10-Q
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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, 2023

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 Select 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 August 31, 2023 was 39,878,231 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, 2023 and January 31, 2023

 

3

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Operations for the three and six months ended July 31, 2023 and 2022

 

4

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended July 31, 2023 and 2022

 

5

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the three and six months ended July 31, 2023 and 2022

 

6

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended July 31, 2023 and 2022

 

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

 

28

 

 

 

 

Item 4.

Controls and Procedures

 

29

 

 

 

 

PART II. OTHER INFORMATION

 

29

 

 

 

 

Item 1.

Legal Proceedings

 

29

 

 

 

 

Item 1A.

Risk Factors

 

29

 

 

 

 

Item 5.

Other Information

 

58

 

 

 

 

Item 6.

Exhibits

 

58

 

 

 

 

Signatures

 

60

 

 

 

 

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,

 

 

 

2023

 

 

2023

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

122,515

 

 

$

113,541

 

Marketable debt securities

 

 

93,997

 

 

 

93,322

 

Accounts receivable, net

 

 

30,158

 

 

 

51,987

 

Inventories

 

 

34,770

 

 

 

40,486

 

Restricted cash

 

 

8

 

 

 

8

 

Prepaid expenses and other current assets

 

 

5,199

 

 

 

5,288

 

Total current assets

 

 

286,647

 

 

 

304,632

 

Property and equipment, net

 

 

11,246

 

 

 

11,814

 

Deferred tax assets, non-current

 

 

22,184

 

 

 

19,276

 

Intangible assets, net

 

 

63,121

 

 

 

58,497

 

Operating lease right-of-use assets, net

 

 

6,626

 

 

 

8,339

 

Goodwill

 

 

303,625

 

 

 

303,625

 

Other non-current assets

 

 

2,795

 

 

 

4,012

 

Total assets

 

$

696,244

 

 

$

710,195

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

 

11,943

 

 

 

17,845

 

Accrued and other current liabilities

 

 

54,032

 

 

 

56,655

 

Operating lease liabilities, current

 

 

3,548

 

 

 

3,539

 

Income taxes payable

 

 

2,458

 

 

 

4,112

 

Deferred revenue, current

 

 

2,709

 

 

 

1,311

 

Total current liabilities

 

 

74,690

 

 

 

83,462

 

Operating lease liabilities, non-current

 

 

3,216

 

 

 

5,097

 

Other long-term liabilities

 

 

16,020

 

 

 

15,548

 

Total liabilities

 

 

93,926

 

 

 

104,107

 

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, 2023 and January 31, 2023, respectively

 

 

 

 

 

 

Ordinary shares, $0.00045 par value per share, 200,000,000 shares authorized; 39,870,771 and 39,043,000 shares issued and outstanding at July 31, 2023 and January 31, 2023, respectively

 

 

18

 

 

 

18

 

Additional paid-in capital

 

 

635,844

 

 

 

572,076

 

Accumulated other comprehensive loss

 

 

(930

)

 

 

(492

)

Retained earnings (accumulated deficit)

 

 

(32,614

)

 

 

34,486

 

Total shareholders’ equity

 

 

602,318

 

 

 

606,088

 

Total liabilities and shareholders' equity

 

$

696,244

 

 

$

710,195

 

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,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

$

62,121

 

 

$

80,884

 

 

$

124,263

 

 

$

171,189

 

Cost of revenue

 

 

23,659

 

 

 

29,820

 

 

 

48,282

 

 

 

63,578

 

Gross profit

 

 

38,462

 

 

 

51,064

 

 

 

75,981

 

 

 

107,611

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

54,917

 

 

 

52,338

 

 

 

109,358

 

 

 

99,028

 

Selling, general and administrative

 

 

18,884

 

 

 

18,914

 

 

 

37,504

 

 

 

39,269

 

Total operating expenses

 

 

73,801

 

 

 

71,252

 

 

 

146,862

 

 

 

138,297

 

Loss from operations

 

 

(35,339

)

 

 

(20,188

)

 

 

(70,881

)

 

 

(30,686

)

Other income (expense), net

 

 

737

 

 

 

(26

)

 

 

2,023

 

 

 

60

 

Loss before income taxes

 

 

(34,602

)

 

 

(20,214

)

 

 

(68,858

)

 

 

(30,626

)

Provision (benefit) for income taxes

 

 

(3,404

)

 

 

3,436

 

 

 

(1,758

)

 

 

3,846

 

Net loss

 

$

(31,198

)

 

$

(23,650

)

 

$

(67,100

)

 

$

(34,472

)

Net loss per share attributable to ordinary shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.79

)

 

$

(0.62

)

 

$

(1.70

)

 

$

(0.91

)

Diluted

 

$

(0.79

)

 

$

(0.62

)

 

$

(1.70

)

 

$

(0.91

)

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

39,736,704

 

 

 

38,258,341

 

 

 

39,538,748

 

 

 

37,986,839

 

Diluted

 

 

39,736,704

 

 

 

38,258,341

 

 

 

39,538,748

 

 

 

37,986,839

 

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,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net loss

 

$

(31,198

)

 

$

(23,650

)

 

$

(67,100

)

 

$

(34,472

)

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized losses on investments

 

 

(548

)

 

 

(2

)

 

 

(438

)

 

 

(2

)

Other comprehensive loss, net of tax

 

 

(548

)

 

 

(2

)

 

 

(438

)

 

 

(2

)

Comprehensive loss

 

$

(31,746

)

 

$

(23,652

)

 

$

(67,538

)

 

$

(34,474

)

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 Earnings

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

(Accumulated Deficit)

 

 

Total

 

Balance--January 31, 2023

 

 

39,043,000

 

 

$

18

 

 

$

572,076

 

 

$

(492

)

 

$

34,486

 

 

$

606,088

 

Issuance of shares through employee equity plans

 

 

467,996

 

 

 

 

 

 

5,198

 

 

 

 

 

 

 

 

 

5,198

 

Issuance of shares through employee stock purchase plan

 

 

80,207

 

 

 

 

 

 

4,448

 

 

 

 

 

 

 

 

 

4,448

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

26,249

 

 

 

 

 

 

 

 

 

26,249

 

Other comprehensive gain - net of tax

 

 

 

 

 

 

 

 

 

 

 

110

 

 

 

 

 

 

110

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(35,902

)

 

 

(35,902

)

Balance--April 30, 2023

 

 

39,591,203

 

 

 

18

 

 

 

607,971

 

 

 

(382

)

 

 

(1,416

)

 

 

606,191

 

Issuance of shares through employee equity plans

 

 

279,568

 

 

 

 

 

 

553

 

 

 

 

 

 

 

 

 

553

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

27,320

 

 

 

 

 

 

 

 

 

27,320

 

Other comprehensive loss - net of tax

 

 

 

 

 

 

 

 

 

 

 

(548

)

 

 

 

 

 

(548

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,198

)

 

 

(31,198

)

Balance--July 31, 2023

 

 

39,870,771

 

 

$

18

 

 

$

635,844

 

 

$

(930

)

 

$

(32,614

)

 

$

602,318

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Outstanding

 

 

Additional

 

 

Other

 

 

 

 

 

 

 

 

 

Ordinary Shares

 

 

Paid-in

 

 

Comprehensive

 

 

Retained Earnings

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

(Accumulated Deficit)

 

 

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

 

 

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,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(67,100

)

 

$

(34,472

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

11,945

 

 

 

9,295

 

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

 

 

(710

)

 

 

 

Stock-based compensation