Financial Analysis

14. Commitments and Contingencies Contract Manufacturer Commitments The Companys components and products are procured and built by independent contract manufacturers based on sales forecasts. These forecasts include estimates of future demand, historical trends, analysis of sales and marketing activities, and adjustment of overall market conditions. The Company regularly issues purchase orders to independent contract manufacturers which are cancelable upon agreement between the Company and third-party manufacturers. These manufacturing purchase commitments typically provide the Company with flexibility to cancel, reschedule or adjust requirements based upon business needs but the Company may incur certain costs depending on the production stage of the products. As of April 30, 2026 and January 31, 2026, total manufacturing purchase commitments were approximately $ 53.9 million and $ 80.4 million, respectively. On a quarterly basis, the Company also reviews and assesses the need for any expected loss liabilities for products that it does not expect to sell for which it has committed purchases from suppliers and records the liabilities in accrued and other current liabilities in the condensed consolidated balance sheets. As of April 30, 2026, approximately $ 1.2 million of loss liabilities were recorded in the condensed consolidated balance sheets from adverse purchase commitments. There were no material loss liabilities recorded in the condensed consolidated balance sheets fro …

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11. Stock-based Compensation The following table presents the classification of stock-based compensation for the periods indicated: Three Months Ended April 30, 2026 2025 (in thousands) Stock-based compensation: Cost of revenue $ 783 $ 951 Research and development 13,714 17,585 Selling, general and administrative 7,396 7,594 Total stock-based compensation $ 21,893 $ 26,130 As of April 30, 2026, approximately $ 1.3 million of stock-based compensation expense was accrued in accrued and other current liabilities in the condensed consolidated balance sheets. Total unrecognized compensation cost of unvested awards at April 30, 2026 was approximately $ 169.6 million and is expected to be recognized over a weighted-average period of 2.45 years. The following table sets forth the weighted-average assumptions used to estimate the fair value of employee stock purchase plan awards for the periods indicated: Three Months Ended April 30, 2026 2025 Employee stock purchase plan awards: Volatility 66 % 54 % Risk-free interest rate 3.72 % 4.29 % Expected term (years) 0.5 0.5 Dividend yield 0 % 0 % The following table summarizes stock option activities for the period indicated: Options Outstanding Weighted- Total Intrinsic Average Weighted- Value Of Remaining Aggregate Weighted- Average Options Contractual Intrinsic Average Grant-date Exercised Term Value Shares Exercise Price Fair Value (in thousands) (in years) (in thousands) Outstanding at January 31, 2026 159,912 $ 52.48 Exercised ( 51,170 …

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5. Goodwill and Intangible Assets, Net Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired in a business combination. Intangible assets primarily consist of software licenses as well as developed technology, customer relationships and trade name that were acquired from business combinations. The Company enters into certain software license agreements with third parties from time-to-time. The software licenses consist of noncancelable on-premise internal-use software and software with alternative use that is to be sold, leased or otherwise marketed as part of a product. The licenses have been capitalized as intangible assets, and the corresponding future payments have been recorded as liabilities at net present value. As of April 30, 2026, software license liabilities of approximately $ 11.1 million were recorded in accrued and other current liabilities and approximately $ 9.3 million were recorded in other long-term liabilities in the condensed consolidated balance sheets. The components of intangible assets as of April 30, 2026 and January 31, 2026 were as follows: As of April 30, 2026 As of January 31, 2026 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in thousands) Software licenses $ 56,275 $ ( 12,169 ) $ 44,106 $ 51,194 $ ( 9,279 ) $ 41,915 Developed technology 21,200 ( 13,775 ) 7,425 21,200 ( 13,018 ) 8 …

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13. Income Taxes The following table provides details of income taxes for the periods indicated: Three Months Ended April 30, 2026 2025 (in thousands) Loss before income taxes $ ( 17,333 ) $ ( 23,683 ) Provision for income taxes 760 645 Effective tax rate ( 4.4 )% ( 2.7 )% The Company recorded an expense for income taxes of $ 0.8 million and $ 0.6 million for the three months ended April 30, 2026 and 2025, respectively. The increased income tax expense for the three months ended April 30, 2026, as compared to the same period in the prior fiscal year, was primarily due to a projected decrease in net loss in the current fiscal year . The Company files federal and state income tax returns in the United States and in various foreign jurisdictions. The Companys fiscal years 2023 through 2026 are generally open and subject to potential examination by U.S. federal tax authorities. The Companys fiscal years 2022 through 2026 are generally open and subject to potential examination by state tax authorities. The Companys fiscal years 2019 to 2026 remain open to examination by foreign tax authorities. Fiscal years outside of the normal statute of limitations remain open to audit by tax authorities due to tax attributes generated in those earlier years, which have been carried forward and may be audited in subsequent years when utilized . The Company regularly assesses the likelihood of adverse outcomes resulting from potential tax examinations to determine the adequacy of its provision f …

