Sports camera maker GoPro recently announced plans for an IPO, which provided key details for component maker Ambarella (NASDAQ:AMBA). More specifically, Ambarella is vital to GoPro's operations, as it makes semiconductors found in every single GoPro camera.

Key GoPro component
A quick glance through GoPro's prospectus shows that Ambarella is a vital contributor. Listed in the company's risk factors is, "We incorporate video compression and image processing semiconductors from one provider into all of our cameras." GoPro makes it known that there is no alternative supplier.

An upcoming GoPro IPO will put shares of Ambarella into the spotlight, which could be a great catalyst to boost shares that are currently down over 20% in the last year. In the last month, shares have risen 8%, but are down from their highs, seen around the time the prospectus was released.

The company helps companies with wearable sports cameras, automotive aftermarket cameras, and IP security cameras. Ambarella has seen some of its growth from sports cameras fall, as GoPro experienced declining sales in its most recent quarter.

Growth beyond GoPro
Ambarella is vital to GoPro and its cameras, but GoPro isn't as important to Ambarella and its financials. Lately, Ambarella has seen stronger growth in its IP security camera business. That growth could rocket further, with tech giant Google (NASDAQ:GOOG) (NASDAQ:GOOGL) getting involved.

Reports indicate Google has been considering acquiring Dropcam, a maker of home security cameras. Dropcam also uses Ambarella for its cameras, which retail for approximately $150 each. The thought process is, Google wants Dropcam to integrate with its newly acquired Nest brand. Google spent $3.2 billion to acquire Nest, maker of smart thermostats and smoke detectors. It seems Google wants a bigger piece of the growing connected home market. Apple is also a possible acquirer of Dropcam.

An acquisition of Dropcam by a tech giant would be beneficial for Ambarella, as it would significantly boost sales. A deal would also further diversify Ambarella away from sports cameras and put it further ahead in the growing smart home security market. Dropcam streams footage of its cameras to phones or computers, and also includes an upgrade service with cloud capabilities.

Ambarella recently reported strong first-quarter earnings. The company saw revenue increase 21% to $40.9 million. Earnings per share rose to $0.25, up from $0.21 the prior year. Gross margins declined slightly due to lower sales of sports cameras. Management stated that results were driven by growth in the company's IP security camera business.

The strong first quarter follows a fourth-quarter report that saw revenue increase 26.8% to $40.0 million. In fiscal 2013, total revenue increased 30.2% to $157.6 million. Full-year gross margins increased, and full-year earnings per share grew to $0.85, up from $0.60 in the prior year.

Ambarella trades with no debt and over $140 million in cash, which isn't bad for a company with a market capitalization of $745 million. The company continues to see high short interest of around 17%, despite growing sales and strong insider ownership (47% owned by founder Nick Woodman and his wife, Jill).

Analysts predict Ambarella's revenue will grow 16% in fiscal 2015 and 23% in fiscal 2016. Earnings per share are also expected to grow to $1.17 and $1.47 per share in the next two years, respectively.

Shares of Ambarella have traded between $13-$36 over the last year. With the announcement of the GoPro IPO, shares have jumped to $26 and will likely carry momentum for the next couple of weeks.

With upcoming catalysts (GoPro's IPO and a possible Dropcam sale), Ambarella shares can easily return to one-year highs. The next few earnings releases should provide further double-digit revenue increases and send shares higher.