10-Q 1 amba-20240430.htm 10-Q 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 April 30, 2024

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 May 31, 2024 was 40,985,225 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 April 30, 2024 and January 31, 2024

 

3

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Operations for the three months ended April 30, 2024 and 2023

 

4

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three months ended April 30, 2024 and 2023

 

5

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the three months ended April 30, 2024 and 2023

 

6

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended April 30, 2024 and 2023

 

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

 

26

 

 

 

 

Item 4.

Controls and Procedures

 

27

 

 

 

 

PART II. OTHER INFORMATION

 

27

 

 

 

 

Item 1.

Legal Proceedings

 

28

 

 

 

 

Item 1A.

Risk Factors

 

28

 

 

 

 

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

 

 

 

April 30,

 

 

January 31,

 

 

 

2024

 

 

2024

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

131,810

 

 

$

144,914

 

Marketable debt securities

 

 

71,537

 

 

 

75,013

 

Accounts receivable, net

 

 

28,299

 

 

 

24,950

 

Inventories

 

 

28,325

 

 

 

29,043

 

Restricted cash

 

 

7

 

 

 

7

 

Prepaid expenses and other current assets

 

 

6,929

 

 

 

6,230

 

Total current assets

 

 

266,907

 

 

 

280,157

 

Property and equipment, net

 

 

9,763

 

 

 

10,439

 

Deferred tax assets

 

 

115

 

 

 

234

 

Intangible assets, net

 

 

51,099

 

 

 

55,136

 

Operating lease right-of-use assets, net

 

 

4,324

 

 

 

5,250

 

Goodwill

 

 

303,625

 

 

 

303,625

 

Other non-current assets

 

 

2,827

 

 

 

2,814

 

Total assets

 

$

638,660

 

 

$

657,655

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

 

16,470

 

 

 

28,503

 

Accrued and other current liabilities

 

 

49,714

 

 

 

48,598

 

Operating lease liabilities, current

 

 

3,148

 

 

 

3,443

 

Income taxes payable

 

 

904

 

 

 

1,541

 

Deferred revenue, current

 

 

2,009

 

 

 

894

 

Total current liabilities

 

 

72,245

 

 

 

82,979

 

Operating lease liabilities, non-current

 

 

1,243

 

 

 

1,896

 

Other long-term liabilities

 

 

9,747

 

 

 

12,909

 

Total liabilities

 

 

83,235

 

 

 

97,784

 

Commitments and contingencies (Note 14)

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

Preference shares, $0.00045 par value per share, 20,000,000 shares authorized and no shares issued and outstanding at April 30, 2024 and January 31, 2024, respectively

 

 

 

 

 

 

Ordinary shares, $0.00045 par value per share, 200,000,000 shares authorized; 40,985,045 and 40,520,558 shares issued and outstanding at April 30, 2024 and January 31, 2024, respectively

 

 

18

 

 

 

18

 

Additional paid-in capital

 

 

728,842

 

 

 

694,967

 

Accumulated other comprehensive loss

 

 

(572

)

 

 

(183

)

Accumulated deficit

 

 

(172,863

)

 

 

(134,931

)

Total shareholders’ equity

 

 

555,425

 

 

 

559,871

 

Total liabilities and shareholders' equity

 

$

638,660

 

 

$

657,655

 

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 April 30,

 

 

 

2024

 

 

2023

 

Revenue

 

$

54,473

 

 

$

62,142

 

Cost of revenue

 

 

21,313

 

 

 

24,623

 

Gross profit

 

 

33,160

 

 

 

37,519

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

54,137

 

 

 

54,441

 

Selling, general and administrative

 

 

18,468

 

 

 

18,620

 

Total operating expenses

 

 

72,605

 

 

 

73,061

 

Loss from operations

 

 

(39,445

)

 

 

(35,542

)

Other income, net

 

 

2,271

 

 

 

1,286

 

Loss before income taxes

 

 

(37,174

)

 

 

(34,256

)

Provision for income taxes

 

 

758

 

 

 

1,646

 

Net loss

 

$

(37,932

)

 

$

(35,902

)

Net loss per share attributable to ordinary shareholders:

 

 

 

 

 

 

Basic

 

$

(0.93

)

 

$

(0.91

)

Diluted

 

$

(0.93

)

 

$

(0.91

)

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

 

 

 

 

 

 

Basic

 

 

40,774,991

 

 

 

39,340,791

 

Diluted

 

 

40,774,991

 

 

 

39,340,791

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

 

4


 

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited, in thousands)

 

 

 

Three Months Ended April 30,

 

 

 

2024

 

 

2023

 

Net loss

 