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7. Leases There were no material lease agreements entered into, or modified, during the three months ended April 30, 2026. The operating lease expense was approximately $ 0.9 million and $ 0.9 million for the three months ended April 30, 2026 and 2025, respectively. The Company's short-term leases and finance leases were not material as of April 30, 2026 and January 31, 2026, respectively. Supplemental cash flow information related to the operating leases is as follows: Three Months Ended April 30, 2026 2025 (in thousands) Cash paid for operating leases included in operating cash flows $ 409 $ 971 Operating lease assets obtained in exchange for lease obligations $ $ 66 As of April 30, 2026, the weighted average remaining lease term is 6.95 years, and the weighted average discount rate is 8.12 percent. Future minimum lease payments for the lease liabilities are as follows: As of April 30, 2026 Fiscal Year (in thousands) 2027 (9 months remaining) $ 2,592 2028 2,674 2029 1,896 2030 1,952 2031 2,003 Thereafter 6,681 Total future annual minimum lease payments 17,798 Less: interest ( 4,527 ) Total lease liabilities $ 13,271 …

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Recent Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . This new guidance requires public entities to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. The ASU may be applied prospectively or retrospectively and is effective for fiscal years beginning after December 15, 2026 and for interim periods beginning after December 15, 2027. Early adoption is permitted. The Company expects to adopt this new guidance for its fiscal period ending January 31, 2028. The Company expects that such adoption will only have an impact on its financial disclosures and does not believe it will have a material impact on its consolidated financial statements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets . This new guidance simplifies the estimation of credit losses on current accounts receivable and current contract assets arising from transactions accounted for under Accounting Standards Codification (ASC) 606 , Revenue from Contracts with Customers , and allows all entities to elect a practical expedien …

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8. Deferred Revenue Deferred revenue is primarily related to nonrecurring engineering (NRE) charges that are either invoiced or paid but for which the related performance obligations are not yet satisfied, as well as, for product shipments, a portion of a transaction price that exceeds the weighted average selling price for products sold to date under tiered-pricing contracts that contain material rights. During the three months ended April 30, 2026 and 2025, the amount recognized as revenue that was included in deferred revenue at the end of the prior fiscal year was approximately $ 5.5 million and $ 5.2 million, respectively . As of April 30, 2026, the amount of transaction price allocated to performance obligations that are unsatisfied, or partially unsatisfied, which primarily consists of product purchase orders and NRE project service agreements with an original contract duration of more than one year , was approximately $ 69.8 million, of which approximately 98 % is expected to be recognized within the next 12 months . This does not include consideration in contracts with an original expected contract duration of one year or less, or variable consideration that is constrained .

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15. Segment Reporting The Company operates as a single operating and reportable segment and derives substantially all of its revenue from development and sales of low-power AI-based processing and video and image processing SoC solutions. In determining the reportable segment, the Company considers the research and development deployed, the nature of the production process, the distribution channels of SoCs, as well as the Companys management structure. The Chief Executive Officer of the Company has been identified as the Chief Operating Decision Maker (the CODM) and manages the Companys operations as a whole. The CODM uses net loss presented on a consolidated basis to evaluate the financial performance and allocate resources. The CODM also monitors budget versus actual results of the operating segment . The measure of reportable segment assets is reported within the condensed consolidated balance sheets as total assets. The accounting policies for the measurement of net loss and total assets of the reportable segment are described in the Note 1, Organization and Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the 2026 fiscal year filed with the SEC on March 23, 2026. Geographic Revenue The following table sets forth the Companys revenue by geographic region based on bill-to location for the periods indicated. Three Months Ended April 30, 2026 2025 (in thousands) Taiwan $ 60, …

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16. Subsequent Events On May 12, 2026, the Company terminated a development project with a customer. Pursuant to the terms of the termination agreement, the Company agreed to refund $ 4.5 million of the $ 13.5 million deposit previously received from the customer . The remaining $ 9.0 million of the deposit is expected to be recognized as a reduction of research and development expense in the second quarter ending July 31, 2026. On May 27, 2026, the Company's Board of Directors authorized a new share repurchase program for a total of $ 50.0 million commencing J uly 1, 202 6 through June 30, 2027 . The new repurchase program replaces the existing program that expires on June 30, 2026 and does not obligate the Company to acquire any particular amount of ordinary shares, and it may be suspended at any time at the Companys discretion. Repurchases may be made from time-to-time through open market purchases, 10b5-1 plans or privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors. The repurchase program is funded using the Companys working capital and any repurchased shares are recorded as authorized but unissued shares. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing