What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2020-09-09 compared with 2020-06-08 · 94 added, 72 removed, 228 unchanged (42% of the section changed)

9 unchanged sentences

the ongoing and potential impact of the COVID-19 pandemic on our operations or the operations of our supply chain or our customers;

risks associated with the overall economy;

risks associated with the overall economy, including escalating trade tensions between the U.S.

the commercial success of our customers’ products;

20 unchanged sentences

Our revenue from several of these markets, however, has recently experienced significant declines.

As a result, we believe that our future revenue growth, if any, will significantly depend upon our ability to expand within the camera markets, particularly in the professional IP security and home security and monitoring camera markets, as well as emerging markets such as AI-enabled security cameras, AI-based driving applications, including auto-parking, driver monitoring systems, advanced blind spot detection, object detection, and deep learning algorithms for HD mapping solutions, OEM automotive advanced driver assistance systems , or ADAS, applications and industrial and robotics markets.

We expect our research and development expenditures to increase in comparison to prior periods as we devote additional resources to the development of innovative video and image processing solutions with increased functionality, such as computer vision capabilities, and as we target new markets.

As a result, we believe that our future revenue growth, if any, will significantly depend upon our ability to expand within camera markets, particularly in the professional IP security and home security and monitoring camera markets, as well as emerging markets such as AI-enabled security cameras, AI-based driving applications, including auto-parking, driver monitoring systems, advanced blind spot detection, object detection, and deep learning algorithms for HD mapping solutions, OEM automotive advanced driver assistance systems , or ADAS, applications , and industrial and robotics markets.

We expect our research and development expenditures to increase in comparison to prior periods as we devote additional resources to the development of innovative video and image processing solutions with increased functionality, such as AI and CV capabilities, and as we target new markets.

We sell our SoC solutions to leading original design manufacturers, or ODMs, and OEMs globally, and in the automotive market, we also sell to Tier-1 suppliers.

10 unchanged sentences

We anticipate that product lifecycles will typically be longer than 24 months in the OEM automotive and industrial and robotics markets, as new product introductions occur less frequently in these markets.

Financial Highlights and Trends

We recorded revenue of $54.6 million for the three months ended April 30, 2020, an increase of 15.8% as compared to the same period in the prior fiscal year.

The increase in revenue was primarily attributable to higher revenue from the IP security camera, sports camera and drone markets.

In the consumer IP security camera market, continued adoption of our solutions by new customers resulted in significant revenue growth in the home security and monitoring market in the North America region.

In the professional IP security camera market, despite slow demand from our two largest China customers and lower demand in the Asia and Europe regions, shipment growth for our computer vision-based solutions in the North America region resulted in a net revenue increase for the three months ended April 30, 2020.

Higher demand from Dajiang Innovation Technology Inc., or DJI , for our solutions resulted in higher revenue in the sports camera and drone markets in the first quarter of fiscal year 2021.

The increased revenue was partially offset by decreased revenue in the automotive and other consumer markets, including the non-sports wearable cameras and virtual reality markets.

In the automotive markets, despite customers’ initial purchases of our computer vision-based solutions in the OEM video recorder market, an overall slowdown in the automotive industry resulted in flat revenue in this market and decreased revenue in the automotive aftermarket for the three months ended April 30, 2020.

We recorded an operating loss of $15.6 million for the three months ended April 30, 2020, as compared to an operating loss of $18.2 million for the three months ended April 30, 2019.

The decreased operating loss was primarily due to increased revenue, partially offset by a decrease in gross margin and increased operating expenses.

The increase in operating expenses related primarily to increased engineering headcount and increased SoC development costs due to project timing and the number of chips in development, partially offset by decreased equipment expense and consulting services .

We generated cash flows from operating activities of $7.6 million for the three months ended April 30, 2020, as compared to $5.3 million for the three months ended April 30, 2019.

The increased cash flows from operating activities were primarily due to increased revenue and increased liabilities associated with the timing of payments to suppliers.

The increased cash flows from operating activities were partially offset by decreased cash receipts associated with the timing of payments from customers.

F inancial Highlights and Trends

We recorded revenue of $50.1 million and $104.8 million for the three and six months ended July 31, 2020, respectively.

This represented a decrease of 11.2% for the three months ended July 31, 2020 and an increase of 1.1% for the six months ended July 31, 2020, respectively, as compared to the same periods in the prior fiscal year.

