Cambrian 2025 Annual Report Review

Source: Yiliu Investment Research Notes

Disclaimer: This article is for research and discussion purposes only and does not constitute any investment advice. The stock market carries risks; decisions should be made independently. Build your own logical framework and risk control system. Do not follow the crowd blindly.

The earnings season has arrived. Last week, I focused on developing skills to help AI tools read financial reports. I created seven skills aimed at better extracting data from financial reports. The approach is straightforward: first, preprocess PDF reports with Python to extract key information, then structure it into markdown or JSON data, and finally feed the processed data into a new skill to generate an AI review report. The reason for developing so many data extraction skills is to improve accuracy, as directly parsing PDFs with AI sometimes doesn’t yield good results.

Below is a review of Cambrian’s annual report:

1. Financial Summary: Revenue Surges 4.5x, First Profitable Year

Cambrian’s 2025 financial performance is impressive, with total revenue reaching 6.497 billion yuan, up 453.21% year-over-year, marking rapid growth. More importantly, the company achieved its first full-year profit, with net profit attributable to shareholders of 2.059 billion yuan, and non-recurring net profit of 1.77 billion yuan, indicating a transition from a period of heavy R&D investment to a phase of harvest.

Regarding R&D, the company maintained high investment levels, spending 1.169 billion yuan, accounting for 17.99% of revenue. Although the R&D expense ratio decreased by 73.31 percentage points compared to last year, this is mainly due to revenue growth outpacing R&D spending. The company continues to increase its R&D efforts.

Quarterly performance was balanced, with Q2 having the highest revenue at 1.769 billion yuan and a net profit of 683 million yuan. While net cash flow from operating activities remains negative, it has significantly improved compared to last year, indicating progress in sales collection.

2. Business Structure: Cloud Products Dominate, Edge Products Await Breakthrough

Cambrian’s business structure is highly concentrated, with cloud products being the core revenue source, accounting for 99.69% of total revenue, or 6.477 billion yuan, up 455.34%. This growth is driven by the rising demand for computing power in AI industry, with the company’s cloud AI chips and boards deployed at scale in telecom, finance, internet, and other key sectors.

In contrast, edge products performed poorly, with revenue only 3.394 million yuan, down 48.12% year-over-year, and gross margin declined by 6.98 percentage points. Although revenue from IP licensing and software is small, it grew rapidly by 455%, showing the company’s potential in technology licensing.

The company mainly sells directly, with 99.13% of revenue from direct sales. Customer concentration is high, with the top five customers accounting for 88.66% of annual sales. While this reflects product competitiveness, it also poses customer dependency risks.

3. R&D Status: Continued High Investment, Strong Technological Barriers

R&D remains a core competitive advantage. During the reporting period, R&D expenditure was 1.169 billion yuan, up 9.03% from last year. The R&D team comprises 887 members, accounting for 80.13% of total employees, with 80.95% holding master’s degrees or higher, providing strong talent support for innovation.

Significant progress has been made in R&D. The new generation of intelligent processor microarchitecture and instruction set are under development, focusing on optimizing scenarios such as large language models, video and image generation models, and vertical domain models. The training and inference software platforms are also iteratively improved, enhancing model compatibility, training performance, and user experience.

In IP layout, as of December 31, 2025, the company had filed 2,846 patent applications, with 1,734 patents granted. It also owns 65 software copyrights and 6 circuit layout design rights, forming a solid technological barrier.

4. Core Competitiveness: Dual-Driven by Talent and Technology, Ecosystem Advantages Emerge

Cambrian’s core competitiveness lies in technology, talent, product ecosystem, and customer resources. The company has mastered core technologies such as AI processor instruction sets, microarchitecture, and programming languages, characterized by high barriers and broad applicability. Its talented R&D team has extensive industry experience.

The product portfolio covers cloud and edge AI chips, boards, complete systems, processor IP, and software, meeting diverse AI computing needs. Customer deployment spans telecom, finance, internet, and other sectors, establishing a strong brand presence.

Notably, the company has made significant progress in ecosystem development. Its foundational software platform breaks down development barriers between cloud and edge, enabling AI applications to run efficiently on its series of chips, providing a unified development environment for customers.

5. Risk Warning: Intensifying Competition and Supply Chain Challenges

Despite excellent results in 2025, Cambrian faces risks and challenges. Market competition is intensifying as more players enter the AI chip field, requiring the company to maintain technological leadership.

Supply chain risks exist due to the Fabless model, relying on external suppliers for wafer manufacturing, packaging, and testing. Additionally, the company and some subsidiaries are listed on the “Entity List,” which may impact supply chain stability.

Customer concentration remains high, with the top five clients accounting for 88.66% of sales. Any changes in major clients’ operations or demand slowdown could adversely affect performance. The company needs to diversify its customer base to reduce dependency.

Overall, Cambrian achieved a significant transition from investment to output in 2025, with outstanding financials, strong technological capabilities, and broad growth prospects. However, it must address increasing market competition and supply chain risks by continuing innovation and market expansion to maintain its leading position.

Dialogue links:

Skills used:

1. Business Structure Extraction Skill:

2. Financial Summary Extraction Skill:

3. Management Discussion & Analysis Extraction Skill (this skill was refined through repeated clarification):

4. Quarterly Report Review Skill

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