10q10k10q10k.net

What changed in AMBARELLA INC's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of AMBARELLA INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+364 added−485 removedSource: 10-K (2025-03-28) vs 10-K (2024-03-29)

Top changes in AMBARELLA INC's 2025 10-K

364 paragraphs added · 485 removed · 323 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

84 edited+6 added−23 removed82 unchanged
Biggest changeOur solutions enable the streaming of multiple video streams to enable remote monitoring at multiple locations. Embedded computer vision technology supports advanced analytics at the system’s edge, including people counting and tracking, facial recognition and retail behavior analysis. ▪ Home Security .
Biggest changeEmbedded advanced AI technology supports advanced analytics at the system’s edge, including people counting and tracking, facial recognition and retail behavior analysis. In addition, our latest GenAI SoC, the N1-655, can run the latest AI models, without the need for an internet connection, on a variety of on-premise devices, including smart-city security video recorders. ▪ Home Security .
We offer a combination of competitive base salary, time-based equity incentives and bonus plans linked to financial and strategic performance that are designed to motivate and reward personnel with annual grants of stock-based and cash-based incentive compensation awards, plus other benefits, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve both our short and long-term objectives.
We offer a combination of competitive base salary, time-based equity incentives and bonus plans linked to financial and strategic performance that are designed to motivate and reward personnel with annual grants of stock-based and cash-based incentive compensation awards, plus other benefits, in order to increase both stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our short term and long-term objectives.
Our WDR and HDR processing capabilities handle greater dynamic range between the lightest and darkest areas of an image, permitting video images to reveal details that would otherwise be lost against a bright background. We have developed efficient scalable deep learning algorithms for advanced low light processing and HDR tone mapping that augment our image processing hardware.
Our wide dynamic range (WDR) and HDR processing capabilities handle greater dynamic range between the lightest and darkest areas of an image, permitting video images to reveal details that would otherwise be lost against a bright background. We have developed efficient scalable deep learning algorithms for advanced low light processing and HDR tone mapping that augment our image processing hardware.
The CVflow architecture supports a variety of AI, radar and computer vision algorithms, including object detection, classification and tracking, semantic and instance segmentation, image processing, and stereo object detection. Our latest third generation CVflow technology enables us to efficiently process transformer AI networks, which are an enabling technology for next generation automotive and generative AI markets.
The CVflow architecture supports a variety of AI, radar and computer vision algorithms, including object detection, classification and tracking, semantic and instance segmentation, image processing, and stereo object detection. Our third generation CVflow technology enables us to efficiently process transformer AI networks, which are an enabling technology for next generation automotive and generative AI markets.
To date, we have not incurred significant expenditures relating to environmental compliance at our facilities nor have we experienced any material issues relating to employee health and safety. In addition to environmental and worker health and safety laws, our business is subject to various rules and regulations and executive orders relating to export controls and trade sanctions.
To date, we have not incurred significant expenditures relating to environmental compliance at our facilities nor have we experienced any material issues relating to employee health and safety. 15 In addition to environmental and worker health and safety laws, our business is subject to various rules and regulations and executive orders relating to export controls and trade sanctions.
Our CV SoCs enable sensing cameras that analyze video using AI-based algorithms running in the camera to provide remote users with updates, warnings or business data based on the analysis. Since no video, audio or image data needs to leave the camera, privacy can be prioritized.
Our AI SoCs enable sensing cameras that analyze video using AI-based algorithms running in the camera to provide remote users with updates, warnings or business data based on the analysis. Since no video, audio or image data needs to leave the camera, privacy can be prioritized.
Our recent development efforts have focused on creating advanced AI inference technology that enables edge devices to visually perceive the environment and make decisions based on the data collected from cameras and other types of sensors, such as 4D radar.
Our recent development efforts have focused on creating advanced AI inference technology that enables edge devices to perceive the environment and make decisions based on the data collected from cameras and other types of sensors, such as 4D radar.
Its next-generation CVflow® AI engine includes neural network processing that is 20x faster than the previous generation of CV2 SoCs, along with additional general vector processing capabilities to provide the overall performance required for full autonomous driving (AD) stack processing, including computer vision, HD 4D radar, deep fusion and planning.
Its next-generation CVflow® AI accelerator includes neural network processing that is 20x faster than the previous generation of CV2 SoCs, along with additional general vector processing capabilities to provide the overall performance required for full autonomous driving (AD) stack processing, including computer vision, HD 4D radar, deep fusion and planning.
Our CV products enable higher levels of automation than our vision processors through advanced algorithms, such as object detection, classification and tracking, license plate recognition and facial recognition. We address the following security camera applications: ▪ Enterprise and Public Class Security . These cameras are used for video monitoring and security surveillance in enterprise and public infrastructure applications.
Our AI products enable higher levels of automation than our vision processors through advanced algorithms, such as object detection, classification and tracking, license plate recognition and facial recognition. We address the following security camera applications: ▪ Enterprise and Public Class Security . These cameras are used for video monitoring and security surveillance in enterprise and public infrastructure applications.
Volume production may begin within nine to 18 months after a design win, depending on the complexity of our customer’s product and other factors upon which we may have little or no influence. Once our solutions have been incorporated into a customer’s design, they are likely to be used for the life cycle of the customer’s product.
Volume production may begin within 12 to 18 months after a design win, depending on the complexity of our customer’s product and other factors upon which we may have little or no influence. Once our solutions have been incorporated into a customer’s design, they are likely to be used for the life cycle of the customer’s product.
In addition, in each of these locations we employ a staff of field applications engineers to provide direct engineering support locally to our customers. 13 Our sales cycles typically require a significant investment of time and a substantial expenditure of resources before we can realize revenue from the sale of our solutions, if any.
In addition, in each of these locations we employ a staff of field applications engineers to provide direct engineering support locally to our customers. 12 Our sales cycles typically require a significant investment of time and a substantial expenditure of resources before we can realize revenue from the sale of our solutions, if any.
We believe that our continued success depends on our ability to both introduce improved versions of our existing solutions and to develop new solutions for the markets that we serve. As of January 31, 2024, approximately 75% of our employees are engaged in research and development. Our research and development team is comprised of both semiconductor and software designers.
We believe that our continued success depends on our ability to both introduce improved versions of our existing solutions and to develop new solutions for the markets that we serve. As of January 31, 2025, approximately 75% of our employees are engaged in research and development. Our research and development team is comprised of both semiconductor and software designers.
With stereovision capabilities and convolutional neural network (CNN)-based object classification, our solutions are also suited for a variety of industrial machine vision systems, mobile robots for delivery or factory/warehouse applications, aerial drones, robotic vacuum cleaners, and other emerging robotic applications. ▪ Sensing Cameras.
With stereovision capabilities, convolutional neural network (CNN)-based object classification and transformer neural networks, our solutions are also suited for a variety of industrial machine vision systems, mobile robots for delivery or factory/warehouse applications, aerial drones, robotic vacuum cleaners, and other emerging robotic applications. ▪ Sensing Cameras.
In addition, we provide our customers full-function software development kits with a suite of application programming interfaces or APIs, which allow customers to rapidly integrate our solution, adjust product specifications and provide additional functionality to their systems, thereby enabling them to differentiate their product offerings and reduce time to market.
We provide our customers full-function software development kits with a suite of application programming interfaces or APIs, which allow customers to rapidly integrate our solution, adjust product specifications and provide additional functionality to their systems, thereby enabling them to differentiate their product offerings and reduce time to market.
Successful implementation of these computationally intensive steps has helped us maximize compression efficiency. We support H.264 and H.265 video compression standard with our H.265 providing up to 2x better compression efficiency compared to our H.264 video compression technology. 12 Design Methodology The success of our technology platform stems from our algorithm driven design methodology.
Successful implementation of these computationally intensive steps has helped us maximize compression efficiency. We support H.264 and H.265 video compression standard with our H.265 providing up to 2x better compression efficiency compared to our H.264 video compression technology. 11 Design Methodology The success of our technology platform stems from our algorithm driven design methodology.
We work closely with our end customer OEMs and ODMs throughout their product design cycles that often last nine to eighteen months for many of our target markets, although new products may have longer design cycles, particularly those implementing advanced AI features.
We work closely with our end customer OEMs and ODMs throughout their product design cycles that often last twelve to eighteen months for many of our target markets, although new products may have longer design cycles, particularly those implementing advanced AI features.
Applications for sensing cameras include elderly monitoring, building occupancy monitoring and retail store business analytics. 6 • Other IoT Applications. Cameras for the enterprise, home, public spaces and consumer leisure applications that provide HD video quality increasingly include embedded connectivity to share and display video.
Applications for sensing cameras include elderly monitoring, building occupancy monitoring and retail store business analytics. 6 • Other IoT Applications. Cameras for the enterprise, home, public spaces and consumer leisure applications that provide high-definition (HD) video quality increasingly include embedded connectivity to share and display video.
Our CV SoCs are optimized for the requirements of the edge inference market to provide highly accurate results, significant processing power, small form factor and minimal latency while consuming very low amounts of power and simultaneously delivering both human viewing and computer vision functionality, often while supporting multiple cameras and multiple AI inference applications with a single SoC incorporated in an end-point device.
Our AI SoCs are optimized for the requirements of the edge inference market to provide highly accurate results, significant processing power, small form factor and minimal latency while consuming very low amounts of power and simultaneously delivering both human viewing and AI inference functionality, often while supporting multiple cameras and multiple applications with a single SoC incorporated in an end-point device.
Smart electronic mirrors that incorporate our CV SoCs may also help with detecting objects in blind spots, overtaking vehicles and alerting for vulnerable road users, such as pedestrians and bicycles. ▪ Automotive Video Recorders (also known as data loggers).
Smart electronic mirrors that incorporate our AI SoCs may also help with detecting objects in blind spots, overtaking vehicles and alerting for vulnerable road users, such as pedestrians and bicycles. ▪ Automotive Video Recorders (also known as data loggers).
This redundant approach enables us to identify and remediate any weaknesses early in the development cycle, providing a solid foundation on which we build our hardware implementation, and enhances our ability to achieve first-pass silicon success. We possess extensive expertise in AI deep learning, video and imaging algorithms, as well as deep sub-micron digital and mixed-signal design experience.
This redundant approach helps us identify and remediate weaknesses early in the development cycle, providing a solid foundation on which we build our hardware implementation, and enhances our ability to achieve first-pass silicon success. We possess extensive expertise in AI deep learning, video and imaging algorithms, as well as deep sub-micron digital and mixed-signal design experience.
Key differentiators of our technology include: • flexible and scalable CVflow processors for deep learning, HD radar processing and other CV algorithms that cover a broad range of consumer, professional and automotive requirements with power and die size efficiency; • stereo/optical flow processing engines for robust CV processing with high performance and power efficiency; • scalable image processing and video compression engines that cover consumer, professional and automotive requirements from Full HD to 8K video performance levels as well as multiple image sensors simultaneously to support multiple viewpoints, including surround view and virtual reality applications; • algorithms for image processing including deep learning augmented processing for challenging low light and high dynamic range conditions for robust CV and human viewing with high power efficiency. • algorithms and software for scalable and robust HD 4D radar processing using sparse antenna arrays using machine learning and adaptive transmit waveforms for lower cost and better power efficiency; • deep learning algorithms and software for multi class 2D/3D object detection and segmentation, including vehicles, pedestrians, cycles, road markings, traffic signs and traffic lights optimized for our CV2 and CV3 SoC families; • algorithms and software for stereo obstacle detection to provide robust safety in the event of obstacles that are not in the training data; • autonomous driving stack modules optimized for our CV3 SoC family, including fusion for multiple cameras and sensor modalities, mapping and localization algorithms and planning; • algorithms to compress video signals with high compression and power efficiency at multiple operating points; • software development kit comprised of application programming interfaces, or APIs, to facilitate integration into customers’ products; and tools for porting and optimizing customer deep neural networks, or DNNs, developed in industry standard training frameworks; • low-power architecture with minimal system memory footprint; and • programmable architecture that balances flexibility, quality, power and die size with powerful CPUs and optimized hardware acceleration to support advanced processing functions. 10 Our technology platform is based on a high-performance, low-power architecture supported by a high level of system integration.
Key differentiators of our technology include: • flexible and scalable CVflow processors for deep learning, HD radar processing and other AI algorithms that cover a broad range of consumer, professional and automotive requirements with power and die size efficiency; • stereo/optical flow processing engines for robust AI processing with high performance and power efficiency; • scalable image processing and video compression engines that cover consumer, professional and automotive requirements from Full HD to 8K video performance levels as well as multiple image sensors simultaneously to support multiple viewpoints, including surround view and virtual reality applications; 9 • algorithms for image processing including deep learning augmented processing for challenging low light and high dynamic range conditions for robust AI and human viewing with high power efficiency. • algorithms and software for scalable and robust HD 4D radar processing using sparse antenna arrays using machine learning and adaptive transmit waveforms for lower cost and better power efficiency; • deep learning algorithms and software for multi class 2D/3D object detection and segmentation, including vehicles, pedestrians, cycles, road markings, traffic signs and traffic lights optimized for our CV2 and CV3 SoC families; • algorithms and software for stereo obstacle detection to provide robust safety in the event of obstacles that are not in the training data; • autonomous driving stack modules optimized for our CV3 SoC family, including fusion for multiple cameras and sensor modalities, mapping and localization algorithms and planning; • algorithms to compress video signals with high compression and power efficiency at multiple operating points; • software development kit comprised of application programming interfaces, or APIs, to facilitate integration into customers’ products; and tools for porting and optimizing customer deep neural networks, or DNNs, developed in industry standard training frameworks; • low-power architecture with minimal system memory footprint; and • programmable architecture that balances flexibility, quality, power and die size with powerful CPUs and optimized hardware acceleration to support advanced processing functions.
Our sales efforts are typically directed to the OEM of the product that will incorporate our computer vision and video and image processing solution, but the eventual design and incorporation of our SoC into the product may be handled by an ODM or Tier-1 supplier on behalf of the OEM.
Our sales efforts are typically directed to the OEM of the product that will incorporate our AI and video and image processing solution, but the eventual design and incorporation of our SoC into the product may be handled by an ODM or Tier-1 supplier on behalf of the OEM.
These modules include HD radar processing for standalone and central radar processing, DL based low light and HDR image processing, monocular and stereo camera perception, and autonomous driving stack modules optimized for the CV3 family, including fusion for multiple cameras and sensor modalities, mapping and localization algorithms and planning.
These modules include HD radar processing for standalone and central radar processing, deep learning based low light and HDR image processing, monocular and stereo camera perception, and autonomous driving stack modules optimized for the CV3 family, including fusion for multiple cameras and sensor modalities, mapping and localization algorithms and planning.
We recently introduced a centralized radar architecture that synergistically leverages Oculii’s adaptive AI software algorithms together with our CV3 domain controller family, resulting in improved perception, lower power consumption and reduced bills-of-material for mobility applications compared to the current generation of radar systems utilized in the market today.
We have introduced a centralized radar architecture that synergistically leverages these adaptive AI software algorithms together with our CV3 domain controller family, resulting in improved perception, lower power consumption and reduced bills-of-material for mobility applications compared to the current generation of radar systems utilized in the market today.
Ambarella’s products are now used in a wide variety of human viewing and computer vision applications, including a variety of automotive camera systems, video security cameras, mobile and fixed robots, industrial applications, and consumer devices, such as action, drone and 360° cameras.
Ambarella’s products are used in a wide variety of human viewing, computer vision and edge AI applications, including a variety of automotive camera systems, video security cameras, mobile and fixed robots, industrial applications, and consumer devices, such as action, drone and 360° cameras.
Our ability to compete successfully in the rapidly evolving camera markets depends on several factors, including: • the design and manufacturing of new solutions, including software, that anticipate the video processing and integration needs of our customers’ next-generation products and applications; • performance of our computer vision solutions, as measured by convolutional neural network performance, video and still picture image quality, resolution and frame processing rates; • power consumption efficiency of our solutions; • the ease of implementation of our products by customers; • the strength of our customer relationships; • the selection of the foundry process technology and architecture tradeoffs to meet customers’ product requirements in a timely manner; • reputation and reliability; • customer support; and • the cost of the total solution. 15 We believe we compete favorably with respect to these factors, particularly because our solutions typically provide high-performance and low power consumption video, CNN performance, efficient integration of our advanced algorithms, exceptional storage and transmission efficiencies at lower power, highly-integrated SoC solutions based on a scalable platform, and comprehensive and flexible software.
Our ability to compete successfully in the rapidly evolving camera markets depends on several factors, including: • the design and manufacturing of new solutions, including software, that anticipate the video processing and integration needs of our customers’ next-generation products and applications; • performance of our AI solutions, as measured by convolutional neural network performance and/or transformer neural network performance, video and still picture image quality, resolution and frame processing rates; • power consumption efficiency of our solutions; • the ease of implementation of our products by customers; • the strength of our customer relationships; • the selection of the foundry process technology and architecture tradeoffs to meet customers’ product requirements in a timely manner; • reputation and reliability; • customer support; and • the cost of the total solution. 14 We believe that, overall, we compete favorably with respect to these factors, particularly because our solutions typically provide high-quality video, and low power consumption, efficient CNN and transformer performance, efficient integration of advanced algorithms, exceptional storage and transmission efficiencies, highly-integrated SoC solutions based on a scalable platform, and comprehensive and flexible software.
Industry Background and Target Markets Computer vision functionality has historically been executed with graphics processing units (GPU), field programmable gate-arrays (FPGA) or general purpose microprocessors (CPU) in servers or data centers.
Industry Background and Target Markets AI functionality has historically been executed with graphics processing units (GPU), field programmable gate-arrays (FPGA) or general purpose microprocessors (CPU) in servers or data centers.
We refer to ODMs and Tier-1 suppliers as our customers and OEMs as our end customers, except as otherwise indicated or as the context otherwise requires. Sales to customers in Asia accounted for approximately 79%, 79%, and 86% of our total revenue in the fiscal years ended January 31, 2024, 2023, and 2022, respectively.