The decreased revenue for the three months ended July 31, 2020 was primarily attributable to lower revenue from the sports camera, professional IP security camera, and automotive markets.

In the sports camera market, incorporation of our solutions into newly launched sports camera products from Dajiang Innovation Technology Inc., or DJI, resulted in a ramp of SoC shipments in the second quarter of fiscal year 2020 that did not recur in the current fiscal period.

In the professional IP security camera market, despite continued growth in the North America and Asia regions, lower demand from our two largest China customers caused by higher inventory build-up in fiscal year 2020 and escalated trade tensions between the United States and China, together with less demand from the Europe region, resulted in a significant revenue decrease in this market.

The decreased revenue in the automotive markets was primarily due to an overall slowdown in the automotive industry.

The lower revenue was partially offset by increased revenue in the consumer IP security camera and other consumer markets, including drone and wearable camera markets.

In the consumer IP security camera market, revenue growth was led by the home security and monitoring market in the North America region.

For the six months ended July 31, 2020, increased revenue was primarily attributable to higher revenue in the consumer IP security camera and drone markets, partially offset by decreased revenue in the sports camera and professional IP security camera markets.

While revenue was relatively flat for the six months ended July 31, 2020 compared to the same period in the prior fiscal year, we experienced continued demand for our new CV-based solutions in the professional IP security camera market and made initial shipments of our CV-based solutions into the consumer IP security camera and automotive markets in fiscal year 2021.

We recorded operating losses of $15.3 million and $30.9 million for the three and six months ended July 31, 2020, respectively, as compared to operating losses of $10.4 million and $28.6 million for the three and six months ended July 31, 2019, respectively.

In addition to the changes in revenue, the increased operating losses were also attributable to increased operating expenses, partially offset by increased gross margin.

The increase in expenses primarily related to approximately $3.2 million of research and development grants from a foreign government in the second quarter of fiscal year 2020 that did not recur in fiscal year 2021.

The increased expenses were also attributable to increased employee benefit expense and SoC development cost, partially offset by decreased equipment expense, travel expense, consulting services and a foreign subsidy granted due to the COVID-19 pandemic .

We generated cash flows from operating activities of $5.2 million for the six months ended July 31, 2020, as compared to $13.4 million for the six months ended July 31, 2019.

The decreased cash flows from operating activities were primarily due to increased net loss adjusted by non-cash expenses, decreased cash receipts associated with the timing of payments from customers, decreased liabilities associated with the timing of payments to suppliers and increased inventory purchases.

The decreased cash flows from operating activities were partially offset by decreased cash payments for other operating asset purchases.

On March 16, 2020, we repurchased a total of 25,719 of our ordinary shares for approximately $1.0 million in cash.

The repurchased shares were recorded as authorized but unis sued shares.

As of April 30, 2020 , there was approximately $49.0 million available for repurchases under our repurcha se program and such program has been extended for an additional twelve months through June 30, 2021 .

On May 29, 2020, our Board of Directors approved an extension of the repurchase program for an additional twelve months ending June 30, 2021.

There were no shares repurchased for the three months ended July 31, 2020.

As of July 31, 2020, there was approximately $49.0 million available for repurchases through June 30, 2021.

Factors Affecting Our Performance

3 unchanged sentences

Similarly, while we have not yet experienced a major disruption in our supply chain as a result of the COVID-19 pandemic, if there is a significant outbreak that impacts Samsung Electronic Corporation’s ability to manufacture our SoCs or our third-party contractors’ ability to assemble, test and ship our products, we could experience delays or reductions in our ability to ship products to our customers.

The pandemic may also impact our customers’ ability to manufacture their products, support their customers or reduce or delay demand for their products, which could, in turn, reduce demand for our solutions.

For example, in the quarter ended April 30, 2020, we saw an overall slowdown in the automotive industry which negatively impacted our revenue related to our computer vision-based solutions in the OEM video recorder market.

For example, in the six months ended July 31, 2020, we saw an overall slowdown in the automotive industry which negatively impacted our revenue related to our computer vision-based solutions in the OEM video recorder market.

While we cannot quantify specific impacts of the COVID-19 pandemic or actions taken by governments and businesses in response thereto, our results of operations and financial condition may be negatively affected if we encounter supply chain problems, reductions in demand due to our customers or end customers having problems, or other unexpected COVID-19 ramifications.

