Ambiq Micro, Inc.

The results of operations data in the following tables for the periods presented have been derived from the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Comparison of Three and Six Months Ended June 30, 2026 and 2025

The following table summarizes our results of operations for the three and six months ended June 30, 2026 and 2025:

The following table summarizes the results of our operations for the three and six months ended June 30, 2026 and 2025 as a percentage of net sales. All percentage amounts were calculated using the underlying data:

Net Sales

Net sales increased $16.0 million, or 89.7%, to $33.9 million for the three months ended June 30, 2026 and increased $25.4 million, or 75.5%, to $59.0 million for the six months ended June 30, 2026 compared to the corresponding prior year periods. The growth was broad-based across our major customers primarily attributable to new product launch ramps coupled with utilization of our newer product offerings. Furthermore, we introduced a new major customer product launch which led to significant sales in both the three and six months ended June 30, 2026.

Gross Profit and Gross Margin

Gross profit increased $8.1 million, or 112.9%, to $15.3 million for the three months ended June 30, 2026 and increased $10.6 million, or 68.1%, to $26.2 million for the six months ended June 30, 2026 compared to the corresponding prior year periods. The increases were primarily due to an increase in the average selling price for our products coupled with an increase in demand for our products due to new product launch ramps.

Gross margin increased 490 basis points to 45.0% for the three months ended June 30, 2026 compared to the corresponding prior year period, primarily due to an increase in average selling price for our products. Gross margin decreased 190 basis points to 44.4% for the six months ended June 30, 2026 compared to the corresponding prior year period, primarily due to a non-monetary gain of $1.6 million in the first quarter of 2025, which did not repeat in 2026, partially offset by an increase in the average selling price for our products.

Average selling price increased for the three and six months ended June 30, 2026 primarily due to our customers transitioning to our new products.

Research and Development Expenses

Research and development expenses increased $5.2 million, or 58.9%, to $14.1 million for the three months ended June 30, 2026 and increased $9.4 million, or 53.4%, to $27.0 million during the six months ended June 30, 2026 compared to the corresponding prior year periods. The overall increases in research and development expenses were primarily attributable to increased intellectual property development and technology spend in addition to higher contractor and compensation-related costs, including both variable compensation for our internal incentive compensation program and share-based compensation expenses associated with RSU grants after our IPO. For the three and six months ended June 30, 2026 we hired an additional 15 and 23 employees, respectively, in line with our development plans.

Selling, General and Administrative Expenses

Selling, general and administrative expenses during the three months ended June 30, 2026 increased $2.8 million, or 39.4%, to $9.9 million compared to the corresponding prior year period. The increase was primarily due to higher share-based compensation expenses associated with RSU grants after our IPO, as well as higher variable compensation for our internal incentive compensation program, internal and third-party sales commissions, which increased with higher revenue earned during the quarter, and incremental costs associated with our ongoing obligations as a public company, including audit, legal and compliance-related fees.

During the six months ended June 30, 2026, selling, general and administrative expenses increased $4.1 million, or 26.4%, to $19.6 million compared to the corresponding prior year period, primarily attributable to the above items, partially offset by the absence of non-capitalizable IPO expenses incurred during the first quarter of 2025.

Other Income, Net

During the three months ended June 30, 2026 other income, net increased $1.3 million, or 412.1%, to $1.6 million and increased $2.4 million, or 303.9%, to $3.1 million for the six months ended June 30, 2026 compared to the corresponding prior year periods. The increases were primarily attributable to higher interest income earned on greater cash proceeds raised through our IPO and subsequent follow-on offerings in January and June 2026.

Provision for Income Taxes

We recorded minimal income tax expense for the three and six months ended June 30, 2026 on a pre-tax loss of $7.1 million and $17.3 million, respectively, yielding an effective tax rate of 0.01% and 0.02%, respectively. Our effective tax rate was lower than the U.S. statutory rate of 21%, principally due to the change in valuation allowance. We recorded minimal income tax expense for the three and six months ended June 30, 2025 on a pre-tax loss of $8.5 million and $16.8 million, respectively, yielding an effective tax rate of 0.17% and 0.11%, respectively.