$

(37,932

)

 

$

(35,902

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

Net unrealized gains (losses) on investments

 

 

(389

)

 

 

110

 

Other comprehensive income (loss), net of tax

 

 

(389

)

 

 

110

 

Comprehensive loss

 

$

(38,321

)

 

$

(35,792

)

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, 2024

 

 

40,520,558

 

 

$

18

 

 

$

694,967

 

 

$

(183

)

 

$

(134,931

)

 

$

559,871

 

Issuance of shares through employee equity plans

 

 

367,413

 

 

 

 

 

 

4,237

 

 

 

 

 

 

 

 

 

4,237

 

Issuance of shares through employee stock purchase plan

 

 

97,074

 

 

 

 

 

 

4,055

 

 

 

 

 

 

 

 

 

4,055

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

25,583

 

 

 

 

 

 

 

 

 

25,583

 

Other comprehensive loss - net of tax

 

 

 

 

 

 

 

 

 

 

 

(389

)

 

 

 

 

 

(389

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(37,932

)

 

 

(37,932

)

Balance--April 30, 2024

 

 

40,985,045

 

 

$

18

 

 

$

728,842

 

 

$

(572

)

 

$

(172,863

)

 

$

555,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

See accompanying notes to condensed consolidated financial statements.

 

6


 

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

 

 

 

Three Months Ended April 30,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(37,932

)

 

$

(35,902

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

6,354

 

 

 

5,824

 

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

 

 

(205

)

 

 

(369

)

Stock-based compensation

 

 

26,036

 

 

 

27,265

 

Deferred income taxes

 

 

119

 

 

 

846

 

Other non-cash items, net

 

 

478

 

 

 

64

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(3,349

)

 

 

22,162

 

Inventories

 

 

928

 

 

 

(737

)

Prepaid expenses and other current assets

 

 

(702

)

 

 

(810

)

Other non-current assets

 

 

(13

)

 

 

106

 

Accounts payable

 

 

(12,037

)

 

 

7,780

 

Accrued and other current liabilities

 

 

5,806

 

 

 

(2,613

)

Income taxes payable

 

 

(637

)

 

 

(493

)

Deferred revenue

 

 

1,115

 

 

 

(152

)

Operating lease liabilities

 

 

(983

)

 

 

(968

)

Other long-term liabilities

 

 

71

 

 

 

22

 

Net cash provided by (used in) operating activities

 

 

(14,951

)

 

 

22,025

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of investments

 

 

(6,653

)

 

 

(19,790

)

Sales of investments

 

 

7,195

 

 

 

1,468

 

Maturities of investments

 

 

2,725

 

 

 

12,410

 

Purchase of tangible and intangible assets

 

 

(1,132

)

 

 

(2,298

)

Net cash provided by (used in) investing activities

 

 

2,135

 

 

 

(8,210

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from exercise of stock options and employee stock purchase plan

 

 

2,903

 

 

 

2,592

 

Long-term financing payment for intangible assets

 

 

(3,191

)

 

 

(2,207

)

Net cash provided by (used in) financing activities

 

 

(288

)

 

 

385

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

(13,104

)

 

 

14,200

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

144,921

 

 

 

113,549

 

Cash, cash equivalents and restricted cash at end of period

 

$

131,817

 

 

$

127,749

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Cash paid for income taxes

 

$

1,084

 

 

$

1,251

 

Supplemental disclosure of noncash investing activities:

 

 

 

 

 

 

Unpaid liabilities related to tangible and intangible assets purchases

 

$

298

 

 

$

825

 

See accompanying notes to condensed consolidated financial statements.

 

 

7


 

AMBARELLA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

1. Organization and Summary of Significant Accounting Policies

Organization

Ambarella, Inc. (the Company) was incorporated in the Cayman Islands on January 15, 2004. The Company is a leading developer of low-power semiconductor solutions offering high-definition (HD) and Ultra HD compression, advanced image signal processing, and powerful artificial intelligence (AI) processing. The Company combines its processor design capabilities with its expertise in video and image processing, algorithms and software to provide a technology platform that is designed to be easily scalable across multiple applications and enable rapid and efficient product development. The Company’s system-on-a-chip, or SoC, designs fully integrate high-definition video processing, image processing, AI computer vision algorithms, audio processing and system functions onto a single chip. These low power SoCs deliver exceptional video and image quality and can extract valuable data from high-resolution video and radar streams. The Company is currently addressing a broad range of human and computer vision applications, including video security, advanced driver assistance systems (ADAS), electronic mirrors, drive recorders, driver/cabin monitoring systems, autonomous driving, and industrial and robotic applications.