2 unchanged sentences

If additional tariffs or trade restrictions are imposed on our SoC solutions or the products of our customers, or trade restrictions are imposed on our ability to conduct business with certain customers, there could be a negative impact on our operations and financial performance.

For instance, during the six months ended July 31, 2020, lower demand from our two largest China customers resulted in our revenue decreased in the professional IP security camera market.

Even in the absence of new tariffs or trade restrictions, it is possible that China customers or potential customers could take actions to reduce dependence on the supply of components subject to United States trade laws, including our solutions.

7 unchanged sentences

As a result, we believe that our ability to develop advanced AI computer vision technology, enable and support customer product development in emerging applications, such as ADAS, advanced blind spot detection, object detection, people recognition, retail analytics, and machine learning, and gain customer acceptance of our technology platform and solutions, will be critical to our future success.

Moreover, achieving design wins, particularly for computer vision-centric applications in the IP security, automotive and robotics markets, is vital to our ability to generate revenue growth.

Moreover, achieving design wins, particularly for computer vision-centric applications in the IP security, automotive, and industrial and robotics markets, is vital to our ability to generate revenue growth.

As such, we closely monitor design wins by customer and end market.

3 unchanged sentences

To compete successfully, we must design, develop, market and sell enhanced solutions with increased levels of performance and functionality that meet the expectations of our customers.

As such, we continuously invest in our research and development projects, especially computer vision technologies.

As such, we continuously invest in our research and development projects, especially CV technologies.

However, failure to anticipate or timely develop new or enhanced solutions in response to technology shifts and trends could result in decreased revenue and our competitors achieving design wins we sought.

17 unchanged sentences

We believe, however, that continued expansion into new markets is required to facilitate revenue growth and customer diversification.

We have recently introduced solutions to address emerging applications and markets, such as the incorporation of computer vision functionalities for AI-enabled security cameras, AI-based driving applications and industrial and robotics markets.

We have recently introduced solutions to address emerging applications and markets, such as the incorporation of CV functionalities for AI-enabled security cameras, AI-based driving applications and industrial and robotics markets.

While we will continue to seek to expand our end market exposure, we anticipate that sales to a limited number of end markets will continue to account for a significant percentage of our total revenue for the foreseeable future.

22 unchanged sentences

The following table sets forth a summary of our statement of operations for the periods indicated:

Three Months Ended April 30,

Three Months Ended July 31,

Six Months Ended July 31,

(dollars in thousands)

9 unchanged sentences

The following table sets forth operating results as a percentage of revenue of each line item for the periods indicated:

Three Months Ended April 30,

Three Months Ended July 31,

Six Months Ended July 31,

Cost of revenue

7 unchanged sentences

Provision for income taxes

We derive substantially all of our revenue from the sale of HD and Ultra HD video and image processing SoC solutions to IP security OEMs, IP security ODMs, OEM automotive or Tier-1 automotive suppliers, either directly or through our distributors.

We derive substantially all of our revenue from the sale of HD and Ultra HD video and image processing SoC solutions to IP security camera OEMs, IP security camera ODMs, OEM automotive or Tier-1 automotive suppliers, either directly or through our distributors.

In recent years, our SoC solutions have been primarily used in camera markets, such as IP security, automotive video recorder, drone and wearable cameras.

Although we expect these camera markets, in particular the IP security and automotive video recorder markets, to continue to generate revenue for the foreseeable future, we have recently introduced new SoCs targeting emerging computer vision applications in the IP security, OEM automotive and industrial and robotics markets.

Although we expect these camera markets, in particular the IP security and automotive video recorder markets, to continue to generate revenue for the foreseeable future, we have recently introduced new SoCs targeting emerging CV applications in the IP security camera, OEM automotive and industrial and robotics markets.

We derive a substantial portion of our revenue from sales made indirectly through one of our distributors, Wintech Microelectronics Co., Ltd., or Wintech, and directly to one of our ODM customers, Chicony Electronics Co., Ltd., or Chicony.

5 unchanged sentences

As a result, the composition and timing of our revenue may differ meaningfully during periods of technology or consumer preference changes.

We expect shifts in consumer use of video capture to continue to change over time, as computer vision specialized use cases emerge and video capture continues to proliferate.

We expect shifts in consumer use of video capture to continue to change over time, as AI and CV specialized use cases emerge and video capture continues to proliferate.

Cost of Revenue and Gross Margin

1 unchanged sentence

Cost of revenue also includes indirect costs, such as warranty, inventory valuation reserves and other general overhead costs.

