AMBARELLA INC
For the period ended Oct 31, 2025. Filed Dec 4, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Oct 31, 2025 · Filed Dec 4, 2025
AMBA$58.55+6.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-07-31; filed 2025-09-03.
0001193125-25-194853
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-10-31; filed 2025-12-04.
0001193125-25-307917
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 81 previous paragraphs and 82 current paragraphs.
59 unchanged; 20 reworded; 3 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Net Cash Provided by Financing Activities
Current report
Intangible Assets
Current report
During the three months ended October 31, 2025, we entered into a noncancelable on-premise internal-use software license agreement for product design. As of October 31, 2025, total cash payments for the license are approximately $5.3 million, of which $3.5 million will be paid within 12 months and the remaining $1.8 million will be paid within 12 to 24 months.
Removed paragraphs (2)
Previous report
On May 28, 2025, our Board of Directors approved an extension of the existing share repurchase program for an additional twelve months through June 30, 2026. During the six months ended July 31, 2025, we repurchased a total of 24,152 of our ordinary shares for approximately $1.0 million in cash. As of July 31, 2025, there was approximately $48.0 million available for repurchases under the repurchase program through June 30, 2026.
Previous report
Net Cash Provided by (Used in) Financing Activities
Reworded paragraphs (20)
Previous wording
We recorded revenue of $95.5 million and $181.4 million for the three and six months ended July 31, 2025, respectively. This represented increases of 49.9% and 53.5%, respectively, as compared to the same periods in the prior fiscal year. The increases in revenue were primarily attributable to higher product unit shipments, an increased percentage of our sales from higher average selling price AI inference processors, and higher nonrecurring engineering (NRE) project service revenue.
Current wording
We recorded revenue of $108.5 million and $289.8 million for the three and nine months ended October 31, 2025, respectively. This represented increases of 31.2% and 44.3%, respectively, as compared to the same periods in the prior fiscal year. The increases in revenue were primarily attributable to higher product unit shipments and an increased percentage of sales from higher average selling price AI inference processors as a result of high demand for our edge AI solutions.
Previous wording
We recorded operating losses of $22.0 million and $47.8 million for the three and six months ended July 31, 2025, respectively, as compared to operating losses of $36.3 million and $75.7 million for the three and six months ended July 31, 2024, respectively. The reductions in operating losses were primarily attributable to higher revenue and consequently, higher gross profit, partially offset by increases in operating expenses. The increases in operating expenses primarily related to higher personnel and engineering-related costs, including chip development costs and tools and equipment expenses.
Current wording
We recorded operating losses of $16.2 million and $64.1 million for the three and nine months ended October 31, 2025, respectively, as compared to operating losses of $25.5 million and $101.2 million for the three and nine months ended October 31, 2024, respectively. The reductions in operating losses were primarily attributable to higher revenue and consequently, higher gross profit, partially offset by increases in operating expenses. The increased operating expenses primarily related to higher personnel and engineering-related costs, including chip development costs and tools and equipment expenses, as well as higher facility-related costs associated with relocating our US headquarters.
Previous wording
We generated cash flows from operating activities of $20.3 million for the six months ended July 31, 2025, as compared to $1.8 million for the six months ended July 31, 2024. The increase in cash flows from operating activities was primarily attributable to a net profit adjusted for certain non-cash items for the six months ended July 31, 2025 compared to a net loss adjusted for certain non-cash items for the six months ended July 31, 2024. This increase was partially offset by lower net working capital associated primarily with the timing of collections and payments with our customers and vendors.
Current wording
We generated cash flows from operating activities of $54.6 million for the nine months ended October 31, 2025, as compared to $8.4 million for the nine months ended October 31, 2024. The increase in cash flows from operating activities was primarily attributable to an increase in net profit adjusted for certain non-cash items, as well as increased liabilities associated with the timing of payments to our vendors.
