Item 1. Financial Statements
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.
6. Leases
The Company has entered into various operating leases for its worldwide office facilities . The operating lease expense was approximately $ 0.9 million and $ 0.8 million for the three months ended April 30, 2022 and 2021, respectively. The Company's short-term leases and finance leases were not material as of April 30, 2022 and January 31, 2022, respectively .
Supplemental cash flow information related to leases is as follows:
Three Months Ended
April 30, 2022
(in thousands)
Cash paid for operating leases included in operating cash flows
$
1,069
Supplemental non-cash information related to lease liabilities arising from obtaining right-of-use assets
$
87
As of April 30, 2022, the weighted average remaining lease term is 3.39 years, and the weighted average discount rate is 3.56 percent. Future minimum lease payments for the lease liabilities are as follows :
As of
April 30, 2022
Fiscal Year
(in thousands)
2023 (9 months remaining)
$
2,737
2024
3,443
2025
3,240
2026
1,421
2027
344
Thereafter
123
Total future annual minimum lease payments
11,308
Less: interest
( 577
)
Total lease liabilities
$
10,731
7. Other Long-Term Liabilities
Other long-term liabilities at April 30, 2022 and January 31, 2022 consisted of the following:
As of
April 30, 2022
January 31, 2022
(in thousands)
Unrecognized tax benefits, including interest
$
9,418
$
9,313
Deferred tax liabilities, non-current
1,962
1,769
Software license liabilities, non-current
638
1,674
Other long-term liabilities
6
7
Total other long-term liabilities
$
12,024
$
12,763
8. Capital Stock
Preference shares
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 April 30, 2022 and January 31, 2022, respectively.
Ordinary shares
As of April 30, 2022 and January 31, 2022, a total of 200,000,000 ordinary shares were authorized.
11
In the first quarter of fiscal year 2023, the Company added 466,285 ordinary shares to the ordinary shares reserved for issuance, pursuant to an “evergreen” provision contained in the Amended and Restated 2012 Employee Stock Purchase Plan, or ESPP. 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 February 1st of each fiscal year, or (iii) an amount determined by the Company’s Board of Directors or a duly authorized committee of the Board of Directors.
As of April 30, 2022 and January 31, 2022, the following ordinary shares were reserved for future issuance under the Company’s equity plans and ESPP:
As of
April 30, 2022
January 31, 2022
Shares reserved for options, restricted stock and
restricted stock units under equity plans
6,724,308
7,461,541
Shares reserved for ESPP
3,047,444
2,624,704
Stock purchase program
No ordinary shares were repurchased in the three months ended April 30, 2022. As of April 30, 2022, $ 49.0 million remained available for repurchases under the current repurchase program through June 30, 2022. 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. The repurchase program does not obligate the Company to acquire any particular amount of ordinary shares, and it may be suspended at any time at the Company’s discretion. The repurchase program is funded using the Company’s working capital and any repurchased shares are recorded as authorized but unissued shares .
9. Stock-based Compensation
The following table presents the classification of stock-based compensation for the periods indicated:
Three Months Ended April 30,
2022
2021
(in thousands)
Stock-based compensation:
Cost of revenue
$
349
$
323
Research and development
17,151
11,194
Selling, general and administrative
9,541
7,325
Total stock-based compensation
$
27,041
$
18,842
As of April 30, 2022, approximately $ 1.0 million of stock-based compensation expense was accrued and reflected under accrued and other current liabilities in the condensed consolidated balance sheets. Total unrecognized compensation cost related to unvested stock options at April 30, 2022 was $ 24.8 million and is expected to be recognized over a weighted-average period of 2.39 years. Total unrecognized compensation cost related to unvested restricted stock units at April 30, 2022 was $ 207.1 million and is expected to be recognized over a weighted-average period of 2.43 years. In April 2022, the Company’s Compensation Committee of the Board of Directors approved the acceleration of vesting of 35,703 shares of unvested equity awards associated with the departure of Mr. Casey Eichler, who was the Company’s Chief Financial Officer until March 2022. As a result, there was approximately $ 1.7 million of additional stock-based compensation expense, net related to the departure recognized during the three months ended April 30, 2022.
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:
12
Three Months Ended April 30,
2022
2021
Stock Options:
Volatility
—
51
%
Risk-free interest rate
—
0.99
%
Expected term (years)
—
5.3
Dividend yield
—
0
%
Employee stock purchase plan awards:
Volatility
89
%
61
%
Risk-free interest rate
0.86
%
0.06
%
Expected term (years)
0.5
0.5
Dividend yield
0
%
0
%
The following table summarizes stock option activities for the period indicated:
Option Outstanding
Weighted-
Total Intrinsic
Average
Weighted-
Value Of
Remaining
Aggregate
Weighted-
Average
Options
Contractual
Intrinsic
Average
Grant-date
Exercised
Term
Value
Shares
Exercise Price
Fair Value
(in thousands)
(in years)
(in thousands)
Outstanding at January 31, 2022
619,322
$
40.08
Granted
—
—
—
Exercised
( 37,536
)
23.17
$
2,902
Forfeited
( 2,801
)
35.95
Expired
( 14
)
43.35
Outstanding at April 30, 2022
578,971
41.20
4.8
$
38,249
Exercisable at April 30, 2022
390,006
$
43.85
3.5
$
24,711
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 April 30, 2022 was $ 82.08 , 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.
The following table summarizes the restricted stock units activities for the period indicated:
Weighted-
Average
Grant-Date
Shares
Fair Value
Unvested at January 31, 2022
2,651,135
$
85.41
Granted
615,737
85.44
Vested
( 698,980
)
65.78
Forfeited
( 68,007
)
82.10
Unvested at April 30, 2022
2,499,885
$
91.00
As of April 30, 2022, the aggregate intrinsic value of unvested restricted stock units was $ 205.2 million.