We expect that our gross margin may fluctuate from period to period as a result of changes in average selling price, product mix and the introduction of new products by us or our competitors.

We expect that our gross margin may fluctuate from period to period as a result of changes in customer mix, average selling price, product mix and the introduction of new products by us or our competitors.

In general, solutions incorporated into more complex configurations, such as those used in high-performance cameras, and in future advanced automotive OEM applications, have had or are expected to have higher prices and higher gross margins, as compared to solutions sold into the lower-performance, more competitive camera applications.

28 unchanged sentences

In the event that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.

Comparison of the Three Months Ended April 30, 2020 and 2019

Three Months Ended April 30,

Comparison of the Three and Six Months Ended July 31, 2020 and 2019

Three Months Ended July 31,

Six Months Ended July 31,

(dollars in thousands)

The increased revenue for the three months ended April 30, 2020, as compared to the same period in the prior fiscal year, was primarily attributable to higher revenue from the IP security camera, sports camera and drone markets.

Higher demand from DJI for our solutions resulted in higher revenue in the sports camera and drone markets in the first quarter of fiscal year 2021.

The increased revenue was partially offset by decreased revenue in the automotive and other consumer markets, including the non-sports wearable cameras and virtual reality markets.

The decreased revenue for the three months ended July 31, 2020, as compared to the same period in the prior fiscal year, was primarily attributable to lower revenue from the sports camera, professional IP security camera, and automotive markets.

The decreased revenue in the automotive markets was primarily due to an overall slowdown in the automotive industry.

The lower revenue was partially offset by increased revenue in the consumer IP security camera and other consumer markets, including drone and wearable camera markets.

In the consumer IP security camera market, revenue growth was led by the home security and monitoring market in the North America region.

Cost of Revenue and Gross Margin

Three Months Ended April 30,

Three Months Ended July 31,

Six Months Ended July 31,

(dollars in thousands)

Cost of revenue

Cost of revenue increased for the three months ended April 30, 2020, as compared to the same period in the prior fiscal year, primarily due to higher volumes of SoC shipments associated with increased revenue in the IP security camera, sports camera and drone markets.

Gross margin decreased for the three months ended April 30, 2020 , as compared to the same period in the prior fiscal year, primarily due to a large percentage of our total revenue coming from the professional IP security camera market, which continued to have lower gross margins over the periods, principally in the China region .

The decreased gross margin was partially offset by a shift in revenue composition to the higher gross margi n consumer IP security camera market in the North America region and drone market for the thr ee months ended April 30, 2020 .

Cost of revenue decreased for the three months ended July 31, 2020, as compared to the same period in the prior fiscal year, primarily due to lower volumes of SoC shipments associated with decreased revenue.

Cost of revenue decreased for the six months ended July 31, 2020, as compared to the same period in the prior fiscal year, primarily due to lower SoC shipments in the professional IP security camera market, partially offset by increased shipments in the consumer IP security camera and drone markets.

Gross margin increased for the three and six months ended July 31, 2020, as compared to the same periods in the prior fiscal year, primarily due to gross margin improvement in the professional IP security camera market as a result of customer concentration shift from the China region to the North America and Asia regions other than China.

Research and Development

Three Months Ended April 30,

Three Months Ended July 31,

Six Months Ended July 31,

(dollars in thousands)

Research and development

Research and development expense increased for the three months ended April 30, 2020, as compared to the same period in the prior fiscal year, primarily due to increased engineering headcount associated with computer vision technology development, as well as increased SoC development cost.

Our engineering headcount increased to 564 at April 30, 2020 compared to 557 at April 30, 2019, which resulted in an increase in salary and employee benefit related expenses of approximately $0.3 million in the first quarter of fiscal year 2021.

SoC development cost increased by approximately $1.1 million, as compared to the same period in the prior fiscal year, due to project timing and number of chips in development.

The increases were partially offset by approximately $0.4 million less in expenditures on contractor services caused by COVID-19 pandemic restrictions for the three months ended April 30, 2020.

Research and development expense increased for the three and six months ended July 31, 2020, as compared to the same periods in the prior fiscal year, primarily due to approximately $3.2 million of research and development grants from a foreign government in the second quarter of prior fiscal year that did not recur in the current fiscal year.

For the three and six months ended July 31, 2020, employee benefit expense increased by approximately $0.5 million and $0.5 million, respectively, as a result of issuance of stock and benefit programs.

