Ambarella, Inc.

Hello, and welcome to Umbrella's second quarter fiscal year 2026 earnings call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 11 on your telephone. You will then hear an automatic message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to turn the conference over to Louis Gerhardt, Vice President of Corporate Development. You may begin.

Thank you, Tawanda. And good afternoon. Thank you for joining our second quarter fiscal year 2026 financial results conference call. On the call with me today is Dr. Fermi Wong, President and CEO, and John Young, CFO. The primary purpose of today's call is to provide you with information regarding the results for our second quarter fiscal year 2026. The discussion today and the responses to your questions will contain forward-looking statements regarding our projected financial results, financial prospects, market growth, and demand for our solutions among other things. These statements are based on currently available information and subject to risks, uncertainties, and assumptions. Should any of these risks or uncertainties materialize, or should our assumptions prove to be incorrect, our actual results could differ materially from these forward-looking statements, and we're under no obligation to update these statements. These risks, uncertainties, and assumptions, as well as other information on potential risk factors that could affect our financial results, are more fully described in the documents we file with the SEC. Before starting the call, I'd like to summarize our planned investor events for our third fiscal quarter. On September 3rd, we'll participate in Citi's global TMT conference in New York City. September 4th, we'll host KGI Securities bus tour in Santa Clara. On September 16th, we'll host Bernstein's seventh annual West Coast semiconductor bus tour at our office in Santa Clara. And on September 18th and 19th, Craig Hallam will host us on a Midwestern NDR. Access to our second quarter fiscal year 2026 results, press release, transcripts, historical results, SEC filings, and a replay of today's call can be found on the investor relations page of our website. The content of today's call, as well as the materials posted on our website, are Amborella's property and cannot be reproduced or transcribed without our prior written consent. Fermi will now provide a business update for the quarter. John will review the financial results and outlook, and we'll be available for your questions after that. Fermi?