The Company sells its solutions to leading original equipment manufacturers, or OEMs, who include the Company’s SoCs in their products, and original design manufacturers, or ODMs, who include the Company’s SoCs in the products that they supply to OEMs, globally.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and, therefore, do not include all information and notes normally provided in audited financial statements. The accounting policies are described in the “Notes to Consolidated Financial Statements” in the Annual Report on Form 10-K for the 2024 fiscal year filed with the SEC on March 29, 2024 (the Form 10-K) and updated, as necessary, in this Form 10-Q. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from audited financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair statement have been included. The results of operations for any interim period are not necessarily indicative of, nor comparable to, the results of operations for any other interim period or for a full fiscal year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Form 10-K.

Basis of Consolidation

The Company’s fiscal year ends on January 31. The condensed consolidated financial statements of the Company and its subsidiaries have been prepared in conformity with U.S. GAAP. All intercompany transactions and balances have been eliminated upon consolidation.

 

Significant Accounting Policies

 

There have been no material changes to the Company’s significant accounting policies described in Note 1 - Organization and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2024.

 

Concentration of Risk

The Company’s products are manufactured, assembled and tested by third-party contractors located primarily in Asia. The Company does not have long-term agreements with these contractors. A significant disruption in the operations of one or more of these contractors would impact the production of the Company’s products which could have a material adverse effect on its business, financial condition and results of operations.

 

8


 

A substantial portion of the Company’s revenue is derived from sales through one of its distributors, WT Microelectronics Co., Ltd., formerly Wintech Microelectronics Co., Ltd., or WT, which serves as its non-exclusive sales representative and fulfillment partner in Asia other than Japan, and to one ODM, Chicony Electronics Co., Ltd., or Chicony, which manufactures devices incorporating the Company’s solutions on behalf of multiple end-customers. Termination of the relationships with these customers could result in a temporary or permanent loss of revenue. Furthermore, any credit issues from these customers could impair their abilities to make timely payment to the Company. See Note 15 for additional information regarding revenue and credit concentration with these customers.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, marketable debt securities and accounts receivable. The Company maintains its cash primarily in checking accounts with reputable financial institutions. Cash deposits held with these financial institutions may exceed the amount of insurance provided on such deposits. The Company has not experienced any losses on deposits of its cash. In order to limit the exposure of each investment, the cash equivalents and marketable debt securities consist primarily of money market funds, fixed deposit accounts, commercial paper, corporate bonds, asset-backed securities and U.S. government securities which management assesses to be highly liquid. The Company does not hold or issue financial instruments for trading purposes.

The Company performs ongoing credit evaluation of its customers and adjusts credit limits based upon payment history and customers’ credit worthiness. The Company regularly monitors collections and payments from its customers.

 

Restricted Cash

Amounts included in restricted cash represent those required to be set aside to secure certain transactions in a foreign entity. As of April 30, 2024 and January 31, 2024, restricted cash was immaterial, respectively. The following table presents cash, cash equivalents and restricted cash reported on the condensed consolidated balance sheets, and the totals are presented on the condensed consolidated statements of cash flows:

 

 

 

As of

 

 

 

April 30,
2024

 

 

January 31,
2024

 

 

April 30,
 2023

 

 

January 31,
2023

 

 

 

(in thousands)

 

Cash and cash equivalents

 

$

131,810

 

 

$

144,914

 

 

$

127,741

 

 

$

113,541

 

Restricted cash

 

 

7

 

 

 

7

 

 

 

8

 

 

 

8

 

Total as presented in the condensed consolidated statements of cash flows

 

$

131,817

 

 

$

144,921

 

 

$

127,749

 

 

$

113,549

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recent Accounting Pronouncements

There has been no adoption of any new and recently issued accounting pronouncements.

 

9


 

2. Financial Instruments and Fair Value

The Company invests a portion of its cash in money market funds and debt securities that are denominated in United States dollars. The debt security investment portfolio consists of commercial paper, corporate bonds, asset-backed securities and U.S. government securities. All of the investments are classified as available-for-sale securities and reported at fair value in the condensed consolidated balance sheets as follows:

 

 

 

As of April 30, 2024

 

 

 

Amortized Cost

 

 

Unrealized Gains

 

 

Unrealized Losses

 

 

Fair Value

 

 

 

(in thousands)

 

Money market funds

 

$

4,061

 

 

$

 

 

$

 

 

$

4,061

 

Commercial paper

 

 

15,781

 

 

 

 

 

 

 

 

 

15,781

 

Corporate bonds

 

 

42,221

 

 

 

37

 

 

 

(297

)

 

 

41,961

 

