Ambiq Micro: Demand Is "Skyrocketing" Faster Than Supply, Forcing Chipmaker to Defer Revenue Even as Growth Nearly Doubles
Q2 2026 earnings call, August 11, 2026 — revenue up 89.7% year-over-year, with management guiding to roughly 100% growth in the third quarter despite an industry-wide supply crunch
Ambiq Micro's second-quarter results confirmed what investors have suspected for several quarters: the edge AI chip maker's problem is not demand, it's capacity. Net sales came in at $33.9 million, up 89.7% year-over-year and ahead of guidance, marking the fifth consecutive quarter of sequential growth. But the more consequential disclosure came from CEO Fumihide Esaka, who told analysts that Ambiq and its customers are now structurally supply-constrained, and that the company is turning away orders it cannot fill.
Demand Outrunning Supply, With No End in Sight
Asked by Stifel's Tore Svanberg how much larger 2026 revenue could have been absent capacity limits, Esaka declined to give a number, but his answer was telling. "Our customers' demand is skyrocketing... as we speak, our demand keeps on going up," he said. "I cannot put a specific number, but I must say that a lot of additional demand is coming in week after week. We believe that this trend will continue not only second half of this year, but even into 2027." He illustrated the mismatch with an anecdote: a customer launched a new product in May with preorders running three to five times its own forecast, then asked Ambiq to deliver additional supply within a month — a request Esaka said was "physically impossible."
The company is working with foundry and OSAT partners to secure additional wafer, packaging, substrate and test capacity, but management was explicit that the second-half outlook is capped by what supply allows, not by end demand. That framing matters for the model: Ambiq is guiding to approximately $135 million in full-year net sales and roughly 100% year-over-year growth in the third quarter (to $36 million-$37 million), even while acknowledging that unmet orders represent "deferred demand" that should convert to revenue once capacity frees up, extending the growth runway into 2027 rather than pulling it forward.
Margins Holding Up Better Than Planned, Despite Rising Input Costs
Non-GAAP gross margin reached 47.2% in the quarter, up 450 basis points year-over-year, and management now expects modest year-over-year margin improvement for full-year 2026 — an upgrade from its prior guidance of flat margins, even as the company absorbs rising component and manufacturing costs tied to the broader supply squeeze. CFO Jeffrey Winzeler attributed the resilience to two levers: pricing discipline and manufacturing efficiency. "We continue to win business and price our products to extract the maximum value that we're providing to end customers," he said, adding that yield and test-time improvements as products ramp into full-scale manufacturing are offsetting cost pressure, though not fully. Unit volume, not price, remains the primary growth driver — Winzeler confirmed to UBS's Tim Arcuri that the roughly $18 million of incremental September-quarter revenue is "primarily" unit-driven, underscoring that Ambiq is not simply raising prices into scarcity but genuinely taking share.
Wearables Shift Toward Screenless, AI-Agent-Driven Devices
Founder and CTO Scott Hanson flagged a notable shift within Ambiq's largest end market. Demand is broad-based across watches, bands, rings and glasses, he said, but "one of the hot new areas is displayless trackers" — devices like smart rings, the Loop device and the new Fitbit Air that forgo screens entirely. The driver, according to Hanson, is the rise of cloud-based AI agents that interpret biosignal data on the user's behalf: "You don't necessarily need the display right there to tell you what's going on... you rely on the AI agent to analyze all your data and give you feedback about how to adjust your sleep and how to adjust your eating." He reiterated a theme from prior calls that these devices are increasingly taking on characteristics of medical instruments, a positioning that plays directly to Ambiq's ultra-low-power value proposition.
Diversification Beyond Wearables Progressing, but Denominator Effect Masks the Mix Shift
Management reiterated that revenue from medical, industrial and smart-home/building applications is on track to more than double in 2026, with design-funnel visibility suggesting these categories will represent roughly 25% or more of new device launches next year — a figure Winzeler admitted is "not as fast as one might like in these fast-growing times" simply because wearables demand is growing even faster. The use-case list Hanson cited was extensive: Holter monitors, fetal heart-rate monitors, EEG and ECG patches, seizure-detection devices, radiation dosimeters, implantable animal monitors and seabed sensing. Much of this reaches the market indirectly through module manufacturers that embed Ambiq silicon and resell to a broader industrial customer base, effectively extending Ambiq's go-to-market reach without a dedicated industrial sales force.
Product Roadmap: New SoCs Shipping, Atomiq Still Tracking to a 2028 Ramp
The newly introduced Apollo 330 Plus and Apollo 510 Light SoC families are expected to begin contributing revenue in the third quarter, with first customer devices reaching the market in early 2027. Further out, the Atomiq 110 and Apollo 340 remain on track for customer sampling in early 2027, with Hanson noting that an early Atomiq 110 development platform is already in customer hands as an FPGA and generating "a lot of useful feedback" across multiple end markets. He reaffirmed that a "meaningful ramp" for Atomiq 110 is still expected in 2028, a multi-year timeline investors should keep anchored against near-term enthusiasm.
Recurring IP Costs and an Open-Ended Path to Profitability
Arcuri pressed management on $2 million of intellectual property purchases embedded in the third-quarter operating expense guidance of $24 million-$25 million, questioning whether this was a one-off. Winzeler confirmed it is not: the $7 million-$10 million of IP spending baked into the full-year $85 million OpEx guide is "directly linked" to Atomiq 110 and Apollo 340 development and will recur as the company licenses IP for future products beyond those two. On the bottom line, the non-GAAP net loss narrowed to $1.8 million from a much larger loss a year ago, but Hanson was candid that profitability is not an near-term target: "It's too early to really talk about that tipping point of when we'll get to cash flow breakeven... we're very much focused on a growth model right now." Operating expense is guided to step back up in the third quarter as product development investment continues.
Balance Sheet Loaded for Organic Investment — and Possibly M&A
Ambiq ended the quarter with $366.8 million in cash and no debt, after raising approximately $168 million in net proceeds from an upsized June follow-on offering, bringing total net proceeds from two 2026 offerings to roughly $243 million. When ROTH Capital's Suji Desilva asked whether the stronger balance sheet opens the door to inorganic expansion, Esaka was coy but suggestive: "We cannot talk about what's our strategy on organic or inorganic growth... it could be beyond what we talked about on Atomiq. But please stay tuned. We're very excited." That comment, paired with the capital raised, signals optionality for portfolio expansion beyond the current hardware and software roadmap that investors will want to watch for in coming quarters.