8-K

 

 

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

December 5, 2013

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))

 

 

 


Item 2.02 Results of Operations and Financial Condition

On December 5, 2013, Ambarella, Inc. issued a press release announcing its results for the third fiscal quarter ended October 31, 2013. 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 December 5, 2013


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: December 5, 2013       Ambarella, Inc.
     

/s/ George Laplante

     

George Laplante

Chief Financial Officer


Exhibit Index

 

Exhibit

Number

  

Exhibit Title

99.1    Press Release dated December 5, 2013
EX-99.1

Exhibit 99.1

Ambarella, Inc. Announces Third Quarter Fiscal 2014 Results

Revenue up 29% Year over Year

Contact:

Deborah Stapleton

650.470.4200

deb@stapleton.com

Dec. 5, 2013 -Santa Clara, CA – Ambarella, Inc. (NASDAQ: AMBA), a leading developer of low-power, HD video compression and image processing semiconductors, today announced financial results for its fiscal third quarter ended October 31, 2013.

Revenue for the third quarter of fiscal 2014 was $46.0 million, up 29% from $35.7 million in the same period in fiscal 2013. For the nine months ended October 31, 2013, revenue was $117.6 million, up 31% from $89.5 million for the nine months ended October 31, 2012.

Gross margin under U.S. generally accepted accounting principles (GAAP) for the third quarter of fiscal 2014 was 63.7%, compared with 64.5% for the same period in fiscal 2013. For the nine months ended October 31, 2013, GAAP gross margin was 63.1%, compared with 67.8% for the nine months ended October 31, 2012.

GAAP net income for the third quarter of fiscal 2014 was $9.1 million, or $0.30 per diluted ordinary share, compared with GAAP net income of $6.7 million, or $0.25 per diluted ordinary share, for the same period in fiscal 2013. GAAP net income for the nine months ended October 31, 2013 was $20.1 million, or $0.68 per diluted ordinary share. This compares with GAAP net income of $14.5 million, or $0.51 per diluted ordinary share, for the nine months ended October 31, 2012.

Gross margin on a non-GAAP basis for the third quarter of fiscal 2014 was 63.8%, compared with 64.5% for the same period in fiscal 2013. For the nine months ended October 31, 2013, non-GAAP gross margin was 63.2%, compared with 67.9% for the nine months ended October 31, 2012.

Non-GAAP net income for the third quarter of fiscal 2014 was $11.1 million, or $0.37 per diluted ordinary share. This compares with non-GAAP net income of $8.1 million, or $0.31 per diluted ordinary share, for the same period in fiscal 2013. Non-GAAP net income for the nine months ended October 31, 2013 was $25.0 million, or $0.84 per diluted ordinary share. This compares with non-GAAP net income of $17.7 million for the nine months ended October 31, 2012, or $0.65 per diluted ordinary share.

Ambarella reports gross margin, net income and earnings per share in accordance with GAAP and, additionally, on a non-GAAP basis. Non-GAAP financial information excludes stock-based compensation expense and the associated tax impact. A reconciliation of the GAAP to non-GAAP gross margin, net income and earnings per share numbers, as well as a description of the items excluded from the non-GAAP calculations, is included in the condensed consolidated financial statements portion of this press release.


Cash and cash equivalents at the end of the third fiscal quarter of 2014 were $128.1 million, compared with $118.3 million at the end of the immediately preceding quarter and $94.8 million at the end of the same quarter a year ago.

“We are very pleased with our execution across major markets as demonstrated by the strong Q3 year- over-year growth of 29%,” said Fermi Wang, President and CEO of Ambarella. “Our penetration into the fast growing, professional and consumer IP security markets continued in the quarter, reflecting our strong competitive position, as well as our broad product roadmap. In sports cameras, market leader GoPro introduced 2 new models based on Ambarella technology that deliver industry leading features at both 1080p60 and 4K resolutions.

“This is an exciting time for our company as we continue to develop products on leading edge technology that we believe will enable us to continue to offer our customers the best resolutions and exceptional compression technology without compromising power efficiency,” he said.

Quarterly Conference Call

Ambarella plans to hold a conference call at 5 p.m. Eastern Time / 2 p.m. Pacific Time today with Fermi Wang, Chief Executive Officer, and George Laplante, Chief Financial Officer, to discuss third quarter fiscal 2014 results. The call can be accessed by dialing 877-304-8963 in the USA; international callers should dial 760-666-4834, participant passcode: 97325330. 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, Inc. (NASDAQ: AMBA), is a leading developer of low-power, high-definition (HD) video compression and image processing solutions. The company’s products are used in a variety of HD cameras including security IP-cameras, wearable sports cameras, and automotive video camera recorders. Ambarella technology is also used in television broadcasting with TV programs being transmitted worldwide using Ambarella compression chips. For more information about Ambarella, 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,” or similar expressions, including the comments of our CEO relating to expansion of our target markets, the ability of our technology and product features to gain market


acceptance and design wins, our ability to continue to introduce new and enhanced solutions, and the ability of our customer’s products to gain market acceptance. 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 success of our business is subject to risks and uncertainties that include, but are not limited to, risks associated with revenue being generated from new customers or design wins, neither of which is assured; our growth strategy; our ability to anticipate future market demands and future needs of our customers; our plans for future products; our ability to introduce new and enhanced solutions, our ability to retain and expand customer relationships and to achieve design wins; our ability to successfully enter new 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, 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, future 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 fiscal quarter ended October 31, 2013 could differ from the preliminary results announced in this press release.

Ambarella assumes no obligation and does not intend to update the information contained 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, and earnings 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.

