Ambarella, Inc.

Thank you for standing by and welcome to the Umbrella's second quarter fiscal year 2027 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Louis Gerhardy, Vice President, Corporate Development. Please go ahead, sir.

Thank you, Jonathan, and good afternoon. Thank you for joining our second quarter fiscal year 2027 Financial Results Conference call. The call with me today is Dr. Feng-Ming Wang, 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 of fiscal year 2027. 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. We are 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 who filed with the SEC. Access to our second quarter fiscal year 2027 results press release, transcripts, historical results, SEC filings, and the 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. Before starting the call, we hope to see you at one of the following investor events that we have scheduled in our third quarter. First, on September 8th, we'll host a D&B bus tour at our offices in Santa Clara. September 9th, we'll be at Citi's 2026 Global TMT Conference in New York. September 15th, we'll participate in Piper Sandler's Growth Frontier Conference in Nashville. September 16th, We will host Sanford Bernstein's 8th Annual West Coast Semiconductor Bus Tour. And during the week of October 4th, we will have a European NDR with cities to be determined. Also available to investors during the third fiscal quarter will be our booth and presentations at the AI Infrastructure Summit in Santa Clara on September 15th to 17th. We hope to see you there. where we will lead the physical AI track with a number of edge AI and robotics demos in our exhibit area. Fermi's now going to provide a business update for the quarter. John will review the financial results and outlook, and then the three of us are available for your questions. Fermi?

