Ambarella’s Market Expansion in IoT and Automotive: A Calculated Move To Catalyze Growth?

Ambarella’s third-quarter fiscal year 2025 results illustrate both potential growth opportunities and certain challenges that the company faces. On the positive side, Ambarella reported a significant 30% sequential increase in revenue, surpassing the high end of its guidance range, driven primarily by growth in its auto and IoT business segments. This upsurge was credited to successful product launches, particularly involving its higher-priced AI processors like the CV5, which contributed to an increased average selling price and a record level of revenue from AI products. Consequently, Ambarella revised its revenue growth forecast for fiscal year 2025 from the mid-to-high teens to a range of 22% to 24%.