We refer to ODMs and Tier-1 suppliers as our customers and OEMs as our end customers, except as otherwise indicated or as the context otherwise requires. Sales to customers in Asia accounted for approximately 85%, 79%, and 79% of our total revenue in the fiscal years ended January 31, 2025, 2024, and 2023, respectively.
CVflow Our proprietary AI computer vision processing architecture, known as CVflow®, uses a flexible hardware engine programmed with a data flow graph algorithm description to achieve increased performance while minimizing die size and power consumption. This description allows the hardware to maximize use of its resources by exploiting all available parallelism without software intervention.
CVflow 10 Our proprietary AI processing architecture, known as CVflow®, uses a flexible hardware accelerator programmed with a data flow graph algorithm description to achieve increased performance while minimizing die size and power consumption. This description allows the hardware to maximize use of its resources by exploiting all available parallelism without software intervention.
ITEM 1. B USINESS Overview Ambarella is a leading developer of low-power system-on-a-chip, or SoC, semiconductors and software for edge artificial intelligence, or AI, applications.
ITEM 1. B USINESS Overview Incorporated in 2004, Ambarella is a leading developer of low-power system-on-a-chip, or SoC, semiconductors and software for edge artificial intelligence, or AI, applications.
Our Competitive Strengths Our platform technology solutions provide performance attributes that satisfy the stringent demands of the camera market, enable integration of HD video and image capture capabilities in portable devices, and provide computer vision capabilities that address the evolving needs of the automotive and IoT markets.
Our Competitive Strengths Our platform technology solutions provide performance attributes that satisfy the stringent demands of the camera market, enable integration of HD video and image capture capabilities in portable devices, and provide AI inference capabilities that address the evolving needs of the automotive and IoT markets.
Our sales are generally made pursuant to purchase orders received approximately four to 30 weeks prior to the scheduled product delivery date, depending upon agreed terms with our customers and the current manufacturing lead time at the time the purchase order is received. These purchase orders may not be cancelled without our written consent.
Our sales are generally made pursuant to purchase orders received approximately 20 to 30 weeks prior to the scheduled product delivery date, depending upon agreed terms with our customers and the current manufacturing lead time at the time the purchase order is received. Typically, these purchase orders may not be cancelled or modified without our written consent.
Consequently, we believe we are well positioned to not only be designed into our customers’ current products, but also to continue to develop next-generation HD video and image processing solutions for their future products. The product life cycles in many of our target markets typically range from twelve to 24 months.
Consequently, we believe we are well positioned to not only be designed into our customers’ current products, but also to continue to develop next-generation AI solutions for their future products. The product life cycles in many of our target markets typically range from twelve to 24 months.
Due to the scheduling requirements of our foundry, assembly and test contractors, we generally provide our contractors with our production forecasts and place firm orders for products with our suppliers up to 36 weeks prior to the anticipated delivery date, or potentially longer during times of acute capacity shortages, usually without a purchase order from our own customers. 14 Research and Development We believe our technology is a competitive advantage and we engage in substantial research and development efforts to develop new products and integrate AI computer vision capabilities into our HD and UHD video processing solutions.
Due to the scheduling requirements of our foundry, assembly and test contractors, we generally provide our contractors with our production forecasts and place firm orders for products with our suppliers up to 40 weeks prior to the anticipated delivery date, or potentially longer during times of acute capacity shortages, usually without a purchase order from our own customers. 13 Research and Development We believe our technology is a competitive advantage and we engage in substantial research and development efforts to develop new products and integrate AI functionality into our video processing solutions.
Additionally, our neural-network image signal processing (NN-ISP) software module improves low light imaging in security camera applications. 8 The chart below describes our current product lines: 9 Technology Our semiconductor processing solutions enable artificial intelligence and computer vision processing, HD, UHD and 8K UHD (up to 7680 x 4320p60) video and image processing, and video compression, sharing and display while offering exceptional power, size, and performance characteristics.
Additionally, our neural-network image signal processing (NN-ISP) software module improves low light imaging in security camera applications. 8 The chart below describes our current product lines: Technology Our semiconductor processing solutions enable edge AI processing, HD, Ultra HD (UHD) and 8K UHD (up to 7680 x 4320p60) video and image processing, and video compression, sharing and display while offering exceptional power, size, and performance characteristics.
Our technologies make electronic systems smarter, enabling features such as person detection, object classification, and analytics, in addition to performing complex data analysis in real time, delivering high quality imagery, and preserving vital system resources such as power and network bandwidth.
Our technologies make electronic systems smarter, enabling them to become partially or fully autonomous with features such as person detection, object classification, and analytics, in addition to performing complex data analysis in real time, delivering high quality imagery, and preserving vital system resources such as power and network bandwidth.
We are a leader in enterprise and home security camera markets, with solutions that deliver exceptional computer vision performance, industry-leading compression efficiency, low power consumption, and outstanding image quality, including high dynamic range (HDR), low-light processing and fisheye lens dewarping.
We are a leader in enterprise and home security camera markets, with solutions that deliver exceptional AI inference performance, industry-leading compression efficiency, low power consumption, and outstanding image quality, including high dynamic range (HDR), low-light processing and fisheye lens de-warping.
Approximately 90% of eligible U.S. employees participate in our 401(k) plan, and 91% of eligible employees participated in the most recent offering period of our employee stock purchase plan. The average tenure of our employees is approximately 7.6 years and approximately 31% of our employees have been employed by us for more than 10 years.
Approximately 90% of eligible U.S. employees participate in our 401(k) plan, and 90% of eligible employees participated in the most recent offering period of our employee stock purchase plan. The average tenure of our employees is approximately 8.1 years and approximately 33% of our employees have been employed by us for more than 10 years.
Our worldwide voluntary employee turnover rate in fiscal year 2024 was approximately 5.6%. 17 Corporate Information Ambarella was founded and incorporated in the Cayman Islands in January 2004. Our registered address is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands.
Our worldwide voluntary employee turnover rate in fiscal year 2025 was approximately 3.3%. 16 Corporate Information Ambarella was founded and incorporated in the Cayman Islands in January 2004. Our registered address is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands.
As of January 31, 2024, women represented 29% of our independent directors, 19% of senior management, 17% of our technical roles, and 20% of our total workforce. Of our total employee workforce, approximately 37% is represented by a work council in Taiwan.
As of January 31, 2025, women represented 33% of our independent directors, 18% of senior management, 17% of our technical roles, and 20% of our total workforce. Of our total employee workforce, approximately 37% is represented by a work council in Taiwan.
In addition, CVflow can process other sensor modalities, including lidar, radar, time of flight, thermal and near infrared (NIR), and allows customers to differentiate their products by porting their own or third party neural networks and/or classical computer vision algorithms to our CVflow-based SoCs.
In addition, CVflow can process data from other sensing modalities, including lidar, radar, time of flight, thermal and near infrared (NIR), and allows customers to differentiate their products by porting their own or third party neural networks and/or AI algorithms to our CVflow-based SoCs.
As of January 31, 2024, we had 344 issued patents in the United States, 123 of which were continuation or divisional patents, 10 issued patents in Europe, 8 issued patents in China, 8 issued patents in Japan and 64 pending patent applications in the United States. The issued patents in the United States expire beginning in 2024 through 2042.
As of January 31, 2025, we had 372 issued patents in the United States, 137 of which were continuation or divisional patents, 10 issued patents in Europe, 12 issued patents in China, 8 issued patents in Japan and 64 pending patent applications in the United States. The issued patents in the United States expire beginning in 2025 through 2042.
These video cameras are pre-installed in vehicles or mounted (aftermarket) to record events for reconciliation, such as for insurance and liability, driver scoring or training, and security purposes. We offer solutions for both OEM and aftermarket drive recording devices, some of which include advanced driver assistance systems (ADAS) features. • Security Cameras .
These video cameras are pre-installed in vehicles or mounted (aftermarket) to record events for reconciliation, such as for insurance and liability, driver scoring or training, and security purposes. We offer solutions for both OEM and aftermarket drive recording devices, some of which include ADAS features. Autonomy: • Central domain controllers for L2+ to L4 Autonomous Vehicles.
Our B6 and B8 SerDes (Serializer/Deserializer) products are mixed-signal (analog and digital) semiconductors used to transport data short distances (up to 10 meters) from a CMOS image sensor, often in a remote camera location, to our video and CV SoCs.
Our B8 SerDes (Serializer/Deserializer) product is a mixed-signal (analog and digital) semiconductor used to transport data short distances (up to 10 meters) from a CMOS image sensor, often in a remote camera location, to our video and AI SoCs.
Our solutions achieve high storage and transmission efficiencies through innovative and complex video and image compression algorithms that significantly reduce the output bitrate. This smaller storage footprint directly benefits the performance of our solutions in several ways, including lower memory storage requirements and reduced bandwidth needs for transmission, which both facilitate sharing content between devices.
Our solutions achieve high storage and transmission efficiencies through innovative and complex video and image compression algorithms that significantly reduce the output bitrate, which directly benefits the performance of our solutions in several ways, including lower memory storage requirements, reduced bandwidth needs for transmission and lower cloud storage costs.
Governmental Regulation Our business and operations around the world are subject to government regulation at the national, state or local level addressing, among other matters, applicable environmental laws, health and safety laws and regulations, laws relating to export controls and economic sanctions, and the rules of industrial standards bodies such as the International Standards Organization and governmental agencies such as the Federal Trade Commission. 16 We believe that our properties and operations comply in all material respects with applicable laws protecting the environment and worker health and safety.
Governmental Regulation Our business and operations around the world are subject to government regulation at the national, state or local level addressing, among other matters, applicable environmental laws, health and safety laws and regulations, laws relating to export controls and economic sanctions, and the rules of industrial standards bodies such as the International Standards Organization and governmental agencies such as the Federal Trade Commission.
Our latest third generation CVflow technology enables us to address incremental and computationally intense AI applications for deep fusion, deep planning, and large language models (LLMs), as well as to efficiently process transformer AI networks.
Our latest third generation CVflow technology enables us to efficiently process transformer AI networks, which facilitate incremental and computationally intense advanced AI applications, including deep fusion, deep planning, large language models (LLMs) and reasoning models.
Seasonality Our business has tended to be seasonal with higher revenue in our second and third fiscal quarters as our customers typically increase their production to meet holiday shopping season or year-end demand for their products.
Seasonality Our business has tended to be seasonal with higher revenue in our second and third fiscal quarters as our customers typically increase their production to meet holiday shopping season or year-end demand for their products. We also may experience seasonally lower demand in our first and fourth fiscal quarters due to ODM and OEM factory holiday closures.
Currently, the substantial majority of our SoCs are supplied by Samsung in facilities located in Austin, Texas and South Korea, from whom we have the option to purchase both fully-assembled and tested products as well as tested die in wafer form for assembly. We also have small volumes of some products supplied by GlobalFoundries Inc.
We currently manufacture our solutions in the 10nm and 5nm process nodes. Currently, the substantial majority of our SoCs are supplied by Samsung Electronics Corporation (“Samsung”) in facilities located in Austin, Texas and South Korea, from whom we have the option to purchase both fully-assembled and tested products as well as tested die in wafer form for assembly.
Stereo cameras and radar detect obstacles without relying on training for specific obstacle categories because the depth information is used to directly construct a three-dimensional model of the camera’s surroundings, including any obstacles.
Stereo cameras and radar detect obstacles without relying on training for specific obstacle categories because the depth information is used to directly construct a three-dimensional model of the camera’s surroundings, including any obstacles. This allows more robust decisions to be made in applications such as autonomous driving.
This category of AI technology is known as computer vision (CV), or edge inference AI, and our AI inference SoCs integrate our state-of-the-art video processor technology together with our recently developed deep learning neural network processing technology, which we refer to as CVflow®.
This is known as edge AI, and our AI inference SoCs integrate our state-of-the-art video processor technology together with our proprietary AI accelerator, also known as a deep learning neural network processor, which we refer to as CVflow®.
Our recently announced N1 SoC is capable of running LLM inferencing with models up to 34 billion parameters, enabling a range of AI applications in IoT devices, including industrial robotics, intelligent healthcare imaging and diagnostics, edge AI servers running multi-modal LLMs, and autonomous fleet telematics. In November 2021, we acquired Oculii Corp., a developer of high definition radar technology.
Our N1 SoC is capable of running LLM inferencing with models up to 34 billion parameters, enabling a range of AI applications in IoT devices, including industrial robotics, intelligent healthcare imaging and diagnostics, edge AI servers running multi-modal vision-language models (VLMs) and traditional LLMs, and autonomous fleet telematics.
As of January 31, 2024, we employed a total of 915 people, including 253 in the United States, 581 in Asia, primarily 343 in Taiwan and 224 in China, and 81 in Europe. Approximately 75% of our employees are engaged in research and development, 2% in operations, and 23% in sales, marketing and administration.
As of January 31, 2025, we employed a total of 941 people, including 260 in the United States, 590 in Asia, primarily with 352 in Taiwan and 223 in China, and 91 in Europe. Approximately 75% of our employees are engaged in research and development, 23% in sales, marketing and administration and 2% in operations.
Our semiconductor design team has extensive experience in large-scale semiconductor design, including architecture description, logic and circuit design, implementation and verification. Our software design team has extensive experience in development and verification of software for the HD video market.
Our semiconductor design team has extensive experience in large-scale semiconductor design, including architecture description, logic and circuit design, implementation and verification. Our software design team has extensive experience in development and verification of video processing, AI deep learning and adaptive AI radar software.
The building blocks of our platform are illustrated below: Our technology platform enables the capture of high-resolution still images and UHD video while simultaneously performing CV processing and encoding for high-quality storage and lower resolution real time streaming.
Our technology platform is based on a high-performance, low-power architecture supported by a high level of system integration. The building blocks of our platform are illustrated below: Our technology platform enables the capture of high-resolution still images and UHD video while simultaneously performing AI processing and encoding for high-quality storage and lower resolution real time streaming.
In addition to enabling small device size and low power consumption, our SoC solutions make possible differentiated functionalities, such as computer vision functionality, simultaneous video and image capture, multiple-stream video capture, image stabilization and wireless connectivity. Central Domain Controller.
In addition to enabling small device size and low power consumption, our SoC solutions make possible differentiated functionalities, such as advanced AI functionality, simultaneous video and image capture, multiple-stream video capture, image stabilization and wireless connectivity. Central Domain Controller. Our CV3-AD family of automotive AI domain controllers, targets L2+ to L4 autonomous vehicles and advanced robots.
Incorporated in 2004, we have primarily served human-viewing applications with video and image processors for enterprise, public infrastructure and home applications, such as internet protocol, or IP, security cameras, sports cameras, wearables, aerial drones, and aftermarket automotive video recorders. We are now leveraging our human-viewing heritage to pursue the machine sensing market.
Until 2023, a majority of our revenue originated from human-viewing only applications with video and image processors for enterprise, public infrastructure and home applications, such as internet protocol, or IP, security cameras, sports cameras, wearables, aerial drones, and aftermarket automotive video recorders. Since 2018, we have been leveraging our human-viewing heritage to pursue the machine sensing market.
In addition to offering our existing advanced camera perception processing, CV3 adds sensor fusion and planning layers that enable a broader set of fully-automated devices.
Our CV3 AI central domain controller family of SoCs is specifically architected for partially to fully automated driving applications. In addition to offering our existing advanced camera perception processing, CV3 adds sensor fusion and planning layers that enable a broader set of fully-automated devices.
Our manufacturing production is based on estimates and advance non-binding commitments from customers as to future purchases. We follow industry practice that allows customers to cancel, change or defer orders with limited advance notice prior to shipment. Given this practice, we do not believe that backlog is a reliable indicator of future revenue levels.
Our manufacturing production is based on estimates and advance non-binding commitments from customers as to future purchases. We follow industry practice that generally allows customers to change or defer orders with limited advance notice prior to shipment, often without penalty.
As a result, we periodically evaluate the benefits of migrating our solutions to smaller geometry process technologies in order to improve performance and efficiency. We believe this strategy will help us remain competitive.
We aim to use the most advanced manufacturing process technology appropriate for our products that is available from our third-party foundries. As a result, we periodically evaluate the benefits of migrating our solutions to smaller geometry process technologies in order to improve performance and efficiency. We believe this strategy will help us remain competitive.
We contract the assembly of products supplied by Global Foundries Inc. to ASE. Final testing of our products is handled primarily by Sigurd Corporation or King Yuan Electronics Co., Ltd. under the supervision of our engineers. All test software and related processes for our products are developed by our engineers.
Final testing of our products is handled primarily by Sigurd Corporation or King Yuan Electronics Co., Ltd. under the supervision of our engineers. All test software and related processes for our products are developed by our engineers. We continually monitor the results of testing at all of our test contractors to ensure that our testing procedures are properly implemented.
Applications include enterprise access control panels, electronic locks and contactless mobile payment terminals. ▪ Robotic Products. Our products and technology are well suited for a variety of smart home and enterprise robotic applications.
We address the following industrial and robotic market applications: ▪ Identification/Authentication Cameras. Our video-based sensing solutions enable contactless access control for home, enterprise and public applications. Applications include enterprise access control panels, electronic locks and contactless mobile payment terminals. ▪ Robotic Products. Our products and technology are well suited for a variety of smart home and enterprise robotic applications.
We continually monitor the results of testing at all of our test contractors to ensure that our testing procedures are properly implemented. As part of our total quality assurance program, our quality management system has been certified to ISO 9001:2015 standards. Our assembly and testing vendors are also ISO 9001 certified.
As part of our total quality assurance program, our quality management system has been certified to ISO 9001:2015 standards. Our assembly and testing vendors are also ISO 9001 certified.
In addition, privacy and security can be enhanced, as critical personal information may not need to enter the network infrastructure. Our first AI SoC was introduced in 2018 and the CV3 SoC integrates our third generation CVflow technology. Our development efforts are now focused on SoCs that provide both human viewing and computer vision functionality.
In addition, privacy and security can be enhanced, as critical personal information may not need to enter the network infrastructure. Our first AI SoC was introduced in 2018 and the CV3 SoC integrates our third generation AI accelerator, which we refer to as CVflow.
