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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2025


☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to ______

Commission file number: 001-35667

AMBARELLA, INC.

(Exact name of registrant as specified in its charter)


Cayman Islands		98-0459628
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3101 Jay Street Santa Clara, California		95054
(Address of principal executive offices)		(Zip Code)

(408) 734-8888

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Ordinary Shares, $0.00045 Par Value Per Share	AMBA	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of ordinary shares of the Registrant outstanding as of May 31, 2025 was 42,414,087 shares.

AMBARELLA, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


		Page

PART I. FINANCIAL INFORMATION			3

Item 1.	Financial Statements		3

	Unaudited Condensed Consolidated Balance Sheets at April 30, 2025 and January 31, 2025		3

	Unaudited Condensed Consolidated Statements of Operations for the three months ended April 30, 2025 and 2024		4

	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three months ended April 30, 2025 and 2024		5

	Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the three months ended April 30, 2025 and 2024		6

	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended April 30, 2025 and 2024		7

	Notes to Unaudited Condensed Consolidated Financial Statements		8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		27

Item 4.	Controls and Procedures		28

PART II. OTHER INFORMATION			28

Item 1.	Legal Proceedings		28

Item 1A.	Risk Factors		28

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		54

Item 5.	Other Information		55

Item 6.	Exhibits		55

Signatures			57

PART I – FINANCIAL INFORMATION

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,
	2025			2025
ASSETS
Current assets:
Cash and cash equivalents	$	141,285		$	144,622
Marketable debt securities		118,102			105,643
Accounts receivable, net		30,235			29,767
Inventories		39,289			34,428
Restricted cash		441			7
Prepaid expenses and other current assets		6,197			6,084
Total current assets		335,549			320,551
Property and equipment, net		10,248			9,084
Intangible assets, net		44,895			47,279
Operating lease right-of-use assets, net		4,377			5,188
Goodwill		303,625			303,625
Other non-current assets		3,224			3,241
Total assets	$	701,918		$	688,968
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		35,290			21,775
Accrued and other current liabilities		73,479			80,781
Operating lease liabilities, current		2,335			2,829
Income taxes payable		1,633			1,383
Deferred revenue, current		12,114			14,226
Total current liabilities		124,851			120,994
Operating lease liabilities, non-current		2,056			2,436
Other long-term liabilities		2,295			4,126
Total liabilities		129,202			127,556
Commitments and contingencies (Note 14)
Shareholders' equity:
Preference shares, $0.00045 par value per share, 20,000,000 shares authorized and no shares issued and outstanding at April 30, 2025 and January 31, 2025, respectively		—			—
Ordinary shares, $0.00045 par value per share, 200,000,000 shares authorized; 42,413,608 and 41,963,959 shares issued and outstanding at April 30, 2025 and January 31, 2025, respectively		19			19
Additional paid-in capital		848,756			813,683
Accumulated other comprehensive income (loss)		326			(233	)
Accumulated deficit		(276,385	)		(252,057	)
Total shareholders’ equity		572,716			561,412
Total liabilities and shareholders' equity	$	701,918		$	688,968

See accompanying notes to condensed consolidated financial statements.

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)


	Three Months Ended April 30,
	2025			2024
Revenue	$	85,872		$	54,473
Cost of revenue		34,336			21,313
Gross profit		51,536			33,160
Operating expenses:
Research and development		58,819			54,137
Selling, general and administrative		18,575			18,468
Total operating expenses		77,394			72,605
Loss from operations		(25,858	)		(39,445	)
Other income, net		2,175			2,271
Loss before income taxes		(23,683	)		(37,174	)
Provision for income taxes		645			758
Net loss	$	(24,328	)	$	(37,932	)
Net loss per share attributable to ordinary shareholders:
Basic	$	(0.58	)	$	(0.93	)
Diluted	$	(0.58	)	$	(0.93	)
Weighted-average shares used to compute net loss per share attributable to ordinary shareholders:
Basic		42,219,972			40,774,991
Diluted		42,219,972			40,774,991

See accompanying notes to condensed consolidated financial statements.

