Ambarella, Inc. Announces First Quarter Fiscal 2015 Financial Results

Ambarella, Inc. Announces First Quarter Fiscal 2015 Financial Results

First Quarter Revenue up 21% Year Over Year

SANTA CLARA, Calif., June 3, 2014 (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 first quarter ended April 30, 2014.

Revenue for the first quarter of fiscal 2015 was $40.9 million, up 21% from
$33.9 million in the same period in fiscal 2014. Gross margin under U.S.
generally accepted accounting principles (GAAP) for the first quarter of
fiscal 2015 was 62.5%, compared with 63.9% for the same period in fiscal 2014.
GAAP net income for the first quarter of fiscal 2015 was $5.3 million, or
$0.17 per diluted ordinary share, compared with GAAP net income of $4.7
million, or $0.16 per diluted ordinary share, for the same period in fiscal
2014.

Gross margin on a non-GAAP basis for the first quarter of fiscal 2015 was
62.7%, compared with 64.0% for the same period in fiscal 2014. Non-GAAP net
income for the first quarter of fiscal 2015 was $7.8 million, or $0.25 per
diluted ordinary share. This compares with non-GAAP net income of $6.2
million, or $0.21 per diluted ordinary share, for the same period in fiscal
2014.

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.

Total cash and marketable securities on hand at the end of the first fiscal
quarter of 2015 were $155.6 million, compared with $104.3 million at the end
of the same quarter a year ago.

"We are very pleased with the financial results of our first fiscal quarter of
2015," said Fermi Wang, president and CEO. "During the first quarter we
achieved revenue of $40.9 million, up 21% from the same period last year,
driven by continued growth in our IP security camera business. We believe the
expanding markets for innovative, high definition professional and consumer
cameras will continue to give us the opportunity to grow our revenues in the
year ahead."

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 first quarter 2015 results. The
call can be accessed by dialing 877-304-8963 in the USA; international callers
should dial 760-666-4834. The conference ID is 42871710. 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 IP security
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 the
expansion of our target markets and our ability to generate revenue growth
from our business operations. 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 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
ability to introduce new and enhanced solutions; 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 for our 2014
fiscal year, 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 Quarterly Report on Form 10-Q for the first
quarter ended April 30, 2014 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 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 April 30,
                                                 2014           2013
                                                 
Revenue                                           $40,921      $33,941
                                                               
Cost of revenue                                   15,325        12,248
Gross profit                                      25,596        21,693
                                                               
Operating expenses:                                             
Research and development                          12,914        11,317
Selling, general and administrative               6,755         5,157
                                                               
Total operating expenses                         19,669        16,474
                                                               
Income from operations                            5,927         5,219
                                                               
Other income (loss), net                          49            (5)
                                                               
Income before income taxes                        5,976         5,214
                                                               
Provision for income taxes                        716           473
                                                               
Net income                                        $5,260       $4,741
                                                               
Net income per share attributable to ordinary                   
shareholders:
Basic                                            $0.18        $0.17
Diluted                                          $0.17        $0.16
                                                 
Weighted-average shares used to compute net
income per share attributable to ordinary                       
shareholders:
Basic                                            28,976,339    27,056,932
Diluted                                          31,763,993    29,066,062
                                                               

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

                                   Three Months Ended April 30,
                                   2014           2013
                                   (unaudited, in thousands)
Stock-based compensation:                         
Cost of revenue                     $59          $34
Research and development            1,590         974
Selling, general and administrative 1,225         598
                                                 
Total stock-based compensation      $2,874       $1,606



AMBARELLA, INC.
RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS PER SHARE
(in thousands, except share and per share data)
                                                               
                                                 Three Months Ended April 30,
                                                 2014           2013
                                                 (unaudited)
GAAP net income                                   $5,260       $4,741
Two-class method - allocation to participating    (2)           (9)
securities
Treasury stock method - additional allocation to  —              1
ordinary shares
GAAP net income - diluted                         $5,258       $4,733
                                                               
Non-GAAP adjustments:                                           
Stock-based compensation expense, net of tax      2,576         1,463
effect
Two-class method - additional allocation to       (1)           (3)
participating securities
Treasury stock method - additional allocation to  —              —
ordinary shares
Non-GAAP net income - diluted                     $7,833       $6,193
                                                               
GAAP - diluted weighted average shares            31,763,993    29,066,062
Non-GAAP - diluted weighted average shares        31,763,993    29,066,062
                                                               
GAAP - diluted net income per share               $0.17        $0.16
Non-GAAP adjustments:                                           
Stock-based compensation expense, net of tax      0.08          0.05
effect
Non-GAAP adjustment to two-class method diluted   —              —
net income
Non-GAAP adjustment to treasury stock method      —              —
diluted net income
Non-GAAP - diluted net income per share           $0.25        $0.21

For fiscal Q1 2015 and Q1 2014, the difference between GAAP and non-GAAP gross
margin was 0.2% and 0.1%, or $59,157 and $34,041, respectively.The difference
was due to the effect of stock-based compensation recorded for GAAP purposes.



AMBARELLA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
                                                    
                                          April 30, January 31,
                                          2014       2014
                                                    
ASSETS                                               
Current assets:                                      
Cash and cash equivalents                  $129,480 $143,394
Marketable securities                      26,136    —
Accounts receivable, net                   21,305    18,837
Inventories                                10,034    10,452
Restricted cash                            5         3
Deferred tax assets, current               1,599     1,599
Prepaid expenses and other current assets  2,621     2,951
Total current assets                       191,180   177,236
                                                    
Property and equipment, net                2,950     3,018
Deferred tax assets, non-current           1,260     1,134
Other assets                               1,873     1,919
                                                    
Total assets                               $197,263 $183,307
                                                    
LIABILITIES AND SHAREHOLDERS' EQUITY                 
Current liabilities:                                 
Accounts payable                           13,408    8,321
Accrued liabilities                        9,334     11,705
Income taxes payable                       449       545
Deferred revenue, current                  4,817     4,831
Total current liabilities                  28,008    25,402
                                                    
Other long-term liabilities                1,556     1,544
                                                    
Total liabilities                          29,564    26,946
                                                    
Shareholders' equity:                                
Preference shares                          —          —
Ordinary shares                            13        13
Additional paid-in capital                 116,355   110,285
Accumulated other comprehensive income     8         —
Retained earnings                          51,323    46,063
Total shareholders' equity                 167,699   156,361
                                                    
Total liabilities and shareholders' equity $197,263 $183,307

CONTACT: Deborah Stapleton
         650.470.4200
         deb@stapleton.com
 
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