AMBARELLA INC

Previous wording

We recorded revenue of $100.4 million for the three months ended April 30, 2026, an increase of 16.9% as compared to the same period in the prior fiscal year. The increase in revenue was 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, partially offset by lower nonrecurring engineering (NRE) project service revenue.

Current wording

We recorded revenue of $108.1 million and $208.5 million for the three and six months ended July 31, 2026, respectively. This represented increases of 13.2% and 14.9%, respectively, as compared to the same periods in the prior fiscal year. The increases in revenue were primarily attributable to higher product unit shipments from our high priced AI inference processors.

Previous wording

We recorded operating losses of $19.4 million for the three months ended April 30, 2026, as compared to operating losses of $25.9 million for the three months ended April 30, 2025. The reduction in operating losses was primarily attributable to higher revenue and, consequently, higher gross profit, partially offset by higher operating expenses. The increase in operating expenses primarily resulted from higher payroll-related expenses as a result of an increase in headcount, higher engineering-related costs associated with the progress and number of chips in development, and higher marketing expense, partially offset by lower stock-based compensation expense.

Current wording

We recorded operating losses of $8.1 million and $27.6 million for the three and six months ended July 31, 2026, respectively, as compared to operating losses of $22.0 million and $47.8 million for the three and six months ended July 31, 2025, respectively. The reductions in operating losses were primarily attributable to higher revenue and consequently, higher gross profit, as well as lower operating expenses. The decreases in operating expenses primarily related to a $9.0 million reduction to research and development expense associated with the release of a deposit liability following a development project termination, partially offset by higher engineering-related costs associated with the progress and number of chips in development.

Previous wording

We had cash outflows from operating activities of $25.6 million for the three months ended April 30, 2026, as compared to cash inflows of $14.8 million for the three months ended April 30, 2025. The decrease in cash flows from operating activities was mainly driven by higher cash outflows from changes in working capital, primarily due to increased inventory purchases, partially offset by improved operating results.

Current wording

We had cash outflows from operating activities of $25.9 million for the six months ended July 31, 2026, as compared to cash inflows of $20.3 million for the six months ended July 31, 2025. The decrease in cash flows from operating activities was mainly driven by higher cash outflows from changes in working capital, primarily due to increased inventory purchases, partially offset by improved operating results.

Previous wording

During the three months ended April 30, 2026, we repurchased a total of 47,798 shares for approximately $2.4 million in cash. The repurchased shares were recorded as authorized but unissued shares. As of April 30, 2026, there was approximately $45.6 million available for repurchases under the existing repurchase program through June 30, 2026.

Current wording

On May 27, 2026, the Company's Board of Directors authorized a share repurchase program for a total of $50.0 million commencing July 1, 2026 through June 30, 2027. There were no shares repurchased during the three months ended July 31, 2026. As of July 31, 2026, there was $50.0 million available for repurchases under the repurchase program through June 30, 2027.

Previous wording

Impact of Global Supply Chain Conditions on Our Business. The semiconductor industry has faced significant global supply chain challenges over the past few years. Supply chain issues can impact our business as they relate to both our suppliers and our customers. We have seen cycles of supply chain challenges in the past, which may recur in future periods as well, with constant changes in the macro-economic environment, including potential retaliatory tariffs and restrictions on exports to foreign locations due to the recent imposition of tariffs by the U.S. Government on imports.

Current wording

Impact of Global Supply Chain Conditions on Our Business. The semiconductor industry has faced significant global supply chain challenges over the past few years. Supply chain issues can impact our business as they relate to both our suppliers and our customers. Recently, there have been tightening supply conditions for memory chip components that our customers use in their end products, which could have an impact on their demand for our products. With constant changes in the macro-economic environment, including potential retaliatory tariffs and restrictions on exports to foreign locations due to the recent imposition of tariffs by the U.S. Government on imports, we anticipate that supply chain challenges may recur in future periods.

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 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.

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 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.

Previous wording

We expect that our gross margin may fluctuate from period to period as a result of changes in customer mix, average selling price, product mix and the introduction of new products by us or our competitors. In general, solutions incorporated into more complex configurations, such as those used in high-performance cameras, and in future advanced automotive OEM applications, have had or are expected to have higher prices and higher gross margins, as compared to solutions sold into the lower-performance, more competitive camera applications. As semiconductor products mature and unit volumes sold to customers increase, their average selling prices typically decline. These declines may be paired with improvements in manufacturing yields and lower wafer, packaging and test costs, which offset some of the margin reduction that could result from lower selling prices.

Current wording

We expect that our gross margin may fluctuate from period to period as a result of changes in customer mix, average selling price, product mix, the introduction of new products by us or our competitors and changes in the amount of our inventory reserves. In general, solutions incorporated into more complex configurations, such as those used in high-performance cameras, and in future advanced automotive OEM applications, have had or are expected to have higher prices and higher gross margins, as compared to solutions sold into the lower-performance, more competitive camera applications. As semiconductor products mature and unit volumes sold to customers increase, their average selling prices typically decline. These declines may be paired with improvements in manufacturing yields and lower wafer, packaging and test costs, which offset some of the margin reduction that could result from lower selling prices.

Previous wording

Comparison of the Three Months Ended April 30, 2026 and 2025

Current wording

Comparison of the Three and Six Months Ended July 31, 2026 and 2025

Previous wording

Revenue increased for the three months ended April 30, 2026, as compared to the same period 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, partially offset by lower NRE project service revenue.

Current wording

Revenue increased for the three and six months ended July 31, 2026, as compared to the same periods in the prior fiscal year, primarily due to higher product unit shipments from our high priced AI inference processors.

