Ambarella Earnings 2019-10-31

AMBA 10Q Quarterly Report

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Balance Sheet	Income Statement	Cash Flow

Comparables ($MM TTM)
Ticker	M Cap	Assets	Liab	Rev	G Profit	Net Inc	EBITDA	EV	G Margin	EV/EBITDA	ROA
CRUS	3,246	1,584	405	1,192	618	117	191	3,024	52%	15.8	7%
ENPH	2,974	524	371	507	172	45	66	2,875	34%	43.8	9%
IPHI	2,737	912	564	349	201	-81	19	3,103	57%	159.8	-9%
POWI	2,749	636	71	400	203	58	78	2,669	51%	34.2	9%
AMBA	2,132	514	69	172	99	-32	-21	1,880	58%	-88.3	-6%
OSIS	1,996	1,290	749	1,207	434	57	134	2,172	36%	16.2	4%
LSCC	2,763	593	284	400	233	22	59	2,823	58%	47.7	4%
OIIM	1,970	89	10	0	0	0	0	1,937			0%
ACIA	2,755	705	151	443	213	29	29	2,691	48%	92.3	4%
DIOD	2,067	1,610	533	1,262	471	136	174	1,847	37%	10.6	8%

amba-10q_20191031.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, 2019

☐

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)

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, 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 December 2, 2019 was 33,544,802 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, 2019 and January 31, 2019		3

	Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended October 31, 2019 and 2018		4

	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended October 31, 2019 and 2018		5

	Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended October 31, 2019 and 2018		6

	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended October 31, 2019 and 2018		8

	Notes to Unaudited Condensed Consolidated Financial Statements		9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		36

Item 4.	Controls and Procedures		36

PART II. OTHER INFORMATION			37

Item 1.	Legal Proceedings		37

Item 1A.	Risk Factors		37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		62

Item 6.	Exhibits		62

Signatures			64

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

AMBARELLA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(unaudited)

	October 31,		January 31,
	2019		2019
ASSETS
Current assets:
Cash and cash equivalents	$	252,310	$	194,047
Marketable debt securities		148,481		164,861
Accounts receivable, net		21,609		26,212
Inventories		19,845		18,252
Restricted cash		9		11
Prepaid expenses and other current assets		5,174		6,206
Total current assets		447,428		409,589
Property and equipment, net		5,927		6,728
Deferred tax assets, non-current		10,320		10,587
Intangible assets, net		8,232		10,936
Operating lease right-of-use assets, net		10,595		—
Goodwill		26,601		26,601
Other non-current assets		5,386		2,412
Total assets	$	514,489	$	466,853
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		18,697		12,801
Accrued and other current liabilities		28,447		24,700
Operating lease liabilities, current		2,161		—
Income taxes payable		955		993
Deferred revenue, current		545		529
Total current liabilities		50,805		39,023
Operating lease liabilities, non-current		8,519		—
Other long-term liabilities		9,925		8,341
Total liabilities		69,249		47,364
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, 2019 and January 31, 2019, respectively		—		—
Ordinary shares, $0.00045 par value per share, 200,000,000 shares authorized at October 31, 2019 and January 31, 2019, respectively; 33,540,324 shares issued and outstanding at October 31, 2019; 32,303,540 shares issued and outstanding at January 31, 2019		15		15
Additional paid-in capital		245,490		188,516
Accumulated other comprehensive income		685		97
Retained earnings		199,050		230,861
Total shareholders’ equity		445,240		419,489
Total liabilities and shareholders' equity	$	514,489	$	466,853

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,
	2019			2018			2019			2018
Revenue	$	67,922		$	57,286		$	171,520		$	176,698
Cost of revenue		28,819			22,701			72,127			69,208
Gross profit		39,103			34,585			99,393			107,490
Operating expenses:
Research and development		32,480			31,653			95,917			95,446
Selling, general and administrative		13,791			12,354			39,293			38,098
Total operating expenses		46,271			44,007			135,210			133,544
Loss from operations		(7,168	)		(9,422	)		(35,817	)		(26,054	)
Other income, net		1,917			993			6,308			2,517
Loss before income taxes		(5,251	)		(8,429	)		(29,509	)		(23,537	)
Provision (benefit) for income taxes		(942	)		592			2,302			2,367
Net loss	$	(4,309	)	$	(9,021	)	$	(31,811	)	$	(25,904	)
Net loss per share attributable to ordinary shareholders:
Basic	$	(0.13	)	$	(0.28	)	$	(0.97	)	$	(0.79	)
Diluted	$	(0.13	)	$	(0.28	)	$	(0.97	)	$	(0.79	)
Weighted-average shares used to compute net loss per share attributable to ordinary shareholders:
Basic		33,304,171			32,171,890			32,885,729			32,908,614
Diluted		33,304,171			32,171,890			32,885,729			32,908,614

See accompanying notes to condensed consolidated financial statements.