Our software compatible portfolio of products, with a broad range of performance and price points, allows our customers to develop a range of end products from a common software base. • Comprehensive and Flexible Software . Our years of investment in developing and optimizing our comprehensive and flexible software serve as the foundation of our high-performance video application solutions.
Our software compatible portfolio of products, with a broad range of performance and price points, allows our customers to develop a wide range of differentiated end products from a common software base. • Comprehensive and Flexible Software .
The CV3 family enables centralized, single-chip processing for multi-sensor perception, including high-resolution vision, radar, ultrasonic and lidar, as well as deep fusion for multiple sensor modalities and autonomous vehicle path planning. The central domain controller in autonomous vehicles is connected to the camera, radar and other sensor suites.
The CV3 family enables centralized, single-chip processing for multi-sensor perception, including high-resolution vision, radar, ultrasonic and lidar, as well as deep fusion for multiple sensor modalities and autonomous vehicle path planning. In addition, the domain controller can simultaneously process in-cabin sensing applications, including driver and occupant monitoring. IoT Applications: • Security Cameras .
These interior mounted cameras track drivers and passengers to help prevent accidents by alerting a drowsy or distracted driver and assisting with the deployment of safety features, such as airbags. These interior cameras may also be utilized by service providers, in particular with autonomous vehicles, to create new business opportunities in which in-cabin information, collected through cameras, may be monetized.
These interior mounted cameras track drivers and passengers to help prevent accidents by alerting a drowsy or distracted driver and assisting with the deployment of safety features, such as airbags. These interior cameras may also be utilized by telematic service providers to provide feedback on driver performance and behavior. 5 ▪ Electronic Mirrors.
In fiscal year 2024, the customers representing 10% or more of revenue were WT Microelectronics Co., Ltd., formerly Wintech Microelectronics Co., Ltd., or WT, our non-exclusive sales representative and fulfillment partner in Asia other than Japan, and Chicony Electronics Co., Ltd., or Chicony, one ODM that manufactures devices incorporating our solutions on behalf of multiple end-customers, which accounted for approximately 53% and 14% of total revenue, respectively.
In fiscal year 2025, the customer representing 10% or more of revenue was WT Microelectronics Co., Ltd., formerly Wintech Microelectronics Co., Ltd., or WT, our non-exclusive sales representative and fulfillment partner in Asia other than Japan, which accounted for approximately 63% of total revenue.
Cameras and other sensors, as well as high performance computing processors, are utilized for a variety of applications in the automotive market and our products are designed into both original equipment manufacturer (OEM) and aftermarket applications. We address the following automotive market applications: ▪ Central domain controllers for L2+ to L4 Autonomous Vehicles.
We are focusing on the automotive and IoT end markets that require increasingly sophisticated AI inference workloads and processing performance: Automotive Applications: Cameras and other sensors, as well as high performance computing processors, are utilized for a variety of applications in the automotive market and our products are designed into both original equipment manufacturer (OEM) and aftermarket applications.
Our advanced CV SoCs handle an array of complex algorithms, from low-level perception functions and neural networks to higher-level autonomous software stacks, while our video processing pipeline enables operation in challenging lighting conditions such as high-contrast scenes and extremely low-light environments, all with low power consumption. We address the following industrial and robotic market applications: ▪ Identification/Authentication Cameras.
Our advanced AI SoCs handle an array of complex algorithms, from low-level perception functions and neural networks to higher-level autonomous software stacks, while our neural network-based image signal processing (NN-ISP) provides advanced noise reduction to enable better performance in challenging lighting conditions such as high-contrast scenes and extremely low-light environments, all with low power consumption.
Additionally, our HDR processing capabilities handle scenes with large dynamic range between the lightest and darkest areas to reveal details that would otherwise be lost in shadow or highlight areas.
Our solutions can deliver clear images in low light conditions because of our advanced noise reduction, including 3D motion compensated temporal filtering (MCTF) and multiple exposure processing. Additionally, our HDR processing capabilities handle scenes with large dynamic range between the lightest and darkest areas to reveal details that would otherwise be lost in shadow or highlight areas.
Our extensive algorithm expertise, which facilitates efficient AI, video and image compression, enables our solutions to achieve low power consumption without compromising performance. Our solutions provide Full HD and UHD video up to 32-megapixel resolution and 60 frames per second.
Our extensive algorithm expertise, which facilitates efficient AI, video and image compression, enables our solutions to achieve low power consumption without compromising performance. Our solutions support high resolution, high frame-rate and multi-stream video capabilities.
Oculii’s adaptive AI software algorithms are designed to enable radar perception using current production radar chips to achieve significantly higher resolution, longer range and greater accuracy. Oculii’s software can be deployed on our existing CVflow SoCs, operating in conjunction with leading radar RF solutions to significantly increase safety and reliability.
Our Oculii adaptive AI software algorithms are designed to enable radar perception using current production radar chips to achieve significantly higher resolution, longer range and greater accuracy.
We do not have a guaranteed level of production capacity from any of our suppliers’ facilities to produce our solutions. We carefully qualify each of our suppliers and their subcontractors and processes in order to meet the extremely high-quality and reliability standards required of our solutions.
We carefully qualify each of our suppliers and their subcontractors and processes in order to meet the extremely high-quality and reliability standards required of our solutions. Wafer Fabrication We have a history of using several process nodes from 130 nm through 5 nm.
Manufacturing We employ a fabless business model and use third-party foundries and assembly and test contractors to manufacture, assemble and test our solutions. This outsourced manufacturing approach allows us to focus our resources on the design, sales and marketing of our solutions and avoid the cost associated with owning and operating our own manufacturing facility.
This outsourced manufacturing approach allows us to focus our resources on the design, sales and marketing of our solutions and avoid the cost associated with owning and operating our own manufacturing facility. Our engineers work closely with foundries and other contractors to increase yields, lower manufacturing costs and improve quality.
Form factors include smart video door-bells and video-enabled lights. Embedded computer vision technology supports advanced functions, including intruder and pet detection, face recognition and package monitoring. • Emerging Robotic and Industrial Applications .
Home security cameras are designed for home or small business use and may be connected to cloud services and applications via home networks using WiFi. Form factors include smart video door-bells and video-enabled lights. Embedded AI technology supports advanced functions, including intruder and pet detection, face recognition and package monitoring. • Emerging Robotic and Industrial Applications .
As a fabless semiconductor company, we do not manufacture our own products but do maintain laboratory space at certain of our facilities to facilitate the development, evaluation and testing of our SoC products. These laboratories may maintain small quantities of hazardous materials.
We believe that our properties and operations comply in all material respects with applicable laws protecting the environment and worker health and safety. As a fabless semiconductor company, we do not manufacture our own products but do maintain laboratory space at certain of our facilities to facilitate the development, evaluation and testing of our SoC products.
Our engineers work closely with foundries and other contractors to increase yields, lower manufacturing costs and improve quality. In addition, we believe outsourcing many of our manufacturing and assembly activities provides us the flexibility needed to respond to new market opportunities, simplifies our operations and significantly reduces our capital requirements.
In addition, we believe outsourcing many of our manufacturing and assembly activities provides us the flexibility needed to respond to new market opportunities, simplifies our operations and significantly reduces our capital requirements. We do not have a guaranteed level of production capacity from any of our suppliers’ facilities to produce our solutions.
With the acquisition of Oculii, we complement our advanced camera perception capabilities with advanced radar perception to enable higher levels of autonomy. We are focusing on the automotive and Internet-of-Things (IoT) end markets that require increasingly sophisticated AI inference workloads and processing performance: • Automotive Applications .
Our development efforts are now focused on SoCs that provide both human viewing and AI inference functionality. With the acquisition of Oculii, we complement our advanced camera perception capabilities with advanced radar perception to enable higher levels of autonomy.
Our AI technology is creating opportunities for us to address a broader range of markets and applications while also allowing us to capture more content per electronic system. Our new CV3 AI central domain controller family of SoCs is specifically architected for automated driving applications.
Our AI technology is creating opportunities for us to address a broader range of markets and applications while also allowing us to capture more content per electronic system. Our newest product families, CV7, CV3 and N1 integrate our 3 rd generation CVflow AI accelerator and are all built on advanced 5 nanometer (nm) process technology.

… 33 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

149 edited+18 added−110 removed243 unchanged
Biggest changeWe may have difficulty accurately predicting our future revenue and appropriately budgeting our expenses. • The complexity of our solutions could result in unforeseen delays or expenses from undetected defects, errors or bugs in hardware or software which could reduce the market adoption of our new solutions, damage our reputation with current or prospective customers and adversely affect our operating costs. • We may experience difficulties transitioning to new wafer fabrication process technologies or achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs. • Rapidly changing industry standards could make our video and image processing solutions obsolete, which would cause our operating results to suffer. • Some of our operations and a significant portion of our customers and our subcontractors are located outside of the United States, which subjects us to additional risks, including increased complexity and costs of managing international operations and geopolitical instability. • Any acquisitions we may make in the future could disrupt our business, cause dilution to our shareholders, reduce our financial resources and harm our business. • We face tax risks, including relating to the complexity of calculating our tax provision, changes in effective tax rates, or unfavorable tax law changes. • Fluctuations in our operating results on a quarterly and annual basis could cause the market price of our ordinary shares to decline. • If we do not generate revenue growth, we may not be able to execute our business plan and our operating results could suffer. • We do not have long-term supply contracts with our third-party manufacturing vendors, and they may not allocate sufficient capacity to us at reasonable prices to meet future demands for our solutions. • Our customers incorporate components supplied by multiple third parties, and a supply shortage or delay in delivery of these components could delay orders for our solutions by our customers. • We outsource our wafer fabrication, assembly and testing operations to third parties, and if these parties fail to produce and deliver our products according to requested demands in specification, quantity, cost and time, our reputation, customer relationships and operating results could suffer. • A substantial portion of our revenue is processed through a single distributor and the loss of this distributor may cause disruptions in our shipments, which may adversely affect our operations and financial condition. • We are subject to risks associated with our distributors’ product inventories. • We rely on various third-party vendors, service providers and contractors in the operation of our business. • Global economic and political conditions, including high inflation and trade restrictions, recessionary concerns and trade restrictions, may impact our business and financial condition in ways that we currently cannot predict. • We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets, including China.
Biggest changeIf we are unsuccessful or delayed in qualifying these products or third-party contractors with a customer, our business and operating results could suffer. • We expect competition to increase in the future, which could have an adverse effect on our revenue and market share. • A breach of our security systems may have a material adverse effect on our business. • While we intend to continue to invest in research and development, we may be unable to make the substantial investments that are required to remain competitive in our business. • We rely on highly skilled personnel and, if we are unable to hire, retain or motivate key personnel, we may not be able to grow effectively which could harm our business. • The average selling prices of semiconductor solutions in our target markets have typically decreased over time and will likely do so in the future, which could harm our revenue and gross margins. • If we are unable to manage any future growth, we may not be able to execute our business plan and our operating results could suffer. • Deterioration of the financial conditions of our customers could adversely affect our operating results. • We are subject to the cyclical nature of the semiconductor industry. • The complexity of our solutions could result in unforeseen delays or expenses from undetected defects, errors or bugs in hardware or software which could reduce the market adoption of our new solutions, damage our reputation with current or prospective customers and adversely affect our operating costs. • We may experience difficulties transitioning to new wafer fabrication process technologies or achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs. • Rapidly changing industry standards could make our video and image processing solutions obsolete, which would cause our operating results to suffer. • Some of our operations and a significant portion of our customers and our subcontractors are located outside of the United States, which subjects us to additional risks, including increased complexity and costs of managing international operations and geopolitical instability. • Climate change and climate change-related policies and regulations may have a long-term impact on our business. • We face tax risks, including relating to the complexity of calculating our tax provision, changes in effective tax rates, or unfavorable tax law changes. • Fluctuations in our operating results on a quarterly and annual basis could cause the market price of our ordinary shares to decline. • If we do not generate revenue growth, we may not be able to execute our business plan and our operating results could suffer. • We outsource our wafer fabrication, assembly and testing operations to third parties, and if these parties fail to produce and deliver our products according to requested demands in specification, quantity, cost and time, our reputation, customer relationships and operating results could suffer. • We do not have long-term supply contracts with our third-party manufacturing vendors, and they may not allocate sufficient capacity to us at reasonable prices to meet future demands for our solutions. • Our customers incorporate components supplied by multiple third parties, and a supply shortage or delay in delivery of these components could delay orders for our solutions by our customers. • A substantial portion of our revenue is processed through a single distributor and the loss of this distributor may cause disruptions in our shipments, which may adversely affect our operations and financial condition. • We are subject to risks associated with our distributors’ product inventories. • We rely on various third-party vendors, service providers and contractors in the operation of our business. • Global economic and political conditions, including high inflation, recessionary concerns and trade restrictions, may impact our business and financial condition in ways that we currently cannot predict. 18 • We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets, including China.
We have also experienced, during times of supply chain capacity shortages, customers placing orders for our products that exceed their actual demand, which may lead to us manufacturing a surplus of products and could have a negative impact on our results of operations and cash reserves and lead to our customers having excess inventory.
We have also experienced, during times of supply chain capacity shortages, customers placing orders for our products that exceed their actual demand, which may lead to us manufacturing a surplus of products and could have a negative impact on our results of operations and cash reserves and lead to us and our customers having excess inventory.
These provisions include the following: • the division of our board of directors into three classes; • the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or due to the resignation or departure of an existing board member; • prohibition of cumulative voting in the election of directors which would otherwise allow less than a majority of shareholders to elect director candidates; • the requirement for the advance notice of nominations for election to our board of directors or for proposing matters that can be acted upon at a shareholders’ meeting; • the ability of our board of directors to issue, without shareholder approval, such amounts of preference shares as the board of directors deems necessary and appropriate with terms set by our board of directors, which rights could be senior to those of our ordinary shares; • the elimination of the rights of shareholders to call a special meeting of shareholders and to take action by written consent in lieu of a meeting; and • the required approval of a special resolution of the shareholders, being a two-thirds vote of shares held by shareholders present and voting at a shareholder meeting, to alter or amend the provisions of our post-offering memorandum and articles of association.
These provisions include the following: • the division of our board of directors into three classes; • the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or due to the resignation or departure of an existing board member; • prohibition of cumulative voting in the election of directors which would otherwise allow less than a majority of shareholders to elect director candidates; • the requirement for the advance notice of nominations for election to our board of directors or for proposing matters that can be acted upon at a shareholders’ meeting; 40 • the ability of our board of directors to issue, without shareholder approval, such amounts of preference shares as the board of directors deems necessary and appropriate with terms set by our board of directors, which rights could be senior to those of our ordinary shares; • the elimination of the rights of shareholders to call a special meeting of shareholders and to take action by written consent in lieu of a meeting; and • the required approval of a special resolution of the shareholders, being a two-thirds vote of shares held by shareholders present and voting at a shareholder meeting, to alter or amend the provisions of our post-offering memorandum and articles of association.
Factors that may affect our operating results include: • fluctuations in demand, sales cycles, product mix, and prices for our products; • the forecasting, scheduling, rescheduling or cancellation of orders by our customers; • shifts in consumer or manufacturer preferences and any resultant change in demand for our customers’ products; • changes in the competitive dynamics of our markets, including new entrants or pricing pressures; • delays in our customers’ ability to manufacture and ship products that incorporate our solutions caused by internal and external factors beyond our control; • our ability to successfully define, design and release new solutions in a timely manner that meet our customers’ needs; • timely availability of adequate manufacturing capacity from our manufacturing subcontractors; 31 • changes in manufacturing costs, including wafer, test and assembly costs, mask costs, manufacturing yields and product quality and reliability; • the timing of product announcements by our competitors or by us; • incurrence of research and development and related new products expenditures; • write-downs of inventory for excess quantities and technological obsolescence; • impairment of investment or other asset values; • future accounting pronouncements and changes in accounting policies; • volatility in our share price, which may lead to higher stock-based compensation expense; • volatility in our effective tax rate; • general socioeconomic and political conditions in the countries where we operate or where our products are sold or used, including recent macroeconomic volatility, pandemics or widespread public health problems, U.S.-China relations and the conditions in Hong Kong; and • costs associated with litigation, especially related to intellectual property.
Factors that may affect our operating results include: • fluctuations in demand, sales cycles, product mix, and prices for our products; • the forecasting, scheduling, rescheduling or cancellation of orders by our customers; • shifts in consumer or manufacturer preferences and any resultant change in demand for our customers’ products; • changes in the competitive dynamics of our markets, including new entrants or pricing pressures; • delays in our customers’ ability to manufacture and ship products that incorporate our solutions caused by internal and external factors beyond our control; • our ability to successfully define, design and release new solutions in a timely manner that meet our customers’ needs; • timely availability of adequate manufacturing capacity from our manufacturing subcontractors; • changes in manufacturing costs, including wafer, test and assembly costs, mask costs, manufacturing yields and product quality and reliability; • the timing of product announcements by our competitors or by us; 28 • incurrence of research and development and related new products expenditures; • write-downs of inventory for excess quantities and technological obsolescence; • impairment of investment or other asset values; • future accounting pronouncements and changes in accounting policies; • volatility in our share price, which may lead to higher stock-based compensation expense; • volatility in our effective tax rate; • general socioeconomic and political conditions in the countries where we operate or where our products are sold or used, including recent macroeconomic volatility, pandemics or widespread public health problems, U.S.-China relations and the conditions in Hong Kong; and • costs associated with litigation, especially related to intellectual property.
Any potential intellectual property litigation also could force us to do one or more of the following: • stop selling products or using technology that contain the allegedly infringing intellectual property; • incur significant legal expenses; • pay substantial damages to the party whose intellectual property rights we may be found to be infringing; • redesign those products that contain the allegedly infringing intellectual property; • attempt to obtain a license to the relevant intellectual property from third parties, which may not be available on reasonable terms or at all; or • lose the opportunity to license our technology to others or to collect royalty payments based upon successful protection and assertion of our intellectual property against others.
