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What changed 10-Q

Item 1. Financial Statements

2021-12-10 compared with 2021-09-08 · 137 added, 113 removed, 499 unchanged (33% of the section changed)

29 unchanged sentences

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

authorized and no shares issued and outstanding at July 31, 2021 and

authorized and no shares issued and outstanding at October 31, 2021 and

January 31, 2021, respectively

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

authorized at July 31, 2021 and January 31, 2021, respectively;

36,644,636 shares issued and outstanding at July 31, 2021;

authorized at October 31, 2021 and January 31, 2021, respectively;

36,925,142 shares issued and outstanding at October 31, 2021;

shares issued and outstanding at January 31, 2021

8 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended July 31,

Six Months Ended July 31,

Three Months Ended October 31,

Nine Months Ended October 31,

Cost of revenue

6 unchanged sentences

Loss before income taxes

Provision for income taxes

Net loss per share attributable to ordinary shareholders:

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

Provision (benefit) for income taxes

Net income (loss)

Net income (loss) per share attributable to ordinary shareholders:

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

See accompanying notes to condensed consolidated financial statements.

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)

Three Months Ended July 31,

Six Months Ended July 31,

Three Months Ended October 31,

Nine Months Ended October 31,

Net income (loss)

Other comprehensive income (loss), net of tax:

Net unrealized gains (losses) on investments

Net change and reclassification of unrealized gains (losses) on investments

Other comprehensive income (loss), net of tax

Comprehensive loss

Comprehensive income (loss)

See accompanying notes to condensed consolidated financial statements.

8 unchanged sentences

Stock-based compensation expense related to stock awards granted to employees and consultants

Net unrealized losses on investments - net of tax

Other comprehensive income (loss) - net of tax

Balance--April 30, 2021

1 unchanged sentence

Stock-based compensation expense related to stock awards granted to employees and consultants

Net unrealized losses on investments - net of tax

Other comprehensive income (loss) - net of tax

Balance--July 31, 2021

Issuance of shares through employee equity incentive plan

Issuance of shares through employee stock purchase plan

Stock-based compensation expense related to stock awards granted to employees and consultants

Other comprehensive income (loss) - net of tax

Balance--October 31, 2021

Ordinary Shares

5 unchanged sentences

Stock-based compensation expense related to stock awards granted to employees and consultants

Net unrealized losses on investments - net of tax

Other comprehensive income (loss) - net of tax

Balance--April 30, 2020

1 unchanged sentence

Stock-based compensation expense related to stock awards granted to employees and consultants

Net unrealized gains on investments - net of tax

Other comprehensive income (loss) - net of tax

Balance--July 31, 2020

Issuance of shares through employee equity incentive plan

Issuance of shares through employee stock purchase plan

Stock-based compensation expense related to stock awards granted to employees and consultants

Other comprehensive income (loss) - net of tax

Balance--October 31, 2020

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(unaudited, in thousands)

Six Months Ended July 31,

Nine Months Ended October 31,

Cash flows from operating activities:

69 unchanged sentences

Actual results could differ from these estimates under different assumptions or circumstances and such differences could be material.

The Company also assessed the impacts of COVID-19 on the above accounting matters as of July 3 1 , 2021 and through the date of issuing this report.

The Company also assessed the impacts of COVID-19 on the above accounting matters as of October 3 1 , 2021 and through the date of issuing this report.

While it is difficult to quantify the impact of COVID-19 , the future magnitude and duration of COVID-19, as well as other associated factors, could r esult in material negative impacts to the Company’s condensed consolidated financial statements in future reporting periods .

32 unchanged sentences

The non-credit-related portion of the loss is recognized in Accumulated other comprehensive income in the condensed consolidated balance sheets.

The credit-related losses from the financial instruments were not material for the three and six months ended July 31, 2021 and 2020, respectively, and the associated allowance amounts were not material as of July 31, 2021 and January 31, 2021, respectively.

As of October 31, 2021, the Company fully liquidated all of the investments in debt securities and realized all of the gains and losses in the condensed consolidated statements of operations.

Restricted Cash

10 unchanged sentences

Once inventory is written down, a new accounting cost basis is established and, accordingly, any associated reserve is not released until the inventory is sold or scrapped.