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited, in thousands)

	Three Months Ended October 31,						Nine Months Ended October 31,
	2019			2018			2019			2018
Net loss	$	(4,309	)	$	(9,021	)	$	(31,811	)	$	(25,904	)
Other comprehensive income, net of tax:
Net unrealized gains on investments		140			26			588			94
Other comprehensive income, net of tax		140			26			588			94
Comprehensive loss	$	(4,169	)	$	(8,995	)	$	(31,223	)	$	(25,810	)

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, 2019		32,303,540	$	15	$	188,516	$	97	$	230,861		$	419,489
Issuance of shares through employee equity incentive plan		335,301		—		1,520		—		—			1,520
Issuance of shares through employee stock purchase plan		99,759		—		3,063		—		—			3,063
Stock-based compensation expense related to stock awards granted to employees and consultants		—		—		15,423		—		—			15,423
Net unrealized gains on investments - net of taxes		—		—		—		254		—			254
Net loss		—		—		—		—		(17,311	)		(17,311	)
Balance--April 30, 2019		32,738,600	$	15	$	208,522	$	351	$	213,550		$	422,438
Issuance of shares through employee equity incentive plan		295,019		—		988		—		—			988
Stock-based compensation expense related to stock awards granted to employees and consultants		—		—		15,032		—		—			15,032
Net unrealized gains on investments - net of taxes		—		—		—		194		—			194
Net loss		—		—		—		—		(10,191	)		(10,191	)
Balance--July 31, 2019		33,033,619	$	15	$	224,542	$	545	$	203,359		$	428,461
Issuance of shares through employee equity incentive plan		428,600		—		2,711		—		—			2,711
Issuance of shares through employee stock purchase plan		78,105		—		2,904		—		—			2,904
Stock-based compensation expense related to stock awards granted to employees and consultants		—		—		15,333		—		—			15,333
Net unrealized gains on investments - net of taxes		—		—		—		140		—			140
Net loss		—		—		—		—		(4,309	)		(4,309	)
Balance--October 31, 2019		33,540,324	$	15	$	245,490	$	685	$	199,050		$	445,240

	Outstanding					Additional			Other
	Ordinary Shares					Paid-in			Comprehensive			Retained
	Shares			Amount		Capital			Income (Loss)			Earnings			Total
Balance--January 31, 2018		33,489,614		$	15	$	221,186		$	(279	)	$	261,265		$	482,187
Cumulative effect of change in accounting principle		—			—		—			—			43			43
Issuance of shares through employee equity incentive plan		272,723			—		305			—			—			305
Issuance of shares through employee stock purchase plan		71,415			—		2,818			—			—			2,818
Stock repurchase		(437,448	)		—		(20,624	)		—			—			(20,624	)
Stock-based compensation expense related to stock awards granted to employees and consultants		—			—		14,195			—			—			14,195
Net unrealized losses on investments - net of taxes		—			—		—			(110	)		—			(110	)
Net loss		—			—		—			—			(10,006	)		(10,006	)
Balance--April 30, 2018		33,396,304		$	15	$	217,880		$	(389	)	$	251,302		$	468,808
Issuance of shares through employee equity incentive plan		373,126			—		642			—			—			642
Stock repurchase		(1,119,193	)		—		(44,989	)		—			—			(44,989	)
Stock-based compensation expense related to stock awards granted to employees and consultants		—

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$0.00	33	$2,137

10-Q	2019-12-06	Quarter: 2019-10-31
10-Q	2019-09-06	Quarter: 2019-07-31
10-Q	2019-06-07	Quarter: 2019-04-30
10-K	2019-03-29	Annual: 2019-01-31
10-Q	2018-12-07	Quarter: 2018-10-31
10-Q	2018-09-07	Quarter: 2018-07-31
10-Q	2018-06-08	Quarter: 2018-04-30
10-K	2018-03-30	Annual: 2018-01-31
10-Q	2017-12-08	Quarter: 2017-10-31
10-Q	2017-09-08	Quarter: 2017-07-31
10-Q	2017-06-08	Quarter: 2017-04-30
10-K	2017-03-30	Annual: 2017-01-31
10-Q	2016-12-09	Quarter: 2016-10-31
10-Q	2016-09-08	Quarter: 2016-07-31
10-Q	2016-06-08	Quarter: 2016-04-30
10-K	2016-03-25	Annual: 2016-01-31
10-Q	2015-12-09	Quarter: 2015-10-31
10-Q	2015-09-08	Quarter: 2015-07-31
10-Q	2015-06-08	Quarter: 2015-04-30
10-K	2015-03-30	Annual: 2015-01-31
10-Q	2014-12-09	Quarter: 2014-10-31
10-Q	2014-09-08	Quarter: 2014-07-31
10-Q	2014-06-06	Quarter: 2014-04-30
10-K	2014-04-04	Annual: 2014-01-31
10-Q	2013-12-12	Quarter: 2013-10-31
10-Q	2013-09-13	Quarter: 2013-07-31
10-Q	2013-06-12	Quarter: 2013-04-30
10-K	2013-04-04	Annual: 2013-01-31
10-Q	2012-12-17	Quarter: 2012-10-31

8-K	2020-03-03	Earnings, Exhibits
8-K	2019-11-25	Earnings, Exhibits
8-K	2019-10-15	Other Events
8-K	2019-08-29	Earnings, Exhibits
8-K	2019-08-08	Enter Agreement
8-K	2019-06-06	Shareholder Vote
8-K	2019-06-04	Earnings, Exhibits
8-K	2019-03-05	Earnings, Exhibits
8-K	2019-02-28	Officers
8-K	2018-11-29	Earnings, Exhibits
8-K	2018-10-15	Officers
8-K	2018-08-30	Earnings, Exhibits
8-K	2018-08-06	Officers
8-K	2018-06-05	Earnings, Exhibits
8-K	2018-06-04	Officers, Shareholder Vote, Other Events
8-K	2018-04-18	Officers
8-K	2018-03-01	Earnings, Exhibits

EX-10.1	amba-ex101_152.htm
EX-31.1	amba-ex311_7.htm
EX-31.2	amba-ex312_9.htm
EX-32.1	amba-ex321_6.htm