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited, in thousands)


	Three Months Ended April 30,
	2025			2024
Net loss	$	(24,328	)	$	(37,932	)
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on investments		559			(389	)
Other comprehensive income (loss), net of tax		559			(389	)
Comprehensive loss	$	(23,769	)	$	(38,321	)

See accompanying notes to condensed consolidated financial statements.

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)


									Accumulated
	Outstanding					Additional			Other
	Ordinary Shares					Paid-in			Comprehensive Income
	Shares			Amount		Capital			(Loss)			Accumulated Deficit			Total
Balance--January 31, 2025		41,963,959		$	19	$	813,683		$	(233	)	$	(252,057	)	$	561,412
Issuance of shares through employee equity plans		375,046			—		6,713			—			—			6,713
Issuance of shares through employee stock purchase plan		98,755			—		4,479			—			—			4,479
Stock repurchase		(24,152	)		—		(1,000	)		—			—			(1,000	)
Stock-based compensation expense		—			—		24,881			—			—			24,881
Other comprehensive income (loss) - net of tax		—			—		—			559			—			559
Net loss		—			—		—			—			(24,328	)		(24,328	)
Balance--April 30, 2025		42,413,608		$	19	$	848,756		$	326		$	(276,385	)	$	572,716

									Accumulated
	Outstanding					Additional			Other
	Ordinary Shares					Paid-in			Comprehensive income
	Shares			Amount		Capital			(Loss)			Accumulated Deficit			Total
Balance--January 31, 2024		40,520,558		$	18	$	694,967		$	(183	)	$	(134,931	)	$	559,871
Issuance of shares through employee equity plans		367,413			—		4,237			—			—			4,237
Issuance of shares through employee stock purchase plan		97,074			—		4,055			—			—			4,055
Stock-based compensation expense		—			—		25,583			—			—			25,583
Other comprehensive income (loss) - net of tax		—			—		—			(389	)		—			(389	)
Net loss		—			—		—			—			(37,932	)		(37,932	)
Balance--April 30, 2024		40,985,045		$	18	$	728,842		$	(572	)	$	(172,863	)	$	555,425

See accompanying notes to condensed consolidated financial statements.

AMBARELLA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)


	Three Months Ended April 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(24,328	)	$	(37,932	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		6,748			6,354
Amortization (accretion) of premium (discount) on marketable debt securities, net		(70	)		(205	)
Stock-based compensation		26,130			26,036
Deferred income taxes		6			119
Other non-cash items, net		(239	)		478
Changes in operating assets and liabilities:
Accounts receivable		(468	)		(3,349	)
Inventories		(4,861	)		928
Prepaid expenses and other current assets		(113	)		(702	)
Other non-current assets		11			(13	)
Accounts payable		15,368			(12,037	)
Accrued and other current liabilities		(692	)		5,806
Income taxes payable		250			(637	)
Deferred revenue		(1,984	)		1,115
Operating lease liabilities		(971	)		(983	)
Other long-term liabilities		14			71
Net cash provided by (used in) operating activities		14,801			(14,951	)
Cash flows from investing activities:
Purchase of investments		(21,048	)		(6,653	)
Sales of investments		1,428			7,195
Maturities of investments		8,031			2,725
Purchase of tangible and intangible assets		(4,565	)		(1,132	)
Net cash provided by (used in) investing activities		(16,154	)		2,135
Cash flows from financing activities:
Stock repurchase		(1,000	)		—
Proceeds from exercise of stock options and employee stock purchase plan		2,627			2,903
Long-term financing payment for intangible assets		(3,177	)		(3,191	)
Net cash used in financing activities		(1,550	)		(288	)
Net decrease in cash, cash equivalents and restricted cash		(2,903	)		(13,104	)
Cash, cash equivalents and restricted cash at beginning of period		144,629			144,921
Cash, cash equivalents and restricted cash at end of period	$	141,726		$	131,817
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	294		$	1,084
Supplemental disclosure of noncash investing activities:
Unpaid liabilities related to tangible and intangible assets purchases	$	3,519		$	298

See accompanying notes to condensed consolidated financial statements.

