8-K
AMBARELLA INC RI false 0001280263 0001280263 2022-08-30 2022-08-30

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

August 30, 2022

Date of Report (date of earliest event reported)

 

 

AMBARELLA, INC.

(Exact name of Registrant as specified in its charter)

 

 

 

Cayman Islands   001-35667   98-0459628

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I. R. S. Employer

Identification No.)

3101 Jay Street

Santa Clara, CA 95054

(Address of principal executive offices)

Registrant’s telephone number, including area code: (408) 734-8888

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Ordinary Shares, $0.00045 par value   AMBA   The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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.  ☐

 

 

 


Item 2.02

Results of Operations and Financial Condition

On August 30, 2022, Ambarella, Inc. issued a press release announcing its financial results for the second quarter of fiscal year 2023 ended July 31, 2022. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.

The information in this current report on Form 8-K and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

 

Item 9.01

Financial Statements and Exhibits

(d) Exhibits

 

99.1    Press Release dated August 30, 2022
Exhibit 104    Cover Page Interactive Data File (embedded within the Inline XBRL document).


Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: August 30, 2022   Ambarella, Inc.
 

/s/ Brian C. White

  Chief Financial Officer
EX-99.1

Exhibit 99.1

Ambarella, Inc. Announces Second Quarter Fiscal Year 2023 Financial Results

August 30, 2022 —Santa Clara, Calif. – Ambarella, Inc. (NASDAQ: AMBA), an edge AI vision silicon company, today announced financial results for its second quarter of fiscal year 2023 ended July 31, 2022.

 

   

Revenue for the second quarter of fiscal 2023 was $80.9 million, up 2% from $79.3 million in the same period in fiscal 2022. For the six months ended July 31, 2022, revenue was $171.2 million, up 15% from $149.5 million for the six months ended July 31, 2021.

 

   

Gross margin under U.S. generally accepted accounting principles (GAAP) for the second quarter of fiscal 2023 was 63.1%, compared with 62.3% for the same period in fiscal 2022. For the six months ended July 31, 2022, GAAP gross margin was 62.9%, compared with 62.3% for the six months ended July 31, 2021.

 

   

GAAP net loss for the second quarter of fiscal 2023 was $23.7 million, or loss per diluted ordinary share of $0.62, compared with GAAP net loss of $7.2 million, or loss per diluted ordinary share of $0.20, for the same period in fiscal 2022. GAAP net loss for the six months ended July 31, 2022 was $34.5 million, or loss per diluted ordinary share of $0.91. This compares with GAAP net loss of $18.0 million, or loss per diluted ordinary share of $0.50, for the six months ended July 31, 2021.

Financial results on a non-GAAP basis for the second quarter of fiscal 2023 are as follows:

 

   

Gross margin on a non-GAAP basis for the second quarter of fiscal 2023 was 64.5%, compared with 62.8% for the same period in fiscal 2022. For the six months ended July 31, 2022, non-GAAP gross margin was 64.2%, compared with 62.8% for the six months ended July 31, 2021.

 

   

Non-GAAP net income for the second quarter of fiscal 2023 was $7.6 million, or earnings per diluted ordinary share of $0.20. This compares with non-GAAP net income of $13.1 million, or earnings per diluted ordinary share of $0.35, for the same period in fiscal 2022. Non-GAAP net income for the six months ended July 31, 2022 was $24.7 million, or earnings per diluted ordinary share of $0.63. This compares with non-GAAP net income of $22.1 million, or earnings per diluted ordinary share of $0.58, for the six months ended July 31, 2021.

Based on information available as of today, Ambarella is offering the following guidance for the third quarter of fiscal year 2023, ending October 31, 2022:

 

   

Revenue is expected to be between $81.0 million to $85.0 million.

 

   

Gross margin on a non-GAAP basis is expected to be between 63.0% and 64.0%.

 

   

Operating expenses on a non-GAAP basis are expected to be between $44.0 million and $46.0 million.


Ambarella reports gross margin, net income (loss) and earnings (losses) per share in accordance with GAAP and, additionally, on a non-GAAP basis. Non-GAAP financial information excludes the impact of stock-based compensation and acquisition-related costs 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 (loss) and earnings (losses) per share 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 cash, cash equivalents and marketable debt securities on hand at the end of the second quarter of fiscal 2023 was $197.9 million, compared with $200.6 million at the end of the prior quarter and $449.2 million at the end of the same quarter a year ago. Ambarella fully liquidated its debt security investments by the end of the third quarter of fiscal 2022 to finance the acquisition of Oculii Corp. During Q2 the company resumed its investment in debt securities.

