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Ambarella, Inc. Announces Fourth Quarter and Fiscal 2013 Financial Results

Ambarella, Inc. Announces Fourth Quarter and Fiscal 2013 Financial Results

Fourth Quarter Revenue Up 28.3% Year Over Year

SANTA CLARA, Calif., March 7, 2013 (GLOBE NEWSWIRE) -- Ambarella, Inc.
(Nasdaq:AMBA), a leading developer of low-power, HD video compression and
image processing semiconductors, today announced financial results for its
fiscal fourth quarter and year ended January 31, 2013.

Revenue for the fourth quarter of fiscal 2013 was $31.5 million, up 28.3% from
$24.6 million in the same period in fiscal 2012. For the fiscal year ended
January 31, 2013, revenue was $121.1 million, up 24.5% from $97.3 million for
the year ending January 31, 2012.

Gross margin under U.S. generally accepted accounting principles (GAAP) for
the fourth quarter of fiscal 2013 was 63.2%, compared with 68.2% for the same
period in fiscal 2012. For the year ended January 31, 2013, GAAP gross margin
was 66.6%, compared with 66.6% for the year ended January 31, 2012.

GAAP net income for the fourth quarter of fiscal 2013 was $3.6 million, or
$0.13 per diluted ordinary share, compared with GAAP net income of $1.8
million, or $0.04 per diluted ordinary share, for the same period in fiscal
2012. GAAP net income for the year ended January 31, 2013 was $18.2 million,
or $0.60 per diluted ordinary share. This compares to GAAP net income of $9.8
million, or $0.30 per diluted ordinary share, for the year ended January 31,
2012.

Gross margin on a non-GAAP basis for the fourth quarter of fiscal 2013 was
63.3%, compared with 68.3% for the same period in fiscal 2012. For the year
ended January 31, 2013, non-GAAP gross margin was 66.7%, compared with 66.7%
for the year ended January 31, 2012.

Non-GAAP net income for the fourth quarter of fiscal 2013 was $5.0 million, or
$0.18 per diluted ordinary share. This compares with non-GAAP net income of
$2.7 million, or $0.08 per diluted ordinary share for the same period in
fiscal 2012. Non-GAAP net income for the year ended January 31, 2013 was $22.7
million, or $0.79 per diluted ordinary share. This compares to non-GAAP net
income of $13.1 million, or $0.45 per diluted ordinary share, for the year
ended January 31, 2012.

Ambarella reports gross margin, net income and earnings per share in
accordance with GAAP and, additionally, on a non-GAAP basis. Non-GAAP
financial information excludes the impact of stock-based compensation and the
associated tax impact. A reconciliation of the GAAP to non-GAAP gross margin,
net income and earnings per share numbers, as well as a description of the
items excluded from the non-GAAP calculations, is included in the financial
statements portion of this press release.

Cash and cash equivalents at the end of the fourth fiscal quarter of 2013 were
$100.5 million, compared with $58.9 million at the end of the same quarter a
year ago.Ambarella raised $27.4 million in net proceeds, after deducting
underwriting discounts and commissions, in its initial public offering on
October 10, 2012. An additional $5.0 million, net of underwriting discounts
and commissions, was raised in November 2012 through the exercise of the
over-allotment option by the underwriters of the initial public offering.

"We are very pleased with our fourth quarter and fiscal year 2013 financial
results," said Fermi Wang, president and CEO."We experienced significant
year-over-year growth in our automotive and sports camera markets, and we were
especially pleased with progress in our professional IP security camera
market, which contributed strong gross margins as well as substantial
year-over-year revenue growth.As this security market continues to grow
rapidly, driven by the migration from analog standard definition cameras to
digital, IP-based high definition cameras, we believe our products offer
advanced technology and leading features that allow our customers to deliver
winning solutions to the market."

Quarterly Conference Call

Ambarella plans to hold a conference call at 5 p.m. Eastern Time / 2 p.m.
Pacific Time today with Fermi Wang, Chief Executive Officer, and George
Laplante, Chief Financial Officer, to discuss fourth quarter and fiscal 2013
results. The call can be accessed by dialing 877-304-8963 in the USA;
international callers should dial 760-666-4834. Participant passcode is
Ambarella. Please dial in ten minutes prior to the scheduled conference call
time. A live and archived webcast of the call will be available on Ambarella's
website at http://www.ambarella.com/ for up to 30 days after the call.

