With respect to its financial results for the third quarter of fiscal year 2016, the company has provided below reconciliations between its non-GAAP financial measures to its most directly comparable GAAP financial measures. With respect to the company's expectations for the fourth quarter of fiscal year 2016, a reconciliation of non-GAAP gross margin and non-GAAP net income guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability and low visibility with respect to the charges excluded from this non-GAAP measure. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.
| AMBARELLA, INC. | |||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
| (in thousands, except share and per share data) | |||||
| (unaudited) | |||||
|
Three Months Ended
October 31, |
Nine Months Ended
October 31, |
||||
| 2015 | 2014 | 2015 | 2014 | ||
| Revenue | $ 93,200 | $ 65,689 | $ 248,406 | $ 153,578 | |
| Cost of revenue | 31,938 | 24,130 | 86,378 | 55,887 | |
| Gross profit | 61,262 | 41,559 | 162,028 | 97,691 | |
| Operating expenses: | |||||
| Research and development | 22,062 | 15,584 | 59,485 | 41,995 | |
| Selling, general and administrative | 8,873 | 7,324 | 26,970 | 20,954 | |
| Total operating expenses | 30,935 | 22,908 | 86,455 | 62,949 | |
| Income from operations | 30,327 | 18,651 | 75,573 | 34,742 | |
| Other income | 169 | 40 | 323 | 128 | |
| Income before income taxes | 30,496 | 18,691 | 75,896 | 34,870 | |
| Provision for income taxes | 1,035 | 364 | 4,484 | 1,973 | |
| Net income | $ 29,461 | $ 18,327 | $ 71,412 | $ 32,897 | |
| Net income per share attributable to ordinary shareholders: | |||||
| Basic | $ 0.93 | $ 0.61 | $ 2.27 | $ 1.12 | |
| Diluted | $ 0.87 | $ 0.57 | $ 2.12 | $ 1.03 | |
| Weighted-average shares used to compute net income per share attributable to ordinary shareholders: | |||||
| Basic | 31,815,588 | 30,006,896 | 31,476,668 | 29,467,178 | |
| Diluted | 33,899,202 | 32,382,526 | 33,758,541 | 32,014,373 | |
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 October 31, | Nine Months Ended October 31, | |||
| 2015 | 2014 | 2015 | 2014 | |
| (unaudited, in thousands) | ||||
| Stock-based compensation: | ||||
| Cost of revenue | $ 157 | $ 97 | $ 408 | $ 214 |
| Research and development | 5,201 | 2,363 | 11,966 | 5,582 |
| Selling, general and administrative | 2,587 | 1,824 | 7,174 | 4,311 |
| Total stock-based compensation | $ 7,945 | $ 4,284 | $ 19,548 | $ 10,107 |
| AMBARELLA, INC. | ||||
| RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS PER SHARE | ||||
| (in thousands, except share and per share data) | ||||
| Three Months Ended October 31, | Nine Months Ended October 31, | |||
| 2015 | 2014 | 2015 | 2014 | |
| (unaudited) | ||||
| GAAP net income | $ 29,461 | $ 18,327 | $ 71,412 | $ 32,897 |
| Two-class method - allocation to participating securities | — | (1) | — | (8) |
| Treasury stock method - additional allocation to ordinary shares | — | — | — | 1 |
| GAAP net income - diluted | $ 29,461 | $ 18,326 | $ 71,412 | $ 32,890 |
| Non-GAAP adjustments: | ||||
| Stock-based compensation expense, net of tax effect | 7,174 | 3,740 | 17,351 | 8,947 |
| Acquisition cost | — | — | 1,229 | — |
| Two-class method - additional allocation to participating securities | — | (1) | — | (2) |
| Treasury stock method - additional allocation to ordinary shares | — | — | — | — |
| Non-GAAP net income - diluted | $ 36,635 | $ 22,065 | $ 89,992 | $ 41,835 |
| GAAP - diluted weighted average shares | 33,899,202 | 32,382,526 | 33,758,541 | 32,014,373 |
| Non-GAAP - diluted weighted average shares | 33,899,202 | 32,382,526 | 33,758,541 | 32,014,373 |
| GAAP - diluted net income per share | $ 0.87 | $ 0.57 | $ 2.12 | $ 1.03 |
| Non-GAAP adjustments: | ||||
| Stock-based compensation expense, net of tax effect | 0.21 | 0.11 | 0.51 | 0.28 |
| Acquisition cost | — | — | 0.04 | — |
| 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 | $ 1.08 | $ 0.68 | $ 2.67 | $ 1.31 |
