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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, 2022

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 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 June 1, 2022 was 38,120,104 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, 2022 and January 31, 2022

 

3

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Operations for the three months ended April 30, 2022 and 2021

 

4

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three months ended April 30, 2022 and 2021

 

5

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the three months ended April 30, 2022 and 2021

 

6

 

 

 

 

 

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

 

17

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

27

 

 

 

 

Item 4.

Controls and Procedures

 

27

 

 

 

 

PART II. OTHER INFORMATION

 

27

 

 

 

 

Item 1.

Legal Proceedings

 

27

 

 

 

 

Item 1A.

Risk Factors

 

28

 

 

 

 

Item 6.

Exhibits

 

55

 

 

 

 

Signatures

 

57

 

 

 

 

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,

 

 

 

2022

 

 

2022

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

200,639

 

 

$

171,043

 

Accounts receivable, net

 

 

28,008

 

 

 

44,307

 

Inventories

 

 

41,523

 

 

 

45,219

 

Restricted cash

 

 

10

 

 

 

10

 

Prepaid expenses and other current assets

 

 

8,149

 

 

 

6,169

 

Total current assets

 

 

278,329

 

 

 

266,748

 

Property and equipment, net

 

 

10,138

 

 

 

10,134

 

Deferred tax assets, non-current

 

 

13,970

 

 

 

15,340

 

Intangible assets, net

 

 

48,477

 

 

 

46,302

 

Operating lease right-of-use assets, net

 

 

10,292

 

 

 

11,127

 

Goodwill

 

 

303,625

 

 

 

303,625

 

Other non-current assets

 

 

3,834

 

 

 

4,269

 

Total assets

 

$

668,665

 

 

$

657,545

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

 

29,763

 

 

 

31,170

 

Accrued and other current liabilities

 

 

39,354

 

 

 

52,064

 

Operating lease liabilities, current

 

 

3,293

 

 

 

3,391

 

Income taxes payable

 

 

1,481

 

 

 

1,245

 

Deferred revenue, current

 

 

964

 

 

 

1,414

 

Total current liabilities

 

 

74,855

 

 

 

89,284

 

Operating lease liabilities, non-current

 

 

7,438

 

 

 

8,322

 

Other long-term liabilities

 

 

12,024

 

 

 

12,763

 

Total liabilities

 

 

94,317

 

 

 

110,369

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Preference shares, $0.00045 par value per share, 20,000,000 shares

   authorized and no shares issued and outstanding at April 30, 2022 and

   January 31, 2022, respectively

 

 

 

 

 

 

Ordinary shares, $0.00045 par value per share, 200,000,000 shares

   authorized at April 30, 2022 and January 31, 2022, respectively;

   38,082,879 shares issued and outstanding at April 30, 2022; 37,302,818

   shares issued and outstanding at January 31, 2022

 

 

17

 

 

 

17

 

Additional paid-in capital

 

 

485,281

 

 

 

447,287

 

Retained earnings

 

 

89,050

 

 

 

99,872

 

Total shareholders’ equity

 

 

574,348

 

 

 

547,176

 

Total liabilities and shareholders' equity

 

$

668,665

 

 

$

657,545

 

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,

 

 

 

 

2022

 

 

2021

 

 

Revenue

 

$

90,305

 

 

$

70,133

 

 

Cost of revenue

 

 

33,758

 

 

 

26,368

 

 

Gross profit

 

 

56,547

 

 

 

43,765

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

 

46,690

 

 

 

37,874

 

 

Selling, general and administrative

 

 

20,355

 

 

 

16,027

 

 

Total operating expenses

 

 

67,045

 

 

 

53,901

 

 

Loss from operations

 

 

(10,498

)

 

 

(10,136

)

 

Other income, net

 

 

86

 

 

 

593

 

 

Loss before income taxes

 

 

(10,412

)

 

 

(9,543

)

 

Provision for income taxes

 

 

410

 

 

 

1,275

 

 

Net loss

 

$

(10,822

)

 

$

(10,818

)

 

Net loss per share attributable to ordinary shareholders:

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.29

)

 

$

(0.30

)

 

Diluted

 

$

(0.29

)

 

$

(0.30

)

 

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

 

 

 

 

 

 

 

 

 

Basic

 

 

37,715,338

 

 

 

35,940,304

 

 

Diluted

 

 

37,715,338

 

 

 

35,940,304

 

 

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,

 

 

 

 

2022

 

 

2021

 

 

Net loss

 

$

(10,822

)

 

$

(10,818

)

 

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

Net unrealized losses on investments

 

 

 

 

