Ambiq Micro (NYSE:AMBQ) reported a 110% increase in third-quarter 2026 sales and raised its full-year revenue expectations, citing demand for chips used in devices with increasingly sophisticated edge artificial intelligence capabilities.
The company expects approximately $140 million in 2026 net sales, nearly double its 2025 total and above its initial expectation of more than $100 million, Chief Financial Officer Jeff Winzeler said. Fourth-quarter sales are projected at $43.5 million to $44.5 million, up from $38.1 million in the third quarter.
Chief Executive Officer Fumihide Esaka said sales growth reflected higher unit volumes and average selling prices, demand for existing customer programs, and new product launches across smartwatches, display-less bands and rings. Seven customers each generated more than $1 million in quarterly sales, compared with three a year earlier, while the active customer base grew approximately 50%.
Esaka said lean channel inventories and requests for expedited orders gave the company confidence that demand reflected end-market consumption rather than inventory replenishment. He also expects strong growth in 2027, although he did not provide a numerical forecast.
Margins Improve as Loss Narrows
Third-quarter non-GAAP gross profit rose 128% year over year to $18.6 million, and non-GAAP gross margin expanded 390 basis points to 48.7%. Winzeler said manufacturing efficiencies and a shift toward more advanced products helped offset higher input and supply-chain costs.
Non-GAAP research and development expenses increased 90.1% to $13.1 million as Ambiq invested in product development. 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 expects non-GAAP gross margin to be roughly flat with the third quarter, non-GAAP operating expenses of $25.5 million to $26.5 million and 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 associated with the Atomiq110 and Apollo340 tape-outs.
Supply Remains Tight
Although Ambiq has secured capacity to meet most demand with sufficient lead time, 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, but that was not always dependable. He said Ambiq was also working to reduce testing times and increase throughput.
Esaka said customer forecasts for 2027 remained strong and that a shift toward the Apollo5 platform was supporting higher average selling prices. He said the company would provide more specific forecasts on its first-quarter 2027 earnings call.
Beyond Wearables
Ambiq expects revenue outside wearables to double in 2026 but still account for a mid-single-digit percentage of total sales. Esaka said the share is expected to remain at that level in 2027 before reaching the low double digits in 2028, reflecting longer design cycles in those markets.
The company recently secured a design win for an AI-enabled glass-break sensor with a global provider of cloud-based physical security products. The design uses Ambiq’s Apollo hardware and HELIA AI software. Ambiq also partnered with an industrial AI company focused on asset performance and predictive maintenance; Esaka said the engagements are on track to begin contributing revenue in 2027.
Hanson cited potential uses in infrastructure monitoring and digital health, including machine-health monitoring, blood glucose monitors and heart monitors. He said revenue from Ambiq-developed AI models was currently immaterial but could become significant, particularly among customers without extensive in-house development capabilities. One customer began deploying the company’s first AI model for a voice-based use case during the quarter.
On the product roadmap, Esaka said the first customer devices using Apollo330 Plus and Apollo510 Lite are expected to 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.
About Ambiq Micro (NYSE:AMBQ)
Ambiq Micro is a semiconductor company that develops ultra-low-power systems-on-chip and related technology for battery-powered devices. Its products are designed to help devices process data while using less energy, supporting applications that require extended battery life. The company’s offerings include Apollo microcontroller and system-on-chip products, along with software and development tools. Ambiq’s Subthreshold Power Optimized Technology (SPOT) is designed to reduce power consumption, including in devices that run artificial intelligence workloads at the edge.
