Ambarella, Inc. Announces Second Quarter Fiscal 2014 Results

Ambarella, Inc. Announces Second Quarter Fiscal 2014 Results

Revenue Up 35% Year Over Year

SANTA CLARA, Calif., Sept. 5, 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 second quarter ended July 31, 2013.

Revenue for the second quarter of fiscal 2014 was $37.7 million, up 35% from
$28.0 million in the same period in fiscal 2013. For the six months ended July
31, 2013, revenue was $71.7 million, up 33% from $53.9 million for the six
months ended July 31, 2012.

Gross margin under U.S. generally accepted accounting principles (GAAP) for
the second quarter of fiscal 2014 was 61.8%, compared with 69.1% for the same
period in fiscal 2013. For the six months ended July 31, 2013, GAAP gross
margin was 62.8%, compared with 70.0% for the six months ended July 31, 2012.

GAAP net income for the second quarter of fiscal 2014 was $6.3 million, or
$0.21 per diluted ordinary share, compared with GAAP net income of $5.2
million, or $0.19 per diluted ordinary share, for the same period in fiscal
2013. GAAP net income for the six months ended July 31, 2013 was $11.0
million, or $0.37 per diluted ordinary share. This compares with GAAP net
income of $7.8 million, or $0.26 per diluted ordinary share, for the six
months ended July 31, 2012.

Gross margin on a non-GAAP basis for the second quarter of fiscal 2014 was
61.9%, compared with 69.2% for the same period in fiscal 2013. For the six
months ended July 31, 2013, non-GAAP gross margin was 62.9%, compared with
70.1% for the six months ended July 31, 2012.

Non-GAAP net income for the second quarter of fiscal 2014 was $7.7 million, or
$0.26 per diluted ordinary share. This compares with non-GAAP net income of
$6.2 million, or $0.23 per diluted ordinary share for the same period in
fiscal 2013. Non-GAAP net income for the six months ended July 31, 2013 was
$13.9 million, or $0.47 per diluted ordinary share. This compares with
non-GAAP net income of $9.6 million for the six months ended July 31, 2012, or
$0.34 per diluted ordinary share.

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 stock-based compensation expense 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 second fiscal quarter of 2014 were
$118.3 million, compared with $104.3 million at the end of the immediately
preceding quarter and $65.2 million at the end of the same quarter a year ago.

"We continue to be very pleased with our progress, with second quarter revenue
of $37.7 million, up 35% over the $28 million we reported in the same period a
year ago," said Fermi Wang, President and CEO of Ambarella. "We continue to
enjoy solid success in professional and consumer IP security markets, where we
are delivering cost effective, feature rich solutions for technically
demanding products. In addition to our security market success, our wearable
sports and automotive camera markets continue to grow, contributing to our
strong year-over-year growth."

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 second quarter fiscal 2014
results. The call can be accessed by dialing 877-304-8963 in the USA;
international callers should dial 760-666-4834, participant passcode:
33440884. 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, 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 visit www.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 success of our business is subject to risks and uncertainties that
include, but are not limited to, risks associated with revenue being generated
from new customers or design wins, neither of which is assured; 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 Annual Report on Form 10-K, 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, future
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 Quarterly Report on Form 10-Q for the fiscal quarter ended July 31,
2013 could differ from the preliminary results announced in this press
release.

Ambarella assumes no obligation and does not intend to update the information
contained 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 condensed 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
                                                              
                           Three Months Ended July Six Months Ended July 31,
                             31,
                           2013         2012       2013          2012
                                                               
Revenue                     $37,710    $27,958  $71,651     $53,879
Cost of revenue             14,419      8,626     26,667       16,142
Gross profit                23,291      19,332    44,984       37,737
                                                              
Operating expenses:                                            
Research and development    10,974      9,356     22,291       20,829
Selling, general and        5,385       4,184     10,542       8,209
administrative
                                                              
