Ambiq Micro, Inc.

How such differences are described in AMBIC's SEC filing from time to time, including the section titled Risk Factors in AMBIC's Form 10-Q for the quarter ended September 30th, 2025, filed with SEC today. And now, it's my pleasure to turn the call over to AMBIC's CEO, Kumi Azaka.

Good afternoon, everyone, and thank you for joining us today. On today's call, I will cover the key drivers for our third quarter results and our fourth quarter outlook. I will also highlight the three strategic priorities AMBICS continue to focus on before turning the call over to Jeff for financial performance. The third quarter marked a decisive step forward for Ambex, both financially and strategically. We exceeded net sales expectations, delivered one of our strongest growth margins to date, and closed the quarter with strengthened balance sheet following our IPO. These results underscore the success of our deliberate pivot towards high-value, AI-driven markets where AMBIC's ultra-low-power solution provides unique differentiation. Our design funnel is robust and increasingly diverse. Let me give you a few examples. Industrial customers are using Edge AI to monitor equipment in real-time to detect issues early and prevent costly downtime. A water management customer has reduced their cloud budget by 95% using an Apollo 3-based AI solution to analyze leaks right at the sensor. An AI-enabled headset are being deployed in retail and medical settings with the ability to listen for commands in multiple language and accents. Our Spot platform was recently recognized by Time Magazine as one of the best AI inventions of 2025 and will continue to build on this strong foundation as we introduce new energy-efficient hardware and software products. In late October, we launched Apollo 510 Light SoC series which will enable Edge AI in smaller form factors. We also launched Helia AI runtime products and advanced analytics tools to help customers deploy their AI models more easily and quickly. Our growth is accelerating with increased orders from existing customers, multiple design wins from new customers, and growing Apollo 5 production ramps. Underpinning this momentum are powerful trends in edge AI that are driving growth, reshaping markets, and redefining customer expectations. For example, consumers can now use HSA and FSA accounts to buy wearables from an increasing number of companies, including Wook. This illustrates how the line between consumer electronics and medical grade products are increasingly converging. And we believe this trend will be an additional driver of HAI demand as adoption continues to grow. Looking to the fourth quarter, we expect to deliver net sales between $18.5 and $19.5 million. This meaningfully exceeds consensus estimate of 14.2 million and would mark our strongest quarterly performance of the year. This outlook reflects the increasingly vital role AMBEX plays in enabling edge AI and the growing demand for our ultra-low power solutions. Looking ahead, we believe that 2025 represents the beginning of the much larger opportunity for AMBEC. Edge AI is one of the fastest growing segments in semiconductors, especially in our target markets of personal devices, healthcare, smart buildings, and industrial edge. To fully capture the edge AI opportunity, we are advancing three strategic growth priorities. First, expand aggressively into new edge AI markets. Second, introduce new products to drive the power and performance of edge AI solutions. And third, establish an IP licensing variant for Spot. Let's look at each one in more detail. First, we're accelerating our expansion into high-impact, high-growth edge AI markets. including healthcare, industrial, and intelligent spaces like smart homes and buildings. We have created multiple edge AI solutions that are purpose-built for these markets. Notably, both Apollo 330 Plus and Apollo 510 Light are attracting additional interest. We are engaged with customers who are looking to enable more advanced AI and longer battery life across variety of applications from smart rings to smart agricultural devices. Going forward, we continue to prioritize innovations as we develop more derivative products designed to support further expansion into these high-value edge AI markets. Second, we are advancing our product roadmap to drive the power and performance of our Edge AI solutions. Our Polar 5 family is unlocking a new generation of devices that performs advanced Edge AI functions. Our customers are introducing features like speech recognition, health monitoring, and predictive sensing, all powered by the Spot platform. We are also pleased to share that a major customer plan to launch new Apollo 5 based platform in 2027, serving as another driver of our future revenue. Building on Apollo 5, we expect our upcoming atomic platform will deliver a major leap forward in edge AI with NPU 12 nanometer manufacturing and built-in DRAM and GPU, we see meaningful opportunity to enable even higher performance Edge AI applications. Tomek is in active development and already drawing strong interest from several major high-volume customers. We are excited about how this product will enable a new wave of Edge AI innovation from wearables and health devices to air glasses and security cameras. We are also speeding customer adoption with tailored software solutions designed to lower technical barriers, shorten production time, and reduce power performance trade-offs. Our software team is moving quickly, delivering a steady cadence of new products alongside weekly updates that introduces new features and addresses customer feedback. We're driving new use cases powered by Spot's ultra-low energy efficiency. Increasingly, our customers are incorporating Edge AI to reduce noise, isolate voices, and enhance speech clarity in real time. These capabilities extend across products, including smartwatches, wireless microphones, headphones, and hearing aids. Similarly, customers are incorporating HAI voice recognition to enable instant, reliable voice control for wearables, smart home devices, and industrial tools, helping protect data privacy and extending battery life. And for sensors, AI-based compression helps customers make sense of a huge amount of data. This enables smarter failure detection in industrial machines and more intelligent monitoring of smart grid at every level, from infrastructure to homes. These examples have only deepened our conviction that the new atomic SOC with an NPU will be a catalyst for the next generation of Edge AI devices. For example, next-gen smart glasses will run multiple Edge AI tasks, from eye tracking, gesture recognition, to real-time object identification. Cameras will operate without cloud connectivity or frequent battery replacement, yet still detect motion, classify objects, and identify potential threats. And future wearables will evolve into intelligent companions that understand context, respond to follow-up questions, and provide personalized insight in real time. These emerging use cases also set the stage for our third strategic priority, transforming Spot into licensable platforms. We're building the foundation now and expect commercialization within the next three to five years. In support for these three priorities, we are investing purposefully in R&D and SG&A with a focus on product innovation and enhanced sales and marketing capabilities. The proceeds from our IPO are funding these efforts laying the foundation for sustainable long-term growth as we unlock the full power of our differentiated technology. With that, I will turn it over to Jeff to discuss the financials.

