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CEVA, Inc. Announces Second Quarter 2017 Financial Results

- Total revenue of $20.6 million, up 20% year-over-year

MOUNTAIN VIEW, Calif., Aug. 3, 2017 — (PRNewswire) —  CEVA, Inc. (NASDAQ: CEVA), the leading licensor of signal processing IP for smarter, connected devices, today announced its financial results for the second quarter ended June 30, 2017.

CEVA, Inc. reported Q2 2017 earnings of $20.6 million, including all-time high quarterly licensing revenues of $10.4 million. The Company also signed a portfolio license agreement with a major customer in the quarter. Non-GAAP EPS was $0.28 and CEVA-powered shipments totaled 268 million units.  Notably, initial shipments of CEVA-powered vision processors in smartphones and cellular processors in base stations began in Q2. For more information and highlights, view the infographic.

Total revenue for the second quarter of 2017 was $20.6 million, a 20% increase compared to $17.1 million reported for the second quarter of 2016. Second quarter 2017 licensing and related revenue was $10.4 million, an increase of 38% when compared to $7.5 million reported for the same quarter a year ago. Royalty revenue for the second quarter of 2017 was $10.2 million, an increase of 6% when compared to $9.6 million reported for the second quarter of 2016.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated: "We are pleased to have delivered strong financial results that exceeded the high end of our guidance range. Our licensing business is thriving, with key industry players committing to our IP portfolio and roadmap. On royalties, we are encouraged by the consistent growth in shipments of our non-baseband products, including the initial shipments of CEVA-powered vision processors in smartphones and cellular processors in base stations. Overall, the strong demand for our technologies reaffirms the unique value of our broad product portfolio for the 'smart and connected' world."

GAAP net income for the second quarter of 2017 increased 44% to $3.9 million, compared to $2.7 million reported for the same period in 2016. GAAP diluted earnings per share for the second quarter of 2017 increased 31% to $0.17 from $0.13 a year ago. GAAP net income and diluted earnings per share for the second quarter of 2017 included a tax benefit of approximately $1.8 million as a result of the conclusion of a tax audit.

Non-GAAP net income and diluted earnings per share for the second quarter of 2017 were $6.3 million and $0.28, respectively, representing a 38% and 33% increase, respectively, over the $4.6 million and $0.21 reported for the second quarter of 2016. Non-GAAP net income and diluted earnings per share for the second quarter of 2017 excluded: (a) equity-based compensation expense, net of taxes, of $2.1 million, and (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RivieraWaves. Net income and diluted earnings per share for the second quarter of 2016 excluded: (a) equity-based compensation expense, net of taxes, of $1.6 million, and (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RivieraWaves.

During the quarter, CEVA completed thirteen license agreements. Seven of the agreements were for CEVA DSP cores, platforms and software, five were for CEVA connectivity IPs and one was a portfolio license agreement. Eleven of the licensing agreements signed during the quarter were for non-handset baseband applications and one was for a handset baseband application. Four were with first-time customers of CEVA. Customers' target markets for the licenses include smartphones, automotive ADAS, drones, surveillance cameras, wearables, industrial IoT and a variety of Bluetooth and Wi-Fi connected consumer and medical products. Geographically, six of the deals signed were in China, three were in the U.S., one was in Europe and three were in the APAC region.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: "Our licensing business continues to go from strength to strength, resulting in both all-time record high licensing revenue for the second quarter and backlog for the third quarter, as well as a stellar sales pipeline. Notably, we signed a multi-year portfolio agreement with a major customer, further adding to our backlog. We also managed to further strengthen our balance sheet during the quarter, with our cash balance, marketable securities and bank deposits totaling $170 million, with no debt."

CEVA Conference Call
On August 03, 2017 CEVA management will conduct a conference call at 8:30 a.m. Eastern Time to discuss the operating performance for the quarter.

The conference call will be available via the following dial in numbers:

The conference call will also be available live via webcast at the following link:  https://www.webcaster4.com/Webcast/Page/984/21746. Please go to the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software.

For those who cannot access the live broadcast, a replay will be available by dialing +1-877-344-7529 or +1-412-317-0088 (access code: 10110214) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 10, 2017. The replay will also be available at CEVA's web site www.ceva-dsp.com.

About CEVA, Inc.
CEVA is the leading licensor of signal processing IP for a smarter, connected world. We partner with semiconductor companies and OEMs worldwide to create power-efficient, intelligent and connected devices for a range of end markets, including mobile, consumer, automotive, industrial and IoT. Our ultra-low-power IPs for vision, audio, communications and connectivity include comprehensive DSP-based platforms for LTE/LTE-A/5G baseband processing in handsets, infrastructure and machine-to-machine devices, advanced imaging, computer vision and deep learning for any camera-enabled device, audio/voice/speech and ultra-low power always-on/sensing applications for multiple IoT markets. For connectivity, we offer the industry's most widely adopted IPs for Bluetooth (low energy and dual mode), Wi-Fi (802.11 a/b/g/n/ac up to 4x4) and serial storage (SATA and SAS). Visit us at www.ceva-dsp.com and follow us on Twitter, YouTube and LinkedIn.

