gross -- mix product look you is if to margin. low see to So to move strategy always maintain X-nanometer, margin before we what to people your . And model can. move of that we

quite supply business I on it to our comfortable with since gross to CVX, current IoT current and time on business, work the we are our for it, to work our margin and you on. think particularly guidance about so profile. But think work on automotive have I chain So

end guided to So although our I still but current gross I margin margin than I it. to will think we we low work -- our of time model, that gross think the lower have on say

question Richard Craig-Hallum. comes Shannon from Our with next

AI a been in call. discussion on of haven't There Gen lot this

initiative, that. you How maybe, talking Fermi, in funnel I'd mean, hear about talk to I announced the Gen to the can if it AI. guess if building about talk want a in Maybe So year progress here. you it automotive use you're love your about framework, out since to this over about ago. that's the you space, here I just

to market. it's the company, quarters, is just current In to think the and X our going last become not Gen very impact I AI to only clear me outside

AI fact, way. impacted In Gen a in be will different current market overall by

looking AI impact type customers business. our to Gen all fact, are model In going their of

and us engage wants for what important it's them to with as understand early So as customer our possible.

we still with what we show performance, with the and X what with working X start we them engage and and quarters I I X, of can start we would say, potentially we're products. quarters ago, would NX several them do do So can show we on type ago, them NX, and say, customers on, POC with with

And customer. run current of network security are we that a support CVXX and at looking in that. need model, clip type any the does told start type the or start chip, and to the for -- to large type customer And can Gen when at new of business, realize but AI customer although to that their customers and help other find billion CVXX current very our our define at looking language at it's CVXX model derivative we fact, X we large product, us looking CVXX large, business they -- a same not time, it's of type out frankly, we enterprise pleased of the how to our or of be used language function that clip parameter

it X run which in start definitely can customers chip helps looking the our how talking market So running to kind of a the We're at parameter, billion to difficult very the top X-watt on this find in device lot or for clip just camera. edge today. is supplier -- fact, to in camera traditional on service. going IoT of AI of those they provider, they're like a more security service that our the like And that, Gen home Nest, announced type Ring, of use about consumer example,

we charge similar significantly a And fact, think cost all edge network clip the they can and of of on that service. that and month. type customer service running neural $XX announced enable server, a at we reduce enabling they In the

think large just of AI company. I trend type new language we for for seeing Gen start is not that model a AI open So

will even major our fact, serve can current -- the other and we maybe customer come In customers all apply it down to to with.

Gen So AI our talk strategy. about

customers. to to we network sometime we're onto to CVX first clip XXXX, next type family believe from some family our revenue some our camera revenue see we that of be will engage continue believe First year, use and We see putting and we're CVXX we of all, customers going NX of a expected. And going to CVX. our as

our to major to this in solve the I is to believe we X-nanometer we process Gen the a But Gen AI AI address go more play because appropriate to going advanced to think role most architecture, importantly, think an need platform, node. I

address Of the plan not I have also processing performance, But we to solve but need DRAM do course, to think only we a just bandwidth. both.

to going the here, beneficial for Okay. with question any -- here up to company so you, you? discuss as catch there the all the there detail just detailed, What bit up about follow change with just seen automotive later, the in positive environment, obviously, competitive in how here be being A space you as this -- of year-on-year competitive one of here, me. these that end that going but the are prior lot do exemplified don't market. of a where and think pushouts in dynamics out little your manner? you kind is follow-on probably a my to up changes we've kind funnel I a for in smallest question environment know I'll you later the is to net for Maybe allowing you're

of I solution first for -- need pushout market said for both. the be a one, is And we the -- that definitely Well, price think to or are -- are to the think of all, I the looking I of the both pushback, because, them ready. software both OEMs current Two, and right, the definitely right? need have the be Ambarella

have dissipation lower our definitely and power lower battery on much a helps. bond power so we That cost solution. can costs, Our consumption, the

to that scale X software that that easily The have we think Level from Level other haven't believe we -- we solution a also the seen one I definitely is can software helpful. solution scalable is X.

is delays. of So for going definitely that solution I have we us, won't the say help to -- I think reason we but that delay the can a the

Our with Markets. next Gus question Richard Northland comes from Capital

strong on the Congratulations results.

Just cameras, that capability rolls an that to the going back uplift as provide out? you how consumer ASP AI of much would guys

Right.

because company-wide continue and and example, of the CVX all, I $XX ASP would is $XX. going average around CVX our our up for ASP, around going family ASP, it first up is say, our average -- today, So $XX, $XX,

family, the to is to $XX. me probably Our let -- CVXX $XX. between is $XX, anywhere CVX is CVXX, CVX, teens CVX high probably clear, $XX make And like between said, low between -- somewhere I anywhere

into you trend see are for our building So performance more definitely ASP. can is therefore, we up and capability chip the the driving that AI

there. to we our ASP will continue expect So growth be

that going seeing enterprise entities? imagine or I And given at would from the a the the for point, customers bunch in people. is this government are uptick deporting wondering any of to demand you your security it. just And border, cameras increase. administration, Got just potentially change securing I'm then

continue see that definitely to grow. We IoT the enterprise

that this said enterprise we way for year, next year, in always we us. grow IoT to fact, a believe healthy In continue

said. reflect continue that to that think might growth. current you what overall think environment will But security camera the I I definitely drive

to I'm no would closing CEO, remarks. questions at time. it turn Fermi to showing Wang, now I back President this and further like for

participate today looking I like everyone shows and to Thank our thank road very and forward you And to much. to on would CES. the you see different

call. Thank This participating. conference today's for you concludes

disconnect. now may You