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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 October 31, 2022

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 November 30, 2022 was 38,756,861 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, 2022 and January 31, 2022

 

3

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended October 31, 2022 and 2021

 

4

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended October 31, 2022 and 2021

 

5

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended October 31, 2022 and 2021

 

6

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended October 31, 2022 and 2021

 

7

 

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

8

 

 

 

 

Item 2.

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

 

19

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

29

 

 

 

 

Item 4.

Controls and Procedures

 

29

 

 

 

 

PART II. OTHER INFORMATION

 

30

 

 

 

 

Item 1.

Legal Proceedings

 

30

 

 

 

 

Item 1A.

Risk Factors

 

30

 

 

 

 

Item 6.

Exhibits

 

60

 

 

 

 

Signatures

 

62

 

 

 

 

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

 

 

 

October 31,

 

 

January 31,

 

 

 

2022

 

 

2022

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

112,837

 

 

$

171,043

 

Marketable debt securities

 

 

86,197

 

 

 

 

Accounts receivable, net

 

 

48,556

 

 

 

44,307

 

Inventories

 

 

45,395

 

 

 

45,219

 

Restricted cash

 

 

7

 

 

 

10

 

Prepaid expenses and other current assets

 

 

5,338

 

 

 

6,169

 

Total current assets

 

 

298,330

 

 

 

266,748

 

Property and equipment, net

 

 

10,753

 

 

 

10,134

 

Deferred tax assets, non-current

 

 

14,585

 

 

 

15,340

 

Intangible assets, net

 

 

47,550

 

 

 

46,302

 

Operating lease right-of-use assets, net

 

 

9,186

 

 

 

11,127

 

Goodwill

 

 

303,625

 

 

 

303,625

 

Other non-current assets

 

 

3,428

 

 

 

4,269

 

Total assets

 

$

687,457

 

 

$

657,545

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

 

29,130

 

 

 

31,170

 

Accrued and other current liabilities

 

 

43,561

 

 

 

52,064

 

Operating lease liabilities, current

 

 

3,425

 

 

 

3,391

 

Income taxes payable

 

 

3,782

 

 

 

1,245

 

Deferred revenue, current

 

 

1,036

 

 

 

1,414

 

Total current liabilities

 

 

80,934

 

 

 

89,284

 

Operating lease liabilities, non-current

 

 

5,897

 

 

 

8,322

 

Other long-term liabilities

 

 

12,228

 

 

 

12,763

 

Total liabilities

 

 

99,059

 

 

 

110,369

 

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, 2022 and January 31, 2022, respectively

 

 

 

 

 

 

Ordinary shares, $0.00045 par value per share, 200,000,000 shares authorized; 38,746,179 and 37,302,818 shares issued and outstanding at October 31, 2022 and January 31, 2022, respectively

 

 

17

 

 

 

17

 

Additional paid-in capital

 

 

543,833

 

 

 

447,287

 

Accumulated other comprehensive loss

 

 

(1,043

)

 

 

 

Retained earnings

 

 

45,591

 

 

 

99,872

 

Total shareholders’ equity

 

 

588,398

 

 

 

547,176

 

Total liabilities and shareholders' equity

 

$

687,457

 

 

$

657,545

 

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 October 31,

 

 

Nine Months Ended October 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

$

83,096

 

 

$

92,167

 

 

$

254,285

 

 

$

241,627

 

Cost of revenue

 

 

31,418

 

 

 

34,541

 

 

 

94,996

 

 

 

90,817

 

Gross profit

 

 

51,678

 

 

 

57,626

 

 

 

159,289

 

 

 

150,810

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

52,864

 

 

 

41,362

 

 

 

151,892

 

 

 

118,794

 

Selling, general and administrative

 

 

18,944

 

 

 

17,475

 

 

 

58,213

 

 

 

49,323

 

Total operating expenses

 

 

71,808

 

 

 

58,837

 

 

 

210,105

 

 

 

168,117

 

Loss from operations

 

 

(20,130

)

 

 

(1,211

)

 

 

(50,816

)

 

 

(17,307

)

Other income, net

 

 

1,433

 

 

 

407

 

 

 

1,493

 

 

 

1,218

 

Loss before income taxes

 

 

(18,697

)

 

 

(804

)

 

 

(49,323

)

 

 

(16,089

)

Provision (benefit) for income taxes

 

 

1,112

 

 

 

(1,560

)

 

 

4,958

 

 

 

1,129

 

Net income (loss)

 

$

(19,809

)