About Ambarella

Ambarella, Inc.(Nasdaq:AMBA), is a leading developer of low-power,
high-definition (HD) video compression and image processing solutions. The
company's products are used in a variety of HD cameras including security
IP-cameras, wearable sports cameras, digital still cameras, and automotive
video camera recorders. Ambarella technology is also used in television
broadcasting with TV programs being transmitted worldwide using Ambarella
compression chips. For more information about Ambarella, please
visitwww.ambarella.com.

"Safe harbor" statement under the Private Securities Litigation Reform Act of
1995

This press release contains forward-looking statements that are not historical
facts and often can be identified by terms such as "outlook," "projected,"
"intends," "will," "estimates," "anticipates," "expects," "believes," "could,"
or similar expressions, including the comments of our CEO relating to
expansion of our target markets and the ability of our technology and product
features to gain market acceptance and design wins. The achievement or success
of the matters covered by such forward-looking statements involves risks,
uncertainties and assumptions. Our actual results could differ materially from
those predicted or implied and reported results should not be considered as an
indication of our future performance.

The risks and uncertainties referred to above include, but are not limited to,
risks associated with our growth strategy; our ability to anticipate future
market demands and future needs of our customers; our plans for future
products; our ability to retain and expand customer relationships and to
achieve design wins; our ability to successfully enter new markets;
anticipated trends and challenges, including competition, in the markets in
which we operate; our ability to effectively manage growth; our ability to
retain key employees; and the potential for intellectual property disputes or
other litigation.

Further information on these and other factors that could affect our financial
results is included in the company's final prospectus for its initial public
offering, which is on file with the Securities and Exchange Commission.
Additional information will also be set forth in the company's quarterly
reports on Form 10-Q, annual reports on Form 10-K and other filings the
company makes with the Securities and Exchange Commission from time to time,
copies of which may be obtained by visiting the Investor Relations portion of
our web site at www.ambarella.com or the SEC's web site at www.sec.gov.Undue
reliance should not be placed on the forward-looking statements in this
release, which are based on information available to us on the date
hereof.The results we report in our Annual Report on Form 10-K for the fiscal
year ended January 31, 2013 could differ from the preliminary results
announced in this press release.

Ambarella assumes no obligation and does not intend to update the
forward-looking statements made in this press release, except as required by
law.

Non-GAAP Financial Measures

The company has provided in this release non-GAAP financial information
including non-GAAP gross margin, net income, and earnings per share, as a
supplement to the consolidated financial statements, which are prepared in
accordance with generally accepted accounting principles ("GAAP"). Management
uses these non-GAAP financial measures internally in analyzing the company's
financial results to assess operational performance and liquidity. The company
believes that both management and investors benefit from referring to these
non-GAAP financial measures in assessing its performance and when planning,
forecasting and analyzing future periods. Further, the company believes these
non-GAAP financial measures are useful to investors because they allow for
greater transparency with respect to key financial metrics that the company
uses in making operating decisions and because the company believes that
investors and analysts use them to help assess the health of its business and
for comparison to other companies. Non-GAAP results are presented for
supplemental informational purposes only for understanding the company's
operating results. The non-GAAP information should not be considered a
substitute for financial information presented in accordance with GAAP, and
may be different from non-GAAP measures used by other companies.

The company has provided below reconciliations between its non-GAAP financial
measures to its most directly comparable GAAP financial measures.

AMBARELLA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
                                                               
                           Three Months Ended January Twelve Months Ended
                             31,                        January 31,
                           2013          2012         2013        2012
                           
Revenue                     $31,518     $24,571    $121,066  $97,257
                                                               
Cost of revenue             11,584       7,802       40,405     32,458
Gross profit                19,934       16,769      80,661     64,799
                                                               
Operating expenses:                                             
Research and development    11,198       10,007      42,829     37,618
Selling, general and        5,114        4,665       17,926     15,926
administrative
                                                               
Total operating expenses   16,312       14,672      60,755     53,544
                                                               
Income from operations      3,622        2,097       19,906     11,255
                                                               
Other income (loss), net    (3)          (69)        136        (90)
                                                               
