On October 9, 2019, the Bureau of Industry and Security (“BIS”) of the United States Department of Commerce published a final rule adding 28 Chinese entities, including several China-based IP security camera customers of Ambarella, Inc. (the “Company”) to the Entity List (84 FR 54002) (the “Entity List Rule”). While the Entity List Rule will negatively impact the Company’s ability to ship items subject to BIS regulations, including US-produced system-on-chip, or SoC, products to the listed entities, at this time, the Company expects that it will continue to be able to ship foreign-produced products to the listed entities, including SoCs responsible for a majority of the Company’s current revenue with those newly listed entities as well as the Company’s recently introduced computer vision SoCs. Consequently, based on information known to the Company at this time, the Company does not expect the Entity List Rule to have a significant impact on the Company’s current financial results and confirms the guidance provided and discussed in the Company’s last earnings call on August 29, 2019.
The foregoing disclosure contains forward-looking statements that are not historical facts and often can be identified by terms such as “outlook,” “projected,” “intends,” “will,” “estimates,” “anticipates,” “expects,” “believes,” “could,” or similar expressions. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. Our actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of our future performance. The risks and uncertainties include, but are not limited to, risks associated with global economic and political conditions, including possible additional trade tariffs and restrictions; further trade restrictions imposed by the U.S. or foreign governments on our ability to conduct business with certain customers, including China-based IP security camera customers; actions by foreign customers to reduce dependence on the supply of components subject to U.S. export controls or trade restrictions; our ability to generate revenue from our new computer vision products; risks associated with our sole warehouse being located in Hong Kong; revenue being generated from design wins; the commercial success of our customers’ products; the expansion of our current markets and our ability to successfully enter new markets; anticipated trends and challenges, including competition, in the markets in which we operate; our ability to effectively manage growth; our ability to retain key employees; and the potential for intellectual property disputes or other litigation. Further information on these and other factors that could affect our financial results is included in the company’s Annual Report on Form 10-K for our 2019 fiscal year, and Quarterly Report on Form 10-Q for the second fiscal quarter of our 2020 fiscal year, both of which are on file with the Securities and Exchange Commission and may be accessed atwww.sec.gov.
