What changed in this filing

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Item 1A. Risk Factors

2021-09-08 compared with 2021-06-08 · 53 added, 16 removed, 821 unchanged (8% of the section changed)

59 unchanged sentences

Disruptions may also adversely affect our customers’ ability to manufacture their products, which in turn could reduce their demand for our products.

For example, Taiwan has recently experienced a significant rise in cases of COVID-19 that, if such conditions persist or worsen, could impact our third-party contractors’ ability to assemble, test and ship our products and negatively impair our operations and financial results.

Moreover, the semiconductor industry in general is currently experiencing significant shortages of capacity, due in part to COVID-19, which has resulted in a lengthening of the manufacturing lead time for our products and could be impacting the normal forecasting and ordering patterns of our customers.

For example, Taiwan recently experienced a significant rise in cases of COVID-19 that, if such conditions persist or worsen, could impact our third-party contractors’ ability to assemble, test and ship our products and negatively impair our operations and financial results.

The semiconductor industry in general is currently experiencing significant shortages of capacity, due in part to COVID-19, which has resulted in a lengthening of the manufacturing lead time for our products and could be impacting the normal forecasting and ordering patterns of our customers.

Moreover, if there is a significant COVID-19 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.

In addition, the COVID-19 pandemic or other disease outbreaks will, in the short-term, and could over the longer term, adversely affect the economies and financial markets of many countries, resulting in an economic downturn or recession that could adversely affect demand for our products and impact our results of operations and financial condition.

36 unchanged sentences

It is also possible during this time of supply chain capacity shortage that customers may place orders for our products that exceed their actual demand, which may lead to us manufacturing a surplus of products and could have a negative impact on our results or operations and cash reserves.

Our primary inventory warehouse is located in Hong Kong and may be affected by continued political, social and economic conditions in Hong Kong.

Our primary inventory warehouse is located in Hong Ko ng and may be affected by continued political, social and economic conditions in Hong Kong.

We operate a warehouse facility in Hong Kong through which the substantial majority of our finished SoCs are shipped to customers or logistic partners.

BIS has imposed additional restrictions on exports and reexports of U.S.-controlled items to Hong Kong by removing preferential treatment that Hong Kong used to receive and imposing more stringent licensing requirements similar to those applicable to China.

Hong Kong has experienced, and continues to experience, significant political unrest and social strife, including protests that resulted in the closing of the Hong Kong international airport on August 12, 2019 for two days.

In response to national security legislation adopted by the Chinese government, the U.S.

Secretary of State certified to the U.S.

Congress on May 27, 2020 that Hong Kong no longer maintains a sufficient degree of autonomy from China to warrant special treatment by the U.S.

Congress in May 2020 that Hong Kong no longer maintains a sufficient degree of autonomy from China to warrant special treatment by the U.S.

While such certification does not have an immediate impact on Hong Kong for trade or other purposes, this action represents an escalation in political and trade tensions involving the U.S, China and Hong Kong.

16 unchanged sentences

Because production lead times often exceed the amount of time required by our customers to fill their orders, we often must build SoCs in advance of receiving orders from customers, relying on an imperfect demand forecast to project volumes and product mix.

As a result of a number of factors, including longer manufacturing times for our products and increased demand from customers, we have increased our inventory levels in the near term.

Our SoCs are incorporated into products manufactured by or for our end customers, and as a result, demand for our solutions is influenced by the demand for our customers’ products.

14 unchanged sentences

In fiscal year 2021, the customers representing 10% or more of our revenue were WT Microelectronics Co., Ltd., formerly Wintech Microelectronics Co., Ltd., or Wintech, our distributor, and Chicony Electronics Co., Ltd., or Chicony, a direct ODM customer, which accounted for approximately 63% and 16% of total revenue, respectively.

For the three months ended April 30, 2021, the customers representing 10% or more of revenue were Wintech and Chicony, which accounted for approximately 63% and 16% of total revenue, respectively.

For the six months ended July 31, 2021, the customers representing 10% or more of revenue were Wintech and Chicony, which accounted for approximately 62% and 16% of total revenue, respectively.

We believe that our operating results for the foreseeable future will continue to depend on sales to a relatively small number of customers and end customers.

87 unchanged sentences

Our research and development expense was $140.8 million, $129.7 million and $128.1 million in fiscal years 2021, 2020 and 2019, respectively.

For the three months ended April 30, 2021, our research and development expense was $37.9 million.

For the six months ended July 31, 2021, our research and development expense was $77.4 million.

We expect to increase our research and development expenditures as compared to prior periods as part of our strategy of focusing on the development of innovative computer vision, video and image processing solutions with increased functionality, and as we target new markets, such as the automotive OEM and robotics markets.

37 unchanged sentences

Deterioration of the financial condition of our distributors or customers could adversely impact our collection of accounts receivable.

For the three months ended April 30, 2021, the customers representing 10% or more of revenue and accounts receivable were Wintech and Chicony, which accounted for approximately 63% and 16% of total revenue, respectively.

As of April 30, 2021, accounts receivable with Wintech and Chicony were approximately $17.0 million and $11.3 million, respectively.

For the six months ended July 31, 2021, the customers representing 10% or more of revenue and accounts receivable were Wintech and Chicony, which accounted for approximately 62% and 16% of total revenue, respectively.

As of July 31, 2021, accounts receivable with Wintech and Chicony were approximately $17.7 million and $12.6 million, respectively.

We regularly review the collectability and creditworthiness of our distributors and customers to determine an appropriate allowance for credit losses.

66 unchanged sentences

In the future, we may acquire other businesses, products or technologies.

Other than our acquisition of VisLab S.r.l., or VisLab, in June 2015, we have not made any acquisitions to date and do not have any agreements or commitments for any specific acquisition at this time.