Income before income taxes  3,619        2,028       20,042     11,165
                                                               
Provision for income taxes  (24)         251         1,854      1,344
                                                               
Net income                  $3,643      $1,777     $18,188   $9,821
                                                               
Net income per share
attributable to ordinary                                        
shareholders:
Basic                      $0.14       $0.04      $0.64     $0.32
Diluted                    $0.13       $0.04      $0.60     $0.30
Weighted-average shares
used to compute net income                                      
per share attributable to
ordinary shareholders:
Basic                      26,894,966   7,958,603   13,511,646 7,961,944
Diluted                    28,547,219   9,431,803   15,016,986 9,469,820

The following table presents details of stock-based compensation expense
included in each functional line item in the consolidated statements of
operations above:

                                                             
                                                             
                               Three Months Ended Twelve Months Ended January
                                January 31,        31,
                               2013       2012    2013          2012
                               (in thousands)
Stock-based compensation:                                     
Cost of revenue                 $33      $15   $92         $52
Research and development        963       552    2,942        1,821
Selling, general and            562       404    1,965        1,743
administrative
Total stock-based compensation  $1,558   $971  $4,999      $3,616


AMBARELLA, INC.
RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS PER SHARE
(in thousands, except share and per share data)
                                                                
                                Three Months Ended     Twelve Months Ended
                                 January 31,            January 31,
                                2013        2012       2013        2012
                                
GAAP net income                  $3,643    $1,777   $18,188   $9,821
Two-class method - allocation to
participatingsecurities basic   (8)        (1,424)   (9,578)    (7,255)
net income
Additional allocation to
ordinary shares - treasury stock —           38        432        277
method
GAAP net income - diluted        $3,635    $391     $9,042    $2,843
                                                                
Non-GAAP adjustments:                                            
Stock-based compensation         1,372      883       4,538      3,291
expense, net of tax effect
Two-class method - additional
allocation to participating      (2)        (507)     (1,710)    (1,873)
securities
Non-GAAP net income - diluted    $5,005    $767     $11,870   $4,261
                                                                
GAAP - diluted weighted average  28,547,219 9,431,803 15,016,986 9,469,820
shares
Non-GAAP - diluted weighted      28,547,219 9,431,803 15,016,986 9,469,820
average shares
                                                                
GAAP - diluted net income per    $0.13     $0.04    $0.60     $0.30
share
Non-GAAP adjustments:                                            
Stock-based compensation         0.05       0.09      0.30       0.35
expense, net of tax effect
Non-GAAP adjustment to two-class (0.00)     (0.05)    (0.11)     (0.20)
method diluted net income
Non-GAAP - diluted net income    $0.18     $0.08    $0.79     $0.45
per share

For fiscal Q4 and the year ending 2013, the difference between GAAP and
non-GAAP gross margin was 0.1%, or $33,000 and $92,000, respectively, for each
period.The difference was due to the effect of stock-based compensation and
the associated tax impact, recorded for GAAP purposes.

AMBARELLA, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
                                                                          
                                                       January 31,          
                                                       2013       2012      
ASSETS                                                                      
Current assets:                                                            
Cash                                                    $100,494 $58,944 
Accounts receivable, net                                20,153    9,485    
Inventories                                             8,918     6,786    
Restricted cash                                         3         517      
Deferred tax assets, current                            1,220     861      
Prepaid expenses and other current assets               2,360     1,226    
Total current assets                                    133,148   77,819   
                                                                          
Property and equipment, net                             2,536     1,686    
Deferred tax assets, non-current                        938       426      
Intangible assets, net                                  —          270      
Other assets                                            1,981     1,538    
                                                                          
Total assets                                            $138,603 $81,739 
                                                                          
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERENCE SHARES                      
AND SHAREHOLDERS' EQUITY
Current liabilities:                                                       
Accounts payable                                        6,674     6,481    
Accrued liabilities                                     14,419    7,931    
Income taxes payable                                    286       530      
Deferred revenue, current                               3,451     8,002    
Total current liabilities                               24,830    22,944   
                                                                          
Deferred revenue, non-current                           —          200      
Other long-term liabilities                             1,441     1,246    
                                                                          
Total liabilities                                       26,271    24,390   
                                                                          
Preference Shares                                       —          50,900   
Shareholders' equity:                                                      
Ordinary shares                                         12        3        
Additional paid-in capital                              91,911    4,225    
Retained earnings                                       20,409    2,221    
Total shareholders' equity                              112,332   6,449    
                                                                          
Total liabilities, redeemable convertible preference    $138,603 $81,739 
shares and shareholders' equity

CONTACT: Deborah Stapleton
         650.470.4200
         deb@stapleton.com
 
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