Thank you, Louis, and good afternoon. Thank you for joining our call today. Our strong momentum continued in our second quarter with revenue over $95.5 million, increasing 11% sequentially above the high end of our prior guidance range of $86 to $94 million. The second quarter results represent the fifth consecutive quarter of record HAI revenue. Furthermore, I am proud to say the midpoint of our new third quarter and the full fiscal year 2026 revenue guidance range represents all time record quarterly and the fiscal year total revenue for umbrella. In our May 29th earning call, we increased our fiscal 2026 revenue growth estimate to a range of 19% to 25%, or approximately $348 million at the midpoint. With a strong order book, as well as our expectation for both our total unit ship and our average selling price to increase in fiscal 2026, we are increasing our fiscal 2026 revenue growth estimate to a range of 31% to 35%, or approximately $379 million at the midpoint. Needless to say, it is a very exciting time for Umbrella. Fundamentally, after a multi-year period of significant AGI R&D investment, our broad product portfolio enabled us to address a rising breadth of AGI applications. This increased breadth not only drives our overall unit demand, but we continue to see very strong demand for our new 5-nanometer AI SOCs in both our existing and emerging AGI markets. which is driving our firm-wide average AI spend price higher. I would like to double-click on the rising breadth of H-AI applications I mentioned and focus on three applications we see as rapidly emerging for us, portable video, robotic aerial drones, and the H infrastructure. Our H-AI revenue began in the enterprise security market more than five years ago, And it was followed by an incremental AGI application in a small home, automotive safety, and the telematics market, all of which are continuing their unique growth trajectories. Now this year, the year on top is the rising demand for our AGI SoCs from the portable video market, including action camera, panorama cameras, and the body-worn cameras. In addition to portable video market, we expect to commence high volume shipment into the robotics market by the end of this fiscal year. The unit volume in the robotic market is highly fragmented by application, phone factors, and the customers. But our technology products and roadmap have enabled us to win one of the early high volume robotic application, partially autonomous aerial drones. Portable video and robotic boats represent new emerging HAI applications in Umbrella's traditional market for IoT endpoints. Today, we are also announcing our first win in the HAI infrastructure with our N1655 SoC. This win is yet another example of the expanding breadth of our HAI business, and I am encouraged by the interest in our N1 HAI infrastructure roadmap from both new and existing customers. In the automotive autonomy market, the largest subset of the robotic market, we are actively bidding on OEM projects with our CB380 family of advanced 5 nanometer central domain controller for L2 plus to L4 applications. While offering significant lifetime revenue opportunities, the lower frequency of award decision, OEM program delays, and a longer time to revenue are causing our other AI applications to emerge more rapidly. Nevertheless, we remain highly focused on developing this business, and we will provide updates on our progress as wins occur. I will now describe some representative customer engagement during the quarter, beginning with the two key customer design wins that validate our future vision and strategy. In a rapidly growing robotic drone market, Arashi Vision, also known as Insta360, launched the world's first 8K 360-degree drone on this new anti-gravity brand. Powered by our CV5 AI SoC, this drone features on both the top and the bottom, enabling 8K 360-degree video recording. The AI capacity in CV5 is fully utilized in this partially autonomous drone, and our product portfolio will enable the drone market to evolve rapidly to higher levels of autonomy. The anti-gravity A1 is set to launch globally in January 2026. We are proud to see Arash very successfully differentiate their diverse portable video and now robotic aerial drone portfolio with AI features, such as neural net image signal processing, AI editing, and gesture control, leveraging our AI SoCs. A majority of Arashi's products are based on umbrella SOCs, and approximately 70% of Arashi's shipments are exported. In the emerging AGI infrastructure market, a global networking customer is loading out a compact on-premises network AI appliance with multi-modal intelligence at the event level built on our N1655 AI SOC. This appliance will add Large language model powered, natural language search, and we were selected because of power efficiency, network bandwidth saving, and low bill of material cost. This is a great example of one of the green shoots I mentioned earlier. There are several other use cases being evaluated on our N1655 SoC. Now automotive safety, ADAS, and the telematics business. I would like to share some key customer wins during the quarter. Sensara, a leading provider of a commercial fleet of telematics solutions, has introduced its AI multi-cam platform. Based on Embraer's CV72 AI SoC, Sensara's AI multi-cam delivers live 360-degree visibility and real-time risk detection alerts on an in-cap monitor with up to four times auxiliary HD camera updates. It is a great design win for CV72 that demonstrates more camera inputs and advanced AI features on a single SoC. Audi is utilizing CV22FS for their left-right email functions in the E5 model, initially in the China market. It enables them to provide intelligent context adaptive viewing mode on highways, parking, turning, and lane changes. with dynamic image processing and display enhancement functions. Also in the mirror market, BAIC Steleto ACE9 is utilizing CV22FS for their rear view electronic mirror. They note that AI-aided detection via camera inputs help them cut down blind spots by up to 60%. And a leading Chinese OEM, well utilize our CV22 SOC for their 8 megapixel sensor designed specifically for the level 2 front ADAS functionality. A key capability they are enabling is small target detection at the long range. In the enterprise security segment, Honeywells in India has launched their 50 series enterprise security cameras in 3 megapixel and 5 megapixel resolutions based on our CV25 SOCs. India is a fast-growing market with a drive for made-in-India products, creating new customer opportunity for us. In the small home market, one of our long-term customers in the U.S. has leveraged our H32 SoCs to build multi-sensory, multi-model AI products available in the retail outlets today. They have built a nursery device integrating video monitoring two-way intercom, white noise generator, and an air quality sensor, They have also built a garage device that features carbon monocytes and heat detection, security camera, and the intercom functionality. Also in the small home market, Natamo launched their indoor camera advanced product that is built on H6L SOC in the European market. As you can see from this representative customer engagement, we continue to build design wings momentum in our existing AGI endpoint applications. And we continue to successfully address incremental AI applications, such as robotic aerodromes and AI infrastructure as the AI market breadth expands. Having shipped more than 36 million AI processors to hundreds of customers who have successfully ported hundreds of advanced customer AI models to our SOCs, there should be no doubt that Umbrella is a leader in AGI. AGI is expected to represent about 80% of our total revenue this year. We are focusing exclusively on the unique needs of the AGI market, and we continue a rapid pace of innovation. In conclusion, I would like to summarize the key points covered today. First, we deliver Q2 results above the high end of our prior guidance, and we increased the midpoint of full-year fiscal 2026 revenue guidance by 9%. Second, the breadth of our age AI applications we are successfully addressing is expanding. As seen with our ongoing ramp in a variety of portable video applications and the anticipated production ramp for robotic aerial drones and age infrastructure. Third, the growth of our age AI This is over-occurring with our higher-priced AGI SOCs, supporting the anticipated growth in our ASP. Last, we are exclusively focused on the unique requirements of the AGI market, and we remain an established AGI market leader who continues to innovate at the right pace. Now, John will now discuss the Q2 results and the Q3 outlook in more detail.