Any potential intellectual property litigation also could force us to do one or more of the following: 38 • stop selling products or using technology that contain the allegedly infringing intellectual property; • incur significant legal expenses; • pay substantial damages to the party whose intellectual property rights we may be found to be infringing; • redesign those products that contain the allegedly infringing intellectual property; • attempt to obtain a license to the relevant intellectual property from third parties, which may not be available on reasonable terms or at all; or • lose the opportunity to license our technology to others or to collect royalty payments based upon successful protection and assertion of our intellectual property against others.
As a result of our international focus, we face numerous challenges and risks, including: • increased complexity and costs of managing international operations; • longer and more difficult collection of receivables from customers; • difficulties in enforcing contracts generally; • regional economic instability; • geopolitical instability and military conflicts, including the ongoing conflicts in Ukraine and the Middle East; • limited protection of our intellectual property and other assets; • compliance with local laws and regulations and unanticipated changes in local laws and regulations, including tax laws and regulations; • trade and foreign exchange restrictions and higher tariffs; • travel restrictions; • timing and availability of import and export licenses and other governmental approvals, permits and licenses, including export classification requirements; • foreign currency exchange fluctuations relating to our international operating activities; • restrictions imposed by the U.S. government on our ability to do business with certain companies or in certain countries as a result of international political conflicts; • transportation delays and other consequences of limited local infrastructure, and disruptions, such as large-scale outages or interruptions of service from utilities or telecommunications providers; • heightened risk of terrorist acts; • local business and cultural factors that differ from standards and practices in the U.S.; • differing employment practices and labor relations; • regional health issues, pandemics, and natural disasters; and • work stoppages.
As a result of our international focus, we face numerous challenges and risks, including: • increased complexity and costs of managing international operations; • longer and more difficult collection of receivables from customers; • difficulties in enforcing contracts generally; • regional economic instability; • geopolitical instability and military conflicts, including the ongoing conflicts in Ukraine and the Middle East; • limited protection of our intellectual property and other assets; • compliance with local laws and regulations and unanticipated changes in local laws and regulations, including tax laws and regulations; • trade and foreign exchange restrictions and higher and/or additional tariffs; • travel restrictions; 27 • timing and availability of import and export licenses and other governmental approvals, permits and licenses, including export classification requirements; • foreign currency exchange fluctuations relating to our international operating activities; • restrictions imposed by the U.S. government on our ability to do business with certain companies or in certain countries as a result of international political conflicts; • transportation delays and other consequences of limited local infrastructure, and disruptions, such as large-scale outages or interruptions of service from utilities or telecommunications providers; • heightened risk of terrorist acts; • local business and cultural factors that differ from standards and practices in the U.S.; • differing employment practices and labor relations; • regional health issues, pandemics, and natural disasters; and • work stoppages.
Our ability to compete will depend on a number of factors, including: • our ability to anticipate market and technology trends and successfully develop solutions that meet market needs; • our ability to understand the price points and performance metrics of competing products in the marketplace; • our solutions’ performance and cost-effectiveness relative to that of competing products; 24 • our success in identifying and penetrating new markets, applications and customers; • our ability to gain access to leading design tools and product specifications at the same time as our competitors; • our ability to develop and maintain relationships with key OEMs and ODMs; • our products’ effective implementation of video processing or radar standards; • our ability to protect our intellectual property; • our ability to expand international operations in a timely and cost-efficient manner; • our ability to deliver products in volume on a timely basis at competitive prices; • our ability to support our customers’ incorporation of our solutions into their products; and • our ability to recruit design and application engineers with expertise in computer vision, video and image processing technologies and sales and marketing personnel.
Our ability to compete will depend on a number of factors, including: • our ability to anticipate market and technology trends and successfully develop solutions that meet market needs; • our ability to understand the price points and performance metrics of competing products in the marketplace; • our solutions’ performance and cost-effectiveness relative to that of competing products; 23 • our success in identifying and penetrating new markets, applications and customers; • our ability to gain access to leading design tools and product specifications at the same time as our competitors; • our ability to develop and maintain relationships with key OEMs and ODMs; • our products’ effective implementation of video processing or radar standards; • our ability to protect our intellectual property; • our ability to expand international operations in a timely and cost-efficient manner; • our ability to deliver products in volume on a timely basis at competitive prices; • our ability to support our customers’ incorporation of our solutions into their products; and • our ability to recruit design and application engineers with expertise in computer vision, video and image processing technologies and sales and marketing personnel.
Additionally, the U.S. government announced new controls restricting the ability to send certain products and technology related to semiconductors, semiconductor manufacturing, advanced computing, supercomputing, and artificial intelligence to China, including Hong Kong, without an export license. In many cases, these licenses are subject to a policy of denial and will not be issued.
Additionally, in 2022, the U.S. government announced new controls restricting the ability to send certain products and technology related to semiconductors, semiconductor manufacturing, advanced computing, supercomputing, and artificial intelligence to China, including Hong Kong, without an export license. In many cases, these licenses are subject to a policy of denial and will not be issued.
We may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs. 28 We aim to use the most advanced manufacturing process technology appropriate for our products that is available from our third-party foundries.
We may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs. We aim to use the most advanced manufacturing process technology appropriate for our products that is available from our third-party foundries.
Because we currently hold, and expect to continue to hold, a substantial amount of cash or cash equivalents, and because the calculation of the value of our assets may be based in part on the value of our ordinary shares, which may fluctuate and may fluctuate considerably given that market prices of technology companies historically often have been volatile, we may be a PFIC for any taxable year.
Because we currently hold, and expect to continue to hold, a substantial amount of cash or cash equivalents, and because the calculation of the value of our assets may be based in part on the value of our ordinary shares, which may fluctuate and 37 may fluctuate considerably given that market prices of technology companies historically often have been volatile, we may be a PFIC for any taxable year.
Even if we begin a product design, a customer may decide to cancel or change its product plans, resulting in no revenue from such expenditures. • Some of our customers may require our products and our third-party contractors to undergo a qualification process that does not assure product sales.
Even if we begin a product design, a customer may decide to cancel or change its product plans, resulting in no revenue from such expenditures. 17 • Some of our customers may require our products and our third-party contractors to undergo a qualification process that does not assure product sales.
If any of these problems are not found until after we have commenced commercial production of a new product, we may incur significant additional development costs and product recall, repair or replacement costs. These problems may also result in claims against us by our customers or others.
If any of these problems are not found until after we have commenced commercial production of a new product, we may incur significant 26 additional development costs and product recall, repair or replacement costs. These problems may also result in claims against us by our customers or others.
If our key target markets do not grow, grow slower, or do not develop in ways that we currently expect, demand for our SoCs may not materialize as expected, and our business and operating results could suffer. Our customers may cancel their orders, change production quantities or delay production.
If our key target markets do not grow, grow slower, or do not develop in ways that we currently expect, demand for our SoCs may not materialize as expected, and our business and operating results could suffer. 21 Our customers may cancel their orders, change production quantities or delay production.
In such event, our business and results of operations could be adversely affected. 38 We are subject to warranty and product liability claims and to product recalls. From time to time, we are subject to warranty claims that may require us to make significant expenditures to defend these claims or pay damage awards.
In such event, our business and results of operations could be adversely affected. We are subject to warranty and product liability claims and to product recalls. From time to time, we are subject to warranty claims that may require us to make significant expenditures to defend these claims or pay damage awards.
Any significant impairment of our intellectual property rights from any litigation we face could harm our business and our ability to compete. 44 Any potential dispute involving our patents or other intellectual property could affect our customers, which could trigger our indemnification obligations to them and result in substantial expense to us.
Any significant impairment of our intellectual property rights from any litigation we face could harm our business and our ability to compete. Any potential dispute involving our patents or other intellectual property could affect our customers, which could trigger our indemnification obligations to them and result in substantial expense to us.
If we or our customers enable or offer solutions that draw controversy due to their perceived or actual impact on society, such as AI solutions that have unintended consequences or are controversial, we may experience reputational harm, competitive harm or legal liability.
If we or our customers enable or offer solutions that draw controversy due to their perceived or actual impact on society, such as AI solutions that have unintended consequences or are controversial, we may experience reputational harm, competitive harm, financial harm or legal liability.
Failure by our foundry vendors or other suppliers to comply with applicable environmental laws and requirements could cause disruptions and delays in our product shipments, which could adversely affect our relations with our ODMs and OEMs and adversely affect our business and results of operations.
Similarly, failure by our foundry vendors or other suppliers to comply with applicable environmental laws and requirements could cause disruptions and delays in our product shipments, which could adversely affect our relations with our ODMs and OEMs and adversely affect our business and results of operations.
If we fail to accurately forecast demand for our solutions, revenue shortfalls or excess, obsolete or insufficient inventory could result. 22 Our customers typically do not provide us with firm, long-term purchase commitments.
If we fail to accurately forecast demand for our solutions, revenue shortfalls or excess, obsolete or insufficient inventory could result. Our customers typically do not provide us with firm, long-term purchase commitments.
In addition, our ability to sell our products to certain China customers has been restricted. 19 • We are subject to warranty and product liability claims and to product recalls. • We are subject to numerous regulatory compliance requirements, which are costly to comply with, and our failure to comply with these requirements could harm our business and operating results. • Third parties’ assertions of infringement of their intellectual property rights could result in our having to incur significant costs and cause our operating results to suffer.
In addition, our ability to sell certain products to certain China customers has been restricted. • We are subject to warranty and product liability claims and to product recalls. • We are subject to numerous laws and regulatory compliance requirements, which are costly to comply with, and our failure to comply with these requirements could harm our business and operating results. • Third parties’ assertions of infringement of their intellectual property rights could result in our having to incur significant costs and cause our operating results to suffer.
These investments, as well as any cash deposited in bank accounts, are subject to general credit, liquidity, market and interest rate risks, which may be exacerbated by unusual events, such as the pandemics or widespread public health problems, the Eurozone crisis and the U.S. debt ceiling crisis, which affected various sectors of the financial markets and led to global credit and liquidity issues.
These investments, as well as any cash deposited in bank accounts, are subject to general credit, liquidity, market and interest rate risks, which may be exacerbated by unusual events, such as the pandemics or widespread public health problems, the Eurozone crisis, the U.S. debt ceiling crisis, and imposition of tariffs, which affected various sectors of the financial markets and led to global credit and liquidity issues.
If these relationships are not successful, we may be unable to develop new products or product enhancements in a timely manner, which could result in a loss of market share, a decrease in revenue or negatively impact our operating results. 36 We rely on third parties to provide services and technology necessary for the operation of our business.
If these relationships are not successful, we may be unable to develop new products or product enhancements in a timely manner, which could result in a loss of market share, a decrease in revenue or negatively impact our operating results. 32 We rely on third parties to provide services and technology necessary for the operation of our business.
Further, even after securing a design win, we have experienced and may again experience delays in generating revenue from our solutions as a result of the lengthy product development cycle typically required, if we generate any revenue at all as a result of any such design win. 23 Our customers generally take a considerable amount of time to evaluate our solutions.
Further, even after securing a design win, we have experienced and may again experience delays in generating revenue from our solutions as a result of the lengthy product development cycle typically required, if we generate any revenue at all as a result of any such design win. 22 Our customers generally take a considerable amount of time to evaluate our solutions.
In August 2022, the U.S. enacted the Inflation Reduction Act of 2022, or IRA, which includes a new 15% corporate minimum tax as well as a 1% excise tax on the fair value of corporate stock repurchases made by U.S. corporations and certain foreign corporations after December 31, 2022.
For example, in August 2022, the U.S. enacted the Inflation Reduction Act of 2022, or IRA, which includes a new 15% corporate minimum tax as well as a 1% excise tax on the fair value of corporate stock repurchases made by U.S. corporations and certain foreign corporations after December 31, 2022.
In addition, we also face competition in hiring artificial intelligence engineers, including from companies with which we do not directly compete. Our compensation arrangements, such as our equity award programs, may not always be successful in attracting new employees and retaining and motivating our existing employees.
In addition, we also face competition in hiring artificial intelligence engineers, including from companies with which we do not directly compete. Our compensation arrangements, such as our equity award programs, may not always be successful in attracting new employees and retaining and motivating our existing senior executives and employees.
However, a separate determination must be made at the close of each taxable year as to whether we are a PFIC for that taxable year, and we cannot assure you that we will not be a PFIC for our 2025 fiscal year or any future taxable year.
However, a separate determination must be made at the close of each taxable year as to whether we are a PFIC for that taxable year, and we cannot assure you that we will not be a PFIC for our 2026 fiscal year or any future taxable year.
If we fail to penetrate new markets, including the automotive OEM and ADAS market, our revenue and financial condition could be harmed. 20 We believe that our future revenue growth, if any, significantly depends on our ability to expand within the Internet of Things, or IoT, camera markets with our new artificial intelligence, or AI, computer vision SoC solutions, and the OEM automotive, robotics and industrial markets.
If we fail to penetrate new markets, including the automotive OEM and ADAS market, our revenue and financial condition could be harmed. 19 We believe that our future revenue growth, if any, significantly depends on our ability to expand within the Internet of Things, or IoT, camera markets with our new artificial intelligence, or AI, computer vision SoC solutions, and penetrate, or further penetrate, the OEM automotive, robotics and industrial markets.
Any data security breach or incident or theft, misuse, loss, unavailability or other unauthorized processing of this information, or the perception that any of these matters has occurred, could result in, among other things, damage to our reputation, allegations by our customers that we have not performed our contractual obligations, regulatory investigations and other proceedings, litigation by affected parties and possible penalties, damages, and other liabilities, any of which could have a material adverse effect on our business, financial condition, our reputation, and our relationships with our customers and partners.
Any security breach or incident or theft, misuse, loss, unavailability or other unauthorized processing of information, or the perception that any of these matters has occurred, could result in, among other things, damage to our reputation, allegations by our customers that we have not performed our contractual obligations, regulatory investigations and other proceedings, litigation and possible penalties, damages, and other liabilities, any of which could have a material adverse effect on our business, financial condition, our reputation, and our relationships with our customers and partners.
We face increasing complexity in our procurement, design, and research and development operations as a result of requirements relating to the materials composition of our products, including the European Union’s, or EU’s, Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment, or RoHS, directive, which restricts the content of lead and certain other hazardous substances in specified electronic products put on the market in the EU and similar Chinese legislation relating to marking of electronic products which became effective in March 2007.
We face increasing complexity in our procurement, design, and research and development operations as a result of requirements relating to the materials composition of our products, including the European Union’s, or EU’s, Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment, or RoHS, directive, which restricts the content of lead and certain other hazardous substances in specified electronic products put on the market in the EU and similar Chinese legislation relating to marking of electronic products.
Accidental or willful security breaches or incidents or other unauthorized access by third parties to our facilities or our information systems or the existence of computer viruses or other malicious code or security vulnerabilities in our data or software could expose us to a risk of loss, unavailability, misappropriation and other unauthorized processing of proprietary and confidential information.
Accidental or willful security breaches or incidents or other unauthorized access to our facilities or our information systems or the existence of computer viruses or other malicious code or security vulnerabilities in our data or software could expose us to a risk of loss, unavailability, misappropriation and other unauthorized processing of proprietary and confidential information.
Even after an order is received, our customers may cancel these orders, request a decrease in production quantities or request a delay in the delivery of our solutions.
Even after an order is received, our customers may seek to cancel these orders, request a decrease in production quantities or request a delay in the delivery of our solutions.
Our policies and security measures cannot guarantee security, and our IT infrastructure, including our networks and systems, may be vulnerable to security breaches and incidents, cyber-attacks, or fraud.
Our policies and security measures cannot guarantee security, and our information technology (IT) infrastructure, including our networks and systems, may be vulnerable to security breaches and incidents, cyber-attacks, or fraud.
We sell a significant percentage of our solutions through a single distributor, WT, which serves as our non-exclusive sales representative and fulfillment partner in Asia other than Japan. Approximately 53%, 57% and 62% of our revenue was derived from sales through WT for the fiscal years ended January 31, 2024, 2023 and 2022, respectively.
We sell a significant percentage of our solutions through a single distributor, WT, which serves as our non-exclusive sales representative and fulfillment partner in Asia other than Japan. Approximately 63%, 53% and 57% of our revenue was derived from sales through WT for the fiscal years ended January 31, 2025, 2024 and 2023, respectively.
In addition, we believe that revenue from our top 10 end customers, either directly or through a distributor or an ODM, accounted for approximately 51% of our total revenue in fiscal year 2024. We believe that our operating results in the near term will continue to depend on sales to a relatively small number of customers and end customers.
In addition, we believe that revenue from our top 10 end customers, either directly or through a distributor or an ODM, accounted for approximately 59% of our total revenue in fiscal year 2025. We believe that our operating results in the near term will continue to depend on sales to a relatively small number of customers and end customers.
While our current products are not restricted by these controls, such controls could impact our ability to export products to China in the future. It also is possible that the Chinese government will retaliate in ways that could impact our business.
These controls have continued to expand. While our current products are not restricted by these controls, such controls could impact our ability to export products to China in the future. It also is possible that the Chinese government will retaliate in ways that could impact our business.
If our uncollectible accounts, however, were to exceed our current or future allowance for credit losses, our operating results would be negatively impacted. We are subject to the cyclical nature of the semiconductor industry.
If our uncollectible accounts, however, were to exceed our current or future allowance for credit losses, our operating results and cash flows would be negatively impacted. We are subject to the cyclical nature of the semiconductor industry.
In addition, over the last several years, the Organization for Economic Co-operation and Development (OECD) has been working on a Base Erosion and Profit Shifting Project and has been issuing guidelines and proposals covering a number of issues, including country-by-country reporting, permanent establishment rules, transfer pricing rules and tax treaties.
In addition, the Organization for Economic Co-operation and Development has been working on a Base Erosion and Profit Shifting Project and has been issuing guidelines and proposals covering a number of issues, including country-by-country reporting, permanent establishment rules, transfer pricing rules and tax treaties.
Our operations and those of our manufacturers are vulnerable to interruption caused by technical breakdowns, computer hardware and software malfunctions, software viruses, infrastructure failures, pandemics, and regional health issues, earthquakes, fires, severe storms, floods and other negative impacts from climate change, power losses, telecommunications failures, terrorist attacks, wars, Internet failures and other events beyond our control.