“Computer vision (“CV”) revenue increased significantly year-over-year in Q2 and our cumulative CV shipments now exceed 10 million SoCs, including more than 20% shipped into the automotive market. Significant milestones were achieved in the quarter; we provided in-person demonstrations of CV3, our central domain controller for mobility applications, with the full functionality demonstrated across multiple live cameras. The superior efficiency and scalability were clearly recognized and well received. We are also proud that CV5, our first 5nm processor, entered mass production in Q2, ahead of expectations,” said Fermi Wang, President and CEO. “Q2 results were as expected; we absorbed the worst of the China lockdown and the 14nm shortage, while our customers’ kitting challenges remained persistent.”

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, President and Chief Executive Officer, and Brian White, Chief Financial Officer, to discuss the second quarter of fiscal year 2023 results. The call can be accessed by dialing 877-304-8963 in the USA; international callers should dial 760-666-4834. 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’s products are used in a wide variety of human and computer vision applications, including video security, advanced driver assistance systems (ADAS), electronic mirror, drive recorder, driver/cabin monitoring, autonomous driving and robotics applications. Ambarella’s low-power systems-on-chip (SoCs) offer high-resolution video compression, advanced image processing and powerful deep neural network processing to enable intelligent perception, fusion and central processing systems to extract valuable data from high-resolution video and radar streams. For more information, 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,” “should,” or similar expressions, including the guidance for the third quarter of fiscal year 2023 ending October 31, 2022, and the comments of our CEO relating to supply-chain challenges faced by the Company and potential customer acceptance of our CV3 and CV5 SoCs. 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 global health conditions and associated risk mitigation measures; global economic and political conditions, including possible trade tariffs and restrictions; supply chain challenges in the semiconductor industry and markets we serve; revenue being generated from new customers or design wins, neither of which is assured; the commercial success of our customers’ products; our growth strategy; our ability to anticipate future market demands and future needs of our customers, particularly for computer vision applications; our ability to introduce new and enhanced solutions; our ability to gain customer acceptance of our new SoC solutions; our ability to develop, and to generate revenue from, new advanced technologies, such as computer vision functionality; our ability to retain and expand customer relationships and to achieve design wins; the expansion of our current markets and our ability to successfully enter new markets, such as the OEM automotive and robotics 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 2022 fiscal year, which is 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 Quarterly Report on Form 10-Q for the second fiscal quarter ended July 31, 2022 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 (loss), and earnings (losses) per share, as a supplement to the condensed 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 second quarter of fiscal year 2023, the company has provided below reconciliations of its non-GAAP financial measures to its most directly comparable GAAP financial measures. With respect to the company’s expectations for the third quarter of fiscal year 2023, 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.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

 

     Three Months Ended July 31,     Six Months Ended July 31,  
     2022     2021     2022     2021  

Revenue

   $ 80,884     $ 79,327     $ 171,189     $ 149,460  

Cost of revenue

     29,820       29,908       63,578       56,276  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     51,064       49,419       107,611       93,184  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Research and development

     52,338       39,558       99,028       77,432  

Selling, general and administrative

     18,914       15,821       39,269       31,848  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     71,252       55,379       138,297       109,280  

Loss from operations

     (20,188     (5,960     (30,686     (16,096

Other income (expense), net

     (26     218       60       811  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (20,214     (5,742     (30,626     (15,285

Provision for income taxes

     3,436       1,414       3,846       2,689  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (23,650   $ (7,156   $ (34,472   $ (17,974
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share attributable to ordinary shareholders:

        

Basic

   $ (0.62   $ (0.20   $ (0.91   $ (0.50
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.62   $ (0.20   $ (0.91   $ (0.50
  

 

 

   

 

 

   

 

 

   

 

 

 

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

        

Basic

     38,258,341       36,442,536       37,986,839       36,191,420  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     38,258,341       36,442,536       37,986,839       36,191,420  
  

 

 

   

 

 

   

 

 

   

 

 

 


The following tables present details of stock-based compensation and acquisition-related costs included in each functional line item in the condensed consolidated statements of operations above:

 

     Three Months Ended July 31,      Six Months Ended July 31,  
     2022      2021      2022      2021  
                             
     (unaudited, in thousands)  

Stock-based compensation:

           