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 powerful artificial intelligence (AI) processing, advanced image signal processing, and high-definition (HD) and Ultra HD compression. 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, products fully integrate high-definition video processing, image processing, AI 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 AI 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 equipment manufacturers, or OEMs, who include the Company’s SoCs in their products, and original design manufacturers, or ODMs, who include the Company’s SoCs in the products that they supply to 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 2025 fiscal year filed with the SEC on March 28, 2025 (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. 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, 2025.

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 one of its distributors, WT Microelectronics Co., Ltd., formerly Wintech Microelectronics Co., Ltd., or WT, which serves as its non-exclusive sales representative and fulfillment partner in Asia other than Japan, and to one ODM, Chicony Electronics Co., Ltd., or Chicony, which manufactures devices incorporating the Company’s solutions on behalf of multiple end-customers. 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 15 for additional information regarding revenue and credit concentration with these customers.

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. In order to limit the exposure of each investment, the cash equivalents and marketable debt securities consist primarily of money market funds, fixed deposits, commercial paper, corporate bonds, asset-backed securities and U.S. government securities which management assesses to be highly liquid. The Company does not hold or issue financial instruments for trading purposes.

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

During the three months ended April 30, 2025, the Company entered into a Letter of Credit of approximately $0.4 million with a financial institution as collateral for the security deposit on its new office lease located in Santa Clara, California. Refer to Note 8, Leases, of the Notes to Consolidated Financial Statements for detailed lease information included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2025 . The Letter of Credit is irrevocable for one year, during which the Company has the obligation to maintain the full amount of the Letter of Credit. The restricted cash also includes those amounts required to be set aside to secure certain transactions in a foreign entity. 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, 2025		January 31, 2025		April 30, 2024		January 31, 2024
	(in thousands)
Cash and cash equivalents	$	141,285	$	144,622	$	131,810	$	144,914
Restricted cash		441		7		7		7
Total as presented in the condensed consolidated statements of cash flows	$	141,726	$	144,629	$	131,817	$	144,921

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This new guidance requires additional disclosures related to effective tax rate reconciliation, disaggregated income taxes paid and other modified income tax-related disclosures. The ASU shall be applied on a prospective basis with retrospective application permitted, and is effective for annual periods beginning after December 15, 2024. The Company expects to adopt this new guidance for its fiscal period ending January 31, 2026. The Company expects that such adoption will only have an impact on its financial disclosures and does not believe it will have a material impact on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This new guidance requires public entities to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of income statement. The ASU may be applied prospectively or retrospectively and is effective for fiscal years beginning after December 15, 2026 and for interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this new guidance on its consolidated financial statements and disclosures.

2. Financial Instruments and Fair Value

The Company invests a portion of its cash in money market funds, fixed deposits and marketable debt securities that are denominated in United States dollars. The marketable debt security portfolio consists of corporate bonds, asset-backed securities and U.S. government securities. 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 April 30, 2025
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Money market funds	$	189	$	—	$	—		$	189
Fixed deposits		—		—		—			—
Corporate bonds		62,210		267		(34	)		62,443
Asset-backed securities		21,288		50		(50	)		21,288
U.S. government securities		34,278		127		(34	)		34,371
Total cash equivalents and marketable debt securities	$	117,965	$	444	$	(118	)	$	118,291

	As of January 31, 2025
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Money market funds	$	849	$	—	$	—		$	849
Fixed deposits		3,000		—		—			3,000
Corporate bonds		55,138		111		(123	)		55,126
Asset-backed securities		20,412		20		(67	)		20,365
U.S. government securities		30,326		8		(182	)		30,152
Total cash equivalents and marketable debt securities	$	109,725	$	139	$	(372	)	$	109,492

The following table provides the breakdown of unrealized losses as of April 30, 2025 and January 31, 2025, respectively, aggregated by investment category and length of time that individual securities have been in a continuous loss position:


	As of April 30, 2025
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
Corporate bonds	$	9,927	$	(31	)	$	1,901	$	(3	)	$	11,828	$	(34	)
Asset-backed securities		5,415		(41	)		3,535		(9	)		8,950		(50	)
U.S. government securities		17,388		(31	)		1,816		(3	)		19,204		(34	)
Total marketable debt securities at loss position	$	32,730	$	(103	)	$	7,252	$	(15	)	$	39,982	$	(118	)

