AMBARELLA INC - 10-K filing on 2022-04-01

Income Taxes (Tables)

12 Months Ended

Jan. 31, 2022

Loss before income taxes consisted of the following for the periods indicated:

	Year Ended January 31,
	2022			2021			2020
	(in thousands)
U.S. operations	$	(5,842	)	$	8		$	845
Non-U.S. operations		(22,799	)		(57,311	)		(42,473	)
Loss before income taxes	$	(28,641	)	$	(57,303	)	$	(41,628	)

Schedule of Income Tax Provision (Benefit)

Income tax provision (benefit) consisted of the following for the periods indicated:

	Year Ended January 31,
	2022			2021			2020
	(in thousands)
Current:
U.S. federal tax	$	907		$	1,705		$	1,440
U.S. state taxes		—			256			3
Non-U.S. foreign taxes		1,778			1,019			1,540
		2,685			2,980			2,983
Deferred:
U.S. federal tax		(4,819	)		(432	)		182
U.S. state taxes		(14	)		—			—
Non-U.S. foreign taxes		(82	)		(65	)		(1	)
		(4,915	)		(497	)		181
Provision (benefit) for income taxes	$	(2,230	)	$	2,483		$	3,164

Schedule of Reconciliation Between the Provision (Benefit) for Income Taxes at the Statutory Rate and the Effective Tax Rate

For purposes of the reconciliation between the provision (benefit) for income taxes at the statutory rate and the effective tax rate, a notional U.S. 21% rate is applied to pretax income (loss) as a result of the following for the periods indicated, respectively:

	Year Ended January 31,
	2022			2021			2020
	(in thousands)
Provision at U.S. notional statutory rate	$	(6,015	)	$	(12,034	)	$	(8,742	)
U.S. state taxes		(11	)		212			3
Non-U.S. foreign tax differential		6,483			12,989			10,458
Stock-based compensation		1,900			4,943			4,172
U.S. R&D credit		(5,886	)		(3,928	)		(3,109	)
Valuation allowance		765			—			—
FIN48 interest		311			—			—
Other		223			301			382
Provision (benefit) for income taxes	$	(2,230	)	$	2,483		$	3,164

Schedule of Deferred Tax Assets and Liabilities

Temporary differences that gave rise to significant portions of the Company’s deferred tax assets and liabilities at January 31, 2022 and 2021 were as follows:

	As of January 31,
	2022			2021
	(in thousands)
Deferred tax assets:
Federal and state credits	$	33,485		$	24,394
Net operating losses		7,466			—
Expenses not currently deductible		1,294			939
Operating lease liabilities		2,096			2,144
Stock-based compensation		3,632			3,349
Foreign deferred		191			184
Gross deferred tax assets		48,164			31,010
Valuation allowance		(24,083	)		(17,962	)
Total deferred tax assets	$	24,081		$	13,048
Deferred tax liabilities
Intangible assets		(8,150	)		—
Property and equipment		(386	)		(1,443	)
Operating lease assets		(1,971	)		(1,978	)
Net deferred tax assets	$	13,574		$	9,627

Summary of Tax Valuation Allowance

Tax valuation allowance for the periods indicated below were as follows:

							Deductions
					Additions		Charged to
	Balance at		Additional		Charged to		Expenses		Balance at
	Beginning of		Charged to		Other		or Other		End of
	Period		Expenses		Account		Accounts		Period
	(in thousands)
Tax Valuation Allowance
Year ended January 31, 2022	$	17,962		4,874		1,247			$	24,083
Year ended January 31, 2021	$	14,670		3,292		—		—	$	17,962
Year ended January 31, 2020	$	12,526		2,144		—		—	$	14,670

Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

The following table sets forth a reconciliation of the beginning and ending amount of unrecognized tax benefits:

	Year Ended January 31,
	2022			2021			2020
	(in thousands)
Beginning balance:	$	29,527		$	42,695		$	37,531
Additions based on tax positions related to the current year		1,412			3,360			4,964
Additions for tax positions of prior years		55			16			252
Reductions for tax positions in prior years		—			(10,212	)		—
Settlements for prior periods		—			(6,087	)		—
Lapse of applicable statute of limitations		(110	)		(245	)		(52	)
Ending balance:	$	30,884		$	29,527		$	42,695