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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended July 31, 2021

OR

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from             to             

Commission file number: 001-35667

 

AMBARELLA, INC.

(Exact name of registrant as specified in its charter)

 

 

Cayman Islands

 

98-0459628

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

3101 Jay Street

Santa Clara, California

 

95054

(Address of principal executive offices)

 

(Zip Code)

(408) 734-8888

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol

Name of each exchange on which registered

Ordinary Shares, $0.00045 Par Value Per Share

AMBA

The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes       No  

The number of ordinary shares of the Registrant outstanding as of September 1, 2021 was 36,663,380 shares.

 

 

 


 

AMBARELLA, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

 

 

Page

 

 

 

PART I. FINANCIAL INFORMATION

 

3

 

 

 

 

Item 1.

Financial Statements

 

3

 

 

 

 

 

Unaudited Condensed Consolidated Balance Sheets at July 31, 2021 and January 31, 2021

 

3

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Operations for the three and six months ended July 31, 2021 and 2020

 

4

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended July 31, 2021 and 2020

 

5

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the three and six months ended July 31, 2021 and 2020

 

6

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended July 31, 2021 and 2020

 

7

 

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

8

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

23

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

33

 

 

 

 

Item 4.

Controls and Procedures

 

33

 

 

 

 

PART II. OTHER INFORMATION

 

34

 

 

 

 

Item 1.

Legal Proceedings

 

34

 

 

 

 

Item 1A.

Risk Factors

 

34

 

 

 

 

Item 6.

Exhibits

 

61

 

 

 

 

Signatures

 

63

 

 

 

 

2


 

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

AMBARELLA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(unaudited)

 

 

 

As of

 

 

 

July 31,

 

 

January 31,

 

 

 

2021

 

 

2021

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

258,402

 

 

$

241,274

 

Marketable debt securities

 

 

190,757

 

 

 

199,434

 

Accounts receivable, net

 

 

38,295

 

 

 

24,974

 

Inventories

 

 

42,076

 

 

 

26,081

 

Restricted cash

 

 

10

 

 

 

10

 

Prepaid expenses and other current assets

 

 

4,481

 

 

 

5,531

 

Total current assets

 

 

534,021

 

 

 

497,304

 

Property and equipment, net

 

 

8,237

 

 

 

5,530

 

Deferred tax assets, non-current

 

 

10,699

 

 

 

10,914

 

Intangible assets, net

 

 

15,800

 

 

 

18,703

 

Operating lease right-of-use assets, net

 

 

10,066

 

 

 

9,659

 

Goodwill

 

 

26,601

 

 

 

26,601

 

Other non-current assets

 

 

4,634

 

 

 

4,569

 

Total assets

 

$

610,058

 

 

$

573,280

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

 

33,116

 

 

 

21,124

 

Accrued and other current liabilities

 

 

46,906

 

 

 

48,126

 

Operating lease liabilities, current

 

 

2,886

 

 

 

2,911

 

Income taxes payable

 

 

1,726

 

 

 

962

 

Deferred revenue, current

 

 

902

 

 

 

844

 

Total current liabilities

 

 

85,536

 

 

 

73,967

 

Operating lease liabilities, non-current

 

 

7,763

 

 

 

7,525

 

Other long-term liabilities

 

 

13,705

 

 

 

16,812

 

Total liabilities

 

 

107,004

 

 

 

98,304

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Preference shares, $0.00045 par value per share, 20,000,000 shares

   authorized and no shares issued and outstanding at July 31, 2021 and

   January 31, 2021, respectively

 

 

 

 

 

 

Ordinary shares, $0.00045 par value per share, 200,000,000 shares

   authorized at July 31, 2021 and January 31, 2021, respectively;

   36,644,636 shares issued and outstanding at July 31, 2021; 35,547,440

   shares issued and outstanding at January 31, 2021

 

 

16

 

 

 

16

 

Additional paid-in capital

 

 

394,121

 

 

 

347,458

 

Accumulated other comprehensive income

 

 

608

 

 

 

1,219

 

Retained earnings

 

 

108,309

 

 

 

126,283

 

Total shareholders’ equity

 

 

503,054

 

 

 

474,976

 

Total liabilities and shareholders' equity

 

$

610,058

 

 

