Ambarella
Feb 28, 2017

Ambarella, Inc. Announces Fourth Quarter and Fiscal Year 2017 Financial Results

SANTA CLARA, Calif., Feb. 28, 2017 (GLOBE NEWSWIRE) -- Ambarella, Inc.  (NASDAQ:AMBA), a leading developer of low-power, HD and Ultra HD video compression and image processing semiconductors, today announced financial results for its fourth quarter and fiscal year 2017 ended January 31, 2017.

Financial results on a non-GAAP basis for the fourth quarter and fiscal year 2017 are as follows:

Based on information available as of today, Ambarella is offering the following guidance for the first quarter of fiscal year 2018, ending April 30, 2017:

Ambarella reports gross margin, net income and earnings per share in accordance with GAAP and, additionally, on a non-GAAP basis. Non-GAAP financial information for the fourth fiscal quarter and 2017 fiscal year excludes the impact of stock-based compensation adjusted for the associated tax impact which includes the effect of any benefits or shortfalls recognized.  A reconciliation of the GAAP to non-GAAP gross margin, net income and earnings per share numbers for the periods presented, as well as a description of the items excluded from the non-GAAP calculations, is included in the financial statements portion of this press release.

Total of cash, cash equivalents and marketable securities on hand at the end of the fourth fiscal quarter of 2017 was $405.4 million, compared with $307.9 million at the end of the same quarter a year ago. 

Stock Repurchase

Ambarella's Board of Directors has approved share repurchase plan authorizing the repurchase of up to an aggregate of $75 million of the company's ordinary shares through June 30, 2017.  As of February 27, 2017, Ambarella has repurchased a total of 405,089 shares under the program for total cash consideration of $20.2 million.  No repurchases were made under the program in the fourth fiscal quarter ended January 31, 2017.  Repurchases under the program may be made from time-to-time through open market purchases or through privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors.  The repurchase program does not obligate the company to acquire any particular amount of ordinary shares, and it may be suspended at any time at the company's discretion.  The repurchase program will be funded using Ambarella's working capital.  

"During the year we continued to make progress in diversifying our markets and customer base and enjoyed significant revenue growth from home monitoring and drone markets, as well as building customer momentum in new OEM automotive applications. We entered mass production with our first 14nm SoCs, continued to raise the performance bar with the launch of our 4Kp60 Ultra HD SoCs and introduced our first automotive qualified solutions," said Fermi Wang, president and CEO of Ambarella. "Looking forward, we will continue to invest in computer vision technology, automotive solutions, and advanced 10nm process nodes, as we believe these efforts will provide significant additional opportunities for success in the future."

Quarterly Conference Call

Ambarella plans to hold a conference call at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time today with Fermi Wang, chief executive officer, and George Laplante, chief financial officer, to discuss the fourth quarter and fiscal year 2017 results. The call can be accessed by dialing 877-304-8963 in the USA; international callers should dial 760-666-4834. Participant passcode is "Ambarella." Please dial in ten minutes prior to the scheduled conference call time. A live and archived webcast of the call will be available on Ambarella's website at http://www.ambarella.com/ for up to 30 days after the call.

About Ambarella

Ambarella, Inc. (NASDAQ:AMBA), is a leading developer of low-power, high-definition (HD) and Ultra HD video compression and image processing solutions. The company's products are used in a variety of HD cameras including security IP-cameras, sports cameras, wearable cameras, flying cameras and automotive video camera recorders. Ambarella compression chips are also used in broadcasting TV programs worldwide. Ambarella is the recipient of the Global Semiconductor Alliance 2015 awards for "Most Respected Public Semiconductor Company" and "Best Financially Managed Semiconductor Company," with annual sales of between $100M and $500M.

For more information about Ambarella, please visit www.ambarella.com.

"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements that are not historical facts and often can be identified by terms such as "outlook," "projected," "intends," "will," "estimates," "anticipates," "expects," "believes," "could," or similar expressions, including the guidance for the first quarter of fiscal year 2018, ending April 30, 2017, and the comments of our CEO relating to the company's markets, product ramps, customer momentum and anticipated investment in computer vision technology, automotive solutions and advanced 10nm process nodes.  The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. Our actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of our future performance.

The risks and uncertainties referred to above include, but are not limited to, risks associated with revenue being generated from new customers or design wins, neither of which is assured; our ability to retain and expand customer relationships and to achieve design wins; the commercial success of our customers' products; our growth strategy; our ability to anticipate future market demands and future needs of our customers; our ability to introduce new and enhanced solutions; the expansion of our current markets and our ability to successfully enter new markets; anticipated trends and challenges, including competition, in the markets in which we operate; our ability to effectively manage growth; our ability to retain key employees; and the potential for intellectual property disputes or other litigation.

Further information on these and other factors that could affect our financial results is included in the company's Annual Report on Form 10-K for our 2016 fiscal year and Form 10-Q for the quarter ended October 31, 2016, which are on file with the Securities and Exchange Commission. Additional information will also be set forth in the company's quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings the company makes with the Securities and Exchange Commission from time to time, copies of which may be obtained by visiting the Investor Relations portion of our web site at www.ambarella.com or the SEC's web site at www.sec.gov.  Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to us on the date hereof.  The results we report in our Annual Report on Form 10-K for the fiscal year ended January 31, 2017 could differ from the preliminary results announced in this press release.

Ambarella assumes no obligation and does not intend to update the forward-looking statements made in this press release, except as required by law.