There were no material inventory losses recognized for the three and six months ended July 31, 2021 and 2020, respectively.

There were no material inventory losses recognized for the three and nine months ended October 31, 2021 and 2020, respectively.

Software Licenses

4 unchanged sentences

The Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases in fiscal year 2020 .

As a result, the Company recognizes leases as operating lease right-of-use (“ROU”) assets and corresponding lease liabilities at the lease commencement date based on the present value of future lease payments, while recognizing lease expenses under straight-line method through the lease term.

As a result, t he Company recognizes leases as operating lease right-of-use (“ROU”) assets and corresponding lease liabilities at the lease commencement date based on the present value of future lease payments, while recognizing lease expenses under straight-line method through the lease term.

The Company also elected the practical expedient that does not recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases.

5 unchanged sentences

The renewal options are included in the ROU and liability calculation if it is reasonably certain that the Company will exercise the option.

The Company's finance leases were immaterial as of July 31, 2021 and January 31, 2021, respectively.

The Company's finance leases were immaterial as of October 31, 2021 and January 31, 2021, respectively .

Revenue Recognition

23 unchanged sentences

Because payments received do not correspond directly with the value of the Company’s performance to date, for fixed-price engineering services arrangements, revenue is recognized using the time-based straight line method, which best depicts the Company’s performance toward complete satisfaction of the performance obligation based on the nature of such professional services.

Revenues from engineering service agreements were not material for the three and six months ended July 31, 2021 and 2020, respectively.

Revenues from engineering service agreements were not material for the three and nine months ended October 31, 2021 and 2020, respectively.

Timing of revenue recognition may differ from the timing of invoicing to the Company’s customers.

1 unchanged sentence

The Company’s contract assets are primarily related to satisfied but unbilled performance obligations associated with its engineering service agreements at the reporting date.

As of July 31, 2021 and January 31, 2021, the contract assets for these unbilled receivables were not material.

As of October 31, 2021 and January 31, 2021, the contract assets for these unbilled receivables were not material.

The Company’s contract liabilities consist of deferred revenue.

1 unchanged sentence

This deferred revenue is expected to be recognized over the course of the contract when products are delivered for future pricing below the weighted average selling price of the contract.

For the three and six months ended July 31, 2021 and 2020, the Company did not recognize any material revenue adjustment, respectively, related to performance obligations satisfied in prior periods released from this deferred revenue.

As of July 31, 2021 and January 31, 2021, the respective deferred revenues were not material.

Additionally, the transaction price allocated to unsatisfied, or partially unsatisfied, purchase orders for contracts that are greater than a year was not material as of July 31, 2021 and January 31, 2021, respectively.

For the three and nine months ended October 31, 2021 and 2020, the Company did not recognize any material revenue adjustment, respectively, related to performance obligations satisfied in prior periods released from this deferred revenue.

As of October 31, 2021 and January 31, 2021, the respective deferred revenues were not material.

Additionally, the transaction price allocated to unsatisfied, or partially unsatisfied, purchase orders for contracts that are greater than a year was not material as of October 31, 2021 and January 31, 2021, respectively.

The Company also elects not to disclose the value of unsatisfied or partially unsatisfied performance obligations due to an original expected contract duration of one year or less and elects to exclude amounts collected from customers for all sales taxes from the transaction price .

3 unchanged sentences

Research and development costs are expensed as incurred and consist primarily of personnel costs, product development costs, which include engineering services, development software and hardware tools, license fees, costs of fabrication of masks for prototype products, other development materials costs, depreciation of equipment and tools and allocation of facility costs, net of any research and development grants.

As of July 31, 2021, there was approximately $ 1.4 million of grants recorded in prepaid expenses and other current assets and approximately $ 1.2 million of grants recorded in other non-current assets in the condensed consolidated balance sheets.

As of October 31, 2021, there was approximately $ 1.4 million of grants recorded in prepaid expenses and other current assets and approximately $ 0.9 million of grants recorded in other non-current assets in the condensed consolidated balance sheets.

The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in its financial statements or tax returns.

26 unchanged sentences

government securities, and debt securities of corporations.

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 July 31, 2021

All of the investments are classified as available-for-sale securities and reported at fair value in the condensed consolidated balance sheets.