Our engineering headcount was flat at 561 at July 31, 2020 compared to 559 at July 31, 2019.

SoC development cost increased by $0.9 million and $2.6 million for the three and six months ended July 31, 2020, respectively, due to project timing and number of chips in development.

In the second quarter of fiscal year 2021, there was approximately $0.7 million of a foreign subsidy granted related to the COVID-19 pandemic.

For the three and six months ended July 31, 2020, the equipment expense, travel expense and contractor services decreased by aggregate of $1.4 million and $2.1 million, respectively, caused by COVID-19 pandemic restrictions.

Selling, General and Administrative

Three Months Ended April 30,

Three Months Ended July 31,

Six Months Ended July 31,

(dollars in thousands)

Selling, general and administrative

Selling, general and administrative expense increased for the three months ended April 30, 2020, as compared to the same period in the prior fiscal year, primarily due to increased employee compensation expenses by approximately $0.4 million as a result of salary increases, as well as increased professional services by approximately $0.2 million.

The increases were partially offset by approximately $0.2 million less expenditures on marketing activities caused by COVID-19 pandemic restrictions for the three months ended April 30, 2020.

Selling, general and administrative expense increased for the three and six months ended July 31, 2020, as compared to the same periods in the prior fiscal year, primarily due to increased employee benefit expense, as well as increased professional services and facility cost.

For the three and six months ended July 31, 2020, employee benefit expense increased by approximately $0.3 million and $0.6 million, respectively, as a result of issuance of stock and benefit programs.

Professional services and facility related cost increased by approximately $1.1 million and $1.4 million, respectively.

The increases were partially offset by approximately $0.4 million and $0.7 million of less expenditures on travel and marketing activities for the three and six months ended July 31, 2020, respectively, caused by COVID-19 pandemic restrictions.

Other Income, Net

Three Months Ended April 30,

Three Months Ended July 31,

Six Months Ended July 31,

(dollars in thousands)

Other income, net

The decrease in other income, net, for the three months ended April 30, 2020, as compared to the same period in the prior fiscal year, was primarily due to approximately $0.4 million lower amortization of debt discounts due to a large volume of debt securities matured or sold during the period, as well as an approximately $0.3 million subsidy granted from a foreign government related to research and development activities during the first quarter of fiscal year 2020 that did not recur in the first quarter of fiscal year 2021.

The decrease was also attributable to approximately $0.2 million lower interest income due to lower interest rates during the COVID-19 pandemic period.

The decrease in other income, net, for the three and six months ended July 31, 2020, as compared to the same periods in the prior fiscal year, was primarily due to decreases of approximately $1.3 million and $1.8 million, respectively, in interest and other income from our deposits and debt security investments as a result of lower interest rates during the current fiscal year due to COVID-19 pandemic and a higher number of debt securities purchased at premium.

The decrease was also attributable to an approximately $0.3 million of a foreign subsidy granted during the first half of fiscal year 2020 that did not recur in the current fiscal year.

The decrease was partially offset by approximately $0.5 million and $0.4 million of net gains from foreign currency transactions and remeasurements for the three and six months ended July 31, 2020, respectively.

Provision for Income Taxes

Three Months Ended April 30,

Three Months Ended July 31,

Six Months Ended July 31,

(dollars in thousands)

2 unchanged sentences

The quarterly income taxes reflect an estimate of the corresponding fiscal year’s annual effective tax rate and include, when applicable, adjustments from discrete tax items arising in that quarter.

The decrease in income tax expense for the three months ended April 30, 2020, as compared to the same period in the prior fiscal year, was primarily due to a decrease in loss before income taxes, partially offset by the decrease in proportion of profits generated in lower-tax jurisdictions .

The decrease in income tax expense for the three and six months ended July 31, 2020, as compared to the same periods in the prior fiscal year, was primarily due to a decrease in the proportion of profits generated in higher tax jurisdictions, as well as an increase in the U.S.

federal research tax credit, partially offset by an increase in non-deductible stock-based compensation.

Liquidity and Capital Resources

As of April 30, 2020 and January 31, 2020, we had cash, cash equivalents and marketable debt securities of approximately $411.3 million and $404.7 million, respectively.

As of July 31, 2020 and January 31, 2020, we had cash, cash equivalents and marketable debt securities of approximately $410.7 million and $404.7 million, respectively.

We invest in highly liquid, short-term marketable debt securities and hold these investments as available-for-sale securities.