	As of January 31, 2025
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
Corporate bonds	$	23,200	$	(116	)	$	2,144	$	(7	)	$	25,344	$	(123	)
Asset-backed securities		8,052		(51	)		4,343		(16	)		12,395		(67	)
U.S. government securities		20,380		(169	)		4,809		(13	)		25,189		(182	)
Total marketable debt securities at loss position	$	51,632	$	(336	)	$	11,296	$	(36	)	$	62,928	$	(372	)


	As of
	April 30, 2025		January 31, 2025
	(in thousands)
Included in cash equivalents	$	189	$	3,849
Included in marketable debt securities		118,102		105,643
Total cash equivalents and marketable debt securities	$	118,291	$	109,492

The contractual maturities of the investments at April 30, 2025 and January 31, 2025 were as follows:


	As of
	April 30, 2025		January 31, 2025
	(in thousands)
Due within one year	$	26,378	$	35,405
Due in 1 - 5 years		91,913		74,087
Total cash equivalents and marketable debt securities	$	118,291	$	109,492

The unrealized gains and losses on the available-for-sale securities were primarily caused by fluctuations in market value and interest rates as a result of the economic environment. The Company estimates the expected losses at an individual security level whenever a security’s fair value is below its amortized cost basis using the discounted cash flow method. The credit-related portion of the loss is recognized in other income, net in the condensed consolidated statements of operations but is limited to the difference between the fair value and the amortized cost basis of the security, adjusted for accrued interest. The non-credit-related portion of the loss is recognized in accumulated other comprehensive income (loss) in the condensed consolidated balance sheets. The credit-related losses were not material for the three months ended April 30, 2025 and 2024, respectively.

The following fair value hierarchy is applied for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.

Level 3—Unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

The Company measures the fair value of money market funds and fixed deposits using quoted prices in active markets for identical assets and classifies them within Level 1. 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 April 30, 2025 and January 31, 2025, respectively:


	As of April 30, 2025
	Total		Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	189	$	189	$	—	$	—
Fixed deposits		—		—		—		—
Corporate bonds		62,443		—		62,443		—
Asset-backed securities		21,288		—		21,288		—
U.S. government securities		34,371		—		34,371		—
Total cash equivalents and marketable debt securities	$	118,291	$	189	$	118,102	$	—

	As of January 31, 2025
	Total		Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	849	$	849	$	—	$	—
Fixed deposits		3,000		3,000		—		—
Corporate bonds		55,126		—		55,126		—
Asset-backed securities		20,365		—		20,365		—
U.S. government securities		30,152		—		30,152		—
Total cash equivalents and marketable debt securities	$	109,492	$	3,849	$	105,643	$	—

3. Inventories

Inventories at April 30, 2025 and January 31, 2025 consisted of the following:


	As of
	April 30, 2025		January 31, 2025
	(in thousands)
Work-in-progress	$	24,300	$	20,546
Finished goods		14,989		13,882
Total	$	39,289	$	34,428

4. Property and Equipment, Net

Depreciation expense was approximately $1.1 million and $1.2 million for the three months ended April 30, 2025 and 2024, respectively. Property and equipment at April 30, 2025 and January 31, 2025 consisted of the following:


	As of
	April 30, 2025			January 31, 2025
	(in thousands)
Computer hardware and software	$	27,420		$	25,730
Tools and equipment		8,680			8,625
Furniture and fixtures		1,407			1,376
Leasehold improvements		3,459			3,455
Construction in progress		790			307
		41,756			39,493
Less: accumulated depreciation and amortization		(31,508	)		(30,409	)
Total property and equipment, net	$	10,248		$	9,084

5. Goodwill and Intangible Assets, Net

Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired in a business combination.

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, 2025, software license liabilities of approximately $6.1 million were recorded in accrued and other current liabilities and approximately $0.4 million were recorded in other long-term liabilities in the condensed consolidated balance sheets.