As of October 31, 2021, the Company fully liquidated all of the investments and reported the remaining cash equivalents in the condensed consolidated balance sheets as follows:

As of October 31, 2021

Amortized Cost

19 unchanged sentences

Total cash equivalents and marketable debt securities

As of July 31, 2021, there were no debt securities with unrealized losses for more than twelve months.

July 31, 2021

October 31, 2021

January 31, 2021

3 unchanged sentences

Total cash equivalents and marketable debt securities

The contractual maturities of the investments at July 31, 2021 and January 31, 2021 were as follows:

July 31, 2021

The contractual maturities of the investments at October 31, 2021 and January 31, 2021 were as follows:

October 31, 2021

January 31, 2021

9 unchanged sentences

The non-credit-related portion of the loss is recognized in accumulated other comprehensive income in the condensed consolidated balance sheets.

The credit-related losses were not material for the three and six months ended July 31, 2021, and 2020, respectively.

The credit-related losses were not material for the three and nine months ended October 31, 2020, respectively.

As of October 31, 2021, the Company fully liquidated all of the investment in debt securities and realized all of the gains and losses in the condensed consolidated statement of operations.

The following fair value hierarchy is applied for disclosure of the inputs used to measure fair value.

6 unchanged sentences

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 July 31, 2021 and January 31, 2021, respectively:

As of July 31, 2021

The following tables present the fair value of the financial instruments measured on a recurring basis as of October 31, 2021 and January 31, 2021, respectively:

As of October 31, 2021

(in thousands)

13 unchanged sentences

Total cash equivalents and marketable debt securities

Inventories at July 31, 2021 and January 31, 2021 consisted of the following:

July 31, 2021

Inventories at October 31, 2021 and January 31, 2021 consisted of the following:

October 31, 2021

January 31, 2021

3 unchanged sentences

Property and Equipment, Net

Depreciation expense was approximately $ 0.6 million and $ 0.6 million for the three months ended July 31, 2021 and 2020, respectively, and was approximately $ 1.2 million and $ 1.3 million for the six months ended July 31, 2021 and 2020, respectively.

Property and equipment at July 31, 2021 and January 31, 2021 consisted of the following:

July 31, 2021

Depreciation expense was approximately $ 0.7 million and $ 0.6 million for the three months ended October 31, 2021 and 2020, respectively, and was approximately $ 1.9 million and $ 1.9 million for the nine months ended October 31, 2021 and 2020, respectively.

Property and equipment at October 31, 2021 and January 31, 2021 consisted of the following:

October 31, 2021

January 31, 2021

8 unchanged sentences

Intangible Assets, Net

The intangible assets primarily consist of $ 4.1 million of in-process research and development (“IPR&D”) from the acquisition of VisLab S.r.l., or VisLab, in June 2015 and $ 11.7 million of software licenses, net of amortization expense.

Acquired IPR&D is capitalized at fair value and the amortization commences upon completion of the underlying projects.

Once research and development efforts are completed, the corresponding amount of IPR&D is reclassified as an amortizable purchased intangible asset and is amortized over its estimated useful life.

As of July 31, 2021, there was no IPR&D amortized.

The Company will determine the project incorporating the VisLab IPR&D to be completed when a related chip begins mass production to address the level 3 and above advanced driving assistance systems markets.

The intangible assets primarily consist of $ 4.0 million of developed technology and $ 11.3 million of software licenses, net of amortization expense.

In the third quarter of fiscal year 2022, the Company determined that the underlying project incorporating the in-process research and development (“IPR&D”) from the acquisition of VisLab S.r.l., or VisLab, was completed.

As a result, the acquired $ 4.1 million of IPR&D was reclassified as definite-lived developed technology and will amortize over its estimated economic life of 7 years.

The Company enters into certain software license agreements with third parties from time-to-time.

1 unchanged sentence

The licenses have been capitalized as intangible assets, and the corresponding future payments have been recorded as liabilities at net present value.

As of July 31, 2021, $ 5.6 million was recorded in accrued and other current liabilities and $ 3.0 million was recorded in other long-term liabilities in the condensed consolidated balance sheets.

The carrying amounts of intangible assets as of July 31, 2021 and January 31, 2021 were as follows :

As of July 31, 2021

As of October 31, 2021, $ 5.7 million was recorded in accrued and other current liabilities and $ 2.6 million was recorded in other long-term liabilities in the condensed consolidated balance sheets.