Forward Looking Statement
This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions.  Forward-looking statements include Mr. Wertheizer's statements about the Company's licensing business thriving and the Company being encouraged by the consistent growth in shipments of its non-baseband products, as well as the unique value of the Company's broad product portfolio. Forward looking statements also include Mr. Arieli's statement about backlog for the third quarter and stellar sales pipeline. The risks, uncertainties and assumptions include: the ability of the CEVA DSP cores and other technologies to continue to be strong growth drivers for us; our success in penetrating new markets, including in non-baseband markets, and maintaining our market position in existing markets; our ability to diversify the company's royalty streams, the ability of products incorporating our technologies to achieve market acceptance, the speed and extent of the expansion of the 4G, 5G and LTE networks, the maturation of the IoT market, the effect of intense industry competition and consolidation, global chip market trends, the possibility that markets for CEVA's technologies may not develop as expected or that products incorporating our technologies do not achieve market acceptance; our ability to timely and successfully develop and introduce new technologies; and general market conditions and other risks relating to our business, including, but not limited to, those that are described from time to time in our SEC filings.  CEVA assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME – U.S. GAAP

U.S. dollars in thousands, except per share data



Three months ended

Six months ended


June 30,

June 30,


2017

2016

2017

2016


Unaudited

Revenues:





Licensing and related revenues

$  10,337

$  7,470

$    19,872

$    16,120

Royalties

10,238

9,633

21,990

17,491






Total  revenues

20,575

17,103

41,862

33,611






Cost of revenues

1,608

1,403

3,304

3,031






Gross profit

18,967

15,700

38,558

30,580






Operating expenses:





Research and development, net

10,509

7,811

20,382

15,725

Sales and marketing

3,427

2,855

6,365

5,700

General and administrative

2,552

2,078

4,677

4,068

Amortization of intangible assets

309

309

618

618






Total operating expenses

16,797

13,053

32,042

26,111






Operating income

2,170

2,647

6,516

4,469

Financial income, net

755

561

1,326

1,002






Income  before taxes on income

2,925

3,208

7,842

5,471

 Income taxes expense (benefit)

(983)

497

(173)

960






Net income

3,908

2,711

8,015

4,511






Basic net income per share

$0.18

$0.13

$0.37

$0.22

Diluted  net income per share

$0.17

$0.13

$0.36

$0.21

Weighted-average number of Common Stock used in computation of net income  per share (in thousands):





Basic

21,712

20,604

21,556

20,562

Diluted

22,563

21,371

22,376

21,149

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

U.S. Dollars in thousands, except per share amounts



Three months ended

Six months ended


June 30

June 30


2017

2016

2017

2016


Unaudited






GAAP net income

$3,908

$2,711

$8,015

$4,511

Equity-based compensation expense included in cost of revenue

114

54

205

114

Equity-based compensation expense included in research and development expenses

972

775

1,843

1,421

Equity-based compensation expense included in sales and marketing expenses

370

255

659

502

Equity-based compensation expense included in general and administrative expenses

722

525

1,420

1,046

Income tax benefit related to equity-based compensation expenses

(69)

(53)

(184)

(97)

Amortization of intangible assets related to RivieraWaves transaction

309

309

618

618

Non-GAAP net income

$6,326

$4,576

$12,576

$8,115







GAAP weighted-average number of Common Stock used in computation of diluted net income  per share (in thousands)

22,563

21,371

22,376

21,149






Weighted-average number of shares related to outstanding  stock-based awards (in thousands)

269

344

315

397

Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands )

22,832

21,715

22,691

21,546






GAAP diluted net income per share

$0.17

$0.13

$0.36

$0.21

Equity-based compensation expense, net of taxes

$0.10

$0.07

$0.16

$0.14

Amortization of intangible assets related to RivieraWaves transaction

$0.01

$0.01

$0.03

$0.03

Non-GAAP diluted net income  per share

$0.28

$0.21

$0.55

$0.38

 

CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)



June 30,

December 31,


2017

2016 (*)


Unaudited

Unaudited

ASSETS



Current assets:



Cash and cash equivalents

$        17,103

$        18,401

Marketable securities and short term bank deposits

102,897

108,115

Trade receivables, net

10,389

15,044

Prepaid expenses and other current assets

4,819

3,152

Total current assets

135,208

144,712

Long-term assets:



Bank deposits

50,196

29,977

Severance pay fund

8,956

7,941

Deferred tax assets

2,701

2,252

Property and equipment, net

6,157

4,805

Goodwill

46,612

46,612

Intangible assets, net

2,360

2,978

Other long term assets

4,093

3,218

Total assets

$        256,283

$        242,495



LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:



Trade payables

$           290

$           571

Deferred revenues

3,388

6,258

Accrued expenses and other payables

13,502

15,766

Total current liabilities

17,180

22,595




Long-term liabilities:



Accrued severance pay

9,450

8,349




Total liabilities

26,630

30,944




Stockholders' equity:



Common stock:

22

21

Additional paid in-capital

213,504

212,103

Treasury stock

(29,060)

(39,507)

Accumulated other comprehensive loss

(278)

(497)

Retained earnings

45,465

39,431

Total stockholders' equity

229,653

211,551

Total liabilities and stockholders' equity

$   256,283

$   242,495


(*) Derived from audited financial statements

 

CEVA - a global leader in signal processing IP for everything smart and connected. (PRNewsFoto/CEVA, Inc.)

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SOURCE CEVA, Inc.

Contact:
CEVA, Inc.
Yaniv Arieli, CEVA, Inc., CFO
Phone: +1.650.417.7941
Email Contact
Richard Kingston, CEVA, Inc., VP Market Intelligence, Investor & Public Relations
Phone: +1.650.417.7976
Email Contact
Web: http://www.ceva-dsp.com