Thank you, Louis, and good afternoon. Thank you for joining our call today. Driven by a new record level of AGI revenue, we reported fiscal Q2 revenue slightly above the midpoint of our guidance with non-GAAP EPS of $0.18 and with guidance for seasonal fiscal Q3. By product, we are in the midst of a very steep revenue ramp with our financial leader CB75 and CB72 AISOCs and by market, we have sequential growth in both IoT and OTO with automotive revenue driven by commercial vehicles. The market is increasingly recognizing the strategy value of AGI, as well as our AGI and the fiscal AI platform leadership. We continue to make significant progress with the expansion of our AGI platform leadership, including new go-to-market strategies and the engineering and market development for a number of new higher value SOCs, some of which extend our reach into entirely new markets. We remain optimistic about the long-term secular growth opportunities in the age AI market, and our R&D priorities are aligned with both the physical AI markets that represent a vast majority of our total revenue today, as well as the robotic and the age infrastructure markets that are in the early stages of developing. Altogether, our technology, product, and new go-to markets combined with the significant secular growth in AGI are increasing our five-year serviceable market forecast today. Before I review our new market forecast, I would like to step back and discuss the market environment we are in. Demand signals for the application of AGI remain strong. At the same time, it is obvious that memory vendors and the entire supply chains are prioritizing AI data center demand, which is resulting in raising supply chain costs for everyone. Surging memory price and the scarcity of a supply are impacting the entire industry. Related to this, we are providing significant assistance to customers who are attempting to create a wide variety of workarounds to the memory situation. And Verilock itself is also facing rising supply chain costs, and we plan to pass this cost to our customers to maintain our long-term gross margin target of 59% to 62%. Returning to our rolling five-year serviceable market update, I would like to remind you of our methodology. Our SEM for any given year is based on the products we expect to have available for production in that year, overlaid on the total available market projections from a number of third-party research firms. So our five-year SEM captures any revenue-generating products announced or unannounced on our roadmap in the next five years. Our prior five-year rolling sum was announced in May 2025 and projected a five-year fiscal year 26 to fiscal year 31 compounded annual growth rate of about 18%, with auto representing a slightly higher proportion over the terminal year. Our new five-year rolling sum from $8.5 billion in fiscal year 2027 to $22.9 billion in fiscal year 32 represents a CAGR of about 20% with IoT markets now representing about 70% of the terminal year. While there are several factors behind the strong growth and the underlying mixed change, I will focus on the most important change. In the last year, it has become clear that operational efficiency or the ability of an enterprise to generate more revenue and or to reduce expenses is likely to be a key driver of our emerging edge infrastructure business. Operational efficiency at the edge refer to the use of open weight and the distilled models running on on-premise inferencing hardware in contrast to the large frontier models that run in the cloud. Benefits of this approach include reduced latency Data protection, privacy, lower bandwidth costs, and high reliability. Target markets include security, retail, lodging, logistics, healthcare, and more. The on-premise operational efficiency use case has emerged with growing expectations for sustainable high-volume inferencing and increasingly for agentic AI and physical AI application that can perceive The key question has become, who can help the enterprise lower the cost per useful AI inferencing outcome? This is where Umbrella's superior performance per watt portfolio kicks in, providing the efficient edge intelligence needed to enable this next-generation authentic and physical AI workload at scale. With this perspective, in the last year, we have several new products in development targeting on-premise hardware or what is commonly called edge infrastructure. As you know, we already have our NY655 AI SoC in the market, and we have additional unannounced AI SoCs in development. We also are implementing a standalone AI accelerator product line targeting the edge infrastructure market. Together, this new H infrastructure product, both AI SOCs and the standalone AI accelerators, represent the single most important reason for the upward revisions in our scene. Before I introduce our first standalone AI accelerator, allow me to be clear about our terminology. We define HAI SOC as one integrating all of the accelerated computing functions into a single chip. Camera perception, AI accelerators, CPUs, encoding, and so on. We define an AI accelerator as an AI processor that is not camera-specific and targets a wide variety of digital or physical modalities. We believe this type of multi-modality is critical for each infrastructure applications by target operational efficiency. While not formally announced, I would like to preview one of the new AI accelerators that will anchor this new product category for us with another well-defined, well-performed product already behind it. We refer to this new AI accelerator as X7. This XOC is sampling now and expected to land initial design with the H infrastructure application where it can serve as an AI coprocessor for host processors such as ARM or x86. Together with our new product thrust, expanded market reach, and SAM, we expect our revenue growth to be supported with two incremental go-to-market strategies. First is the multi-step establishment of indirect sales channel, and the second is a semi-cousin chip strategy, both of which will augment our existing direct sales efforts. As a reminder, virtually all our revenue is generated by our direct sales teams, and today I am excited to announce two material partnership agreements to develop our indirect sales channel. Combined, these two partnerships plan to drive a significant amount of incremental revenue over the next seven years through customers who have largely been unserved by us so far. First, today we announce Embraer Strategy Partner with Capgemini. designed to help enterprises adopt AGI and the physical AI solution faster by reducing the complexity of moving from evaluation to scalable deployment. By combining Embraer's power-efficient AI software and the platforms we can optimize global engineering, system integration, and industry expertise. The partnership aims to help customers improve operational efficiency, enhance real-time decision-making, and deploy intelligent In our second partnership to develop our indirect channel, today we also announced a seven-year agreement with Magnica, a leading global technical distributor. Magnica will support both American's physical AI and the new age infrastructure products by developing and supporting an independent software vendor ecosystem. including onboarding, technical integration support, and joint go-to-market programs. With this ecosystem in place, Embraer's solution can be offered as individual components or as a complete bundle for multiple edge AI vertical markets, including video analytics, smart city, edge computing platforms, robotics, industrial IoT, intelligent transportation system, retail analytics, security, and surveillance. I want to emphasize the importance of the indirect channel to serve small and mid-sized customers and highly fragmented market like robotics. However, the indirect channel is also critical to support our more complex AISOC targeting the edge infrastructure where a broad network of partners is vital for our long-term success. Meaningful revenue is expected in two to three years and will grow as we introduce new products for the market. Our second incremental go-to-market is our semi-custom opportunity, which can enable us to gain more shares in existing markets and switch into new markets. We have our first semi-custom project underway, the 2nm CVA SOC, which is expected to generate first-part production revenue in fiscal 2028. And we are in discussion with other companies for additional semi-custom chip projects. Our representative customer engagement this quarter once again demonstrates Embraer's extending traction across a broad set of applications, robotics, automotive, security, trail cameras, and smart video intercoms. With a CD72-based quadruped robot validates Embraer's high-resolution, high multi-camera HDI capabilities in robotics. A major S&P 100 communication equipment company, announced an AI-based enterprise video intercom further extending our reach in the emerging access control market. We landed another win with Moultrie for AI trail cameras and a win with Canon, Suprema, IDIS, and C Pro for the strength, strengthen our AI monitoring pipeline with CV75, CV72, CV5 wins using our own AI ISP software. Through Tier 1s, we had two in-cabin vehicle wins, with Tier 1s in China, one for driver monitors and the other for more complex camera monitor systems used in Audi and VW vehicles. The breadth of these wins and the wide variety of corresponding AI workloads highlight the programmability and flexibility in both our AI SOCs and our Cooper development platform. This ease of use is facilitating the onboarding and expansion of our indirect sales channels. Very few competitors can offer this type of proven platform with more than 15 million HAI SOCs shipped. In conclusion, I've been very excited about the overall growth opportunity of the HAI market and our company's specific growth drivers put us in a unique position to benefit. And Broggi is expanding beyond low-power AISOC to deliver the complete foundation for physical AI, and we are becoming a full-stack physical AI platform provider. With that, I will now turn it to John.