Thank you, Humi, and good afternoon, everyone. Before discussing third quarter results, I want to take a moment to frame 2025 performance in the broader context of 2024 strategic repositioning. We've made a deliberate decision to diversify away from the low margin mainland China customers to prioritize high value markets and customers where energy efficiency and edge AI performance serve as key differentiators. This change has translated to year-to-date 2025 results that reflect higher ASPs, stronger margins, and increased gross profit dollars on 7% lower net sales. Our remaining China business reflects a small, deliberate presence in the market to support select OEM customers. Now turning to our third quarter results. We achieved non-GAAP gross profit of 8.1 million, an increase of 16.8% year over year. Non-GAAP gross margin expanded by more than 10 percentage points of 44.8%, all on net sales of 18.2 million, down 10.4% year over year, which is reflective of our strategy to prioritize non-mainland China opportunities. In the quarter, only 6.7% of net sales were driven by customers in mainland China, down 50% in the third quarter of 2024. Sequentially, net sales increased 1.6%, driven by continued strong demand from key customers. Non-GAAP gross profit dollars increased 6.6% sequentially with non-GAAP gross margin expansion of 207 basis points driven by stronger product mix. Moving to operating expense, we continue to make strategic investments to support commercial expansion for our existing Apollo and next generation atomic families. The breakdown of third quarter non-GAAP operating expense is as follows. Non-GAAP R&D expense was $6.9 million, down 7.3% year over year, largely due to product development timing. Non-GAAP SG&A expenses were $6.2 million, up 12.3% year over year, largely due to public company costs. Other income was $1 million, up $400,000 year over year, due to interest income earned on IPO proceeds. Third quarter non-GAAP net loss attributable to common stockholders was 4 million, a 1.9 million improvement sequentially, and a 1.8 million improvement year over year. Net loss per share attributable to common stockholders was 22 cents on a pro forma basis. We ended the quarter with no debt and 146.5 million in cash and cash equivalents, reflecting the proceeds from the IPO. Our strengthened cash position provides the flexibility to fund growth initiatives and support our strategic priorities. Now turning to our outlook. For the fourth quarter of 2025, we expect revenue in the range of $18.5 million to $19.5 million, with non-GAAP loss per share attributable to common stockholders to be in the range of $0.44 to $0.34. This guidance includes increased variable expenses associated with higher revenues and a non-cash accounting adjustment to reclassify certain Q4 intellectual property costs from capital expenditures to operating expenses. While we'll provide formal 2026 guidance on our fourth quarter call, I want to offer some perspective to help frame the expectations for the trajectory of our performance over the next several years. First, with the strategic repositioning largely complete, we've reshaped the business to drive higher margins while unlocking a broader set of growth opportunities and view 2025 as the baseline from which to measure our progress going forward. Second, we continue to see a path of continued revenue growth and gross margin expansion in 2026 and 2027, driven by multiple generations of Apollo products already in production and derivative offerings of these products designed to reach additional customers and markets. This disciplined expansion of our existing product portfolio enables us to serve a broader range of customer needs with limited incremental investment, enhancing both operating leverage and capital efficiency. In parallel, we're concentrating significant architecture, hardware, and software engineering resources on developing the Atomic family of products. With multiple generations of Apollo contributing today and atomic revenues expected to contribute meaningfully in 2028, we believe we are well positioned to accelerate revenue growth and margin expansion. We are executing on our business plan with focus to drive both top line growth and margin expansion to deliver significant long-term value creation. I'll now turn the call back over to Hume before we open the call to Q&A.