The company has provided below reconciliations between its non-GAAP financial measures to its most directly comparable GAAP financial measures.

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,  
     2013     2012      2013     2012  

Revenue

   $ 45,990      $ 35,669       $ 117,641      $ 89,548   

Cost of revenue

     16,689        12,679         43,356        28,821   
  

 

 

   

 

 

    

 

 

   

 

 

 

Gross profit

     29,301        22,990         74,285        60,727   
  

 

 

   

 

 

    

 

 

   

 

 

 

Operating expenses:

         

Research and development

     13,476        10,802         35,767        31,631   

Selling, general and administrative

     5,761        4,603         16,303        12,812   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total operating expenses

     19,237        15,405         52,070        44,443   

Income from operations

     10,064        7,585         22,215        16,284   

Other income (loss), net

     (12     137         (28     139   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income before income taxes

     10,052        7,722         22,187        16,423   

Provision for income taxes

     926        1,005         2,066        1,878   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 9,126      $ 6,717       $ 20,121      $ 14,545   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income per share attributable to ordinary shareholders:

         

Basic

   $ 0.33      $ 0.27       $ 0.73      $ 0.55   
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

   $ 0.30      $ 0.25       $ 0.68      $ 0.51   
  

 

 

   

 

 

    

 

 

   

 

 

 

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

         

Basic

     27,836,086        12,068,819         27,432,301        9,049,864   
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

     30,355,230        13,415,091         29,754,837        10,506,293   
  

 

 

   

 

 

    

 

 

   

 

 

 

The following table presents details of stock-based compensation expense included in each functional line item in the condensed consolidated statements of operations above:

 

     Three Months Ended October 31,      Nine Months Ended October 31,  
         2013              2012              2013              2012      
     (unaudited, in thousands)  

Stock-based compensation:

           

Cost of revenue

   $ 47       $ 30       $ 115       $ 59   

Research and development

     1,385         905         3,259         1,979   

Selling, general and administrative

     1,029         550         2,286         1,403   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation

   $ 2,461       $ 1,485       $ 5,660       $ 3,441   
  

 

 

    

 

 

    

 

 

    

 

 

 


AMBARELLA, INC.

RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS PER SHARE

(in thousands, except share and per share data)

 

     Three Months Ended October 31,     Nine Months Ended October 31,  
     2013     2012     2013     2012  
     (unaudited)  

GAAP net income

   $ 9,126      $ 6,717      $ 20,121      $ 14,545   

Two-class method - allocation to participating securities

     (8     (3,474     (27     (9,570

Treasury stock method - additional allocation to ordinary shares

     —          155        2        432   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net income - diluted

   $ 9,118      $ 3,398      $ 20,096      $ 5,407   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP adjustments:

        

Stock-based compensation expense, net of tax effect

     2,000        1,388        4,911        3,166   

Two-class method - additional allocation to participating securities

     (3     (631     (7     (1,824

Treasury stock method - additional allocation to ordinary shares

     1        36        1        116   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income - diluted

   $ 11,116      $ 4,191      $ 25,001      $ 6,865   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP - diluted weighted average shares

     30,355,230        13,415,091        29,754,837        10,506,293   

Non-GAAP - diluted weighted average shares

     30,355,230        13,415,091        29,754,837        10,506,293   

GAAP - diluted net income per share

   $ 0.30      $ 0.25      $ 0.68      $ 0.51   

Non-GAAP adjustments:

        

Stock-based compensation expense, net of tax effect

     0.07        0.10        0.16        0.30   

Non-GAAP adjustment to two-class method diluted net income

     —          (0.05     —          (0.17

Non-GAAP adjustment to treasury stock method diluted net income

     —          0.01        —          0.01   

Non-GAAP - diluted net income per share

   $ 0.37      $ 0.31      $ 0.84      $ 0.65   

The difference between GAAP and non-GAAP gross margin was 0.1% for each period other than the third quarter of fiscal 2013 for which there was no difference. The difference was due to the effect of stock-based compensation, as disclosed in the table above, and the associated tax impact recorded for GAAP purposes.


AMBARELLA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

     October 31,      January 31,  
     2013      2013  
     (unaudited)         

ASSETS

     

Current assets:

     

Cash

   $ 128,051       $ 100,494   

Accounts receivable, net

     25,449         20,153   

Inventories

     13,010         8,918   

Restricted cash

     3         3   

Deferred tax assets, current

     1,073         1,220   

Prepaid expenses and other current assets

     1,998         2,360   
  

 

 

    

 

 

 

Total current assets

     169,584         133,148   

Property and equipment, net

     3,025         2,536   

Deferred tax assets, non-current

     1,105         938   

Other assets

     1,970         1,981   
  

 

 

    

 

 

 

Total assets

   $ 175,684       $ 138,603   
  

 

 

    

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

     

Current liabilities:

     

Accounts payable

     14,139         7,051   

Accrued liabilities

     12,066         14,042   

Income taxes payable

     77         286   

Deferred revenue, current

     3,552         3,451   
  

 

 

    

 

 

 

Total current liabilities

     29,834         24,830   

Other long-term liabilities

     1,427         1,441   
  

 

 

    

 

 

 

Total liabilities

     31,261         26,271   
  

 

 

    

 

 

 

Preference shares

     —           —     

Shareholders’ equity:

     

Ordinary shares

     13         12   

Additional paid-in capital

     103,880         91,911   

Retained earnings

     40,530         20,409   
  

 

 

    

 

 

 

Total shareholders’ equity

     144,423         112,332   
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 175,684       $ 138,603