Previous wording

Gross margin decreased for the three months ended April 30, 2026, as compared to the same period in the prior fiscal year, primarily due to higher manufacturing costs associated with advanced process technologies and additional charges from adverse purchase commitments.

Current wording

Gross margin decreased for the three and six months ended July 31, 2026, as compared to the same periods in the prior fiscal year, primarily due to higher manufacturing costs associated with advanced process technologies, partially offset by favorable product mix.

Previous wording

Research and development expense decreased for the three months ended April 30, 2026, as compared to the same period in the prior fiscal year, primarily due to approximately $3.9 million of lower stock-based compensation expense, partially offset by $2.3 million of higher payroll-related expenses as a result of an increase in headcount and $0.9 million of higher engineering-related expenses associated with the progress and number of chips in development.

Current wording

Research and development expense decreased for the three and six months ended July 31, 2026, as compared to the same periods in the prior fiscal year, primarily due to a $9.0 million reduction to research and development expense associated with the release of a deposit liability following a development project termination in the second quarter of fiscal year 2027, as well as approximately $2.8 million and $4.4 million, respectively, of lower personnel-related expenses as a result of a reduction in headcount. The decreases were partially offset by approximately $2.6 million and $3.5 million, respectively, of additional engineering-related expenses associated with the progress and number of chips in development.

Previous wording

Selling, general and administrative expense increased for the three months ended April 30, 2026, as compared to the same period in the prior fiscal year, primarily due to approximately $1.5 million of higher payroll-related expenses as a result of an increase in headcount, partially offset by $0.2 million of lower stock-based compensation expense.

Current wording

Selling, general and administrative expense increased for the three and six months ended July 31, 2026, as compared to the same periods in the prior fiscal year, primarily due to approximately $1.8 million and $3.5 million, respectively, of higher marketing and professional service expenses associated with our business activities. The increases were partially offset by approximately $0.3 million and $0.7 million, respectively, of lower facility-related costs.

Previous wording

The marginal decrease in other income, net, for the three months ended April 30, 2026, as compared to the same period in the prior fiscal year, was primarily due to approximately $0.4 million of higher interest expense associated with financing purchases of software licenses, partially offset by an approximately $0.3 million subsidy received from a foreign government.

Current wording

The decrease in other income, net, for the three and six months ended July 31, 2026, as compared to the same periods in the prior fiscal year, was primarily due to approximately $0.3 million and $0.7 million, respectively, of higher imputed interest expense associated with software license purchases. For the six months ended July 31, 2026, the decreased other income, net, was partially offset by an approximately $0.2 million subsidy received from a foreign government.

Previous wording

The increased income tax expense for the three months ended April 30, 2026, as compared to the same period in the prior fiscal year, was primarily due to a projected decrease in net loss in the current fiscal year.

Current wording

The increases in income tax expense for the three and six months ended July 31, 2026, as compared to the same periods in the prior fiscal year, were primarily due to decreases in loss before income taxes in the current fiscal year.

Previous wording

As of April 30, 2026, we had cash, cash equivalents and marketable debt securities of approximately $277.8 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 July 31, 2026, we had cash, cash equivalents and marketable debt securities of approximately $272.3 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

The decrease in cash flows from operating activities for the three months ended April 30, 2026, as compared to the same period in the prior fiscal year, was mainly driven by higher cash outflows from changes in working capital, primarily due to increased inventory purchases, partially offset by improved operating results.

Current wording

The decrease in cash flows from operating activities for the six months ended July 31, 2026, as compared to the same period in the prior fiscal year, was mainly driven by higher cash outflows from changes in working capital, primarily due to increased inventory purchases, partially offset by improved operating results.

Previous wording

Net cash used in investing activities increased for the three months ended April 30, 2026, as compared to the same period in the prior fiscal year, primarily due to approximately $30.7 million of additional funds invested in our security portfolio, partially offset by $0.6 million of lower payments for purchases of capital assets and software licenses.

Current wording

Net cash used in investing activities increased for the six months ended July 31, 2026, as compared to the same period in the prior fiscal year, primarily due to approximately $37.8 million of additional funds invested in our security portfolio, and $2.1 million of higher payments for purchases of capital assets and software licenses.

Previous wording

Net cash used in financing activities increased for the three months ended April 30, 2026, as compared to the same period in the prior fiscal year, primarily due to an additional $2.7 million financing payment for the purchase of software licenses and $1.4 million of higher cash payment for the repurchase of our ordinary shares, partially offset by $1.0 million of additional cash received from stock compensation activities.

Current wording

Net cash used in financing activities increased for the six months ended July 31, 2026, as compared to the same period in the prior fiscal year, primarily due to an additional $1.3 million financing payment for the purchase of software licenses and $1.4 million of higher cash payment for the repurchase of our ordinary shares, partially offset by $1.0 million of additional cash received from stock compensation activities.

Previous wording

On May 27, 2026, our Board of Directors authorized a new share repurchase program for a total of $50.0 million commencing July 1, 2026 through June 30, 2027. The new repurchase program replaces the existing program that expires on June 30, 2026. Refer to Note 16 of the Notes to Condensed Consolidated Financial Statements for additional information.

Current wording

On May 27, 2026, our Board of Directors authorized a share repurchase program for a total of $50.0 million commencing July 1, 2026 through June 30, 2027. Refer to Note 10 of the Notes to Condensed Consolidated Financial Statements for additional information.

Previous wording

As of April 30, 2026, we had purchase obligations with our independent contract manufacturers of $53.9 million.

Current wording

As of July 31, 2026, we had purchase obligations with our independent contract manufacturers of $49.0 million.