 

$

756

 

 

$

(54,281

)

 

$

(17,218

)

Net income (loss) per share attributable to ordinary shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.51

)

 

$

0.02

 

 

$

(1.42

)

 

$

(0.47

)

Diluted

 

$

(0.51

)

 

$

0.02

 

 

$

(1.42

)

 

$

(0.47

)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

38,582,584

 

 

 

36,792,187

 

 

 

38,185,421

 

 

 

36,391,676

 

Diluted

 

 

38,582,584

 

 

 

39,046,274

 

 

 

38,185,421

 

 

 

36,391,676

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

 

4


 

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)

 

 

 

Three Months Ended October 31,

 

 

Nine Months Ended October 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

$

(19,809

)

 

$

756

 

 

$

(54,281

)

 

$

(17,218

)

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change and reclassification of unrealized losses on investments

 

 

(1,041

)

 

 

(608

)

 

 

(1,043

)

 

 

(1,219

)

Other comprehensive loss, net of tax

 

 

(1,041

)

 

 

(608

)

 

 

(1,043

)

 

 

(1,219

)

Comprehensive income (loss)

 

$

(20,850

)

 

$

148

 

 

$

(55,324

)

 

$

(18,437

)

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 (Loss)

 

 

Earnings

 

 

Total

 

Balance--January 31, 2022

 

 

37,302,818

 

 

$

17

 

 

$

447,287

 

 

$

 

 

$

99,872

 

 

$

547,176

 

Issuance of shares through employee equity plans

 

 

736,516

 

 

 

 

 

 

8,589

 

 

 

 

 

 

 

 

 

8,589

 

Issuance of shares through employee stock purchase plan

 

 

43,545

 

 

 

 

 

 

3,250

 

 

 

 

 

 

 

 

 

3,250

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

26,155

 

 

 

 

 

 

 

 

 

26,155

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,822

)

 

 

(10,822

)

Balance--April 30, 2022

 

 

38,082,879

 

 

 

17

 

 

 

485,281

 

 

 

 

 

 

89,050

 

 

 

574,348

 

Issuance of shares through employee equity plans

 

 

323,572

 

 

 

 

 

 

1,204

 

 

 

 

 

 

 

 

 

1,204

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

26,211

 

 

 

 

 

 

 

 

 

26,211

 

Other comprehensive loss - net of tax

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

(2

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23,650

)

 

 

(23,650

)

Balance--July 31, 2022

 

 

38,406,451

 

 

 

17

 

 

 

512,696

 

 

 

(2

)

 

 

65,400

 

 

 

578,111

 

Issuance of shares through employee equity plans

 

 

278,687

 

 

 

 

 

 

386

 

 

 

 

 

 

 

 

 

386

 

Issuance of shares through employee stock purchase plan

 

 

61,041

 

 

 

 

 

 

3,386

 

 

 

 

 

 

 

 

 

3,386

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

27,365

 

 

 

 

 

 

 

 

 

27,365

 

Other comprehensive loss - net of tax

 

 

 

 

 

 

 

 

 

 

 

(1,041

)

 

 

 

 

 

(1,041

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19,809

)

 

 

(19,809

)

Balance--October 31, 2022

 

 

38,746,179

 

 

$

17

 

 

$

543,833

 

 

$

(1,043

)

 

$

45,591

 

 

$

588,398

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Outstanding

 

 

Additional

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Ordinary Shares

 

 

Paid-in

 

 

Comprehensive

 

 

Retained

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Earnings

 

 

Total

 

Balance--January 31, 2021

 

 

35,547,440

 

 

$

16

 

 

$

347,458

 

 

$

1,219

 

 

$

126,283

 

 

$

474,976

 

Issuance of shares through employee equity plans

 

 

643,120

 

 

 

 

 

 

6,741

 

 

 

 

 

 

 

 

 

6,741

 

Issuance of shares through employee stock purchase plan

 

 

82,783

 

 

 

 

 

 

3,694

 

 

 

 

 

 

 

 

 

3,694

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

17,128

 

 

 

 

 

 

 

 

 

17,128

 

Other comprehensive 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 plans

 

 

371,293

 

 

 

 

 

 

1,461

 

 

 

 

 

 

 

 

 

1,461

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

17,639

 

 

 

 

 

 

 

 

 

17,639

 

Other comprehensive 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 plans

 

 

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

 

 

 

 

 

 

 

 

20,319

 

 

 

 

 

 

 

 

 

20,319

 

Other comprehensive loss - net of tax