13
10. 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 April 30,
2022
2021
(in thousands, except share and per share data)
Numerator:
Net loss
$
( 10,822
)
$
( 10,818
)
Denominator:
Weighted-average ordinary shares - basic
37,715,338
35,940,304
Weighted-average ordinary shares - diluted
37,715,338
35,940,304
Net loss per ordinary share:
Basic
$
( 0.29
)
$
( 0.30
)
Diluted
$
( 0.29
)
$
( 0.30
)
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:
Three Months Ended April 30,
2022
2021
Options to purchase ordinary shares
411,941
427,861
Restricted stock units
1,776,820
1,786,252
Employee stock purchase plan
11,010
22,870
2,199,771
2,236,983
11. Income Taxes
The following table provides details of income taxes for the periods indicated:
Three Months Ended April 30,
2022
2021
(in thousands)
Loss before income taxes
$
( 10,412
)
$
( 9,543
)
Provision for income taxes
410
1,275
Effective tax rate
( 3.9 )%
( 13.4 )%
The Company recorded an income tax provision of $ 0.4 million and $ 1.3 million for the three months ended April 30, 2022 and 2021, respectively. The decrease in income tax expense was primarily due to an increase in the proportion of profits generated in lower tax jurisdictions.
The Company files federal and state income tax returns in the United States and in various foreign jurisdictions. The Internal Revenue Service is currently examining the Company’s U.S. federal income tax return for the fiscal year ended January 31, 2017. The tax years 2013 to 2021 remain open to examination by U.S. federal tax authorities. The tax years 2009 to 2021 remain open to examination by U.S. state tax authorities. The tax years 2015 to 2021 remain open to examination by foreign tax authorities. Fiscal years outside of the normal statute of limitations remain open to audit by tax authorities due to tax attributes generated in those earlier years, which have been carried forward and may be audited in subsequent years when utilized.
The Company regularly assesses the likelihood of adverse outcomes resulting from potential tax examinations to determine the adequacy of its provision for income taxes. These assessments can require considerable estimates and judgments. As of April 30, 2022, the gross amount of unrecognized tax benefits was approximately $ 31.1 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. If events occur, and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities could result in tax benefits being recognized in the period in which the Company determines the liabilities are no longer necessary. The Company does not anticipate significant changes to its uncertain tax positions during the next twelve months.
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12. Commitments and Contingencies
Contract Manufacturer Commitments
The Company’s components and products are procured and built by independent contract manufacturers based on sales forecasts. These forecasts include estimates of future demand, historical trends, analysis of sales and marketing activities, and adjustment of overall market conditions. The Company regularly issues purchase orders to independent contract manufacturers which are cancelable upon agreement between the Company and the third-party manufacturers. 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 April 30, 2022 and January 31, 2022, total manufacturing purchase commitments were approximately $ 66.3 million and $ 71.5 million, respectively. The Company also reviews and assesses the need for any expected loss liabilities on a quarterly basis for all products that it does not expect to sell for which it has committed purchases from suppliers. As of April 30, 2022 and January 31, 2022, there were no material loss liabilities recorded in the condensed consolidated balance sheets from adverse purchase commitments.
Indemnification
The Company, from time to time, in the normal course of business, indemnifies certain vendors with whom it enters into contractual relationships. The Company has agreed to hold the other party harmless against third-party claims in connection with the Company’s future products. The Company also indemnifies certain customers against third-party claims related to certain intellectual property matters. 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 April 30, 2022 and January 31, 2022, respectively.
13. Segment Reporting
The Company operates in one reportable segment related to the development and sales of low-power, high-definition (HD), Ultra HD video compression, image processing and computer vision solutions. The Chief Executive Officer of the Company has been identified as the Chief Operating Decision Maker (the “CODM”) and manages the Company’s operations as a whole. For the purpose of evaluating financial performance and allocating resources, the CODM reviews financial information presented on a consolidated basis accompanied by information by customer and geographic region.
Geographic Revenue
The following table sets forth the Company’s revenue by geographic region based on bill-to location for the periods indicated:
Three Months Ended April 30,
2022
2021
(in thousands)
Taiwan
$
53,636
$
44,587
Asia Pacific
21,555
18,637
Europe
8,393
3,018
North America other than United States
4,886
2,690
United States
1,835
1,201
Total revenue
$
90,305
$
70,133
As of April 30, 2022, substantially all of the Company’s property and equipment were located in the Asia Pacific region, United States and Europe with approximate net amounts of $ 5.4 million, $ 3.2 million and $ 1.5 million, respectively.
Major Customers
The customers representing 10% or more of revenue were WT, Chicony, and Hakuto, which accounted for approximately 57 %, 11 %, and 10 % of total revenue for the three months ended April 30, 2022, respectively. For the three months ended April 30, 2021, the customers representing 10% or more of revenue were WT and Chicony, which accounted for approximately 63 % and 16 % of total revenue, respectively. Accounts receivable with WT, Chicony, and Hakuto were approximately $ 3.1 million, $ 10.5 million, and $ 0.6 million as of April 30, 2022, respectively.
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14. Subsequent Events
On May 27, 2022, the Company’s Board of Directors approved an extension of the current share repurchase program for an additional twelve months ending June 30, 2023 . The repurchase program does not obligate the Company to acquire any particular amount of ordinary shares, and it may be suspended at any time at the Company’s discretion. As of June 7, 2022, there was approximately $ 49.0 million remained available for repurchases under the repurchase program through June 30, 2023.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.