Asset-backed securities

 

 

12,309

 

 

 

 

 

 

(123

)

 

 

12,186

 

U.S. government securities

 

 

23,189

 

 

 

 

 

 

(189

)

 

 

23,000

 

Total cash equivalents and marketable debt securities

 

$

97,561

 

 

$

37

 

 

$

(609

)

 

$

96,989

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of January 31, 2024

 

 

 

Amortized Cost

 

 

Unrealized Gains

 

 

Unrealized Losses

 

 

Fair Value

 

 

 

(in thousands)

 

Money market funds

 

$

296

 

 

$

 

 

$

 

 

$

296

 

Commercial paper

 

 

30,806

 

 

 

 

 

 

 

 

 

30,806

 

Corporate bonds

 

 

38,867

 

 

 

180

 

 

 

(135

)

 

 

38,912

 

Asset-backed securities

 

 

15,212

 

 

 

14

 

 

 

(96

)

 

 

15,130

 

U.S. government securities

 

 

21,118

 

 

 

 

 

 

(146

)

 

 

20,972

 

Total cash equivalents and marketable debt securities

 

$

106,299

 

 

$

194

 

 

$

(377

)

 

$

106,116

 

 

The following table provides the breakdown of unrealized losses as of April 30, 2024 and January 31, 2024, respectively, aggregated by investment category and length of time that individual securities have been in a continuous loss position:

 

 

 

As of April 30, 2024

 

 

 

Less than 12 Months

 

 

12 Months or Greater

 

 

Total

 

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

 

 

(in thousands)

 

Corporate bonds

 

$

27,191

 

 

$

(165

)

 

$

7,963

 

 

$

(132

)

 

$

35,154

 

 

$

(297

)

Asset-backed securities

 

 

4,981

 

 

 

(19

)

 

 

7,205

 

 

 

(104

)

 

 

12,186

 

 

 

(123

)

U.S. government securities

 

 

15,357

 

 

 

(97

)

 

 

7,643

 

 

 

(92

)

 

 

23,000

 

 

 

(189

)

Total marketable debt securities at loss position

 

$

47,529

 

 

$

(281

)

 

$

22,811

 

 

$

(328

)

 

$

70,340

 

 

$

(609

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of January 31, 2024

 

 

 

Less than 12 Months

 

 

12 Months or Greater

 

 

Total

 

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

 

 

(in thousands)

 

Corporate bonds

 

$

9,050

 

 

$

(19

)

 

$

8,363

 

 

$

(116

)

 

$

17,413

 

 

$

(135

)

Asset-backed securities

 

 

4,821

 

 

 

(15

)

 

 

6,289

 

 

 

(81

)

 

 

11,110

 

 

 

(96

)

U.S. government securities

 

 

15,020

 

 

 

(65

)

 

 

5,952

 

 

 

(81

)

 

 

20,972

 

 

 

(146

)

Total marketable debt securities at loss position

 

$

28,891

 

 

$

(99

)

 

$

20,604

 

 

$

(278

)

 

$

49,495

 

 

$

(377

)

 

 

 

 

As of

 

 

 

April 30, 2024

 

 

January 31, 2024

 

 

 

(in thousands)

 

Included in cash equivalents

 

$

25,452

 

 

$

31,103

 

Included in marketable debt securities

 

 

71,537

 

 

 

75,013

 

Total cash equivalents and marketable debt securities

 

$

96,989

 

 

$

106,116

 

 

 

10


 

The contractual maturities of the investments at April 30, 2024 and January 31, 2024 were as follows:

 

 

 

As of

 

 

 

April 30, 2024

 

 

January 31, 2024

 

 

 

(in thousands)

 

Due within one year

 

$

54,987

 

 

$

50,216

 

Due in 1 - 5 years

 

 

42,002

 

 

 

55,900

 

Total cash equivalents and marketable debt securities

 

$

96,989

 

 

$

106,116

 

 

The unrealized gains and losses on the available-for-sale securities were primarily caused by fluctuations in market value and interest rates as a result of the economic environment. In accordance with ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Company estimates the expected losses at an individual security level whenever a security’s fair value is below its amortized cost basis using the discounted cash flow method. The credit-related portion of the loss is recognized in other income, net, in the condensed consolidated statements of operations but is limited to the difference between the fair value and the amortized cost basis of the security, adjusted for accrued interest. The non-credit-related portion of the loss is recognized in accumulated other comprehensive loss in the condensed consolidated balance sheets. The credit-related losses were not material for the three months ended April 30, 2024 and 2023, respectively.