The components of intangible assets as of April 30, 2025 and January 31, 2025 were as follows:


	As of April 30, 2025							As of January 31, 2025
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(in thousands)
Software licenses	$	47,254	$	(22,130	)	$	25,124	$	45,051	$	(18,755	)	$	26,296
Developed technology		21,200		(10,746	)		10,454		21,200		(9,989	)		11,211
Customer relationships		13,200		(5,133	)		8,067		13,200		(4,767	)		8,433
Trade name		2,500		(1,250	)		1,250		2,500		(1,161	)		1,339
Total intangible assets, net	$	84,154	$	(39,259	)	$	44,895	$	81,951	$	(34,672	)	$	47,279

During the three months ended April 30, 2025, there were approximately $2.5 million of software licenses purchased and approximately $0.3 million of software licenses retired. The amortization expense associated with software licenses was approximately $3.5 million and $3.0 million for the three months ended April 30, 2025 and 2024, respectively. The amortization expense associated with acquisition-related intangible assets, including developed technology, customer relationships and trade name, was approximately $1.2 million and $1.2 million for the three months ended April 30, 2025 and 2024, respectively. As of April 30, 2025, the Company has not commenced amortization with respect to approximately $5.7 million of software licenses with alternative uses that are to be sold, leased or otherwise marketed as part of products. Once the associated products are available for general release to customers, the Company will commence amortization on a product-by-product basis over the remaining estimated economic life of the products. The expected future amortization expense related to the intangible assets as of April 30, 2025 is as follows:


	As of
	April 30, 2025
Fiscal Year	(in thousands)
2026 (9 months remaining)	$	11,405
2027		8,565
2028		7,282
2029		5,925
2030		3,532
Thereafter		8,186
Total future amortization expenses:	$	44,895

Goodwill and intangible assets are tested for impairment at least annually, in the fourth fiscal quarter, or more frequently if events or changes in circumstances indicate that they may be impaired. There were no goodwill and intangible asset impairments for the three months ended April 30, 2025 and 2024, respectively.

6. Accrued and Other Current Liabilities

Accrued and other current liabilities at April 30, 2025 and January 31, 2025 consisted of the following:


	As of
	April 30, 2025		January 31, 2025
	(in thousands)
Accrued employee compensation	$	14,502	$	22,941
Accrued product development costs		34,237		32,929
Software license liabilities, current		6,100		7,021
Development deposit liability		13,500		13,500
Other accrued liabilities		5,140		4,390
Total accrued and other current liabilities	$	73,479	$	80,781

The accrued employee compensation primarily consists of accrued payroll and accrued employee benefits, as well as employee stock purchase plan withholding. For the three months ended April 30, 2025, approximately $9.8 million of annual bonus was paid, of which $3.7 million was paid in cash and $6.1 million was settled with fully vested restricted stock units. The $13.5 million of development deposit liability represents a cash advance from a customer for funding a development project that is subject to certain refund conditions.

7. Leases

There were no material lease agreements entered into, or modified, during the three months ended April 30, 2025. The operating lease expense was approximately $0.9 million and $1.0 million for the three months ended April 30, 2025 and 2024, respectively. The Company's short-term leases and finance leases were not material as of April 30, 2025 and January 31, 2025, respectively.

Supplemental cash flow information related to the operating leases is as follows:


	Three Months Ended April 30,
	2025		2024
	(in thousands)
Cash paid for operating leases included in operating cash flows	$	971	$	983
Operating lease assets obtained in exchange for lease obligations	$	66	$	—

As of April 30, 2025, the weighted average remaining lease term is 2.12 years, and the weighted average discount rate is 3.38 percent. Future minimum lease payments for the lease liabilities are as follows:


	As of
	April 30, 2025
Fiscal Year	(in thousands)
2026 (9 months remaining)	$	1,967
2027		1,644
2028		821
2029		26
2030		26
Thereafter		19
Total future annual minimum lease payments		4,503
Less: interest		(112	)
Total lease liabilities	$	4,391

8. Deferred Revenue

Deferred revenue is primarily related to nonrecurring engineering (NRE) charges that are either invoiced or paid but for which the related performance obligations are not yet satisfied, as well as, for product shipments, a portion of a transaction price that exceeds the weighted average selling price for products sold to date under tiered-pricing contracts that contain material rights. During the three months ended April 30, 2025 and 2024, the amount recognized as revenue that was included in the deferred revenue balance at the end of prior fiscal year was approximately $5.2 million and $0.4 million, respectively.