Liquidity and Capital Resources

We have funded operations primarily through equity financings and cash from operations. We have historically incurred losses and negative cash flows from operations and anticipate continuing to incur losses as we heavily invest in product development. During the six months ended June 30, 2026, we reported a net loss of $17.3 million and had an operating cash flow deficit of $20.7 million. As of June 30, 2026, we had cash and cash equivalents totaling $366.8 million and accumulated deficit of $374.0 million.

In January 2026, we completed a follow-on offering, which resulted in net proceeds of $75.3 million after deducting underwriting discounts and commissions of approximately $5.0 million and offering expenses of approximately $1.5 million.

In June 2026, we completed a follow-on offering, which resulted in net proceeds of $167.9 million after deducting underwriting discounts and commissions of $10.8 million and offering expenses of approximately $0.7 million.

In addition to the net proceeds from our IPO and our subsequent follow-on offerings, we continue to improve our operating margins through revenue growth and strategic transition to more profitable opportunities. Our principal use of cash is to fund our operations, invest in research and development to support our growth and other general corporate needs.

We believe that our cash on hand and anticipated cash from operations will be sufficient to finance our operations for at least the next twelve months from the date of this Quarterly Report on Form 10-Q.

Our future capital requirements will depend on many factors including our growth rate, the timing and extent of our selling, general and administrative and research and development expenditures, and the continuing market acceptance of our products. Additionally, we anticipate continued additional costs associated with being a public company. If our current financial resources are not sufficient to satisfy our liquidity requirements, we may be required to seek additional financing. If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Debt financing, if available, may contain covenants that significantly restrict our operations or our ability to obtain additional debt financing in the future. In the event that we need to borrow funds or issue additional equity, we cannot guarantee that any such additional financing will be available on terms acceptable to us, if at all. If we are unable to raise additional capital when we need it, our business, results of operations and financial condition would be adversely affected.

Cash Flows from Operating, Investing and Financing Activities

Changes in the net cash provided by (used in) our operating, investing and financing activities for the six months ended June 30, 2026 and 2025 are set forth in the following table:

Operating Activities

For the six months ended June 30, 2026, cash flows used in operations was $20.7 million, primarily driven by the cash components of our net loss and $13.9 million of unfavorable changes in working capital driven primarily by building $12.4 million in inventory, partially offset by $1.4 million due to the timing of our sales to customers and payments to our vendors.

For the six months ended June 30, 2025, cash flows used in operations was $10.5 million. Operating cash flow generated during the six months ended June 30, 2025 was related to the cash components of our net loss and approximately $2.0 million of favorable changes in working capital driven primarily by $0.8 million of lower inventory purchases offset by approximately $2.8 million due to the timing of our sales to customers and payments to our vendors.

Investing Activities

For the six months ended June 30, 2026, we used $5.9 million in cash for investing activities, which related to $5.1 million of technology investments in intangible assets and $0.8 million in capital expenditures.

For the six months ended June 30, 2025, we used $3.1 million in cash for investing activities, which related primarily to $2.7 million of technology investments in intangible assets and $0.5 million in capital expenditures.

Financing Activities

For the six months ended June 30, 2026, we generated $253.0 million related to financing activities, driven by proceeds from our follow-on offerings of $243.9 million, net of deferred offering costs, underwriting discounts and commissions, proceeds from the exercise of stock options of $6.1 million and proceeds from the exercise of warrants of $3.0 million.

For the six months ended June 30, 2025, we generated approximately $0.2 million in financing activities, driven primarily by proceeds from the exercise of stock options.

Non-GAAP Financial Measures

We use non-GAAP net loss and non-GAAP gross profit, both non-GAAP financial measures, to help us make strategic decisions, establish budgets and operational goals for managing our business, analyze our financial results and evaluate our performance. We define non-GAAP net loss as our net loss adjusted to exclude expenses not directly attributable to the performance of our operations, such as income taxes, depreciation and amortization, stock-based compensation, gain on nonmonetary transaction, severance costs, IPO-related transaction costs, and warrant valuation. We define non-GAAP gross profit as our gross profit adjusted to exclude expenses not directly attributable to gross profit, such as depreciation and amortization, stock-based compensation and non-monetary transactions.