Non-GAAP Financial Measures

The company has provided in this release non-GAAP financial information including non-GAAP gross margin, net income, and earnings per share, as a supplement to the consolidated financial statements, which are prepared in accordance with generally accepted accounting principles ("GAAP"). Management uses these non-GAAP financial measures internally in analyzing the company's financial results to assess operational performance and liquidity. The company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning, forecasting and analyzing future periods. Further, the company believes these non-GAAP financial measures are useful to investors because they allow for greater transparency with respect to key financial metrics that the company uses in making operating decisions and because the company believes that investors and analysts use them to help assess the health of its business and for comparison to other companies. Non-GAAP results are presented for supplemental informational purposes only for understanding the company's operating results. The non-GAAP information should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP measures used by other companies.

With respect to its financial results for the fourth quarter of fiscal year 2017, the company has provided below reconciliations between its non-GAAP financial measures to its most directly comparable GAAP financial measures.  With respect to the company's expectations for the first quarter of fiscal year 2018, a reconciliation of non-GAAP gross margin and non-GAAP operating expenses guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability and low visibility with respect to the charges excluded from these non-GAAP measures.  We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

AMBARELLA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
         
  Three Months Ended January 31, Twelve Months Ended January 31,
   2017  2016  2017   2016
     
Revenue $87,508 $67,967 $310,297 $316,373
         
Cost of revenue  28,994  24,651  105,283  111,029
Gross profit  58,514  43,316  205,014   205,344
         
Operating expenses:        
Research and development  27,129  23,442  101,205  82,927
Selling, general and administrative  11,302  10,768  43,446  37,738
         
Total operating expenses  38,431  34,210  144,651  120,665
         
Income from operations  20,083  9,106  60,363  84,679
         
Other income  188  207  518  530
         
Income before income taxes  20,271  9,313  60,881  85,209
         
Provision for income taxes  1,921  4,217  3,071  8,701
         
Net income $18,350 $5,096 $57,810 $76,508
         
Net income per share attributable to ordinary shareholders:        
Basic $0.56 $0.16 $1.77 $2.42
Diluted $0.53 $0.15 $1.68 $2.27
Weighted-average shares used to compute net income per share       
attributable to ordinary shareholders:        
Basic   33,028,656  32,105,797  32,671,221  31,633,936
Diluted  34,584,700  33,747,273   34,327,724  33,755,709
             

The following table presents details of stock-based compensation expense included in each functional line item in the consolidated statements of operations above:

 Three Months Ended January 31, Twelve Months Ended January 31,
  2017  2016  2017  2016
 (unaudited, in thousands)
Stock-based compensation:       
Cost of revenue$305 $249 $1,078 $657
Research and development 8,333  7,116  29,729  19,082
Selling, general and administrative 4,720  4,181  18,025  11,355
        
Total stock-based compensation$13,358 $11,546 $48,832 $31,094


AMBARELLA, INC.
RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS PER SHARE
(in thousands, except share and per share data)
        
 Three Months Ended January 31, Twelve Months Ended January 31,
  2017  2016   2017   2016 
 (unaudited)
GAAP net income$18,350 $5,096  $57,810  $76,508 
        
Non-GAAP adjustments:       
Stock-based compensation expense 13,358  11,546   48,832   31,094 
Valuation allowance on deferred tax assets   6,090      6,090 
Acquisition cost         1,229 
Income tax effect 277  (1,132)  (6,273)  (3,328)
Non-GAAP net income$31,985 $21,600  $100,369  $111,593 
        
GAAP - diluted weighted average shares 34,584,700  33,747,273   34,327,724   33,755,709 
Non-GAAP - diluted weighted average shares 34,584,700  33,747,273   34,327,724    33,755,709 
        
GAAP - diluted net income per share$0.53 $0.15  $1.68  $2.27 
Non-GAAP adjustments:       
Stock-based compensation expense 0.39  0.34   1.42   0.92 
Valuation allowance on deferred tax assets   0.18      0.18 
Acquisition cost         0.04 
Income tax effect   (0.03)  (0.18)  (0.10)
Non-GAAP - diluted net income per share$0.92 $0.64  $2.92  $3.31 
               

The difference between GAAP and non-GAAP gross margin was 0.3% and 0.4%, or $305,000 and $249,000 for the three months ended January 31, 2017 and 2016, respectively. The difference between GAAP and non-GAAP gross margin was 0.3% and 0.2%, or $1,078,000 and $657,000 for the fiscal year ended January 31, 2017 and 2016, respectively. The difference was due to the effect of stock-based compensation. 

AMBARELLA, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
     
 January 31, January 31, 
  2017   2016  
     
ASSETS    
Current assets:    
Cash and cash equivalents$322,872  $268,056  
Marketable securities 82,522   39,837  
Accounts receivable, net 38,596   39,408  
Inventories 20,145   18,167  
Restricted cash 8   7  
Prepaid expenses and other current assets 4,392   4,170  
Total current assets 468,535   369,645  
     
Property and equipment, net 4,988   3,448  
Deferred tax assets, non-current 5,774   4,626  
Intangible assets, net 4,149   4,178  
Goodwill 26,601   26,601  
Other non-current assets 2,224   2,117  
     
Total assets$512,271  $410,615  
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current liabilities:    
Accounts payable 19,955   14,175  
Accrued liabilities 26,448   23,778  
Income taxes payable 568   787  
Deferred revenue, current 7,425   10,077  
Total current liabilities 54,396   48,817  
     
Other long-term liabilities 3,241   12,342  
     
Total liabilities 57,637   61,159  
     
Shareholders' equity:    
Preference shares      
Ordinary shares 15   15  
Additional paid-in capital 212,276   176,306  
Accumulated other comprehensive loss (70)  (7) 
Retained earnings 242,413   173,142  
Total shareholders' equity 454,634   349,456  
     
Total liabilities and shareholders' equity$512,271  $410,615  

 

Contact:



Deborah Stapleton

650.815.1239

deb@stapleton.com

Source: Ambarella

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