California-based Ambarella is considering strategic options, including a potential sale, reported Bloomberg, citing sources.

Known for its video compression and image-processing chips, Ambarella reportedly has a market value of approximately $2.6bn.

The company has engaged bankers and reached out to potential buyers, including rivals and private equity firms, although no deal is guaranteed.

Ambarella’s chips are widely used in security systems and autonomous vehicles.

The company, led by CEO Fermi Wang, last posted an annual profit in 2017. However, it is forecasting a 28% revenue growth in 2025, driven by demand for edge AI products, which now account for 75% of sales.

Revenue for the first quarter of fiscal 2026 was $85.9m, a 57.6% increase from $54.5m in the same period of fiscal 2025.

The gross margin under US generally accepted accounting principles (GAAP) for the first quarter of fiscal 2026 was 60%, compared to 60.9% in the same period of fiscal 2025. The GAAP net loss for the first quarter of fiscal 2026 was $24.3m, or $0.58 loss per diluted ordinary share, compared to a GAAP net loss of $37.9m, or $0.93 loss per diluted ordinary share, in the same period of fiscal 2025.

For the second quarter of fiscal year 2026, ending 31 July 2025, Ambarella expects revenue between $86m and $94m.

The gross margin on a non-GAAP basis is projected to be between 60.5% and 62.0%, with non-GAAP operating expenses expected to be between $52.5m and $55.5m.

Ambarella’s products are utilised in a variety of edge AI and human vision applications, including video security, advanced driver assistance systems, electronic mirrors, drive recorders, driver/cabin monitoring, autonomous driving, and robotics applications.

Its low-power systems-on-chip offer deep neural network processing, enabling intelligent perception, fusion, and planning, along with high-resolution video compression and advanced image and radar processing.