The carrying amounts of intangible assets as of October 31, 2021 and January 31, 2021 were as follows :

As of October 31, 2021

As of January 31, 2021

7 unchanged sentences

In-process research and development

Developed technology

Software licenses

Total acquired intangible assets

The amortization expense related to the software licenses was approximately $ 1.5 million and $ 1.6 million for the three months ended July 31, 2021 and 2020, respectively, and was approximately $ 3.0 million and $ 3.1 million for the six months ended July 31, 2021 and 2020, respectively.

The expected future amortization expense related to these software licenses as of July 31, 2021 is as follows:

July 31, 2021

Total intangible assets, net

The amortization expense related to the intangible assets was approximately $ 1.7 million and $ 1.7 million for the three months ended October 31, 2021 and 2020, respectively, and was approximately $ 4.7 million and $ 4.8 million for the nine months ended October 31, 2021 and 2020, respectively.

The expected future amortization expense related to these intangible assets as of October 31, 2021 is as follows:

October 31, 2021

(in thousands)

1 unchanged sentence

Total future amortization expenses:

IPR&D is 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 and six months ended July 31, 2021 and 2020, respectively.

The Company is required to test the impairment prior to changing the IPR&D from an indefinite-lived asset to a finite-lived asset.

There were no intangible asset impairments for the three and nine months ended October 31, 2021 and 2020, respectively.

Accrued and Other Current Liabilities

Accrued and other current liabilities at July 31, 2021 and January 31, 2021 consisted of the following:

July 31, 2021

Accrued and other current liabilities at October 31, 2021 and January 31, 2021 consisted of the following:

October 31, 2021

January 31, 2021

7 unchanged sentences

The Company has entered into various operating leases for its worldwide office facilities.

In the first quarter of fiscal year 2022, the Company extended its Shanghai office lease for an additional three years beginning December 1, 2021 to November 30, 2024 .

The Company accounted for this extension as a lease modification and recorded an increase to the operating lease right-of-use assets and corresponding operating lease liabilities of approximately $ 1.7 million, respectively, in the condensed consolidated balance sheets.

The Company also signed a separate lease for additional space for its Shanghai office for a period of 40 months starting from August 1, 2021 through November 30, 2024 and will record an operating lease right-of-use asset and corresponding operating lease liability in the condensed consolidated balance sheets upon commencement on August 1, 2021.

T he total estimated future undiscounted cash payments for this additional lease are approximately $ 1.7 million.

The operating lease expense was approximately $ 0.8 million and $ 0.7 million for the three months ended July 31, 2021 and 2020, respectively.

The operating lease expense was approximately $ 1.6 million and $ 1.4 million for the six months ended July 31, 2021 and 2020, respectively.

The Company's short-term leases and finance leases were not material as of July 31, 2021 and January 31, 2021, respectively .

During the nine months ended October 31, 2021, the Company extended its existing Shanghai office lease for an additional three years beginning December 1, 2021 to November 30, 2024 and extended its existing Hong Kong office lease for an additional five years beginning December 1, 2021 to November 30, 2026 .

The Company also leased an additional space for its Shanghai office for a period of 40 months starting from August 1, 2021 through November 30, 2024 .

The Company recorded an aggregate increase of approximately $ 4.4 million to the operating lease right-of-use assets and corresponding operating lease liabilities in the condensed consolidated balance sheets as a result of these lease extensions and additional leased space.

The operating lease expense was approximately $ 0.9 million and $ 0.8 million for the three months ended October 31, 2021 and 2020, respectively.

The operating lease expense was approximately $ 2.5 million and $ 2.2 million for the nine months ended October 31, 2021 and 2020, respectively.

The Company's short-term leases and finance leases were not material as of October 31, 2021 and January 31, 2021, respectively .

Supplemental cash flow information related to leases is as follows:

Three Months Ended

Six Months Ended

July 31, 2021

July 31, 2021

Nine Months Ended

October 31, 2021

October 31, 2021

(in thousands)

2 unchanged sentences

Leased assets obtained in exchange for operating lease liabilities arising from lease modifications

As of July 31, 2021, the weighted average remaining lease term is 3.99 years, and the weighted average discount rate is 3.83 percent.

