Ambiq Micro Doubles Sales Outlook to $140 Million on Edge AI Demand

Ambiq Micro (NYSE:AMBQ) now expects approximately $140 million in net sales for 2026, nearly double its 2025 total and well above its initial guidance of more than $100 million, after third-quarter sales jumped 110% year over year. The company attributed the surge to demand for ultra-low-power chips in devices running increasingly sophisticated artificial intelligence at the edge.

Chief Financial Officer Jeff Winzeler said the company expects fourth-quarter sales of $43.5 million to $44.5 million, up from $38.1 million in the third quarter. The numbers landed alongside a raised full-year outlook that signals demand has outpaced even Ambiq's own earlier projections.

What drove the 110% sales growth?

Chief Executive Officer Fumihide Esaka said growth reflected higher unit volumes and average selling prices, sustained demand from existing customer programs, and new product launches across smartwatches, display-less bands and rings. The customer base broadened considerably.

• Seven customers each generated more than $1 million in quarterly sales, versus three a year earlier.
• The active customer base grew approximately 50%.
• A shift toward the Apollo5 platform is supporting higher average selling prices.

Esaka said lean channel inventories and requests for expedited orders gave management confidence that the demand reflects end-market consumption rather than inventory replenishment. He expects strong growth in 2027, though he gave no numerical forecast.

How did margins and the loss move?

Third-quarter non-GAAP gross profit rose 128% year over year to $18.6 million, while non-GAAP gross margin expanded 390 basis points to 48.7%. Winzeler said manufacturing efficiencies and a shift toward more advanced products offset higher input and supply-chain costs.

Spending climbed as the company scaled. Non-GAAP research and development expenses increased 90.1% to $13.1 million on product investment. Non-GAAP selling, general and administrative expenses rose 53.8% to $9.6 million, reflecting higher compensation and public-company costs.

The non-GAAP net loss narrowed to $1.2 million, or 5 cents per share, an improvement of $2.8 million from a year earlier. Ambiq ended the quarter with $363.5 million in cash and cash equivalents and no debt.

For the fourth quarter, management guided to:

• Non-GAAP gross margin roughly flat with the third quarter
• Non-GAAP operating expenses of $25.5 million to $26.5 million
• A non-GAAP loss of 3 cents to 9 cents per share

The expense outlook includes $0.5 million of intellectual property spending and other variable costs tied to the Atomiq110 and Apollo340 tape-outs.

Why will some demand go unfilled?

Supply remains the constraint. Ambiq has secured capacity to meet most demand given sufficient lead time, but Esaka said some fourth-quarter demand would go unfilled because orders arrived on short notice. He did not quantify the unmet demand.

Founder and Chief Technology Officer Scott Hanson said suppliers had expedited some orders, though that was not always dependable. Ambiq is also working to cut testing times and increase throughput on its own lines.

What comes after wearables?

Ambiq expects revenue outside wearables to double in 2026, though it would still represent only a mid-single-digit percentage of total sales. Esaka said that share should hold steady in 2027 before reaching low double digits in 2028, reflecting longer design cycles in those markets.

New engagements point in that direction. Ambiq recently secured a design win for an AI-enabled glass-break sensor with a global provider of cloud-based physical security products, using its Apollo hardware and HELIA AI software. It also partnered with an industrial AI company focused on asset performance and predictive maintenance. Esaka said both engagements are on track to contribute revenue in 2027.

Hanson cited potential uses in infrastructure monitoring and digital health, including machine-health monitoring, blood glucose monitors and heart monitors. Revenue from Ambiq-developed AI models is currently immaterial, he said, but could become significant, particularly among customers without extensive in-house development capabilities. One customer began deploying Ambiq's first AI model for a voice-based use case during the quarter.

On the product roadmap, the first customer devices using Apollo330 Plus and Apollo510 Lite should reach the market in early 2027. Atomiq110 remains on track for tape-out by year-end, with customer sampling expected in the first quarter of 2027. Apollo340 is also expected to begin sampling in 2027.

Ambiq develops ultra-low-power systems-on-chip and related technology for battery-powered devices, built on its Subthreshold Power Optimized Technology (SPOT), designed to cut power consumption in devices running AI workloads at the edge. The bottom line: a doubling revenue base, a narrowing loss, and a supply chain that cannot yet keep pace.