As of April 30, 2025, the amount of remaining unsatisfied performance obligations on contracts, primarily consisting of NRE project service agreements and product purchase orders with original contract duration of more than one year, was approximately $50.1 million, of which approximately 92% is expected to be recognized within the next 12 months. This does not include amounts from contracts that have an original expected contract duration of one year or less.

9. Other Long-Term Liabilities

Other long-term liabilities at April 30, 2025 and January 31, 2025 consisted of the following:


	As of
	April 30, 2025		January 31, 2025
	(in thousands)
Unrecognized tax benefits, including interest	$	1,022	$	1,008
Deferred tax liabilities		694		695
Software license liabilities, non-current		448		2,420
Other long-term liabilities		131		3
Total other long-term liabilities	$	2,295	$	4,126

10. Capital Stock

Preference shares

There were no preference shares issued and outstanding as of April 30, 2025 and January 31, 2025, respectively.

Ordinary shares

In the first quarter of fiscal year 2026, the Company added 524,549 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, 2025 and January 31, 2025, the following ordinary shares were reserved for future issuance under the Company’s equity plans and employee stock purchase plan:


	As of
	April 30, 2025		January 31, 2025
Shares reserved for options, restricted stock and restricted stock units under equity plans		4,616,524		4,991,570
Shares reserved for employee stock purchase plan		4,062,385		3,636,591

Share repurchase program

During the three months ended April 30, 2025, the Company repurchased a total of 24,152 shares for approximately $1.0 million in cash. As of April 30, 2025, there was approximately $48.0 million available for repurchases under the current repurchase program through June 30, 2025. 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. 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.

11. Stock-based Compensation

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


	Three Months Ended April 30,
	2025		2024
	(in thousands)
Stock-based compensation:
Cost of revenue	$	951	$	607
Research and development		17,585		17,621
Selling, general and administrative		7,594		7,808
Total stock-based compensation	$	26,130	$	26,036

As of April 30, 2025, approximately $1.3 million of stock-based compensation expense was accrued in accrued and other current liabilities in the condensed consolidated balance sheets. Total unrecognized compensation cost related to unvested stock options at April 30, 2025 was $0.4 million and is expected to be recognized over a weighted-average period of 0.11 years. Total unrecognized compensation cost related to unvested restricted stock units at April 30, 2025 was approximately $160.1 million and is expected to be recognized over a weighted-average period of 2.38 years.

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


	Three Months Ended April 30,
	2025			2024
Employee stock purchase plan awards:
Volatility		54	%		39	%
Risk-free interest rate		4.29	%		5.38	%
Expected term (years)		0.5			0.5
Dividend yield		0	%		0	%

The following table summarizes stock option activities for the period indicated:


	Options 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, 2025		226,616		$	52.20
Exercised		(12,905	)		44.38		$	343
Expired		(4,600	)		64.39
Outstanding at April 30, 2025		209,111			52.42					2.82	$	930
Exercisable at April 30, 2025		204,454		$	52.94					2.76	$	843

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, 2025 was $47.99, as reported by The Nasdaq Global Select 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 restricted stock unit activities for the period indicated:


				Weighted-
				Average
				Grant-Date
	Shares			Fair Value
Unvested at January 31, 2025		2,645,379		$	71.84
Granted		501,725			67.13
Vested		(362,141	)		71.78
Forfeited		(144,799	)		95.19
Unvested at April 30, 2025		2,640,164		$	69.68

As of April 30, 2025, the aggregate intrinsic value of unvested restricted stock units was $126.7 million.

12. Net Loss Per Ordinary Share

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


	Three Months Ended April 30,
	2025			2024
	(in thousands, except share and per share data)
Numerator:
Net loss	$	(24,328	)	$	(37,932	)
Denominator:
Weighted-average ordinary shares - basic		42,219,972			40,774,991

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AMBARELLA INC 10-Q