As of October 31, 2021, the weighted average remaining lease term is 3.81 years, and the weighted average discount rate is 3.55 percent.

Future minimum lease payments for the lease liabilities are as follows :

July 31, 2021

October 31, 2021

(in thousands)

3 unchanged sentences

Other Long-Term Liabilities

Other long-term liabilities at July 31, 2021 and January 31, 2021 consisted of the following:

July 31, 2021

Other long-term liabilities at October 31, 2021 and January 31, 2021 consisted of the following:

October 31, 2021

January 31, 2021

8 unchanged sentences

After completion of the Company’s initial public offering in 2012, a total of 20,000,000 preference shares, with a $ 0.00045 par value per share, were authorized.

There were no preference shares issued and outstanding as of July 31, 2021 and January 31, 2021, respectively.

There were no preference shares issued and outstanding as of October 31, 2021 and January 31, 2021, respectively.

Ordinary shares

As of July 31, 2021 and January 31, 2021, a total of 200,000,000 ordinary shares were authorized.

As of October 31, 2021 and January 31, 2021, a total of 200,000,000 ordinary shares were authorized.

In June 2021, the Company’s shareholders approved the 2021 Equity Incentive Plan, or 2021 EIP.

7 unchanged sentences

Pursuant to such provision, for each fiscal year, the number of ordinary shares reserved for issuance under the ESPP is automatically increased by a number equal to the lesser of (i) 1,500,000 ordinary shares, (ii) one and one quarter percent ( 1.25 %) of the aggregate number of ordinary shares outstanding on such date, or (iii) an amount determined by the Company’s Board of Directors or a duly authorized committee of the Board of Directors.

As of July 31, 2021 and January 31, 2021, the following ordinary shares were reserved for future issuance under the EIP and ESPP:

July 31, 2021

As of October 31, 2021 and January 31, 2021, the following ordinary shares were reserved for future issuance under the EIP and ESPP:

October 31, 2021

January 31, 2021

6 unchanged sentences

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

On May 25, 2021, the Board extended the repurchase program for another 12 months through June 30, 2022 .There were no ordinary shares repurchased in the six months ended July 31, 2021.

On May 25, 2021, the Board extended the repurchase program for another 12 months through June 30, 2022 .There were no ordinary shares repurchased in the nine months ended October 31, 2021.

Repurchases 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.

1 unchanged sentence

The repurchase program is funded using the Company’s working capital and any repurchased shares are recorded as authorized but unissued shares.

As of July 31, 2021, there was approximately $ 49.0 million available for repurchases under the repurchase program through June 30, 2022.

As of October 31, 2021, there was approximately $ 49.0 million available for repurchases under the repurchase program through June 30, 2022.

Stock-based Compensation

The following table presents the classification of stock-based compensation for the periods indicated:

Three Months Ended July 31,

Six Months Ended July 31,

Three Months Ended October 31,

Nine Months Ended October 31,

(in thousands)

4 unchanged sentences

Total stock-based compensation

During the three and six months ended July 31, 2021, approximately $ 1.7 million and $ 3.4 million of stock-based compensation expense was accrued in accrued and other current liabilities in the condensed consolidated balance sheets, respectively.

As of July 31, 2021, total unrecognized compensation cost related to unvested stock options was $ 2.9 million and is expected to be recognized over a weighted-average period of 2.29 years.

During the three and nine months ended October 31, 2021, approximately $ 1.7 million and $ 5.1 million of stock-based compensation expense was accrued in accrued and other current liabilities in the condensed consolidated balance sheets, respectively.

As of October 31, 2021, total unrecognized compensation cost related to unvested stock options was $ 2.4 million and is expected to be recognized over a weighted-average period of 2.13 years.

Total unrecognized compensation cost related to unvested restricted stock units was $ 198.6 million and is expected to be recognized over a weighted-average period of 2.45 years.

The following table sets forth the weighted-average assumptions used to estimate the fair value of stock options and employee stock purchase plan awards for the periods indicated:

Three Months Ended

Six Months Ended

Three Months Ended October 31,

Nine Months Ended October 31,

Stock Options:

13 unchanged sentences

Outstanding at January 31, 2021

Outstanding at July 31, 2021

Exercisable at July 31, 2021

Outstanding at October 31, 2021

Exercisable at October 31, 2021

The intrinsic value of options outstanding and exercisable is calculated based on the difference between the fair market value of the Company’s ordinary shares on the reporting date and the exercise price.