Previous wording
Pricing, Product Cost and Margin. Our pricing and margins depend on the volumes and features of the solutions we provide to our customers. Additionally, we make significant investments in new solutions for both cost improvements and new features that we expect to drive revenue and maintain margins. In general, solutions incorporated into more complex configurations, such as those used in high-performance camera applications or, in the future, advanced driver assistance systems, have higher prices and higher gross margins as compared to solutions sold into lower-performing, more competitive camera applications. Our average selling price can vary by market and application due to market-specific supply and demand, the maturation of products launched in previous years and the launch of new products by us or our competitors.
Current wording
Pricing, Product Cost and Margin. Our pricing and margins depend on the volumes and features of the solutions we provide to our customers. Additionally, we make significant investments in new solutions for both cost improvements and new features that we expect to drive revenue and maintain margins. In general, solutions incorporated into more complex configurations, such as those used in high-performance camera applications or, in the future, advanced driver assistance systems, have higher prices and higher gross margins as compared to solutions sold into lower-performing, more competitive camera applications. Our average selling price can vary by market and application due to market-specific supply and demand, the maturation of products launched in previous years and the launch of new products by us or our competitors and by product mix.
Previous wording
We derive substantially all of our revenue from the sale of low power AI-based processing and video and image processing SoC solutions to IoT OEMs, IoT ODMs, automotive OEMs or Tier-1 automotive suppliers, either directly or through our distributors. A substantial portion of our revenue from sales was made indirectly through two of our distributors, WT Microelectronics Co., Ltd., formerly Wintech Microelectronics Co., Ltd., or WT, which serves as our non-exclusive sales representative and fulfillment partner in Asia other than Japan, and Hakuto Co., Ltd., or Hakuto, a Japanese distributor, and to one ODM, Chicony Electronics Co., Ltd., or Chicony, which manufactures devices incorporating our solutions on behalf of multiple end-customers.
Current wording
We derive substantially all of our revenue from the sale of low power AI-based processing and video and image processing SoC solutions to IoT OEMs, IoT ODMs, automotive OEMs or Tier-1 automotive suppliers, either directly or through our distributors. A substantial portion of our revenue from sales was made indirectly through one of our distributors, WT Microelectronics Co., Ltd., formerly Wintech Microelectronics Co., Ltd., or WT, which serves as our 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 our solutions on behalf of multiple end-customers.
Previous wording
We are incorporated and domiciled in the Cayman Islands and also conduct business in several locations such as the United States, China, Taiwan, Hong Kong, Italy, South Korea, Germany, and Japan, and we are subject to taxation in those jurisdictions. Our worldwide operating income is subject to varying tax rates, and our effective tax rate is highly dependent upon the geographic distribution of our earnings or losses and the tax laws and regulations in each geographical region. It is also subject to fluctuation from changes in the valuation of our deferred tax assets and liabilities; tax benefits from excess stock-based compensation deductions; transfer pricing adjustments and the tax effects of nondeductible compensation. We have historically had lower effective tax rates as a substantial percentage of our operations are conducted in lower-tax jurisdictions. If our operational structure were to change in such a manner that would increase the amount of operating income subject to taxation in higher-tax jurisdictions, or if we were to commence operations in jurisdictions assessing relatively higher tax rates, our effective tax rate could fluctuate significantly on a quarterly basis and/or be adversely affected.
Current wording
We are incorporated and domiciled in the Cayman Islands and also conduct business in several locations such as the United States, China, Taiwan, Hong Kong, Italy, South Korea, Germany, and Japan, and we are subject to taxation in those jurisdictions. Our worldwide operating income is subject to varying tax rates, and our effective tax rate is highly dependent upon the geographic distribution of our earnings or losses and the tax laws and regulations in each geographical region. It is also subject to fluctuation from changes in the valuation of our deferred tax assets and liabilities; tax benefits from excess stock-based compensation deductions; transfer pricing adjustments and the tax effects of non-deductible compensation. We have historically had lower effective tax rates as a substantial percentage of our operations are conducted in lower-tax jurisdictions. If our operational structure were to change in such a manner that would increase the amount of operating income subject to taxation in higher-tax jurisdictions, or if we were to commence operations in jurisdictions assessing relatively higher tax rates, our effective tax rate could fluctuate significantly on a quarterly basis and/or be adversely affected.