 

(427

)

 

Other comprehensive loss, net of tax

 

 

 

 

 

(427

)

 

Comprehensive loss

 

$

(10,822

)

 

$

(11,245

)

 

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

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Outstanding

 

 

Additional

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Ordinary Shares

 

 

Paid-in

 

 

Comprehensive

 

 

Retained

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

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

 

Net unrealized losses on investments - 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

 

 

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,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(10,822

)

 

$

(10,818

)

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

4,608

 

 

 

2,883

 

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

 

 

 

 

 

417

 

Stock-based compensation

 

 

27,041

 

 

 

18,842

 

Deferred income taxes

 

 

1,370

 

 

 

433

 

Other non-cash items, net

 

 

32

 

 

 

(190

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

16,299

 

 

 

(9,554

)

Inventories

 

 

3,696

 

 

 

(7,039

)

Prepaid expenses and other current assets

 

 

(2,731

)

 

 

161

 

Other non-current assets

 

 

435

 

 

 

(65

)

Accounts payable

 

 

(2,865

)

 

 

(480

)

Accrued and other current liabilities

 

 

(2,515

)

 

 

1,969

 

Income taxes payable

 

 

236

 

 

 

(262

)

Deferred revenue

 

 

(450

)

 

 

(74

)

Operating lease liabilities

 

 

(1,069

)

 

 

(856

)

Other long-term liabilities

 

 

295

 

 

 

86

 

Net cash provided by (used in) operating activities

 

 

33,560

 

 

 

(4,547

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of investments

 

 

 

 

 

(57,117

)

Escrow claim associated with business acquisition

 

 

749

 

 

 

 

Sales of investments

 

 

 

 

 

18,609

 

Maturities of investments

 

 

 

 

 

29,232

 

Purchase of tangible and intangible assets

 

 

(4,701

)

 

 

(1,954

)

Net cash used in investing activities

 

 

(3,952

)

 

 

(11,230

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options and employee stock purchase plan

 

 

1,876

 

 

 

3,893

 

Payment for intangible assets

 

 

(1,888

)

 

 

(1,881

)

Net cash provided by (used in) financing activities

 

 

(12

)

 

 

2,012

 

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

 

 

29,596

 

 

 

(13,765

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

171,053

 

 

 

241,284

 

Cash, cash equivalents and restricted cash at end of period

 

$

200,649

 

 

$

227,519

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

232

 

 

$

1,013

 

Supplemental disclosure of noncash investing and financing activities:

 

 

 

 

 

 

 

 

Unpaid liabilities related to tangible and intangible assets purchases

 

$

1,549

 

 

$

304

 

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, image processing, and powerful deep neural network 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, artificial intelligence (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 design manufacturers, or ODMs, and original equipment manufacturers, or 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 2022 fiscal year filed with the SEC on April 1, 2022 (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, but does not include all disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP”). 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, 2022.

 

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.

A substantial portion of the Company’s revenue is derived from sales through its two major distributors, WT Microelectronics Co., Ltd., formerly Wintech Microelectronics Co., Ltd., or WT, which serves as its non-exclusive sales representative in Asia other than Japan, and Hakuto Co., Ltd., or Hakuto, a Japan distributor, and directly to one ODM customer, Chicony Electronics Co., Ltd., or Chicony. 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 13 for additional information regarding revenue and credit concentration with these customers.

 

8


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. The cash equivalents consist primarily of money market funds which management assesses to be highly liquid. In fiscal year 2022, the Company fully liquidated its investments in debt securities to finance the acquisition of Oculii Corp, or Oculii. As of April 30, 2022 and January 31, 2022, there were no debt security investments recorded in the condensed consolidated balance sheets.

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, 2022 and January 31, 2022, 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,

2022

 

 

January 31, 2022

 

 

April 30,

2021

 

 

January 31, 2021

 

 

 

(in thousands)

 

Cash and cash equivalents

 

$

200,639

 

 

$

171,043

 

 

$

227,509

 

 

$

241,274

 

Restricted cash

 

 

10

 

 

 

10

 

 

 

10

 

 

 

10

 

Total as presented in the condensed consolidated statements of cash flows

 

$

200,649

 

 

$

171,053

 

 

$

227,519

 

 

$

241,284

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recent Accounting Pronouncements

None.