The closing price of the Company’s ordinary shares on July 31, 2021 was $ 98.49 , as reported by The NASDAQ Global Market.

The closing price of the Company’s ordinary shares on October 31, 2021 was $ 185.83 , as reported by The NASDAQ Global Market.

The intrinsic value of exercised options is calculated based on the difference between the fair market value of the Company’s ordinary shares on the exercise date and the exercise price.

1 unchanged sentence

Unvested at January 31, 2021

Unvested at July 31, 2021

As of July 31, 2021, the aggregate intrinsic value of unvested restricted stock units was $ 239.4 million.

Net Loss Per Ordinary Share

The following table sets forth the computation of basic and diluted loss per ordinary share for the periods indicated:

Three Months Ended July 31,

Six Months Ended July 31,

Unvested at October 31, 2021

As of October 31, 2021, the aggregate intrinsic value of unvested restricted stock units was $ 540.1 million.

Net Income (Loss) Per Ordinary Share

The following table sets forth the computation of basic and diluted net income (loss) per ordinary share for the periods indicated:

Three Months Ended October 31,

Nine Months Ended October 31,

(in thousands, except share and per share data)

Net income (loss)

Weighted-average ordinary shares - basic

Effect of potentially dilutive securities:

Employee stock options

Restricted stock units

Employee stock purchase plan

Weighted-average ordinary shares - diluted

Net loss per ordinary share:

The following weighted-average potentially dilutive securities were excluded from the computation of diluted loss per ordinary share as their effect would have been antidilutive:

Net income (loss) per ordinary share:

The following weighted-average potentially dilutive securities were excluded from the computation of diluted net income (loss) per ordinary share as their effect would have been antidilutive:

Three Months Ended

Six Months Ended

Nine Months Ended

Options to purchase ordinary shares

2 unchanged sentences

The following table provides details of income taxes for the periods indicated:

Three Months Ended July 31,

Six Months Ended July 31,

Three Months Ended October 31,

Nine Months Ended October 31,

(in thousands)

Loss before income taxes

Provision for income taxes

Provision (benefit) for income taxes

Effective tax rate

The Company recorded an income tax provision of $ 1.4 million and $ 0.7 million for the three months ended July 31, 2021 and 2020, and $ 2.7 million and $ 1.9 million for the six months ended July 31, 2021 and 2020, respectively.

The increase in income tax expense was primarily due to an increase in the proportion of profits generated in higher tax jurisdictions, partially offset by an increase in the U.S.

federal research tax credit as well as an increase in tax benefits from excess stock-based compensation deductions.

The Company recorded an income tax benefit of $ 1.6 million and an income tax provision of $ 1.5 million for the three months ended October 31, 2021 and 2020, respectively.

The change from an income tax provision to an income tax benefit was primarily due to the changes in the amounts of pre-tax income, changes to the Company’s estimated annual effective tax rate, and an increase in tax benefits from excess stock-based compensation deductions.

The Company recorded an income tax provision of $ 1.1 million and $ 3.4 million for the nine months ended October 31, 2021 and 2020, respectively.

The decrease in income tax expense was primarily due to an increase in the U.S.

federal research tax credit, and an increase in tax benefits from excess stock-based compensation deductions.

The Company files federal and state income tax returns in the United States and in various foreign jurisdictions.

9 unchanged sentences

These assessments can require considerable estimates and judgments.

As of July 31, 2021, the gross amount of unrecognized tax benefits was approximately $ 27.9 million.

As of October 31, 2021, the gross amount of unrecognized tax benefits was approximately $ 28.1 million.

If the estimates of income tax liabilities prove to be less than the ultimate assessment, then a further charge to expense could be required.

7 unchanged sentences

These manufacturing purchase commitments typically provide the Company with flexibility to cancel, reschedule or adjust requirements based upon business needs but the Company may incur certain costs depending on the production stage of the products.

As of July 31, 2021 and January 31, 2021, total manufacturing purchase commitments were approximately $ 72.3 million and $ 48.2 million, respectively.