 

Interest income, including amortization of premiums and accretion of discounts related to the investments, as well as realized gains and losses from sales of the investments are recorded in other income, net, in the condensed consolidated statements of operations. For the three months ended April 30, 2024 and 2023, interest income and realized gains and losses, net, were approximately $1.3 million and $1.0 million, respectively.

The following fair value hierarchy is applied for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.

Level 3—Unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

The Company measures the fair value of money market funds using quoted prices in active markets for identical assets and classifies them within Level 1. The fair value of the Company’s investments in other debt securities are obtained based on quoted prices for similar assets in active markets and are classified within Level 2.

The following tables present the fair value of the financial instruments measured on a recurring basis as of April 30, 2024 and January 31, 2024, respectively:

 

 

 

As of April 30, 2024

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(in thousands)

 

Money market funds

 

$

4,061

 

 

$

4,061

 

 

$

 

 

$

 

Commercial paper

 

 

15,781

 

 

 

 

 

 

15,781

 

 

 

 

Corporate bonds

 

 

41,961

 

 

 

 

 

 

41,961

 

 

 

 

Asset-backed securities

 

 

12,186

 

 

 

 

 

 

12,186

 

 

 

 

U.S. government securities

 

 

23,000

 

 

 

 

 

 

23,000

 

 

 

 

Total cash equivalents and marketable debt securities

$

96,989

 

 

$

4,061

 

$

92,928

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of January 31, 2024

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(in thousands)

 

Money market funds

$

296

 

 

$

296

 

 

$

 

 

$

 

Commercial paper

 

 

30,806

 

 

 

 

 

 

30,806

 

 

 

 

Corporate bonds

 

 

38,912

 

 

 

 

 

 

38,912

 

 

 

 

Asset-backed securities

 

 

15,130

 

 

 

 

 

 

15,130

 

 

 

 

U.S. government securities

 

 

20,972

 

 

 

 

 

 

20,972

 

 

 

 

Total cash equivalents and marketable debt securities

$

106,116

 

 

$

296

 

$

105,820

 

 

$

 

 

 

11


 

 

In addition to available-for-sale securities, the Company also has fixed deposit accounts that are classified as cash equivalents. As of April 30, 2024 and January 31, 2024, the carrying value of fixed deposit accounts was approximately $12.9 million and $7.0 million, respectively, which represented their fair value within level 1 hierarchy.

 

3. Inventories

Inventories at April 30, 2024 and January 31, 2024 consisted of the following:

 

 

 

As of

 

 

 

April 30, 2024

 

 

January 31, 2024

 

 

 

(in thousands)

 

Work-in-progress

 

$

18,705

 

 

$

18,933

 

Finished goods

 

 

9,620

 

 

 

10,110

 

Total

 

$

28,325

 

 

$

29,043

 

 

4. Property and Equipment, Net

Depreciation expense was approximately $1.2 million and $1.1 million for the three months ended April 30, 2024 and 2023, respectively. Property and equipment at April 30, 2024 and January 31, 2024 consisted of the following:

 

 

 

As of

 

 

 

April 30, 2024

 

 

January 31, 2024

 

 

 

(in thousands)

 

Computer hardware and software

 

$

24,007

 

 

$

23,518

 

Tools and equipment

 

 

8,576

 

 

 

8,564

 

Furniture and fixtures

 

 

1,352

 

 

 

1,351

 

Leasehold improvements

 

 

3,448

 

 

 

3,440

 

Construction in progress

 

 

212

 

 

 

166

 

 

 

 

37,595

 

 

 

37,039

 

Less: accumulated depreciation and amortization

 

 

(27,832

)

 

 

(26,600

)

Total property and equipment, net

 

$

9,763

 

 

$

10,439

 

 

5. Goodwill and Intangible Assets, Net

Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired in a business combination.

Intangible assets primarily consist of software licenses as well as developed technology, customer relationships and trade name that were acquired from business combinations.

The Company enters into certain software license agreements with third parties from time-to-time. The software licenses consist of noncancelable on-premise internal-use software and software with alternative use that is to be sold, leased or otherwise marketed as part of a product. The licenses have been capitalized as intangible assets, and the corresponding future payments have been recorded as liabilities at net present value. As of April 30, 2024, software license liabilities of approximately $8.1 million were recorded in accrued and other current liabilities and approximately $5.1 million were recorded in other long-term liabilities in the condensed consolidated balance sheets.

The components of intangible assets as of April 30, 2024 and January 31, 2024 were as follows:

 

 

 

As of April 30, 2024

 

 

As of January 31, 2024

 

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Carrying Amount

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Carrying Amount

 

 

 

(in thousands)

 

Software licenses

 

$

41,406

 

 

$

(14,929

)