As of April 30, 2020, these securities had a fair value of approximately $211.8 million with unrealized losses of approximately $0.6 million caused by fluctuations in the stock market.

As of July 31, 2020, these securities had a fair value of approximately $214.0 million with immaterial unrealized losses caused by market fluctuations.

The following table summarizes our cash flows for the periods indicated:

Three Months Ended April 30,

Six Months Ended July 31,

(in thousands)

1 unchanged sentence

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

Net increase in cash, cash equivalents and restricted cash

Net cash provided by financing activities

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

Net Cash Provided by Operating Activities

Net cash provided by operating activities increased for the three months ended April 30, 2020, as compared to the same period in the prior fiscal year, primarily due to increased revenue and increased liabilities associated with the timing of payments to suppliers.

The increased cash flows from operating activities were partially offset by decreased cash receipts associated with the timing of payments from customers.

Net cash provided by operating activities decreased for the six months ended July 31, 2020, as compared to the same period in the prior fiscal year, primarily due to increased net loss adjusted by non-cash expenses, decreased cash receipts associated with the timing of payments from customers, decreased liabilities associated with the timing of payments to suppliers and increased inventory purchases.

The decreased cash flows from operating activities were partially offset by decreased cash payments for other operating asset purchases.

Net Cash Provided by (Used in) Investing Activities

Net cash used in investing activities increased for the three months ended April 30, 2020, as compared to the same period in the prior fiscal year, primarily due to approximately $13.5 million of additional investments in debt securities.

The increase was partially offset by an additional $8.1 million of cash receipts from the sale and maturity of debt securities.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities decreased for the three months ended April 30, 2020, as compared to the same period in the prior fiscal year, primarily due to $1.0 million of cash used for the repurchasing of our ordinary shares under the stock repurchase program.

The decrease was also attributable to approximately $1.0 million of less cash proceeds from option exercises and employee stock purchase withholding.

Net cash used in investing activities increased for the six months ended July 31, 2020, as compared to the same period in the prior fiscal year, primarily due to approximately $18.0 million of additional investments in debt securities, as well as approximately $10.7 million less cash receipts from the sale and maturity of debt securities.

The increase was partially offset by approximately $0.3 million of less expenditure on capital asset purchases.

Net Cash Provided by Financing Activities

Net cash provided by financing activities decreased for the six months ended July 31, 2020, as compared to the same period in the prior fiscal year, primarily due to approximately $1.6 million of less cash proceeds from option exercises and employee stock purchase withholdings, $1.0 million of cash used for the repurchasing of our ordinary shares under the stock repurchase program, as well as an additional $0.2 million of payment for intangible asset purchases.

Stock Repurchase Program

Since the inception of the repurchase programs in June 2016, a total of $275.0 million has been authorized for repurchase, and to date, we have repurchased a total of 4,011,595 shares for approximately $175.8 million in cash under the programs.

As of April 30, 2020, $49.0 million remained available for repurchases under the current repurchase program through June 30, 2020, and such program has been extended for an additional twelve months through June 30, 2021.

Since the inception of the stock repurchase programs in June 2016, a total of $275.0 million has been authorized for repurchase, and to date, we have repurchased a total of 4,011,595 shares for approximately $175.8 million in cash under the programs.

As of July 31, 2020, $49.0 million remained available for repurchases under the current repurchase program through June 30, 2021.

Repurchases under the program may be made from time-to-time through open market purchases, 10b5-1 plans or privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors.

2 unchanged sentences

Operating and Capital Expenditure Requirements

As of April 30, 2020, we had cash, cash equivalents and marketable debt securities of approximately $411.3 million.

As of July 31, 2020, we had cash, cash equivalents and marketable debt securities of approximately $410.7 million.

We believe that our existing cash balances will be sufficient to meet our anticipated cash requirements through at least the next 12 months.

16 unchanged sentences

Manufacturing Purchase Obligations

As of April 30, 2020, we had purchase obligations with our independent contract manufacturers of $32.6 million.

As of July 31, 2020, we had purchase obligations with our independent contract manufacturers of $24.4 million.

Except as described above with respect to the manufacturing purchase obligations, there were no other material changes in our contractual obligations, commitments and contingencies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2020.

1 unchanged sentence

Off-Balance Sheet Arrangements

As of April 30, 2020, we did not engage in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities.

As of July 31, 2020, we did not engage in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities.

Recent Authoritative Accounting Guidance

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis