SEC Filing | Ambarella Inc.

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amba-10q_20221031.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, 2022

☐

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 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

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.

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.

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.

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		—		—		—		(608	)		—