Our operations and those of our manufacturers are vulnerable to interruption caused by technical breakdowns, computer hardware and software malfunctions, software viruses, infrastructure failures, pandemics, and regional health issues, earthquakes, natural disasters, and other negative impacts from climate change, power losses, telecommunications failures, terrorist attacks, wars, Internet failures and other events beyond our control.
Changes in effective tax rates or adverse outcomes resulting from examination of our income tax returns could adversely affect our results. 41 Our future effective tax rates could be adversely affected if our earnings are lower than anticipated in countries where we have lower statutory rates and higher than anticipated in countries where we have higher statutory rates, by changes in the valuation of our deferred tax assets and liabilities, transfer pricing adjustments, re-organization or restructuring of our businesses, changes in our corporate structure, including the effect of acquisitions on our legal structure, by tax costs related to intercompany realignments, tax effects of share-based compensation, expiration of or lapses in tax incentives, or by changes in tax laws, regulations, accounting principles or interpretations thereof.
Our future effective tax rates could be adversely affected if our earnings are lower than anticipated in countries where we have lower statutory rates and higher than anticipated in countries where we have higher statutory rates, by changes in the valuation of our deferred tax assets and liabilities, transfer pricing adjustments, re-organization or restructuring of our businesses, changes in our corporate structure, including the effect of acquisitions on our legal structure, by tax costs related to intercompany realignments, tax effects of share-based compensation, expiration of or lapses in tax incentives, or by changes in tax laws, regulations, accounting principles or interpretations thereof.
It is also possible that our normal seasonal patterns will be impacted by ongoing macroeconomic uncertainty, lingering effects of pandemics, supply chain disruptions and semiconductor capacity shortages, including the buildup of inventory by customers in response to such shortages, and continued high inflation.
It is also possible that our normal seasonal patterns will be impacted by ongoing macroeconomic uncertainty, future pandemics or disease outbreaks, supply chain disruptions and semiconductor capacity shortages, including the buildup of inventory by customers in response to such shortages, and continued high inflation.
The semiconductor industry requires substantial investment in research and development in order to bring to market new and enhanced solutions. Our research and development expense was $215.1 million, $204.9 million and $167.3 million in fiscal years 2024, 2023 and 2022, respectively.
The semiconductor industry requires substantial investment in research and development in order to bring to market new and enhanced solutions. Our research and development expense was $226.1 million, $215.1 million and $204.9 million in fiscal years 2025, 2024 and 2023, respectively.
These risks include, but are not limited to, the following: • If our customers do not design our solutions into their product offerings, or if our customers’ product offerings are not commercially successful, our business would suffer. • If we fail to penetrate new markets, including the automotive original equipment manufacturer (OEM) and advanced driver assistance systems (ADAS) market, our revenue and financial condition could be harmed. • If we fail to develop and introduce new or enhanced solutions that meet market requirements on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed. • Shortages in, or increased costs of, wafers and materials could adversely impact our gross margins and lead to reduced revenues. • Our primary inventory warehouse is located in Hong Kong and may be affected by political, social and economic conditions in Hong Kong. • Our target markets may not grow or develop as we currently expect and are subject to market risks, any of which could harm our business, revenue and operating results. • Our customers may cancel their orders, change production quantities or delay production.
These risks include, but are not limited to, the following: • If our customers do not design our solutions into their product offerings, or if our customers’ product offerings are not commercially successful, our business would suffer. • If we fail to penetrate new markets, including the automotive original equipment manufacturer (OEM) and advanced driver assistance systems (ADAS) market, our revenue and financial condition could be harmed. • If we fail to develop and introduce new or enhanced solutions that meet market requirements on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed. • Impacts of the global supply chain challenges could adversely affect our business, financial condition, and results of operations. • Uncertain risks relating to the adoption, use or application of emerging technologies, including artificial intelligence, by our customers and in our business, could adversely impact our financial results and result in reputational harm and liability. • Shortages in, or increased costs of, wafers and materials could adversely impact our gross margins and lead to reduced revenues. • Our primary inventory warehouse is located in Hong Kong and may be affected by political, social and economic conditions in Hong Kong. • Our target markets may not grow or develop as we currently expect and are subject to market risks, any of which could harm our business, revenue and operating results. • Our customers may cancel their orders, change production quantities or delay production.
We may experience foreign exchange gains or losses due to the volatility of other currencies compared to the U.S. dollar. A significant portion of our solutions are sold to customers located outside the United States, primarily in Asia.
We may experience foreign exchange gains or losses due to the volatility of other currencies compared to the U.S. dollar. A significant portion of our solutions are sold to customers located outside the United States, primarily in Asia and we anticipate that this will continue.
Our future operating results depend to a large extent on our ability to successfully manage any expansion and growth, including the challenges of managing a company with an executive management team in the United States and the majority of its employees in Asia.
Our business has, at times, grown rapidly in the past. Our future operating results depend to a large extent on our ability to successfully manage any expansion and growth, including the challenges of managing a company with an executive management team in the United States and the majority of its employees in Asia.
Our success depends, in part, on our ability to protect our intellectual property. We rely primarily on patent, copyright, trademark and trade secret laws, as well as confidentiality and non-disclosure agreements and other contractual protections, to protect our proprietary technologies and know-how, all of which offer only limited protection.
We rely primarily on patent, copyright, trademark and trade secret laws, as well as confidentiality and non-disclosure agreements and other contractual protections, to protect our proprietary technologies and know-how, all of which offer only limited protection.
These threats are constantly evolving, making it increasingly difficult to successfully defend against or implement adequate preventive measures, and we may face difficulties or delays in identifying and otherwise responding to any security breach or incident. Moreover, remote work by our personnel and remote access to our systems have increased significantly, which also increases our cybersecurity risk profile.
These threats are constantly evolving, making it difficult to defend against or implement preventive measures, and we may face difficulties or delays in identifying and otherwise responding to any security breach or incident. Moreover, remote work by our personnel and remote access to our systems increase our cybersecurity risk profile.
If we are unable to generate or maintain adequate revenue growth, our financial results could suffer and we may not be able to continue to invest in the development of new technology and solutions required to be successful. We may have difficulty accurately predicting our future revenue and appropriately budgeting our expenses.
If we are unable to generate or maintain adequate revenue growth, our financial results could suffer and we may not be able to continue to invest in the development of new technology and solutions required to be successful.
The market price of our ordinary shares has historically been highly volatile, and has been particularly volatile in recent years. For example, since February 1, 2020, the trading price of our common stock ranged from a low of $36.02 to a high of $227.59 and was $52.56 at the close of trading on January 31, 2024.
The market price of our ordinary shares has historically been highly volatile, and has been particularly volatile in recent years. For example, since February 1, 2020, the trading price of our common stock ranged from a low of $36.02 to a high of $227.59.
Any inability, or perceived inability, to adequately address privacy and data protection concerns, or to comply with applicable laws, regulations, policies, industry standards, contractual obligations or other legal obligations, even if unfounded, could result in additional cost and liability to us, inhibit sales, damage our reputation and adversely affect our business. 39 Failure to comply with the U.S.
Any inability, or perceived inability, to adequately address privacy, data protection or cybersecurity concerns, or to comply with applicable laws, regulations, industry standards, or other actual or asserted obligations relating to these matters, even if unfounded, could result in additional cost and liability to us, inhibit sales, damage our reputation and adversely affect our business. 35 Failure to comply with the U.S.
Numerous other U.S. states have proposed, and in certain cases enacted, similar general privacy legislation. In 2021, the National People’s Congress passed the Data Security Law of the People’s Republic of China (Data Security Law) and China’s Personal Information Protection Law (PIPL).
Numerous other U.S. states have proposed, and in certain cases enacted privacy laws, many of which are similar to the CCPA. In 2021, the National People’s Congress passed the Data Security Law of the People’s Republic of China (Data Security Law) and China’s Personal Information Protection Law (PIPL).
With respect to our suppliers, we have in the past experienced supply constraints for certain chips from Samsung and we may in the future experience similar issues.
Customers may experience or cause similar delays in the future. With respect to our suppliers, we experienced supply constraints for certain chips from Samsung and we may experience similar issues in the future.
The Data Security Law is the first comprehensive data security legislation in China and aims to regulate a wide range of issues in relation to the collection, storage, processing, use, provision, transaction and publication of any kind of data. The PIPL is the first national-level law comprehensively regulating issues in relation to personal information protection in China.
The Data Security Law is the first comprehensive data security legislation in China and aims to regulate a wide range of issues in relation to the collection, storage, processing, use, provision, transaction and publication of any kind of data.
We outsource our wafer fabrication, assembly and testing operations to third parties, and if these parties fail to produce and deliver our products according to requested demands in specification, quantity, cost and time, our reputation, customer relationships and operating results could suffer. We rely on third parties for substantially all of our manufacturing operations, including wafer fabrication, assembly and testing.
Risks Related to Our Dependence on Third Parties We outsource our wafer fabrication, assembly and testing operations to third parties, and if these parties fail to produce and deliver our products according to requested demands in specification, quantity, cost and time, our reputation, customer relationships and operating results could suffer.
A substantial majority of our sales are made on a purchase order basis, which permits our customers to cancel, change or delay their product purchase commitments with little or no notice to us and often without penalty to them.
A substantial majority of our sales are made on a purchase order basis, which customers may seek to cancel, change or delay their product purchase commitments with little or no notice to us.
These factors include: • changes in financial estimates, including our ability to meet our future revenue and operating profit or loss projections; • fluctuations in our operating results or those of other semiconductor or comparable companies; • fluctuations in the economic performance or market valuations of companies perceived by investors to be comparable to us; • economic developments in the semiconductor industry as a whole; • general economic conditions, including conditions related to the banking industry or caused by pandemics and high inflation, and slow or negative market growth; • trade and other geopolitical activities affecting markets we address; • announcements by us or our competitors of acquisitions, new products, significant contracts or orders, commercial relationships or capital commitments; 45 • our ability to develop and market new and enhanced solutions on a timely basis; • changes in the demand for our customers’ products; • commencement of or our involvement in litigation; • disruption to our operations; • any major change in our board of directors or management; • political or social conditions in the markets where we sell our products; • changes in governmental regulations; and • changes in earnings estimates or recommendations by securities analysts.
These factors include: • changes in financial estimates, including our ability to meet our future revenue and operating profit or loss projections; 39 • fluctuations in our operating results or those of other semiconductor or comparable companies; • our actual operating results failing to meet or exceed our guidance or investor expectations; • fluctuations in the economic performance or market valuations of companies perceived by investors to be comparable to us; • economic developments in the semiconductor industry as a whole; • general economic conditions, including conditions related to the banking industry or caused by pandemics and high inflation, and slow or negative market growth; • trade and other geopolitical activities affecting markets we address; • announcements by us or our competitors of acquisitions, new products, significant contracts or orders, commercial relationships or capital commitments; • sales or purchases of a substantial number of our ordinary shares by us, our officers, or our significant stockholders as well as the perception that such sales or purchases could occur; • short sales of our ordinary shares, short seller reports, and related media coverage; • our issuance or repurchase of ordinary shares; • our ability to develop and market new and enhanced solutions on a timely basis; • changes in the demand for our customers’ products; • commencement of or our involvement in litigation; • disruption to our operations; • any major change in our board of directors or management; • political or social conditions in the markets where we sell our products; • changes in governmental regulations; and • changes in earnings estimates or recommendations by securities analysts or failure of securities analysts to maintain coverage of us.
Furthermore, WT, or any successor or other distributors we do business with, may face issues obtaining credit, which could impair their ability to make timely payments to us.
Furthermore, WT, or any successor or other distributors we do business with, may face issues obtaining credit, which could impair their ability to make timely payments to us. We are subject to risks associated with our distributors' product inventories.
The United Kingdom has adopted legislation that substantially implements the GDPR and provides for a similar penalty structure. Similarly, California has adopted the California Consumer Privacy Act of 2018, or CCPA, which took effect in 2020.
The United Kingdom has adopted legislation that substantially implements the GDPR and provides for a similar penalty structure. Similarly, California has adopted the California Consumer Privacy Act of 2018, or CCPA, which took effect in 2020. The CCPA was modified by the California Privacy Rights Act of 2020, which became effective on January 1, 2023.
Furthermore, currency exchange rates, particularly the exchange rates between the Chinese Yuan Renminbi and the U.S. dollar, between the New Taiwan Dollar and the U.S. dollar, and between the Eurozone Euro and the U.S. dollar, have been volatile in the recent past and these currency fluctuations may make it difficult for us to predict our operating results.
Furthermore, currency exchange rates, particularly the exchange rates between the Chinese Yuan Renminbi and the U.S. dollar, between the New Taiwan Dollar and the U.S. dollar, and between the Eurozone Euro and the U.S. dollar, have been volatile in the recent past and these currency fluctuations may make it difficult for us to predict our operating results. 29 We have not implemented any hedging strategies to mitigate risks related to the impact of fluctuations in currency exchange rates.
We are subject to risks associated with our distributors' product inventories. 35 We sell many of our products to customers through distributors who maintain their own inventory of our products for sale to ODMs and end customers. We allow limited price adjustments on sales to distributors.
We sell many of our products to customers through distributors who maintain their own inventory of our products for sale to ODMs and end customers. We allow limited price adjustments on sales to distributors.
Any violation of the FCPA or other applicable anti-corruption laws could result in severe criminal or civil sanctions and, in the case of the FCPA, suspension or debarment from U.S. government contracting, which could have a material and adverse effect on our reputation, business, financial condition, operating results and cash flows.
Any allegations or violation of the FCPA or other applicable anti-corruption laws could result in whistleblower complaints, investigations, enforcement actions, severe criminal or civil sanctions, fines, adverse media coverage, and suspension or debarment from U.S. government contracting, all of which could have an adverse effect on our reputation, business, financial condition, operating results and cash flows.
In addition, compliance with evolving government regulations worldwide related to AI may increase the costs related to the development of AI products and solutions and limit global adoption, which may also adversely impact demand for our AI related products. 21 Concerns relating to the responsible use of AI in our and our customers’ products may result in reputational and financial harm and liability.
In addition, compliance with evolving government regulations worldwide related to AI may increase the costs related to the development of AI products and solutions and limit global adoption, which may also adversely impact demand for our AI related products.
The semiconductor industry has recently experienced significant shortages of manufacturing capacity, which resulted in a lengthening of the manufacturing lead time for our products and which has at times harmed our revenue.
The semiconductor industry recently experienced significant shortages of manufacturing capacity, which resulted in a lengthening of the manufacturing lead time for our products and which has at times harmed our revenue. While this capacity shortage has improved, we may experience capacity restraints again in the future.
We rely on highly skilled personnel and, if we are unable to hire, retain or motivate key personnel, we may not be able to grow effectively. Our performance largely depends on the talents and efforts of highly skilled individuals.
We rely on highly skilled personnel and, if we are unable to hire, retain or motivate key personnel, we may not be able to grow effectively, which could harm our business. We believe our performance depends in large part on the talents and efforts of our senior management and other highly skilled individuals.
To the extent customers face supply chain issues with respect to other components needed to pair with our products in order to produce their end products, such customers may delay future orders of our products or hold inventory of our products for longer periods of time.
To the extent customers faced supply chain issues with respect to other components needed to pair with our products in order to produce their end products, such customers delayed orders of our products or held inventory of our products for longer periods of time, resulting in a decline in our revenue.
Several of our customers, including Hangzhou Hikvision Digital Technology Co., Ltd, or Hikvision, Zhejiang Dahua Technology Co., Ltd., or Dahua, and affiliates of Shenzhen Dajiang Baiwang Technology Co., Ltd., have been added to the Entity List of the Bureau of Industry and Security, or BIS, of the U.S.
Several of our customers, including Hangzhou Hikvision Digital Technology Co., Ltd, or Hikvision, Zhejiang Dahua Technology Co., Ltd., or Dahua, and affiliates of Shenzhen Dajiang Baiwang Technology Co., Ltd., have been added to the BIS Entity List, which imposes limitations on the supply of U.S. controlled items to the listed entities.
Customer demand for our solutions may be negatively impacted by weak economic conditions, high inflation or recessionary environments in the US and other nations.
Our operations and performance depend significantly on global, regional and U.S. economic and geopolitical conditions. Customer demand for our solutions may be negatively impacted by weak economic conditions, high inflation or recessionary environments in the US and other nations.
Although a large percentage of our sales are made to customers in Asia, we believe that a significant number of the products designed by these customers and incorporating our SoCs are then sold to consumers globally.
Sales to customers in Asia accounted for approximately 85%, 79% and 79% of our total revenue in fiscal years 2025, 2024 and 2023, respectively. Although a large percentage of our sales are made to customers in Asia, we believe that a significant number of the products designed by these customers and incorporating our SoCs are then sold to consumers globally.
A large portion of our employee base is in China and impacts to our China offices could significantly harm our operations, make it difficult to support customers and negatively impact product development.
A large portion of our employee base is in China and impacts to our China offices could significantly harm our operations, make it difficult to support customers and negatively impact product development. The materialization of these risks could have a material adverse effect on our business and financial condition.
Changes in our products or changes in export, import and economic sanctions laws and regulations may delay our introduction of new products in international markets, prevent our customers from deploying our products internationally or, in some cases, prevent the export or import of our products to or from certain countries altogether.
Noncompliance with these laws could have negative consequences, including government investigations, penalties and reputational harm. 34 Changes in our products or changes in export, import and economic sanctions laws and regulations may delay our introduction of new products in international markets, prevent our customers from deploying our products internationally or, in some cases, prevent the export or import of our products to or from certain countries altogether.
Our security systems are designed to maintain the physical security of our facilities and information systems and protect our customers’, suppliers’ and employees’ confidential information.
Our security systems are designed to maintain the physical security of our facilities and information systems and protect our confidential information and that of our customers, suppliers and employees.
It may be difficult or impossible for you to bring an action against us in the Cayman Islands if you believe your rights have been infringed under U.S. securities laws.
Holders of our ordinary shares may have difficulty obtaining or enforcing a judgment against us because we are incorporated under the laws of the Cayman Islands. It may be difficult or impossible for you to bring an action against us in the Cayman Islands if you believe your rights have been infringed under U.S. securities laws.