Total operating expenses   16,359      13,540    32,833       29,038
                                                              
Income from operations      6,932       5,792     12,151       8,699
                                                              
Other income (loss), net    (11)        4         (16)         2
                                                              
Income before income taxes  6,921       5,796     12,135       8,701
                                                              
Provision for income taxes  667         570       1,140        873
                                                              
Net income                  $6,254     $5,226   $10,995     $7,828
                                                              
Net income per share
attributable to ordinary                                       
shareholders:
Basic                      $0.23      $0.20    $0.40       $0.28
Diluted                    $0.21      $0.19    $0.37       $0.26
Weighted-average shares
used to compute net income                                     
per shareattributable to
ordinary shareholders:
Basic                      27,409,343  7,604,443 27,232,142   7,557,345
Diluted                    29,848,676  9,114,927 29,456,374   9,068,762

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 July 31, Six Months Ended July 31,
                        2013          2012          2013         2012
                        (unaudited, in thousands)
Stock-based                                                    
compensation:
Cost of revenue          $34         $15         $68        $29
Research and development 900          542          1,874       1,074
Selling, general and     659          456          1,257       853
administrative
                                                              
Total stock-based        $1,593      $1,013      $3,199     $1,956
compensation



AMBARELLA, INC.
RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS PER SHARE
(in thousands, except share and per share data)
                                                               
                        Three Months Ended July 31, Six Months Ended July 31,
                        2013           2012         2013          2012
                        (unaudited)
GAAP net income          $6,254       $5,226     $10,995     $7,828
Two-class method -
allocation to            (8)           (3,704)     (17)         (5,745)
participating securities
Treasury stock method -
additional allocation to 1             179         1            248
ordinary shares
GAAP net income -        $6,247       $1,701     $10,979     $2,331
diluted
                                                               
Non-GAAP adjustments:                                           
Stock-based compensation
expense, net of tax      1,449         924         2,911        1,778
effect
Two-class method -
additional allocation to (2)           (589)       (4)          (1,137)
participating securities
Treasury stock method -
additional allocation to —              40          —             77
ordinary shares
Non-GAAP net income -    $7,694       $2,076     $13,886     $3,049
diluted
                                                               
GAAP - diluted weighted  29,848,676    9,114,927   29,456,374   9,068,762
average shares
Non-GAAP - diluted       29,848,676    9,114,927   29,456,374   9,068,762
weighted average shares
                                                               
GAAP - diluted net       $0.21        $0.19      $0.37       $0.26
income per share
Non-GAAP adjustments:                                           
Stock-based compensation
expense, net of tax      0.05          0.10        0.10         0.20
effect
Non-GAAP adjustment to
two-class method diluted —              (0.06)      —             (0.13)
net income
Non-GAAP adjustment to
treasury stock method    —              —            —             0.01
diluted net income
Non-GAAP - diluted net   $0.26        $0.23      $0.47       $0.34
income per share

The difference between GAAP and non-GAAP gross margin was 0.1% for each
period.The difference was due to the effect of stock-based compensation, as
disclosed in the table above, and the associated tax impact recorded for GAAP
purposes.


AMBARELLA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                                                     
                                          July 31,    January 31,
                                          2013        2013
                                          (unaudited) 
ASSETS                                                
Current assets:                                       
Cash                                       $118,310  $100,494
Accounts receivable, net                   21,881     20,153
Inventories                                9,913      8,918
Restricted cash                            3          3
Deferred tax assets, current               1,219      1,220
Prepaid expenses and other current assets  1,478      2,360
Total current assets                       152,804    133,148
                                                     
Property and equipment, net                3,219      2,536
Deferred tax assets, non-current           1,135      938
Other assets                               1,995      1,981
                                                     
Total assets                               $159,153  $138,603
                                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                  
Current liabilities:                                  
Accounts payable                           11,440     7,051
Accrued liabilities                        12,177     14,042
Income taxes payable                       381        286
Deferred revenue, current                  4,891      3,451
Total current liabilities                  28,889     24,830
                                                     
Other long-term liabilities                1,461      1,441
                                                     
Total liabilities                          30,350     26,271
                                                     
Preference shares                          —           —
Shareholders' equity:                                 
Ordinary shares                            12         12
Additional paid-in capital                 97,387     91,911
Retained earnings                          31,404     20,409
Total shareholders' equity                 128,803    112,332
                                                     
Total liabilities and shareholders' equity $159,153  $138,603

CONTACT: Deborah Stapleton
         650.470.4200
         deb@stapleton.com
 
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