Previous wording
Comparison of the Three and Six Months Ended July 31, 2025 and 2024
Current wording
Comparison of the Three and Nine Months Ended October 31, 2025 and 2024
Previous wording
Revenue increased for the three and six months ended July 31, 2025, as compared to the same periods in the prior fiscal year, primarily due to higher product unit shipments, an increased percentage of our sales from higher average selling price AI inference processors, and higher NRE project service revenue.
Current wording
Revenue increased for the three and nine months ended October 31, 2025, as compared to the same periods in the prior fiscal year, primarily due to higher product unit shipments and an increased percentage of sales from higher average selling price AI inference processors as a result of high demand for our edge AI solutions.
Previous wording
Gross margin decreased for the three and six months ended July 31, 2025, as compared to the same periods in the prior fiscal year, primarily due to higher manufacturing costs associated with advanced process technologies and lower sales of previously reserved inventory, partially offset by an increase in high margin NRE project service revenue.
Current wording
Gross margin decreased for the three and nine months ended October 31, 2025, as compared to the same periods in the prior fiscal year, primarily due to higher manufacturing costs associated with advanced process technologies, as well as a lower percentage of revenue generated from high margin nonrecurring engineering (NRE) project service.
Previous wording
Research and development expense increased for the three and six months ended July 31, 2025, as compared to the same periods in the prior fiscal year, primarily due to approximately $2.1 million and $4.4 million, respectively, of additional engineering-related expenses associated with the progress and number of chips in development. The increases were also attributable to approximately $1.0 million and $3.4 million, respectively, of higher personnel costs, including stock-based compensation, employee benefits and incentive bonus, as a result of higher headcount.
Current wording
Research and development expense increased for the three and nine months ended October 31, 2025, as compared to the same periods in the prior fiscal year, primarily due to approximately $1.9 million and $6.3 million, respectively, of additional engineering-related expenses associated with the progress and number of chips in development. The increases were also attributable to approximately $1.2 million and $4.6 million, respectively, of higher personnel costs, including stock-based compensation and employee benefits, as a result of an increase in headcount.
Previous wording
Selling, general and administrative expense increased for the three and six months ended July 31, 2025, as compared to the same periods in the prior fiscal year, primarily due to approximately $0.9 million and $0.8 million, respectively, of higher outside professional service expense associated with our business development, partially offset by approximately $0.7 million and $0.5 million, respectively, of lower personnel costs and facility-related expenses.
Current wording
Selling, general and administrative expense increased for the three and nine months ended October 31, 2025, as compared to the same periods in the prior fiscal year, primarily due to approximately $2.0 million and $2.0 million, respectively, of higher personnel costs, including stock-based compensation and employee benefits. The increases were also attributable to approximately $0.3 million and $0.4 million, respectively, of higher outside professional service expenses for legal and administrative purposes.
Previous wording
The marginal increase in other income, net, for the three and six months ended July 31, 2025, as compared to the same periods in the prior fiscal year, was primarily due to higher yields from debt security investments, partially offset by lower interest income from our cash deposit and higher net losses from foreign currency transactions and remeasurements.
Current wording
The marginal decrease in other income, net, for the three and nine months ended October 31, 2025, as compared to the same periods in the prior fiscal year, was primarily due to lower interest income from our cash deposits and lower subsidies received from a foreign government, partially offset by higher yields from our debt security investments. For the nine months ended October 31, 2025, the decrease was also attributable to higher net losses from foreign currency transactions and remeasurements.
Previous wording
The decreases in income tax expense for the three and six months ended July 31, 2025, as compared to the same periods in the prior fiscal year, were primarily due to a decrease in the proportion of profits generated in the U.S. and reduction in U.S. tax expenses because of the One Big Beautiful Bill Act (OBBBA).