As of October 31, 2021 and January 31, 2021, total manufacturing purchase commitments were approximately $ 66.0 million and $ 48.2 million, respectively.

The Company also reviews and assesses the need for any expected loss liabilities on quarterly basis for all products that it does not expect to sell for which it has committed purchases from suppliers.

As of July 31, 2021, there was no material loss recognized in the condensed consolidated balance sheets from adverse purchase commitments.

As of October 31, 2021, there was no material loss recognized in the condensed consolidated balance sheets from adverse purchase commitments.

Indemnification

3 unchanged sentences

It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances that are likely to be involved in each particular claim.

The Company has no t made payments under these obligations, and no liabilities have been recorded for these obligations in the condensed consolidated balance sheets as of July 31, 2021 and January 31, 2021, respectively.

The Company has no t made payments under these obligations, and no liabilities have been recorded for these obligations in the condensed consolidated balance sheets as of October 31, 2021 and January 31, 2021, respectively.

Segment Reporting

4 unchanged sentences

The following table sets forth the Company’s revenue by geographic region based on bill-to location for the periods indicated:

Three Months Ended July 31,

Six Months Ended July 31,

Three Months Ended

Nine Months Ended

(in thousands)

2 unchanged sentences

Total revenue

As of July 31, 2021, substantially all of the Company’s property and equipment, net, was located in the United States, Asia Pacific region and Europe with approximate net amounts of $ 2.8 million, $ 4.0 million and $ 1.5 million, respectively.

As of October 31, 2021, substantially all of the Company’s property and equipment, net, was located in the United States, Asia Pacific region and Europe with approximate net amounts of $ 3.1 million, $ 4.0 million and $ 1.5 million, respectively.

Major Customers

For the three and 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 61.6 % and 15.8 % of total revenue for the three months ended July 31, 2021, respectively, and accounted for approximately 62.4 % and 15.8 % of total revenue for the six months ended July 31, 2021, respectively.

For the three and six months ended July 31, 2020, the customers representing 10% or more of revenue and accounts receivable were Wintech and Chicony, which accounted for approximately 55.6 % and 19.6 % of total revenue for the three months ended July 31, 2020, respectively, and accounted for approximately 59.5 % and 17.4 % of total revenue for the six months ended July 31, 2020, respectively.

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

For the three and nine months ended October 31, 2021, the customers representing 10% or more of revenue and accounts receivable were Wintech and Chicony, which accounted for approximately 63.1 % and 13.4 % of total revenue for the three months ended October 31, 2021, respectively, and accounted for approximately 62.7 % and 14.9 % of total revenue for the nine months ended October 31, 2021, respectively.

For the three and nine months ended October 31, 2020, the customers representing 10% or more of revenue and accounts receivable were Wintech and Chicony, which accounted for approximately 62.3 % and 17.6 % of total revenue for the three months ended October 31, 2020, respectively, and accounted for approximately 60.4 % and 17.4 % of total revenue for the nine months ended October 31, 2020, respectively.

Accounts receivable with Wintech and Chicony were approximately $ 23.5 million and $ 12.4 million as of October 31, 2021, respectively.

Subsequent Events

On November 5, 2021, the Company completed the 100 % voting rights acquisition of Oculii Corporation, a privately-held Ohio-based company that develops adaptive radar perception algorithms for automotive, including advanced driver assistance systems and autonomous vehicle driving systems, and other commercial applications, for an aggregate consideration of $ 307.5 million in cash, subject to customary adjustments for cash, indebtedness, transaction expenses and working capital.

In addition, the Company assumed all unvested options to purchase Oculii capital stock that were held by continuing Oculii service providers, subject to customary adjustments with respect to the exercise price and number of shares underlying such options.

The incurred acquisition related costs of $ 1.6 million were recorded in the operating expenses in the condensed consolidated statements of operations in the third quarter of fiscal 2022.

Due to the limited time since the acquisition date, and the size and complexity of the transaction, the accounting for the business combination and the assumed unvested options are not yet complete.

Accordingly, the Company is not able to provide the allocation of consideration paid to the assets acquired or liabilities assumed and the fair value of the assumed unvested options as of the filing of the condensed consolidated financial statements, but it is expected that the transaction will result in an increase to the Company’s net assets and goodwill.

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