Cost of revenue

   $ 362      $ 359      $ 711      $ 682  

Research and development

     17,883        11,525        35,034        22,719  

Selling, general and administrative

     8,664        7,488        18,205        14,813  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation

   $ 26,909      $ 19,372      $ 53,950      $ 38,214  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Three Months Ended July 31,      Six Months Ended July 31,  
     2022      2021      2022      2021  
                             
     (unaudited, in thousands)  

Acquisition-related costs:

           

Cost of revenue

   $ 757      $ —        $ 1,514      $ —    

Research and development

     —          —          —          —    

Selling, general and administrative

     522        —          1,058        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total acquisition-related costs

   $ 1,279      $ —        $ 2,572      $ —    
  

 

 

    

 

 

    

 

 

    

 

 

 

The difference between GAAP and non-GAAP gross margin was 1.4% and 0.5%, or $1.1 million and $0.4 million, for the three months ended July 31, 2022 and July 31, 2021, respectively. The difference between GAAP and non-GAAP gross margin was 1.3% and 0.5%, or $2.2 million and $0.7 million, for the six months ended July 31, 2022 and July 31, 2021, respectively. The differences were due to the effect of stock-based compensation and the amortization of acquisition-related costs.

AMBARELLA, INC.

RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS (LOSSES) PER SHARE

(in thousands, except share and per share data)

 

     Three Months Ended July 31,      Six Months Ended July 31,  
     2022      2021      2022      2021  
                             
     (unaudited)  

GAAP net loss

   $ (23,650    $ (7,156    $ (34,472    $ (17,974

Non-GAAP adjustments:

           

Stock-based compensation expense

     26,909        19,372        53,950        38,214  

Acquisition-related costs

     1,279        —          2,572        —    

Income tax effect

     3,075        932        2,629        1,831  
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-GAAP net income

   $ 7,613      $ 13,148      $ 24,679      $ 22,071  
  

 

 

    

 

 

    

 

 

    

 

 

 

GAAP - diluted weighted average shares

     38,258,341        36,442,536        37,986,839        36,191,420  

Non-GAAP - diluted weighted average shares

     38,809,422        38,044,906        38,905,976        38,063,110  

GAAP - diluted net loss per share

   $ (0.62    $ (0.20    $ (0.91    $ (0.50

Non-GAAP adjustments:

           

Stock-based compensation expense

     0.71        0.53        1.42        1.06  

Acquisition-related costs

     0.03        —          0.07        —    

Income tax effect

     0.08        0.03        0.07        0.05  

Effect of Non-GAAP - diluted weighted average shares

     —          (0.01      (0.02      (0.03

Non-GAAP - diluted net income per share

   $ 0.20      $ 0.35      $ 0.63      $ 0.58  


AMBARELLA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

 

     July 31,
2022
    January 31,
2022
 

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $  194,944     $ 171,043  

Marketable debt securities

     2,970       —    

Accounts receivable, net

     37,698       44,307  

Inventories

     40,103       45,219  

Restricted cash

     10       10  

Prepaid expenses and other current assets

     7,138       6,169  
  

 

 

   

 

 

 

Total current assets

     282,863       266,748  

Property and equipment, net

     10,443       10,134  

Deferred tax assets, non-current

     14,159       15,340  

Intangible assets, net

     49,563       46,302  

Operating lease right-of-use assets, net

     10,263       11,127  

Goodwill

     303,625       303,625  

Other non-current assets

     3,504       4,269  
  

 

 

   

 

 

 

Total assets

   $  674,420     $ 657,545  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

     22,074       31,170  

Accrued and other current liabilities

     48,396       52,064  

Operating lease liabilities, current

     3,506       3,391  

Income taxes payable

     3,110       1,245  

Deferred revenue, current

     457       1,414  
  

 

 

   

 

 

 

Total current liabilities

     77,543       89,284  

Operating lease liabilities, non-current

     7,024       8,322  

Other long-term liabilities

     11,742       12,763  
  

 

 

   

 

 

 

Total liabilities

     96,309       110,369  
  

 

 

   

 

 

 

Shareholders’ equity:

    

Preference shares

     —         —    

Ordinary shares

     17       17  

Additional paid-in capital

     512,696       447,287  

Accumulated other comprehensive loss

     (2     —    

Retained earnings

     65,400       99,872  
  

 

 

   

 

 

 

Total shareholders’ equity

     578,111       547,176  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 674,420     $ 657,545  
  

 

 

   

 

 

 

Contact:

Louis Gerhardy

408.636.2310

lgerhardy@ambarella.com