Our operations could also be disrupted by geopolitical conditions, particularly in Taiwan or China, where the majority of our employees are located. Any disruption in our services or operations could result in a reduction in revenue, delay product development and R&D, or result in a claim for substantial damages against us, regardless of whether we are responsible for that failure.
Any disruption in our services or operations could result in a reduction in revenue, delay product development and R&D, or result in a claim for substantial damages against us, regardless of 41 whether we are responsible for that failure.
We expect that we will have to address pricing pressures again in the future, particularly in markets experiencing consolidation, which could require us to reduce the prices of our SoC solutions and harm our operating results.
We expect that we will have to address pricing pressures again in the future, particularly in markets experiencing consolidation, which could require us to reduce the prices of our SoC solutions and harm our operating results. 25 If we are unable to manage any future growth, we may not be able to execute our business plan and our operating results could suffer.
General trade tensions between the United States and China have been escalating, which has, in our view, created and will perpetuate an uncertain business environment.
General trade tensions between the United States and China have been escalating, which has, in our view, created and will perpetuate an uncertain business environment. Tariffs on Chinese-origin products have continued to increase and may do so further.
Furthermore, investor perceptions of our company may suffer, and this could cause a decline in the market price of our ordinary shares. We have identified a material weakness in our internal control over financial reporting.
Furthermore, investor perceptions of our company may suffer, and this could cause a decline in the market price of our ordinary shares.
We cannot assure you that the outcomes from these continuous examinations will not have an adverse effect on our operating results and financial condition.
We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. We cannot assure you that the outcomes from these continuous examinations will not have an adverse effect on our operating results and financial condition.
In December 2018, the Cayman Islands passed the International Tax Co-Operation (Economic Substance) Law, 2018, which requires Cayman Islands companies carrying on one or more relevant activities to maintain a substantial economic presence in the Cayman Islands. Effective from December 31, 2019, we have structured our activities to comply with the new law.
We do not expect the IRA to have a material impact on our financial statements. In December 2018, the Cayman Islands passed the International Tax Co-Operation (Economic Substance) Law, 2018, which requires Cayman Islands companies carrying on one or more relevant activities to maintain a substantial economic presence in the Cayman Islands.
Our customers incorporate components supplied by multiple third parties, and a supply shortage or delay in delivery of these components could delay orders for our solutions by our customers. 34 Our customers purchase components used in the manufacture of their products from various sources of supply, often involving several specialized components, including lenses, sensors, microcontrollers, power management integrated circuits (PMICs), Wi-Fi chips, and memory chips.
Our customers purchase components used in the manufacture of their products from various sources of supply, often involving several specialized components, including lenses, sensors, microcontrollers, power management integrated circuits (PMICs), Wi-Fi chips, and memory chips.
This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest. Subject to limited exceptions, under Cayman Islands law, a minority shareholder may not bring a derivative action against the board of directors.
If our solutions are not in compliance with prevailing industry standards for a significant period of time, we could miss opportunities to achieve crucial design wins, which could harm our business. As a result, our sales would suffer, and we could be required to make significant expenditures to develop new SoC solutions to ensure compliance with relevant standards.
If our solutions are not in compliance with prevailing industry standards for a significant period of time, we could miss opportunities to achieve crucial design wins, which could harm our business.
Average selling prices of semiconductor products in the markets we serve have historically decreased over time, and we expect such declines to occur for our solutions over time.
The average selling prices of semiconductor solutions in our target markets have typically decreased over time and will likely do so in the future, which could harm our revenue and gross margins. Average selling prices of semiconductor products in the markets we serve have historically decreased over time, and we expect such declines to occur for our solutions over time.

… 197 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+1 added−0 removed14 unchanged
Biggest changeIn addition, our cybersecurity program leverages industry frameworks, including certain of those established by the National Institute of Standards and Technology (NIST). 48 We regularly assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.
Biggest changeWe regularly assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.
As part of our overall risk management system, we provide periodic mandatory training for personnel regarding cybersecurity threats as a means to equip our employees with information and tools to address cybersecurity threats, and to communicate our information security policies, processes and practices. We also perform periodic email phishing tests to evaluate and maintain cybersecurity awareness among our employees.
As part of our overall risk management system, we provide periodic mandatory training for personnel regarding cybersecurity threats as means to equip our employees with information and tools to address cybersecurity threats, and to communicate our information security policies, processes and practices. We also perform periodic email phishing tests to evaluate and maintain cybersecurity awareness among our employees.
Our IT management team, with oversight from our Board of Directors and Nominating and Corporate Governance Committee as well as members of our management team, including our Chief Operating Officer, Chief Financial Officer and General Counsel, are primarily responsible for assessing and managing our material risks from cybersecurity threats.
Our IT management team, with oversight from our Board of Directors and Nominating and Corporate Governance Committee as well as members of our management team, including our Chief Operating Officer and General Counsel, are primarily responsible for assessing and managing our material risks from cybersecurity threats.
For additional information concerning risks related to cybersecurity, see Item 1A of this report, “ Risk Factors – Risks Related to Our Business and Our Industry – A breach of our security systems may have a material adverse effect on our business .” 49
For additional information concerning risks related to cybersecurity, see Item 1A of this report, “ Risk Factors – Risks Related to Our Business and Our Industry – A breach of our security systems may have a material adverse effect on our business .”
The Board of Directors and the Nominating and Corporate Governance Committee receive presentations and reports on cybersecurity, which address a range of topics including recent developments, evolving standards, the threat environment, cybersecurity systems testing and vulnerability assessments, and the Company’s practices and policies to manage risks.
The Nominating and Corporate Governance Committee oversees management’s implementation of our cybersecurity risk management program. 42 The Board of Directors and the Nominating and Corporate Governance Committee receive presentations and reports on cybersecurity, which address a range of topics including recent developments, evolving standards, the threat environment, cybersecurity systems testing and vulnerability assessments, and the Company’s practices and policies to manage risks.
Governance Our Board considers cybersecurity risk as part of its overall risk oversight function and has delegated to the Nominating and Corporate Governance Committee oversight of cybersecurity matters and other policies and internal controls regarding information security risks. The Nominating and Corporate Governance Committee oversees management’s implementation of our cybersecurity risk management program.
Governance Our Board considers cybersecurity risk as part of its overall risk oversight function and has delegated to the Nominating and Corporate Governance Committee oversight of cybersecurity matters and other policies regarding information security risks.
Added
In addition, our cybersecurity program leverages industry frameworks, including certain of those established by the National Institute of Standards and Technology (NIST).

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed0 unchanged
Biggest changeWe believe that our existing facilities are well maintained and in good operating condition, and are sufficient for our needs for the foreseeable future.
Biggest changeOur lease obligations primarily consist of operating leases with lease periods expiring between fiscal years 2026 to 2031. 43 We believe that our existing facilities are well maintained and in good operating condition, and are sufficient for our needs for the foreseeable future.
ITEM 2. P ROPERTIES Our corporate headquarters are located in Santa Clara, California. These facilities accommodate our sales, marketing, research and development, finance, and administration activities. Outside of Santa Clara, California, we lease some facilities in other U.S. locations that are used for research and development and marketing activities.
ITEM 2. P ROPERTIES Our corporate headquarters are located in Santa Clara, California. These facilities accommodate our sales, marketing, research and development, finance, and administrative activities. Outside of Santa Clara, California, we lease some facilities in other U.S. locations that are used for research and development and marketing activities.
The following table lists our major locations and primary usage as of January 31, 2024: Approximate Square Major Locations Footage Usage United States: Santa Clara, California 61,700 Corporate Headquarters; Sales; Marketing; Research and Development; Finance; Administration Wixom, Michigan 2,700 Business Development Beavercreek, Ohio 16,000 Research and Development Asia Pacific: Hsinchu, Taiwan 86,700 Research and Development; Business Development; Operations; Administration Shanghai, China 31,600 Research and Development; Business Development Shenzhen, China 19,200 Research and Development; Business Development Kowloon, Hong Kong 9,000 Sales; Warehousing Shin-Yokohama, Japan 1,300 Business Development SeongNam, South Korea 1,500 Business Development Europe: Parma, Italy 12,100 Research and Development
The following table lists our major locations and primary usage as of January 31, 2025: Approximate Square Major Locations Footage Usage United States: Santa Clara, California 61,700 Corporate Headquarters; Sales; Marketing; Research and Development; Finance; Administration Wixom, Michigan 2,700 Business Development Beavercreek, Ohio 16,000 Research and Development Asia Pacific: Hsinchu, Taiwan 86,700 Research and Development; Business Development; Operations; Administration Shanghai, China 31,600 Research and Development; Business Development Shenzhen, China 19,200 Research and Development; Business Development Kowloon, Hong Kong 9,000 Sales; Warehousing Shin-Yokohama, Japan 1,300 Business Development SeongNam, South Korea 1,500 Business Development Europe: Parma, Italy 14,400 Research and Development
Outside of the United States, we also lease facilities in various international locations that are used for research and development, sales, business development, operations and administrative support. Our lease obligations primarily consist of operating leases with lease periods expiring between fiscal years 2025 to 2028.
Outside of the United States, we also lease facilities in various international locations that are used for research and development, sales, business development, operations and administrative support.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeITEM 4. M INE SAFETY DISCLOSURES Not applicable. 50 P ART II
Biggest changeITEM 4. M INE SAFETY DISCLOSURES Not applicable. 44 P ART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−1 removed3 unchanged
Biggest changeComparison of 5 year Cumulative Total Return Dividends We have never declared or paid any cash dividends on our ordinary shares and do not currently intend to do so in the foreseeable future.
Biggest changeComparison of 5 year Cumulative Total Return Dividends We have never declared or paid any cash dividends on our ordinary shares and do not currently intend to do so in the foreseeable future. 45 Purchases of Equity Securities by the Issuer There were no shares repurchased in fiscal years 2025, 2024 and 2023.
The following graph shows a comparison from February 1, 2019 through January 31, 2024 of the cumulative total return for our ordinary shares, the NASDAQ Composite Index and the Philadelphia Semiconductor Index. The comparisons in the graph are historical and are not intended to forecast or be indicative of possible future performance of our ordinary shares.
The following graph shows a comparison from February 1, 2020 through January 31, 2025 of the cumulative total return for our ordinary shares, the Nasdaq Composite Index and the Philadelphia Semiconductor Index. The comparisons in the graph are historical and are not intended to forecast or be indicative of possible future performance of our ordinary shares.
ITEM 5. M ARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our ordinary shares are traded on the NASDAQ Global Select Market under the symbol “AMBA”. On March 22, 2024, there were 26 shareholders of record holding our ordinary shares.
ITEM 5. M ARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our ordinary shares are traded on the Nasdaq Global Select Market under the symbol “AMBA”. On March 20, 2025, there were 26 shareholders of record holding our ordinary shares.
On May 26, 2023, our Board of Directors approved an extension of the existing share repurchase program for an additional twelve months through June 30, 2024. As of January 31, 2024, there was approximately $49.0 million available for repurchases through June 30, 2024.
On May 29, 2024, our Board of Directors approved an extension of the existing share repurchase program for an additional twelve months through June 30, 2025. As of January 31, 2025, there was approximately $49.0 million available for repurchases through June 30, 2025.
Repurchases are funded using working capital and any repurchased shares will be recorded as authorized but unissued shares. Recent Sales of Unregistered Securities None. 52 ITEM 6. [RESERVED] 53
Repurchases are funded using working capital and any repurchased shares will be recorded as authorized but unissued shares. Recent Sales of Unregistered Securities None. 46 ITEM 6. [RESERVED] 47
Removed
Securities Authorized for Issuance under Equity Compensation Plans For information about our equity compensation plans, see Note 12, “Employee Benefits and Stock-based Compensation” of the Notes to Consolidated Financial Statements included in this report. 51 Purchases of Equity Securities by the Issuer There were no shares repurchased in fiscal years 2024, 2023 and 2022.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

68 edited+15 added−28 removed68 unchanged
Biggest changeIncome tax benefit increased in fiscal 2023, as compared to fiscal year 2022, primarily due to a decrease in the proportion of profits generated in higher tax jurisdictions and the release of prior FIN48 reserves upon the lapse of the statute of limitations, partially offset by an increase in non-deductible stock-based compensation. 60 Liquidity and Capital Resources Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended January 31, 2024 2023 2022 (in thousands) Net cash provided by operating activities $ 19,024 $ 44,093 $ 38,795 Net cash provided by (used in) investing activities 7,842 (107,295 ) (119,551 ) Net cash provided by financing activities 4,506 5,698 10,525 Net increase (decrease) in cash, cash equivalents and restricted cash $ 31,372 $ (57,504 ) $ (70,231 ) Net Cash Provided by Operating Activities Fiscal year 2024 compared to fiscal year 2023: Cash provided by operating activities decreased primarily due to higher net loss adjusted for certain non-cash items, partially offset by increased working capital as a result of better management on accounts receivable and liabilities, as well as decreased inventory purchases due to lower demand from customers.
Biggest changeLiquidity and Capital Resources Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended January 31, 2025 2024 2023 (in thousands) Net cash provided by operating activities $ 33,836 $ 19,024 $ 44,093 Net cash provided by (used in) investing activities (40,526 ) 7,842 (107,295 ) Net cash provided by financing activities 6,398 4,506 5,698 Net increase (decrease) in cash, cash equivalents and restricted cash $ (292 ) $ 31,372 $ (57,504 ) Net Cash Provided by Operating Activities Fiscal year 2025 compared to fiscal year 2024: Cash provided by operating activities increased primarily due to lower net loss adjusted for certain non-cash items and increased liabilities driven by higher cash advances from NRE projects and development funding, partially offset by lower collections of accounts receivable associated with the timing of sales and increased inventory purchases based on expected future demand from customers.
Net Cash Provided by (Used in) Investing Activities Fiscal year 2024 compared to fiscal year 2023: Net cash provided by investing activities increased primarily due to approximately $63.3 million of less cash used in debt security purchases due to the timing of investment, $49.6 million of higher cash receipts from maturities and sales of our debt security investments, as well as $3.1 million less in payments for purchase of property, equipment and licenses, partially offset by a $0.7 million claim from an acquisition escrow account in fiscal year 2023 that did not recur in fiscal year 2024.
Fiscal year 2024 compared to fiscal year 2023: Net cash provided by investing activities increased primarily due to approximately $63.3 million of less cash used in debt security purchases due to the timing of investment, $49.6 million of higher cash receipts from maturities and sales of our debt security investments, as well as $3.1 million less in payments for purchase of property, equipment and licenses, partially offset by a $0.7 million claim from an acquisition escrow account in fiscal year 2023 that did not recur in fiscal year 2024.
We believe that our existing cash balances will be sufficient to meet our anticipated cash requirements through at least the next 12 months. In the future, we may require more working capital to meet our operating and capital expenditure needs.
Operating and Capital Expenditure Requirements We believe that our existing cash balances will be sufficient to meet our anticipated cash requirements through at least the next 12 months. In the future, we may require more working capital to meet our operating and capital expenditure needs.
As a result, we believe that our ability to develop advanced AI computer vision technology, enable and support customer product development in emerging applications, such as ADAS, advanced blind spot detection, object detection, classification and tracking, people recognition, retail analytics, and machine learning, and gain customer acceptance of our technology platform and solutions will be critical to our future success.
As a result, we believe that our ability to develop advanced AI and computer vision technologies, enable and support customer product development in emerging applications, such as ADAS, advanced blind spot detection, object detection, classification and tracking, people recognition, retail analytics, and machine learning, and gain customer acceptance of our technology platform and solutions will be critical to our future success.
These CV-based technologies are allowing us to address a broader range of markets and applications requiring AI video features, including IP security cameras, a variety of automotive cameras, consumer cameras, and industrial and robotic applications. We anticipate that our CV technology will also enable us to capture more content per electronic system and increase our average selling price.
These AI-based technologies are allowing us to address a broader range of markets and applications requiring AI video features, including IP security cameras, a variety of automotive cameras, consumer cameras, and industrial and robotic applications. We anticipate that our AI technology will also enable us to capture more content per electronic system and increase our average selling price.
We expect our research and development expenditures to increase in comparison to prior periods as we devote additional resources to the development of innovative video and image processing solutions with increased functionality, such as AI and CV capabilities, and as we target new markets.
We expect our research and development expenditures to increase in comparison to prior periods as we devote additional resources to the development of innovative video and image processing solutions with increased functionality, such as AI capabilities, and as we target new markets.
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. 55 We continually monitor the cost of our solutions.
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. We continually monitor the cost of our solutions.
As a result, we believe that our future revenue growth, if any, will significantly depend upon our ability to expand within camera markets with our AI and computer vision technology, particularly in the Internet of Things, or IoT, markets, as well as emerging markets such as AI-enabled security cameras, AI-based driving applications, including driver monitoring systems, advanced blind spot detection, object detection, and deep learning algorithms for HD mapping solutions, automotive advanced driver assistance systems, or ADAS, applications, and industrial and robotics markets.
As a result, we believe that our future revenue growth, if any, will significantly depend upon our ability to expand within camera markets with our AI technology, particularly in the Internet of Things, or IoT, markets, as well as emerging markets such as AI-enabled security cameras, AI-based driving applications, including driver monitoring systems, advanced blind spot detection, object detection, and deep learning algorithms for HD mapping solutions, automotive advanced driver assistance systems, or ADAS, applications, and industrial and robotics markets.
Once inventory is written down, a new accounting cost basis is established and, accordingly, any associated reserve is not released until the inventory is sold or scrapped. 64 Goodwill We do not amortize goodwill.
Once inventory is written down, a new accounting cost basis is established and, accordingly, any associated reserve is not released until the inventory is sold or scrapped. Goodwill We do not amortize goodwill.
The CVflow-architecture supports a variety of CV algorithms, including object detection, classification and tracking, semantic and instance segmentation, image processing, stereo object detection, and terrain mapping. CVflow can process other sensor modalities including lidar and radar, and allows customers to differentiate their products by porting their own, or third party, neural networks and/or classical CV algorithms to our CVflow-based SoCs.