Current wording
The increased income tax expense for the three months ended October 31, 2025 was primarily due to an increase in forecasted full-year profit. The decreased income tax expense for the nine months ended October 31, 2025 was primarily due to a decrease in the proportion of profits generated in the U.S. and reduction in U.S. tax expenses because of the One Big Beautiful Bill Act (OBBBA), partially offset by an increase in forecasted full-year profit.
Previous wording
On July 4, 2025, President Trump signed the OBBBA, which includes a broad range of tax reform provisions affecting businesses. The OBBBA includes numerous changes to existing tax law including extending or making permanent certain business and international tax measures initially established under the 2017 Tax Cuts and Jobs Act, which were set to expire. We are in the process of evaluating the financial statement impact of these provisions to future periods, but do not expect the OBBBA to have a material impact on our consolidated financial statements.
Current wording
On July 4, 2025, President Trump signed the OBBBA, which includes a broad range of tax reform provisions affecting businesses. The OBBBA includes numerous changes to existing tax law including extending or making permanent certain business and international tax measures initially established under the 2017 Tax Cuts and Jobs Act, which were set to expire. We are in the process of evaluating the financial statement impact of these provisions to future periods, and do not expect the OBBBA to have a material impact on our consolidated financial statements.
Previous wording
As of July 31, 2025, we had cash, cash equivalents and marketable debt securities of approximately $261.2 million. We invest in highly-liquid, short-term marketable debt securities and hold these investments as available-for-sale securities. Refer to Note 2 of the Notes to Condensed Consolidated Financial Statements for additional information.
Current wording
As of October 31, 2025, we had cash, cash equivalents and marketable debt securities of approximately $295.3 million. We invest in highly-liquid, short-term marketable debt securities and hold these investments as available-for-sale securities. Refer to Note 2 of the Notes to Condensed Consolidated Financial Statements for additional information.
Previous wording
Net cash provided by operating activities increased for the six months ended July 31, 2025, as compared to the same period in the prior fiscal year, primarily attributable to a net profit adjusted for certain non-cash items for the six months ended July 31, 2025 compared to a net loss adjusted for certain non-cash items for the six months ended July 31, 2024. This increase was partially offset by lower net working capital associated primarily with the timing of collections and payments with our customers and vendors.
Current wording
Net cash provided by operating activities increased for the nine months ended October 31, 2025, as compared to the same period in the prior fiscal year, primarily attributable to an increase in net profit adjusted for certain non-cash items, as well as increased liabilities associated with the timing of payments to our vendors.
Previous wording
Net Cash Provided by (Used in) Investing Activities
Current wording
Net Cash Used in Investing Activities
Previous wording
Net cash used in investing activities increased for the six months ended July 31, 2025, as compared to the same period in the prior fiscal year, primarily attributable to approximately $21.9 million of additional net cash outflow for our debt security investments and approximately $5.0 million higher payments for the purchase of capital assets and software licenses.
Current wording
Net cash used in investing activities decreased for the nine months ended October 31, 2025, as compared to the same period in the prior fiscal year, primarily attributable to approximately $9.4 million of additional net cash received from our debt security investments, partially offset by approximately $5.4 million higher payments for the purchase of capital assets and software licenses.
Previous wording
Net cash used in financing activities increased for the six months ended July 31, 2025, as compared to the same period in the prior fiscal year, primarily due to approximately $1.1 million less cash received from stock activities, as well as $1.0 million of cash paid for the repurchase of our ordinary shares.
Current wording
Net cash provided by financing activities decreased slightly for the nine months ended October 31, 2025, as compared to the same period in the prior fiscal year, primarily due to approximately $1.4 million less cash received from stock activities, $1.0 million of cash paid for the repurchase of our ordinary shares as well as an additional $0.1 million financing payment for the purchase of software licenses.
Previous wording
As of July 31, 2025, we had purchase obligations with our independent contract manufacturers of $69.3 million.
Current wording
As of October 31, 2025, we had purchase obligations with our independent contract manufacturers of $106.2 million.