Ambarella, Inc. Ordinary Shares

Tax and financial reporting · Tax compliance and changes in tax law

We face tax risks, including relating to the complexity of calculating our tax provision, changes in effective tax rates, or unfavorable tax law changes. We are incorporated in the Cayman Islands and our operations are subject to income and transaction taxes in the United States, China, Hong Kong, Germany, Italy, Japan, South Korea, Taiwan and other jurisdictions in which we do business.

Legal and litigation · Litigation and legal proceedings

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. Any potential dispute involving our intellectual property could affect our customers, which could trigger our indemnification obligations to them and result in substantial expense to us.

Tax and financial reporting · Audit and regulatory examinations

We are subject to periodic audits or other reviews by tax authorities in the jurisdictions in which we conduct our activities. For example, our income tax returns are subject to continuous examination by the Internal Revenue Service and other tax authorities. Any such audit, examination or review requires management's time, diverts internal resources and, in the event of an unfavorable outcome, may result in additional tax liabilities or other adjustments to our historical results.

Customer and revenue · Changing customer preferences and behavior

Our customers may cancel their orders, change production quantities or delay production. 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.

Customer and revenue · Customer concentration and key customer dependence

We depend on a limited number of customers and end customers for a significant portion of our revenue. If we fail to retain or expand our customer relationships, our revenue could decline. We believe that revenue from our top 10 end customers, either directly or through a distributor or an ODM, accounted for approximately 67% of our total revenue in fiscal year 2026.

Innovation and product development · Product development and randd investment risks

If we fail to successfully 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. We operate in a dynamic environment characterized by rapidly changing technologies.

Strategic execution · Strategic transformation and turnaround risks

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. We are increasing our investment in research and development and other functions to grow our business and address new markets, such as industrial, robotics and intelligent transportation systems.

Market position and competition · Market cyclicality and demand volatility

Cyclical downturns have been characterized by diminished product demand, production overcapacity, high inventory levels and accelerated erosion of average selling prices, which could harm our business and operating results. The semiconductor industry recently experienced significant shortages of capacity, which resulted in a lengthening of the manufacturing lead time for our products.

Strategic execution · Geographic expansion and market entry

Our target markets may not grow or develop as we currently expect, and if we fail to successfully penetrate new markets, our revenue and financial condition could be harmed. We believe that our future revenue growth, if any, significantly depends on our ability to expand within the Internet of Things, or IoT, and automotive markets with our new artificial intelligence, or AI, SoC solutions.

Stakeholder relations · Supplier and vendor relationships

We rely on third parties to provide services and technology necessary for the operation of our business. Any failure of one or more of our vendors, suppliers or licensors to provide such services or technology could harm our business.

Project and contract management · Large contract concentration

We depend on a limited number of customers and end customers for a significant portion of our revenue. In fiscal year 2026, the customer representing 10% or more of our revenue was WT Microelectronics Co., Ltd., or WT, which serves as our non-exclusive sales representative and fulfillment partner in Asia other than Japan, accounted for approximately 70% of total revenue.

Human capital and workforce · Talent acquisition and retention

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. Our industry is characterized by high demand and intense competition for talent, particularly for engineering personnel.

Human capital and workforce · Key personnel dependence and succession

We believe our performance depends in large part on the talents and efforts of our senior management and other highly skilled individuals. Our future success depends on our continuing ability to identify, hire, develop, motivate, and retain highly skilled personnel for all areas of our organization.

Project and contract management · Project execution and delivery risks

Achieving design wins is subject to lengthy competitive selection processes that require us to incur significant costs. 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.

Natural and catastrophic events · Natural disasters and extreme weather

Our operations could be harmed if manufacturing, logistics or other operations of our third-party contractors or their suppliers are disrupted for any reason, including natural disasters, high heat events or water shortages, severe storms, other negative impacts from climate change, information technology system failures, military actions or environmental, public health or regulatory issues.

Economic and market conditions · Consumer spending and confidence

Economic volatility and adverse economic conditions have affected and may continue to affect the demand for our products and our customers' products. Reduced demand for our customers' products may negatively affect demand for our products and lead to a buildup of inventory at many of our customers.

Geopolitical and trade · International conflicts and tensions

Russia's ongoing conflict with Ukraine has triggered significant sanctions from U.S. and European leaders. Changes in U.S. trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a trade war. These sanctions and restrictions have continued to increase as the conflict has further escalated.

Natural and catastrophic events · Climate change and environmental impact

Global climate change is causing, and is projected to continue to cause, an increase in the frequency and intensity of certain natural disasters. Additionally, adverse weather, such as drought, wildfires, severe storms, sea-level rise, flooding, heat waves and cold waves, may occur more frequently and/or with greater intensity.

Information management · Technology vendor dependence

We rely on third-party software development tools to assist us in the design, simulation and verification of new products or product enhancements. Because of the importance of software development tools to the development and enhancement of our solutions, our relationships with leaders in the computer-aided design industry, including Cadence Design Systems, Inc., Mentor Graphics Corporation and Synopsys, Inc., are critical to us.

Credit and liquidity · Credit risk and customer defaults

Deterioration of the financial condition of our distributors or customers could adversely impact our future revenues and collection of accounts receivable. For the fiscal year ended January 31, 2026, the customer representing 10% or more of revenue was WT, which accounted for approximately 70% of total revenue. As of January 31, 2026, accounts receivable with WT was approximately $24.6 million.