The CVflow-architecture supports a variety of AI algorithms, including object detection, classification and tracking, semantic and instance segmentation, image processing, stereo object detection, and terrain mapping. CVflow can process other sensor modalities including lidar and radar, and allows customers to differentiate their products by porting their own, or third-party, neural networks and/or classical AI algorithms to our CVflow-based SoCs.
Any adjustment to the deferred tax asset valuation allowance would be recorded in the consolidated statements of operations for the periods in which the adjustment is determined to be required. 65
Any adjustment to the deferred tax asset valuation allowance would be recorded in the consolidated statements of operations for the periods in which the adjustment is determined to be required.
Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. 63 The sale of semiconductor products accounts for the substantial majority of our consolidated revenue.
Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. 57 The sale of semiconductor products accounts for the substantial majority of our consolidated revenue.
We estimate our customers’ product life cycles based on the customer, type of product and end market. We typically commence commercial shipments from 9 to 18 months following a design win; however, in some markets, lengthier product and development cycles are possible, depending on the scope and nature of the project, such as in the automotive market.
We estimate our customers’ product life cycles based on the customer, type of product and end market. We typically commence commercial shipments from 12 to 18 months following a design win; however, in some markets, lengthier product and development cycles are possible, depending on the scope and nature of the project, such as in the automotive market.
Volume production may begin within 9 to 18 months after a design win, but could be longer in certain markets, depending on the complexity of our customer’s product and other factors upon which we may have little or no influence.
Volume production may begin within 12 to 18 months after a design win, but could be longer in certain markets, depending on the complexity of our customer’s product and other factors upon which we may have little or no influence.
Our CV-based solutions generally have higher selling prices than our traditional video and image processing SoC solutions that do not enable CV functionality. Our solutions are typically characterized by a life cycle that begins with higher average selling prices and lower volumes, followed by broader market adoption, higher volumes and average selling prices that are lower than initial levels.
Our AI-based solutions generally have higher selling prices than our traditional video and image processing SoC solutions that do not enable AI functionality. Our solutions are typically characterized by a life cycle that begins with higher average selling prices and lower volumes, followed by broader market adoption, higher volumes and average selling prices that are lower than initial levels.
Provision (Benefit) for Income Taxes We are incorporated and domiciled in the Cayman Islands and also conduct business in several countries such as the United States, China, Taiwan, Hong Kong, Italy, South Korea, Germany, and Japan, and we are subject to taxation in those jurisdictions.
Provision (Benefit) for Income Taxes 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 SoC designs fully integrate AI, computer vision functionality, high-definition, or HD, video processing, image processing, audio processing, and system functions onto a single chip, delivering exceptional video and image quality at high compression rates, differentiated functionality and low power consumption.
Our SoC designs fully integrate AI functionality, high-definition, or HD, video processing, image processing, audio processing, and system functions onto a single chip, delivering exceptional video and image quality at high compression rates, differentiated functionality and low power consumption.
On an ongoing basis, we evaluate our estimates and assumptions, including those related to (i) business combinations; (ii) write downs of excess and obsolete inventories; (iii) the estimated useful lives of long-lived assets; (iv) the valuation of stock-based compensation awards; (v) the realization of tax assets and estimates of tax liabilities, including reserves for uncertain tax positions and recognition or release of valuation allowance on deferred tax assets.
On an ongoing basis, we evaluate our estimates and assumptions, including those related to (i) write downs of excess and obsolete inventories; (ii) the estimated useful lives of long-lived assets; (iii) the valuation of stock-based compensation awards; (iv) the realization of tax assets and estimates of tax liabilities, including reserves for uncertain tax positions and recognition or release of valuation allowance on deferred tax assets.
We derived a substantial portion of our revenue from sales 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.
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.
Our latest third generation CVflow technology enables us to address incremental and computationally intense AI applications for deep fusion, deep planning, and large language models (LLMs), as well as efficiently process transformer AI networks.
Our latest third generation CVflow technology enables us to address incremental and computationally intense AI applications for deep fusion, deep planning, vision-language models (VLMs) and large language models (LLMs), as well as efficiently process transformer AI networks.
To compete successfully, we must design, develop, market and sell enhanced solutions with increased levels of performance and functionality that meet the expectations of our customers. As such, we continuously invest in our research and development projects, especially AI and computer vision technologies.
To compete successfully, we must design, develop, market and sell enhanced solutions with increased levels of performance and functionality that meet the expectations of our customers, including advanced process technologies. As such, we continuously invest in our research and development projects, especially AI and computer vision technologies.
As we rely on third-party manufacturers for the manufacture of our products, we maintain a close relationship with these suppliers to continually monitor production yields, component costs and design efficiencies. Continued Concentration of Revenue by End Market .
As we rely on third-party manufacturers for the manufacture of our products, we maintain a close relationship with these suppliers to continually monitor production yields, component costs and design efficiencies. 49 Continued Concentration of Revenue by End Markets .
As of January 31, 2024 and 2023, the contract assets for these unbilled receivables were not material, respectively. Our contract liabilities consist of deferred revenue.
As of January 31, 2025 and 2024, the contract assets for these unbilled receivables were not material, respectively. Our contract liabilities consist of deferred revenue.
We expect our selling, general and administrative expense to increase in absolute dollars as we continue to maintain the infrastructure and expand the size of our sales and marketing organization to support our business strategy of addressing new opportunities with our computer vision technology.
We expect our selling, general and administrative expense to increase in absolute dollars as we continue to maintain the infrastructure and expand the size of our sales and marketing organization to support our business strategy of addressing new opportunities with our AI technology.
Other Income, Net Other income, net, consists primarily of interest income and yields from our cash deposits and debt security investments, realized gains and losses from equity and debt security investments, subsidies granted by foreign governments, as well as gains and losses from foreign currency transactions and remeasurements.
Other Income, Net Other income, net, consists primarily of interest income and yields from our cash deposits and debt security investments, realized gains and losses from equity and debt security investments, subsidies and grants issued by governments, as well as gains and losses from foreign currency transactions and remeasurements.
As of January 31, 2024, we had a total of 2.7 million ordinary shares subject to outstanding stock options and unvested restricted stock units, which will dilute our existing shareholders. This potential dilution will only result if outstanding options vest and are exercised and restricted stock units vest and are settled.
As of January 31, 2025, we had a total of 2.9 million ordinary shares subject to outstanding stock options and unvested restricted stock units, which will dilute our existing shareholders. This potential dilution will only result if outstanding options vest and are exercised and restricted stock units vest and are settled.
Selling, General and Administrative Selling, general and administrative expense consists primarily of personnel costs, including salaries, stock-based compensation and employee benefits for our sales, marketing, finance, human resources, information technology and administrative personnel. The expense also includes amortization of trade name and customer relationships, professional service costs related to accounting, tax, legal services, and allocated depreciation and facility expenses.
Selling, General and Administrative Selling, general and administrative expense primarily consists of personnel costs, including salaries, stock-based compensation and employee benefits for our sales, marketing, finance, human resources, information technology and administrative personnel. The expense also includes amortization of trade name and customer relationships, professional service costs such as accounting, tax, or legal services, and allocated depreciation and facility expenses.
On May 26, 2023, our Board of Directors approved an extension of the existing share repurchase program for an additional twelve months through June 30, 2024. As of January 31, 2024, there was approximately $49.0 million available for repurchases through June 30, 2024.
On May 29, 2024, our Board of Directors approved an extension of our existing share repurchase program for an additional twelve months through June 30, 2025. As of January 31, 2025, there was approximately $49.0 million available for repurchases through June 30, 2025.
This category of AI technology is known as computer vision or edge inference AI, and our CV SoCs integrate our state-of-the-art video processor technology together with our deep learning neural network processing technology, which we refer to as CVflow™.
This category of AI technology is known as edge inference AI, and our latest SoCs integrate our state-of-the-art video processor technology together with our deep learning neural network processing technology, which we refer to as CVflow™.
An IoT product typically has a life cycle of 6 to 24 months.
An IoT product typically has a life cycle of 12 to 24 months.
Our development efforts are focused on SoCs that provide human viewing, computer vision and radar detection functionalities.
Our development efforts are focused on SoCs that provide human viewing, AI and radar detection functionalities.
Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. Although we believe our reserves are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in our historical provision for income taxes and accruals.
Although we believe our reserves are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in our historical provision for income taxes and accruals.
With respect to our customers, to the extent customers face supply chain issues with other components needed to pair with our products in order to produce their end products, such customers may delay future orders of our products or hold inventory of our products for longer periods of time.
With respect to our customers, to the extent customers face supply chain issues with other components needed to pair with our products in order to produce their end products or otherwise take actions in an attempt to adjust their inventory levels, such customers may delay future orders of our products or hold inventory of our products for longer periods of time.
All research and development costs are expensed as incurred. We expect our research and development expense to increase in absolute dollars as we continue to enhance and expand our product features and offerings and increase headcount for new SoC development and development of computer vision technology.
All research and development costs are expensed as incurred. We expect our research and development expense to generally increase in absolute dollars as we continue to enhance and expand our product features and offerings and increase headcount for new SoC development and development of AI technologies.
We elect to account for forfeitures as they occur. Income Taxes We record income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns.
Income Taxes We record income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns.
An IoT product typically has a product life cycle of 6 to 24 months. We anticipate that product development and product life cycles will typically be longer than 24 months in the OEM automotive, Tier-1 automotive suppliers and robotics markets, as new product introductions typically occur less frequently in these markets.
An IoT product typically has a product life cycle of 12 to 24 months. We anticipate that product development and product life cycles will typically be longer than 24 months in the OEM automotive, Tier-1 automotive suppliers and robotics markets, as new product introductions typically occur less frequently in these markets. Impact of Global Supply Chain Conditions on Our Business.
We also enter into various project service agreements with certain customers. These agreements may include multiple performance obligations, such as software development services, licensing of intellectual property and post-contract customer support, or PCS. These multiple performance obligations are highly interdependent, highly interrelated, are typically not sold separately and do not have standalone selling prices.
These agreements may include multiple performance obligations, such as software development services, licensing of intellectual property and post-contract customer support, or PCS. These multiple performance obligations are highly interdependent, highly interrelated, are typically not sold separately and do not have standalone selling prices.
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.
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. 52 Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes.
As of January 31, 2024, these lease obligations were a total of $5.5 million, with $3.6 million due in the next 12 months. Refer to Note 9 Leases within Notes to Consolidated Financial Statements for further information.
As of January 31, 2025, these undiscounted lease payments were a total of $5.4 million, with $2.9 million due in the next 12 months. Refer to Note 8 Leases within Notes to Consolidated Financial Statements for further information.
The end markets into which we sell our products have seen significant changes as consumer preferences have evolved in response to new technologies. As a result, the composition and timing of our revenue may differ meaningfully during periods of technology or consumer preference changes.
The end markets into which we sell our products have seen significant changes as customer preferences have evolved in response to new technologies. As a result, the composition and timing of our revenue may change in future periods.
We anticipate that product life cycles will typically be longer than 24 months in the OEM automotive and industrial and robotics markets, as new product introductions occur less frequently in these markets. 54 Fiscal Year 2024 Financial Highlights and Trends • We recorded revenue of $226.5 million in fiscal year 2024, a decrease of 32.9% as compared to fiscal year 2023.
We anticipate that product life cycles will typically be longer than 24 months in the OEM automotive and industrial and robotics markets, as new product introductions occur less frequently in these markets. 48 Fiscal Year 2025 Financial Highlights • We recorded revenue of $284.9 million in fiscal year 2025, an increase of 25.8% as compared to fiscal year 2024.
Research and Development Change Year Ended January 31, 2024 2023 2024 2023 2022 Amount % Amount % (dollars in thousands) Research and development $ 215,052 $ 204,946 $ 167,337 $ 10,106 4.9 % $ 37,609 22.5 % Research and development expense increased in fiscal year 2024, as compared to fiscal year 2023, primarily due to approximately $5.0 million of additional SoC development cost from our foundries associated with the progress, complexity and number of chips in development, $1.7 million of additional engineering-related expenses for supporting our CV-based and radar solutions, as well as $3.4 million of additional personnel costs as a result of increased stock-based compensation and employee benefit programs.
Research and development expense increased in fiscal year 2024, as compared to fiscal year 2023, primarily due to approximately $5.0 million of additional SoC development cost from our foundries associated with the progress, complexity and number of chips in development, $1.7 million of additional engineering-related expenses for supporting our AI-based and radar solutions, as well as $3.4 million of additional personnel costs as a result of increased stock-based compensation and employee benefit programs.
Results of Operations The following table sets forth our historical operating results for the periods indicated: Year Ended January 31, 2024 2023 2022 (dollars in thousands) Revenue $ 226,474 $ 337,606 $ 331,856 Cost of revenue 89,657 128,672 123,724 Gross profit 136,817 208,934 208,132 Operating expenses: Research and development 215,052 204,946 167,337 Selling, general and administrative 76,325 78,244 70,438 Total operating expenses 291,377 283,190 237,775 Loss from operations (154,560 ) (74,256 ) (29,643 ) Other income, net 6,030 3,318 1,002 Loss before income taxes (148,530 ) (70,938 ) (28,641 ) Provision (benefit) for income taxes 20,887 (5,552 ) (2,230 ) Net loss $ (169,417 ) $ (65,386 ) $ (26,411 ) 56 The following table sets forth our historical operating results as a percentage of revenue of each line item for the periods indicated: Year Ended January 31, 2024 2023 2022 Revenue 100 % 100 % 100 % Cost of revenue 40 38 37 Gross profit 60 62 63 Operating expenses: Research and development 95 61 50 Selling, general and administrative 34 23 21 Total operating expenses 129 84 71 Loss from operations (69 ) (22 ) (8 ) Other income, net 3 1 — Loss before income taxes (66 ) (21 ) (8 ) Provision (benefit) for income taxes 9 (2 ) — Net loss (75 ) % (19 ) % (8 ) % Revenue We derive substantially all of our revenue from the sale of HD and Ultra HD video and image processing SoC solutions to IoT OEMs, IoT ODMs, automotive OEMs or Tier-1 automotive suppliers, either directly or through our distributors.
Government on imports and restrictions on exports to foreign locations. 50 Results of Operations The following table sets forth our historical operating results for the periods indicated: Year Ended January 31, 2025 2024 2023 (dollars in thousands) Revenue $ 284,865 $ 226,474 $ 337,606 Cost of revenue 112,535 89,657 128,672 Gross profit 172,330 136,817 208,934 Operating expenses: Research and development 226,109 215,052 204,946 Selling, general and administrative 72,816 76,325 78,244 Total operating expenses 298,925 291,377 283,190 Loss from operations (126,595 ) (154,560 ) (74,256 ) Other income, net 8,867 6,030 3,318 Loss before income taxes (117,728 ) (148,530 ) (70,938 ) Provision (benefit) for income taxes (602 ) 20,887 (5,552 ) Net loss $ (117,126 ) $ (169,417 ) $ (65,386 ) The following table sets forth our historical operating results as a percentage of revenue of each line item for the periods indicated: Year Ended January 31, 2025 2024 2023 Revenue 100 % 100 % 100 % Cost of revenue 40 40 38 Gross profit 60 60 62 Operating expenses: Research and development 79 95 61 Selling, general and administrative 25 34 23 Total operating expenses 104 129 84 Loss from operations (44 ) (69 ) (22 ) Other income, net 3 3 1 Loss before income taxes (41 ) (66 ) (21 ) Provision (benefit) for income taxes — 9 (2 ) Net loss (41 ) % (75 ) % (19 ) % Revenue 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.
Gross Margin Change Year Ended January 31, 2024 2023 2024 2023 2022 Amount % Amount % (dollars in thousands) Gross margin 60.4 % 61.9 % 62.7 % — (1.5 )% — (0.8 )% Gross margin decreased in fiscal year 2024, as compared to fiscal year 2023, primarily due to unfavorable product mix and higher indirect costs associated with amortization of intangible assets and assembly cost, partially offset by reversals of adverse purchase commitments recognized in prior fiscal years and sales of previously reserved inventory.
Gross margin decreased in fiscal year 2024, as compared to fiscal year 2023, primarily due to unfavorable product mix and higher indirect costs associated with amortization of intangible assets and assembly cost, partially offset by reversals of adverse purchase commitments recognized in prior fiscal years and sales of previously reserved inventory.
Sources of Liquidity As of January 31, 2024, we had cash, cash equivalents and marketable debt securities on hand of approximately $219.9 million, compared with approximately $206.9 million of cash, cash equivalents and marketable debt securities on hand as of January 31, 2023. 61 Operating and Capital Expenditure Requirements As of January 31, 2024, we had cash, cash equivalents and marketable debt securities on hand of approximately $219.9 million.
Sources of Liquidity As of January 31, 2025, we had cash, cash equivalents and marketable debt securities on hand of approximately $250.3 million, compared with approximately $219.9 million of cash, cash equivalents and marketable debt securities on hand as of January 31, 2024.
Cost of Revenue and Gross Margin Cost of revenue includes the cost of materials, such as wafers processed by third-party foundries, costs associated with packaging, assembly, testing and manufacturing support operations, such as logistics, planning and quality assurance, as well as personnel costs (including stock-based compensation) related to project service agreements.
We expect shifts in use of video capture to continue to change over time, as AI specialized use cases emerge and video capture continues to proliferate. 51 Gross Margin Cost of revenue includes the cost of materials, such as wafers processed by third-party foundries, costs associated with packaging, assembly, testing and manufacturing support operations, such as logistics, planning and quality assurance, as well as personnel costs (including stock-based compensation) related to project service agreements.
Net Cash Provided by Financing Activities Fiscal year 2024 compared to fiscal year 2023: Net cash provided by financing activities decreased primarily due to approximately $1.1 million less in payments for the purchase of licenses.
Fiscal year 2024 compared to fiscal year 2023: Net cash provided by financing activities decreased primarily due to approximately $1.1 million less in payments for the purchase of licenses. 55 Stock Repurchase Program There were no shares repurchased in fiscal years 2025, 2024 and 2023.
We determine the fair value of restricted stock and restricted stock units with service or performance conditions based on the fair market value of our ordinary shares on the grant date. We use the Black-Scholes option pricing model to determine the fair value of stock options.