$

573,280

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

 

3


 

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended July 31,

 

 

Six Months Ended July 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

$

79,327

 

 

$

50,113

 

 

$

149,460

 

 

$

104,758

 

Cost of revenue

 

 

29,908

 

 

 

19,155

 

 

 

56,276

 

 

 

41,780

 

Gross profit

 

 

49,419

 

 

 

30,958

 

 

 

93,184

 

 

 

62,978

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

39,558

 

 

 

32,802

 

 

 

77,432

 

 

 

67,002

 

Selling, general and administrative

 

 

15,821

 

 

 

13,445

 

 

 

31,848

 

 

 

26,880

 

Total operating expenses

 

 

55,379

 

 

 

46,247

 

 

 

109,280

 

 

 

93,882

 

Loss from operations

 

 

(5,960

)

 

 

(15,289

)

 

 

(16,096

)

 

 

(30,904

)

Other income, net

 

 

218

 

 

 

1,280

 

 

 

811

 

 

 

2,558

 

Loss before income taxes

 

 

(5,742

)

 

 

(14,009

)

 

 

(15,285

)

 

 

(28,346

)

Provision for income taxes

 

 

1,414

 

 

 

747

 

 

 

2,689

 

 

 

1,873

 

Net loss

 

$

(7,156

)

 

$

(14,756

)

 

$

(17,974

)

 

$

(30,219

)

Net loss per share attributable to ordinary shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.20

)

 

$

(0.43

)

 

$

(0.50

)

 

$

(0.88

)

Diluted

 

$

(0.20

)

 

$

(0.43

)

 

$

(0.50

)

 

$

(0.88

)

Weighted-average shares used to compute net loss per share attributable to ordinary shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,442,536

 

 

 

34,480,307

 

 

 

36,191,420

 

 

 

34,280,318

 

Diluted

 

 

36,442,536

 

 

 

34,480,307

 

 

 

36,191,420

 

 

 

34,280,318

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

 

4


 

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited, in thousands)

 

 

 

Three Months Ended July 31,

 

 

Six Months Ended July 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

 

$

(7,156

)

 

$

(14,756

)

 

$

(17,974

)

 

$

(30,219

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains (losses) on investments

 

 

(184

)

 

 

1,182

 

 

 

(611

)

 

 

819

 

Other comprehensive income (loss), net of tax

 

 

(184

)

 

 

1,182

 

 

 

(611

)

 

 

819

 

Comprehensive loss

 

$

(7,340

)

 

$

(13,574

)

 

$

(18,585

)

 

$

(29,400

)

See accompanying notes to condensed consolidated financial statements.

 

 

 

 

5


 

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Outstanding

 

 

Additional

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Ordinary Shares

 

 

Paid-in

 

 

Comprehensive

 

 

Retained

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Earnings

 

 

Total

 

Balance--January 31, 2021

 

 

35,547,440

 

 

$

16

 

 

$

347,458

 

 

$

1,219

 

 

$

126,283

 

 

$

474,976

 

Issuance of shares through employee equity incentive plan

 

 

643,120

 

 

 

 

 

 

6,741

 

 

 

 

 

 

 

 

 

6,741

 

Issuance of shares through employee stock purchase plan

 

 

82,783

 

 

 

 

 

 

3,694

 

 

 

 

 

 

 

 

 

3,694

 

Stock-based compensation expense related to stock awards granted to employees and consultants

 

 

 

 

 

 

 

 

17,128

 

 

 

 

 

 

 

 

 

17,128

 

Net unrealized losses on investments - net of tax

 

 

 

 

 

 

 

 

 

 

 

(427

)

 

 

 

 

 

(427

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,818

)

 

 

(10,818

)

Balance--April 30, 2021

 

 

36,273,343

 

 

 

16

 

 

 

375,021

 

 

 

792

 

 

 

115,465

 

 

 

491,294

 

Issuance of shares through employee equity incentive plan

 

 

371,293

 

 

 

 

 

 

1,461

 

 

 

 

 

 

 

 

 

1,461

 

Stock-based compensation expense related to stock awards granted to employees and consultants

 

 

 

 

 

 

 

 

17,639

 

 

 

 

 

 

 

 

 

17,639

 

Net unrealized losses on investments - net of tax

 