 

2. Inventories

Inventories at April 30, 2022 and January 31, 2022 consisted of the following:

 

 

 

As of

 

 

 

April 30, 2022

 

 

January 31, 2022

 

 

 

(in thousands)

 

Work-in-progress

 

$

32,892

 

 

$

25,844

 

Finished goods

 

 

8,631

 

 

 

19,375

 

Total

 

$

41,523

 

 

$

45,219

 

 

3. Property and Equipment, Net

Depreciation expense was approximately $0.9 million and $0.6 million for the three months ended April 30, 2022 and 2021, respectively. Property and equipment at April 30, 2022 and January 31, 2022 consisted of the following:

 

 

 

As of

 

 

 

April 30, 2022

 

 

January 31, 2022

 

 

 

(in thousands)

 

Computer equipment and software

 

$

17,133

 

 

$

16,488

 

Machinery and equipment

 

 

7,757

 

 

 

7,532

 

Furniture and fixtures

 

 

1,253

 

 

 

1,243

 

Leasehold improvements

 

 

3,065

 

 

 

2,942

 

Construction in progress

 

 

806

 

 

 

1,060

 

 

 

 

30,014

 

 

 

29,265

 

Less: accumulated depreciation and amortization

 

 

(19,876

)

 

 

(19,131

)

Total property and equipment, net

 

$

10,138

 

 

$

10,134

 

 

 

9


 

4. Intangible Assets, Net

   As of April 30, 2022, the 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, 2022, $4.9 million was recorded in accrued and other current liabilities and $0.6 million was recorded in other long-term liabilities in the condensed consolidated balance sheets.

The components of intangible assets as of April 30, 2022 and January 31, 2022 were as follows:

 

 

 

As of April 30, 2022

 

 

As of January 31, 2022

 

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Carrying Amount

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Carrying Amount

 

 

 

(in thousands)

 

Software licenses

 

$

26,635

 

 

$

(12,486

)

 

$

14,149

 

 

$

22,093

 

 

$

(11,331

)

 

$

10,762

 

Developed technology

 

 

21,200

 

 

 

(1,661

)

 

 

19,539

 

 

 

21,200

 

 

 

(904

)

 

 

20,296

 

Customer relationships

 

 

13,200

 

 

 

(733

)

 

 

12,467

 

 

 

13,200

 

 

 

(367

)

 

 

12,833

 

Trade name

 

 

2,500

 

 

 

(178

)

 

 

2,322

 

 

 

2,500

 

 

 

(89

)

 

 

2,411

 

Total intangible assets, net

 

$

63,535

 

 

$

(15,058

)

 

$

48,477

 

 

$

58,993

 

 

$

(12,691

)

 

$

46,302

 

During the three months ended April 30, 2022, there was approximately $4.9 million of software licenses purchased and approximately $0.4 million of software licenses retired. The amortization expense associated with software licenses was approximately $1.6 million and $1.5 million for the three months ended April 30, 2022 and 2021, respectively. The amortization expense associated with acquisition-related intangible assets, including developed technology, customer relationships and trade name, was approximately $1.2 million for the three months ended April 30, 2022. There was no acquisition-related amortization expense for the three months ended April 30, 2021. The expected future amortization expense related to these intangible assets as of April 30, 2022 is as follows:

 

 

As of

 

 

 

April 30, 2022

 

Fiscal Year

 

(in thousands)

 

2023 (9 months remaining)

 

$

7,693

 

2024

 

 

8,211

 

2025

 

 

6,971

 

2026

 

 

5,408

 

2027

 

 

5,405

 

Thereafter

 

 

14,789

 

Total future amortization expenses:

 

$

48,477

 

The intangible assets are required to be tested for impairment at least annually in the fourth fiscal quarter or sooner whenever events or changes in circumstances indicate that the assets may be impaired. There were no intangible asset impairments for the three months ended April 30, 2022 and 2021, respectively.

 

5. Accrued and Other Current Liabilities

Accrued and other current liabilities at April 30, 2022 and January 31, 2022 consisted of the following:

 

 

 

As of

 

 

 

April 30, 2022

 

 

January 31, 2022

 

 

 

(in thousands)

 

Accrued employee compensation

 

$

20,751

 

 

$

30,044

 

Accrued product development costs

 

 

6,992

 

 

 

10,523

 

Software license liabilities, current

 

 

4,947

 

 

 

6,001

 

Other accrued liabilities

 

 

6,664

 

 

 

5,496

 

Total accrued and other current liabilities

 

$

39,354

 

 

$

52,064

 

 

10


 

The timing of SoC development progress and payments to outside foundries resulted in fluctuation of the accrued product development costs. The decrease in employee compensation liabilities was primarily due to $10.9 million of annual bonus paid in the first quarter of fiscal year 2023, of which $3.2 million was paid in cash and $7.7 million was settled with restricted stock units.