We determine the fair value of restricted stock units with service conditions based on the fair market value of our ordinary shares on the grant date. We use the Lattice pricing model and perform Monte Carlo Simulation to evaluate the fair value of restricted stock units with market conditions.
Provision (Benefit) for Income Taxes Change Year Ended January 31, 2024 2023 2024 2023 2022 Amount % Amount % (dollars in thousands) Provision (benefit) for income taxes $ 20,887 $ (5,552 ) $ (2,230 ) $ 26,439 (476.2 )% $ (3,322 ) 149.0 % Effective tax rate (14.1)% 7.8% 7.8% — (21.9)% — — Income tax expense increased in fiscal 2024, as compared to fiscal year 2023, primarily due to a one-time charge of $22.7 million of valuation allowance against the Company’s remaining U.S. net deferred tax assets, a decrease in the proportion of profits generated in lower tax jurisdictions and a decrease in the benefit from FIN48 reserves upon the lapse of the statute of limitations, partially offset by a decrease in non-deductible stock-based compensation.
Provision (Benefit) for Income Taxes Change Year Ended January 31, 2025 2024 2025 2024 2023 Amount % Amount % (dollars in thousands) Provision (benefit) for income taxes $ (602 ) $ 20,887 $ (5,552 ) $ (21,489 ) (102.9 )% $ 26,439 (476.2 )% Effective tax rate 0.5% (14.1)% 7.8% — 14.6% — (21.9)% 54 Income tax expense decreased in fiscal year 2025, as compared to fiscal year 2024, primarily due to a one-time charge of $22.7 million of valuation allowance in the prior fiscal year that did not recur in the current fiscal year, a benefit from income tax reserve release upon the lapse of the statute of limitations of $2.8 million and an increase in the proportion of profits generated in lower tax jurisdictions, partially offset by an increase in non-deductible stock-based compensation.
Stock-Based Compensation We measure stock-based compensation for equity awards granted to employees and directors based on the estimated fair value on the grant date, and recognize that compensation as expense using the straight-line attribution method for service condition awards or using the graded-vesting attribution method for awards with performance conditions over the requisite service period, which is typically the vesting period of each award.
No goodwill impairment has been identified to date based on our qualitative factors assessment. 58 Stock-Based Compensation We measure stock-based compensation for equity awards based on the estimated fair value on the grant date, and recognize that compensation as expense using the straight-line attribution method over the requisite service period, which is typically the vesting period of each award.
If our available cash balances are insufficient to satisfy our future liquidity requirements, we may seek to sell equity or convertible debt securities or borrow funds commercially. The sale of equity and convertible debt securities may result in dilution to our shareholders, and those securities may have rights senior to those of our ordinary shares.
If our available cash balances are insufficient to satisfy our future liquidity requirements, we may seek to sell equity or convertible debt securities or borrow funds commercially.
Other Income, Net Change Year Ended January 31, 2024 2023 2024 2023 2022 Amount % Amount % (dollars in thousands) Other income, net $ 6,030 $ 3,318 $ 1,002 $ 2,712 81.7 % $ 2,316 231.1 % The increase in other income, net, in fiscal year 2024, as compared to fiscal year 2023, was primarily due to $5.7 million of additional yields and interest income from our debt security investments and cash deposits.
The increase in other income, net, in fiscal year 2024, as compared to fiscal year 2023, was primarily due to $5.7 million of additional yields and interest income from our debt security investments and cash deposits.
The lower cash flows from operating activities were primarily attributable to higher net loss adjusted for certain non-cash items, partially offset by increased working capital as a result of better management on accounts receivable and liabilities, and decreased inventory purchase due to lower demand from customers. Factors Affecting Our Performance Impact of Global Supply Chain Conditions on Our Business.
Fiscal year 2024 compared to fiscal year 2023: Cash provided by operating activities decreased primarily due to higher net loss adjusted for certain non-cash items, partially offset by increased working capital as a result of better management on accounts receivable and liabilities, as well as decreased inventory purchases due to lower demand from customers.
(2) Manufacturing purchase commitments consist primarily of inventory purchase commitments with our independent contract manufacturers. (3) Capital commitment represents future construction cost and lease payments for our office building constructed in Parma, Italy. (4) Unrecognized tax benefits, including interest, represent our liabilities for uncertain tax positions as of January 31, 2024.
(2) Manufacturing purchase commitments consist primarily of inventory purchase commitments with our independent contract manufacturers. (3) Capital commitment primarily represents future construction cost for our office building constructed in Parma, Italy. (4) Lease commitment represents the new office future lease payments for our headquarters located in Santa Clara, California.
Qualitative factors include industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting unit . No goodwill impairment has been identified to date based on our qualitative factors assessment.
Qualitative factors include industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting unit .
Uncertain market demand may be exacerbating these customers’ inventory reduction efforts. Supply chain issues can impact our business as they relate to both our suppliers and our customers. With respect to our suppliers, we have in the past experienced supply constraints for certain chips from Samsung Electronics Corporation and we may in the future experience similar issues.
With respect to our suppliers, we have experienced supply constraints for certain chips from Samsung Electronics Corporation and we may in the future experience similar issues.
Fiscal year 2023 compared to fiscal year 2022: Net cash used in investing activities decreased primarily due to $307.0 million of net cash paid for the Oculii acquisition in fiscal year 2022, partially offset by approximately $290.0 million less net cash receipts from debt security investments and approximately $5.4 million additional payments for purchase of property and equipment and licenses.
Net Cash Provided by (Used in) Investing Activities Fiscal year 2025 compared to fiscal year 2024: Net cash used in investing activities increased primarily due to approximately $36.5 million of additional cash payments for our debt security purchases and $13.5 million of less cash proceeds from maturities and sales of our debt security investments, partially offset by $1.6 million less in payment for the purchase of property and equipment.
The decreased revenue from lower product shipments was partially offset by continued adoption of our CV-based solutions, which have higher average selling prices than non-CV solutions. • We recorded a loss from operations of $154.6 million in fiscal year 2024, as compared to a loss from operations of $74.3 million in fiscal year 2023.
Revenue decreased in fiscal year 2024, as compared to fiscal year 2023, primarily due to lower product unit shipments as a result of customer inventory level reduction efforts. The decreased revenue from lower product shipments was partially offset by continued adoption of our AI inference processors, which have higher average selling prices than video processors.
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. 57 Research and Development Research and development expense consists primarily of personnel costs, including salaries, stock-based compensation and employee benefits.
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.
The increase in operating expenses primarily related to higher chip tape-out costs from our foundries associated with the progress, complexity and number of chips in development, increased engineering-related expenses for supporting our CV-based and radar solutions, as well as increased personnel costs. • We generated cash flows from operating activities of $19.0 million in fiscal year 2024, as compared to $44.1 million in fiscal year 2023.
The increase in operating expenses primarily related to higher engineering-related expenses, including chip development costs, tools and equipment expenses as well as outside service expenses. • We generated cash flows from operating activities of $33.8 million in fiscal year 2025, as compared to $19.0 million in fiscal year 2024.
The increased loss from operations was primarily due to a decrease in revenue and gross profit, as well as an increase in operating expenses.
The reduction in operating loss was primarily attributable to higher revenue and higher gross profit, partially offset by an increase in operating expenses.
Contractual Obligations, Commitments and Contingencies The following table summarizes our outstanding contractual obligations as of January 31, 2024: Payment Due by Period as of January 31, 2024 (in thousands) Less than More than All Total 1 Year 1-3 Years 3-5 Years 5 Years Other Contractual Obligations Technology licenses (1) $ 17,024 $ 8,611 $ 8,413 $ — $ — $ — Manufacturing purchase commitments (2) 30,650 30,650 — — — — Capital commitment (3) 4,324 — 3,934 24 366 — Unrecognized tax benefits, including interest (4) 3,762 — — — — 3,762 Total $ 55,760 $ 39,261 $ 12,347 $ 24 $ 366 $ 3,762 (1) Technology license obligations represent future cash payments for noncancelable internal-use software licenses used in product design.
Contractual Obligations, Commitments and Contingencies The following table summarizes our outstanding contractual obligations as of January 31, 2025: Payment Due by Period as of January 31, 2025 (in thousands) Less than More than All Total 1 Year 1-3 Years 3-5 Years 5 Years Other Contractual Obligations Technology licenses (1) $ 10,038 $ 7,456 $ 2,582 $ — $ — $ — Manufacturing purchase commitments (2) 56,378 56,378 — — — — Capital commitment (3) 4,453 210 3,865 23 355 — Lease commitment (4) 15,747 — 3,134 3,786 8,827 — Service commitment (5) 8,022 1,093 3,425 3,504 — — Total $ 94,638 $ 65,137 $ 13,006 $ 7,313 $ 9,182 $ — (1) Technology license obligations primarily represent future cash payments for noncancelable internal-use software licenses used in product design.
The decrease was also attributable to approximately $0.8 million lower personnel costs as a result of lower headcount. Selling, general and administrative expense increased in fiscal year 2023, as compared to fiscal year 2022, primarily due to increased personnel costs, marketing, travel, and facility-related expenses as well as the amortization of acquisition-related intangible assets.
The decrease was partially offset by approximately $0.3 million of additional professional service costs. Selling, general and administrative expense decreased in fiscal year 2024, as compared to fiscal year 2023, primarily due to approximately $1.1 million of lower traveling, sales support, professional service and facility-related expenses.
The increased research and development expense was also attributable to approximately $5.7 million of additional SoC development cost due to process node technological changes, increased licensed intellectual property associated with the new chips, as well as the number of chips in development. 59 Selling, General and Administrative Change Year Ended January 31, 2024 2023 2024 2023 2022 Amount % Amount % (dollars in thousands) Selling, general and administrative $ 76,325 $ 78,244 $ 70,438 $ (1,919 ) (2.5 )% $ 7,806 11.1 % Selling, general and administrative expense decreased in fiscal year 2024, as compared to fiscal year 2023, primarily due to approximately $1.1 million of lower traveling, sales support, professional service and facility-related expenses.
Selling, General and Administrative Change Year Ended January 31, 2025 2024 2025 2024 2023 Amount % Amount % (dollars in thousands) Selling, general and administrative $ 72,816 $ 76,325 $ 78,244 $ (3,509 ) (4.6 )% $ (1,919 ) (2.5 )% Selling, general and administrative expense decreased in fiscal year 2025, as compared to fiscal year 2024, primarily due to approximately $3.0 million lower net personnel costs associated with departure of certain employees and $0.9 million of lower facility-related expenses.
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgment and estimates: Business Combination In the application of purchase accounting in a business combination, we allocate the purchase price to the assets acquired and liabilities assumed based on their estimated fair values.
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgment and estimates: Revenue Recognition In accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, we recognize revenue when control of goods and services is transferred to our customers.
Personnel costs increased by approximately $8.2 million as a result of higher stock-based compensation expense and an increase of more than 20 employees. The increase was also attributable to approximately $1.4 million of additional marketing, travel, and facility-related expenses to support our business development and an additional $1.4 million of amortization of acquisition-related intangible assets.
The increase was also attributable to approximately $3.4 million of additional personnel costs, including stock-based compensation expense, as a result of higher headcount in support of our AI strategy.
Comparison of the Fiscal Years Ended January 31, 2024, 2023 and 2022 Revenue 58 Change Year Ended January 31, 2024 2023 2024 2023 2022 Amount % Amount % (dollars in thousands) Revenue $ 226,474 $ 337,606 $ 331,856 $ (111,132 ) (32.9 )% $ 5,750 1.7 % Revenue decreased in fiscal year 2024, as compared to fiscal year 2023, primarily due to lower product unit shipments as a result of customer inventory level reduction efforts.
Comparison of the Fiscal Years Ended January 31, 2025, 2024 and 2023 Revenue Change Year Ended January 31, 2025 2024 2025 2024 2023 Amount % Amount % (dollars in thousands) Revenue $ 284,865 $ 226,474 $ 337,606 $ 58,391 25.8 % $ (111,132 ) (32.9 )% Revenue increased in fiscal year 2025, as compared to fiscal year 2024, primarily as a result of higher product unit shipments driven by customers' new product ramps, an increased percentage of our sales from higher value AI inference processors which contributed to a higher average selling price, as well as higher NRE project service revenue.
The increase in other income, net, in fiscal year 2023, as compared to fiscal year 2022, was primarily due to higher yields from our debt security investments driven by security purchases at discounts and higher interest rates. Subsidies received from a foreign government, as well as gains from foreign currency transactions and remeasurements also contributed to the increase.
Other Income, Net Change Year Ended January 31, 2025 2024 2025 2024 2023 Amount % Amount % (dollars in thousands) Other income, net $ 8,867 $ 6,030 $ 3,318 $ 2,837 47.0 % $ 2,712 81.7 % The increase in other income, net, in fiscal year 2025, as compared to fiscal year 2024, was primarily due to an approximately $1.2 million impairment charge relating to an equity investment recognized in the prior fiscal year that did not recur in the current fiscal year, approximately $0.9 million of higher interest income and yields from our cash deposits and debt security investments, as well as $0.8 million of net gains from a government grant and foreign currency transactions and remeasurements.
Removed
The decrease in revenue was primarily attributable to lower product unit shipments as a result of customer inventory level reduction efforts.
Added
The increase in revenue was primarily attributable to higher product unit shipments driven by customers' new product ramps, an increased percentage of our sales from higher value AI inference processors which contributed to a higher average selling price, as well as higher nonrecurring engineering (NRE) project service revenue. • We recorded a loss from operations of $126.6 million in fiscal year 2025, as compared to a loss from operations of $154.6 million in fiscal year 2024.
Removed
Uncertainty in customer demand as well as the worldwide economy, in general, have increased volatility in our sales and revenues. Some customers have indicated they are reducing their inventory levels, as some component lead times contract toward normal levels, which has reduced and may continue to reduce demand for our products.
Added
The increase in cash flows from operating activities was primarily attributable to lower net loss adjusted for certain non-cash items and increased liabilities driven by higher cash advances from NRE projects and development funding.
Removed
We believe that our customers are making progress with their inventory reduction efforts, and we expect conditions to return to more stability in future periods. Ability to Capitalize on AI and Computer Vision Trends .
Added
The increase in cash flows from operating activities was partially offset by lower collections of accounts receivable associated with the timing of sales and increased inventory purchases based on expected future demand from customers. Factors Affecting Our Performance Ability to Capitalize on AI and Computer Vision Trends .
Removed
In recent years, our SoC solutions have been primarily used in IoT camera markets, such as IP security, automotive video recorder, drone and wearable cameras.
Added
Due in part to impacts of the COVID-19 pandemic, the semiconductor industry 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.
Removed
Although we expect these human viewing camera markets to continue to generate revenue for the foreseeable future, we have recently introduced new SoCs targeting emerging AI and computer vision applications in the IoT, automotive, industrial and robotics markets.
Added
Recent supply chain challenges have subsided and we expect conditions to return to more stability in future periods. However, challenges may recur in future periods with changes in the macro-economic environment, including imposition of tariffs by the U.S.
Removed
We expect shifts in consumer use of video capture to continue to change over time, as AI and computer vision specialized use cases emerge and video capture continues to proliferate.
Added
Research and Development Research and development expense primarily consists of personnel costs, including salaries, stock-based compensation and employee benefits.

… 31 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+1 added−0 removed3 unchanged
Biggest changeOur results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. As we grow our operations, our exposure to foreign currency risk could become more significant.
Biggest changeOur results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. To date, we have not entered into any foreign currency hedging contracts due to immaterial impact on our financial statements from the foreign currency fluctuations. As we grow our operations, our exposure to foreign currency risk could become more significant.
As of January 31, 2024, a hypothetical 10% change in interest rates would not have a material impact on our interest income or investment fair value. Foreign Currency Risk To date, all of our product sales and inventory purchases have been denominated in U.S. dollars. We therefore have not had any foreign currency risk associated with these two activities.
As of January 31, 2025, a hypothetical 10% change in interest rates would not have a material impact on our interest income or investment fair value. 59 Foreign Currency Risk To date, all of our product sales and inventory purchases have been denominated in U.S. dollars. We therefore have not had any foreign currency risk associated with these two activities.
ITEM 7A. Q UANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We had cash, cash equivalents and marketable debt securities totaling $219.9 million and $206.9 million at January 31, 2024 and 2023, respectively.
ITEM 7A. Q UANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We had cash, cash equivalents and marketable debt securities totaling $250.3 million and $219.9 million at January 31, 2025 and 2024, respectively.
Our cash is held primarily for working capital purposes. We do not enter into investments for trading or speculative purposes. Interest Rate Fluctuation Risk The primary objective of our investment activities is to preserve capital, and provide both, liquidity and income, without significantly increasing risk. Some of the securities we invest in are subject to market risk.
Interest Rate Fluctuation Risk The primary objective of our investment activities is to preserve capital, and provide both, liquidity and income, without significantly increasing risk. Some of the securities we invest in are subject to market risk.
To date, we have not entered into any foreign currency exchange contracts and currently do not expect to enter into foreign currency exchange contracts for trading or speculative purposes. 66
We also do not expect to enter into foreign currency exchange contracts for trading or speculative purposes. 60
Our cash is deposited in checking accounts with reputable financial institutions in excess of the Federal Deposit Insurance Corporation, or FDIC, insurance coverage limit of $250,000 per depositor, per FDIC-insured bank, per ownership category. The cash equivalents and marketable debt securities consist primarily of investments in money market funds, commercial paper, corporate bonds, asset-backed securities and U.S. government securities.
Our cash is deposited in checking accounts with reputable financial institutions in excess of the Federal Deposit Insurance Corporation, or FDIC, insurance coverage limit of $250,000 per depositor, per FDIC-insured bank, per ownership category.
Added
The cash equivalents and marketable debt securities consist primarily of investments in money market funds, fixed deposits, commercial paper, corporate bonds, asset-backed securities and U.S. government securities. Our cash is held primarily for working capital purposes. We do not enter into investments for trading or speculative purposes.

Other AMBA 10-K year-over-year comparisons