 

 

 

 

 

 

 

 

 

 

(184

)

 

 

 

 

 

(184

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,156

)

 

 

(7,156

)

Balance--July 31, 2021

 

 

36,644,636

 

 

$

16

 

 

$

394,121

 

 

$

608

 

 

$

108,309

 

 

$

503,054

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Outstanding

 

 

Additional

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Ordinary Shares

 

 

Paid-in

 

 

Comprehensive

 

 

Retained

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Earnings

 

 

Total

 

Balance--January 31, 2020

 

 

33,805,609

 

 

$

15

 

 

$

261,220

 

 

$

768

 

 

$

186,069

 

 

$

448,072

 

Issuance of shares through employee equity incentive plan

 

 

478,643

 

 

 

 

 

 

6,463

 

 

 

 

 

 

 

 

 

6,463

 

Issuance of shares through employee stock purchase plan

 

 

83,564

 

 

 

 

 

 

2,660

 

 

 

 

 

 

 

 

 

2,660

 

Stock repurchase

 

 

(25,719

)

 

 

 

 

 

(1,000

)

 

 

 

 

 

 

 

 

(1,000

)

Stock-based compensation expense related to stock awards granted to employees and consultants

 

 

 

 

 

 

 

 

15,214

 

 

 

 

 

 

 

 

 

15,214

 

Net unrealized losses on investments - net of tax

 

 

 

 

 

 

 

 

 

 

 

(363

)

 

 

 

 

 

(363

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,463

)

 

 

(15,463

)

Balance--April 30, 2020

 

 

34,342,097

 

 

 

15

 

 

 

284,557

 

 

 

405

 

 

 

170,606

 

 

 

455,583

 

Issuance of shares through employee equity incentive plan

 

 

268,739

 

 

 

 

 

 

344

 

 

 

 

 

 

 

 

 

344

 

Stock-based compensation expense related to stock awards granted to employees and consultants

 

 

 

 

 

 

 

 

16,294

 

 

 

 

 

 

 

 

 

16,294

 

Net unrealized gains on investments - net of tax

 

 

 

 

 

 

 

 

 

 

 

1,182

 

 

 

 

 

 

1,182

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,756

)

 

 

(14,756

)

Balance--July 31, 2020

 

 

34,610,836

 

 

$

15

 

 

$

301,195

 

 

$

1,587

 

 

$

155,850

 

 

$

458,647

 

 

See accompanying notes to condensed consolidated financial statements.

 

6


AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

 

 

 

Six Months Ended July 31,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(17,974

)

 

$

(30,219

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

5,803

 

 

 

5,786

 

Amortization (accretion) of premium (discount) on marketable debt securities, net

 

 

852

 

 

 

88

 

Stock-based compensation

 

 

38,214

 

 

 

32,430

 

Deferred income taxes

 

 

215

 

 

 

188

 

Other non-cash items, net

 

 

13

 

 

 

(72

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(13,321

)

 

 

(4,788

)

Inventories

 

 

(15,995

)

 

 

(936

)

Prepaid expenses and other current assets

 

 

1,033

 

 

 

1,472

 

Other non-current assets

 

 

435

 

 

 

329

 

Accounts payable

 

 

11,992

 

 

 

(1,217

)

Accrued and other current liabilities

 

 

(619

)

 

 

2,144

 

Income taxes payable

 

 

764

 

 

 

(180

)

Deferred revenue

 

 

58

 

 

 

699

 

Operating lease liabilities

 

 

(1,763

)

 

 

(1,031

)

Other long-term liabilities

 

 

183

 

 

 

529

 

Net cash provided by operating activities

 

 

9,890

 

 

 

5,222

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of investments

 

 

(101,664

)

 

 

(109,161

)

Sales of investments

 

 

32,839

 

 

 

44,044

 

Maturities of investments

 

 

75,490

 

 

 

49,227

 

Purchase of tangible and intangible assets

 

 

(3,754

)

 

 

(665

)

Net cash provided by (used in) investing activities

 

 

2,911

 

 

 

(16,555

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Stock repurchase

 

 

 

 

 

(1,000

)

Proceeds from exercise of stock options and employee stock purchase plan

 

 

7,161

 

 

 

3,866

 

Payment for intangible assets