Other than our acquisition of VisLab S.r.l., or VisLab, in June 2015, we have not made any acquisitions to date and do not have any commitments for any specific acquisition at this time.

Our ability to make and successfully integrate acquisitions is unproven.

41 unchanged sentences

We incurred a net loss in fiscal years 2021, 2020, and 2019, respectively.

For the three months ended April 30, 2021, while our revenue increased by 28.3% compared to the same period in fiscal year 2021, we incurred a net loss of $10.8 million.

For the six months ended July 31, 2021, while our revenue increased by 42.7% compared to the same period in fiscal year 2021, we incurred a net loss of $18.0 million.

We may experience similar fluctuations or declines in revenue or net losses in the future, which would harm our financial results.

5 unchanged sentences

We incurred net loss in fiscal years 2021, 2020, and 2019, respectively.

For the three months ended April 2021, while our revenue increased by 28.3% compared to the same period in fiscal year 2021, we continued a net loss of $10.8 million.

For the six months ended July 31, 2021, while our revenue increased by 42.7% compared to the same period in fiscal year 2021, we incurred a net loss of $18.0 million.

Accordingly, if we are unable to generate or maintain adequate revenue growth, our financial results could suffer and our stock price could decline.

16 unchanged sentences

Sales to customers in Asia accounted for approximately 88%, 90% and 87% of our total revenue in fiscal years 2021, 2020 and 2019, respectively.

For the three months ended April 30, 2021, sales to customers in Asia accounted for approximately 90% of our total revenue.

For the six months ended July 31, 2021, sales to customers in Asia accounted for approximately 89% of our total revenue.

Because most of our end customers or their ODM manufacturers are located in Asia, we anticipate that a majority of our future revenue will continue to come from sales to that region.

21 unchanged sentences

Our marketable securities portfolio could experience a decline in market value, which could materially and adversely affect our financial results.

As of April 30, 2021, we had approximately $214.9 million in debt security investments.

As of July 31, 2021, we had approximately $215.0 million in debt security investments.

These investments consisted primarily of money market funds, commercial paper, asset-backed securities, U.S.

39 unchanged sentences

We sell a significant percentage of our solutions through a single distributor, Wintech, which serves as our non-exclusive sales representative in Asia, other than Japan.

Approximately 63%, 60% and 58% of our revenue was derived from sales through Wintech for the fiscal years ended January 31, 2021, 2020 and 2019, respectively, and approximately 63% of our revenue was derived from sales through Wintech for the three months ended April 30, 2021.

Approximately 63%, 60% and 58% of our revenue was derived from sales through Wintech for the fiscal years ended January 31, 2021, 2020 and 2019, respectively, and approximately 62% of our revenue was derived from sales through Wintech for the six months ended July 31, 2021.

We anticipate that a significant portion of our revenue will continue to be derived from sales through Wintech in the foreseeable future.

24 unchanged sentences

For example, a disruption in the availability of image sensors from Sony Corporation as a result of the April 14, 2016 Kumamoto, Japan earthquake impacted our customers’ ability to build or launch cameras and, as a result, negatively impacted the timing and scope of demand for our SoCs in the second and third quarters of fiscal year 2017.

The semiconductor industry is currently experiencing shortages of certain devices, which has impacted, and may continue to impact, our customers’ ability to build their products and negatively impact our customers’ demand for our solutions.

Similarly, our ability to generate design wins in some markets, such as the automotive OEM market, requires us to collaborate with third-party software suppliers in order to offer a complete solution to customers.

42 unchanged sentences

Our ability to sell our products to several China customers has been restricted.

On October 9, 2019, our security camera customers Hangzhou Hikvision Digital Technology Co., Ltd, or Hikvision, and Zhejiang Dahua Technology Co., Ltd., or Dahua, were added to the Entity List of the Bureau of Industry and Security, or BIS, of the U.S.

In October 2019, our security camera customers Hangzhou Hikvision Digital Technology Co., Ltd, or Hikvision, and Zhejiang Dahua Technology Co., Ltd., or Dahua, were added to the Entity List of the Bureau of Industry and Security, or BIS, of the U.S.

Department of Commerce, or Commerce, which imposes limitations on the supply of certain U.S.

285 unchanged sentences

If one or more analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets which in turn could cause our stock price or trading volume to decline.

The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this Quarterly Report.

EXHIBIT INDEX

Amended and Restated Memorandum of Association and Second Amended and Restated Articles of Association of the Registrant.

Ambarella, Inc.

2021 Equity Incentive Plan.

Amendment No.

6 to Sales Representative Agreement dated May 1, 2021 by and between Ambarella, Inc.

and WT Microelectronics Co., Ltd.

Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.

Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.

Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C.

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document

Inline XBRL Taxonomy Schema Linkbase Document

Inline XBRL Taxonomy Calculation Linkbase Document

Inline XBRL Taxonomy Definition Linkbase Document

Inline XBRL Taxonomy Labels Linkbase Document

Inline XBRL Taxonomy Presentation Linkbase Document

The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2021, has been formatted in Inline XBRL and included in Exhibit 101.

Incorporated by reference to the Registrant’s registration statement on Form S-1 (No.

333-174838) Amendment No.

3 as filed with the Securities and Exchange Commission on September 12, 2012.

Incorporated by reference to the Registrant’s current report on Form 8-K as filed with the Securities and Exchange Commission on June 23, 2021.

In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No.

33-8238 and 34-47986, Final Rule:

Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act.

Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AMBARELLA, INC.

September 8, 2021

/s/ Feng-Ming Wang

Feng-Ming Wang

President and Chief Executive Officer

September 8, 2021

Chief Financial Officer

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 1A. Risk Factors