We present the non-GAAP financial measures non-GAAP net loss and non-GAAP gross profit in this Quarterly Report on Form 10-Q because we believe these non-GAAP financial measures provide additional tools for investors to use in comparing our core business and results of operations over multiple periods with other companies in our industry, many of which present similar non-GAAP financial measures to investors. However, our presentation of non-GAAP net loss and non-GAAP gross profit may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated. Non-GAAP net loss and non-GAAP gross profit have limitations, and should not be considered as the sole measures of our performance and should not be considered in isolation from, or as a substitute for, net loss and gross profit calculated in accordance with GAAP.

Some of these limitations are that non-GAAP net loss and non-GAAP gross profit:

•

do not reflect incomes taxes, which are necessary costs incurred in connection with our operations and reduce cash available to us;

•

exclude depreciation and amortization, and although these are non-cash expenses, the assets being depreciated may have to be replaced in the future, increasing our cash requirements;

•

do not reflect stock-based compensation expenses, which represent a significant cost of attracting and retaining qualified employees, and excluding them may underestimate the true economic cost of our workforce;

•

do not reflect gain on nonmonetary transactions;

•

do not reflect severance costs which represent costs associated with reductions in force;

•

exclude IPO and related transaction costs which represent non-recurring professional fees for advisory, legal, accounting, valuation and other professional or consulting services incurred related to the IPO; and

•

exclude warrant valuation costs, which represent the mark-to-market valuation of liability-classified warrants.

Because of these limitations, we consider, and you should consider, non-GAAP net loss and non-GAAP gross profit alongside other financial performance measures, including net loss and gross profit and our other GAAP results. A reconciliation of our non-GAAP net loss to net loss and non-GAAP gross profit to gross profit, the most directly comparable financial measures stated in accordance with GAAP, are provided below. Investors are encouraged to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measure to their most directly comparable GAAP financial measure.

The following tables reconcile the most directly comparable GAAP financial measure to each of these non-GAAP financial measures.

Non-GAAP Net Loss:

During the six months ended June 30, 2025, the Company received nonreciprocal transfer of assets from a vendor. The total fair value of nonmonetary transactions recorded during the first six months of 2025 was approximately $1.6 million, which was recognized as a gain in cost of sales.

Non-GAAP Gross Profit:

Critical Accounting Policies and Estimates

Our discussion and analysis of financial condition are based upon the consolidated financial statements of this business, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to bad debts, revenue reserves, inventory valuation, stock-based compensation, taxes on income, warranty obligations and contingencies and litigation. We based our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and such differences may be material to the financial statements. We believe that the accounting policies and estimates described below are the most meaningful to our operations or require management’s most difficult, subjective or complex judgments. Judgments or uncertainties affecting the application of these policies may result in materially different amounts being reported under different conditions or using different assumptions. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our financial condition and results of operations. Our significant accounting policies are described in Note 1 to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

There have been no material changes to our critical accounting policies and estimates as described in our Annual Report on Form 10-K.

Recently Issued and Adopted Accounting Pronouncements

For more information regarding recently issued accounting pronouncements, see Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Controls and Procedures

We are not currently required to comply with all the provisions of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act). Our management is not required to certify as to the effectiveness of our internal control over financial reporting until our second annual report on Form 10-K following our IPO. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company will our independent registered public accounting firm be required to provide an attestation report on the effectiveness of our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement. However, we do have internal controls in place in key areas of risk.

Emerging Growth Company and Smaller Reporting Company Status

We are an “emerging growth company,” as defined in the JOBS Act, enacted in April 2012. We intend to take advantage of certain exemptions under the JOBS Act from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.

We will remain an emerging growth company and may take advantage of these exemptions until the earliest of: (i) December 31, 2030; (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion; (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year; or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.