SEC Filing | Ambarella Inc.

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amba-10q_20211031.htm

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 October 31, 2021

☐

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.

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 December 2, 2021 was 37,003,100 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 October 31, 2021 and January 31, 2021		3

	Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended October 31, 2021 and 2020		4

	Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended October 31, 2021 and 2020		5

	Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended October 31, 2021 and 2020		6

	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended October 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		62

Signatures			64

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
	October 31,		January 31,
	2021		2021
ASSETS
Current assets:
Cash and cash equivalents	$	457,760	$	241,274
Marketable debt securities		—		199,434
Accounts receivable, net		44,776		24,974
Inventories		47,039		26,081
Restricted cash		10		10
Prepaid expenses and other current assets		5,789		5,531
Total current assets		555,374		497,304
Property and equipment, net		8,498		5,530
Deferred tax assets, non-current		11,467		10,914
Intangible assets, net		15,267		18,703
Operating lease right-of-use assets, net		11,958		9,659
Goodwill		26,601		26,601
Other non-current assets		4,190		4,569
Total assets	$	633,355	$	573,280
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		27,071		21,124
Accrued and other current liabilities		48,909		48,126
Operating lease liabilities, current		3,494		2,911
Income taxes payable		1,358		962
Deferred revenue, current		787		844
Total current liabilities		81,619		73,967
Operating lease liabilities, non-current		9,053		7,525
Other long-term liabilities		13,448		16,812
Total liabilities		104,120		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 October 31, 2021 and January 31, 2021, respectively		—		—
Ordinary shares, $0.00045 par value per share, 200,000,000 shares authorized at October 31, 2021 and January 31, 2021, respectively; 36,925,142 shares issued and outstanding at October 31, 2021; 35,547,440 shares issued and outstanding at January 31, 2021		17		16
Additional paid-in capital		420,153		347,458
Accumulated other comprehensive income		—		1,219
Retained earnings		109,065		126,283
Total shareholders’ equity		529,235		474,976
Total liabilities and shareholders' equity	$	633,355	$	573,280

See accompanying notes to condensed consolidated financial statements.

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

	Three Months Ended October 31,						Nine Months Ended October 31,
	2021			2020			2021			2020
Revenue	$	92,167		$	56,090		$	241,627		$	160,848
Cost of revenue		34,541			21,298			90,817			63,078
Gross profit		57,626			34,792			150,810			97,770
Operating expenses:
Research and development		41,362			36,573			118,794			103,575
Selling, general and administrative		17,475			14,468			49,323			41,348
Total operating expenses		58,837			51,041			168,117			144,923
Loss from operations		(1,211	)		(16,249	)		(17,307	)		(47,153	)
Other income, net		407			673			1,218			3,231
Loss before income taxes		(804	)		(15,576	)		(16,089	)		(43,922	)
Provision (benefit) for income taxes		(1,560	)		1,502			1,129			3,375
Net income (loss)	$	756		$	(17,078	)	$	(17,218	)	$	(47,297	)
Net income (loss) per share attributable to ordinary shareholders:
Basic	$	0.02		$	(0.49	)	$	(0.47	)	$	(1.37	)
Diluted	$	0.02		$	(0.49	)	$	(0.47	)	$	(1.37	)
Weighted-average shares used to compute net income (loss) per share attributable to ordinary shareholders:
Basic		36,792,187			34,819,880			36,391,676			34,460,172
Diluted		39,046,274			34,819,880			36,391,676			34,460,172

See accompanying notes to condensed consolidated financial statements.

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)

	Three Months Ended October 31,						Nine Months Ended October 31,
	2021			2020			2021			2020
Net income (loss)	$	756		$	(17,078	)	$	(17,218	)	$	(47,297	)
Other comprehensive income (loss), net of tax:
Net change and reclassification of unrealized gains (losses) on investments		(608	)		(224	)		(1,219	)		595
Other comprehensive income (loss), net of tax		(608	)		(224	)		(1,219	)		595
Comprehensive income (loss)	$	148		$	(17,302	)	$	(18,437	)	$	(46,702	)

See accompanying notes to condensed consolidated financial statements.

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
Other comprehensive income (loss) - 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
Other comprehensive income (loss) - 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
Issuance of shares through employee equity incentive plan		244,507			1		2,200			—			—			2,201
Issuance of shares through employee stock purchase plan		35,999			—		3,513			—			—			3,513
Stock-based compensation expense related to stock awards granted to employees and consultants		—			—		20,319			—			—			20,319
Other comprehensive income (loss) - net of tax		—			—		—			(608	)		—			(608	)
Net income		—			—		—			—			756			756
Balance--October 31, 2021		36,925,142		$	17	$	420,153		$	—		$	109,065		$	529,235

									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
Other comprehensive income (loss) - 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
Other comprehensive income (loss) - 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
Issuance of shares through employee equity incentive plan		361,886			1		1,102			—			—			1,103