- Record total revenue of $24 million, up 35% year-over-year
MOUNTAIN VIEW, Calif., Nov. 1, 2017 — (PRNewswire) — CEVA, Inc. (NASDAQ: CEVA), the leading licensor of signal processing IP for smarter, connected devices, today announced its financial results for the third quarter ended September 30, 2017.
Total revenue for the third quarter of 2017 was $24 million, a 35% increase compared to $17.8 million reported for the third quarter of 2016. Third quarter 2017 licensing and related revenue was $14 million, an increase of 88% when compared to $7.5 million reported for the same quarter a year ago. Royalty revenue for the third quarter of 2017 was $10 million, a decrease of 4% when compared to $10.4 million reported for the third quarter of 2016.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated: "Our third quarter record revenues considerably exceeded our expectations, driven by outstanding licensing execution and unprecedented demand for our IP. It is evident that our customers are increasingly placing greater value on our platform-based product strategy that expedites their development of high entry barrier technologies, including 5G, neural networks and short-range wireless. Furthermore, our design wins and customer relationships set the foundations for future royalty revenue streams as our licensees ship the next wave of smart and connected devices."
GAAP net income for the third quarter of 2017 increased 73% to $5.8 million, compared to $3.4 million reported for the same period in 2016. GAAP diluted earnings per share for the third quarter of 2017 also increased 73%, to $0.26 from $0.15 a year ago.
Non-GAAP net income and diluted earnings per share for the third quarter of 2017 were $8.3 million and $0.36, respectively, representing a 59% and 50% increase, respectively, over the $5.2 million and $0.24 reported for the third quarter of 2016. Non-GAAP net income and diluted earnings per share for the third 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 third quarter of 2016 excluded: (a) equity-based compensation expense, net of taxes, of $1.5 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 eight license agreements. Two of the agreements were for CEVA DSP cores, platforms and software and six were for CEVA connectivity IPs. All of the licensing agreements signed during the quarter were for non-handset baseband applications and three were with first-time customers of CEVA. Customers' target markets for the licenses include 5G base stations, A.I. for smartphones and consumer and industrial IoT. Geographically, two of the deals signed were in China, three were in the U.S. and three were in the APAC region.
Yaniv Arieli, Chief Financial Officer of CEVA, stated: "Our exceptional third quarter set new record highs across multiple key financial metrics, including total revenue, licensing revenue, operating income, GAAP and non-GAAP net income and non-GAAP fully diluted earnings per share. We also generated $7.1 million in the quarter from operating cash flow that continued to strengthen our balance sheet with our cash balance, marketable securities and bank deposits totaling approximately $178 million, with no debt."
CEVA Conference Call
On November 01, 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:
- U.S. Participants: Dial 1-844-435-0316 (Access Code: CEVA)
- International Participants: Dial +1-412-317-6365 (Access Code: CEVA)
The conference call will also be available live via webcast at the following link: https://www.webcaster4.com/Webcast/Page/984/22872. 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: 10112881) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on November 8, 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 CEVA's customers increasingly valuing its platform-based product strategy as a way to expedite their development of high entry barrier technologies, including 5G, neural networks and short range wireless, as well as the anticipation that CEVA's current design wins and customer relationships set the foundations for future royalty revenue streams. 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 licensing customers and 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 and connectivity markets, 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.
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CEVA, INC. AND ITS SUBSIDIARIES | ||||||||
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CONSOLIDATED STATEMENTS OF INCOME – U.S. GAAP
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Three months ended |
Nine months ended | ||||||
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September 30, |
September 30, | ||||||
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2017 |
2016 |
2017 |
2016 | ||||
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Unaudited | |||||||
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Revenues: |
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Licensing and related revenues |
$ 14,021 |
$ 7,456 |
$ 33,893 |
$ 23,576 | ||||
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Royalties |
10,023 |
10,390 |
32,013 |
27,881 | ||||
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Total revenues |
24,044 |
17,846 |
65,906 |
51,457 | ||||
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Cost of revenues |
1,726 |
1,422 |
5,030 |
4,453 | ||||
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Gross profit |
22,318 |
16,424 |
60,876 |
47,004 | ||||
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Operating expenses: |
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Research and development, net |
10,031 |
7,346 |
30,413 |
23,071 | ||||
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Sales and marketing |
3,057 |
2,763 |
9,422 |
8,463 | ||||
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General and administrative |
2,711 |
2,218 |
7,388 |
6,286 | ||||
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Amortization of intangible assets |
309 |
309 |
927 |
927 | ||||
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Total operating expenses |
16,108 |
12,636 |
48,150 |
38,747 | ||||
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Operating income |
6210 |
3,788 |
12,726 |
8,257 | ||||
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Financial income , net |
821 |
615 |
2,147 |
1,617 | ||||
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Income before taxes on income |
7,031 |
4,403 |
14,873 |
9,874 | ||||
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Income taxes |
1,181 |
1,015 |
1,008 |
1,975 | ||||
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Net income |
5,850 |
3,388 |
13,865 |
7,899 | ||||
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Basic net income per share |
$0.27 |
$0.16 |
$0.64 |
$0.38 | ||||
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Diluted net income per share |
$0.26 |
$0.15 |
$0.62 |
$0.37 | ||||
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Weighted-average number of Common Stock used in computation of net income per share (in thousands): |
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Basic |
21,946 |
21,025 |
21,687 |
20,718 | ||||
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Diluted |
22,683 |
21,883 |
22,480 |
21,395 | ||||
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Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
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Three months ended |
Nine months ended | |||
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September 30 |
September 30 | |||
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2017 |
2016 |
2017 |
2016 | |
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Unaudited | ||||
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GAAP net income |
$5,850 |
$3,388 |
$13,865 |
$7,899 | |
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Equity-based compensation expense included in cost of revenue |
125 |
65 |
330 |
179 | |
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Equity-based compensation expense included in research and development expenses |
991 |
741 |
2,834 |
2,162 | |
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Equity-based compensation expense included in sales and marketing expenses |
381 |
179 |
1,040 |
681 | |
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Equity-based compensation expense included in general and administrative expenses |
722 |
580 |
2,142 |
1,626 | |
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Income tax benefit related to equity-based compensation expenses |
(84) |
(51) |
(268) |
(148) | |
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Amortization of intangible assets related to RivieraWaves transaction |
309 |
309 |
927 |
927 | |
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Non-GAAP net income |
$8,294 |
$5,211 |
$20,870 |
$13,326 | |
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GAAP weighted-average number of Common Stock used in computation of diluted net income per share (in thousands) |
22,683 |
21,883 |
22,480 |
21,395 | |
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Weighted-average number of shares related to outstanding stock-based awards (in thousands) |
273 |
267 |
301 |
354 | |
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Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands ) |
22,956 |
22,150 |
22,781 |
21,749 | |
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GAAP diluted net income per share |
$0.26 |
$0.15 |
$0.62 |
$0.37 | |
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Equity-based compensation expense, net of taxes |
$0.09 |
$0.07 |
$0.26 |
$0.20 | |
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Amortization of intangible assets related to RivieraWaves transaction |
$0.01 |
$0.02 |
$0.04 |
$0.04 | |
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Non-GAAP diluted net income per share |
$0.36 |
$0.24 |
$0. 92 |
$0. 61 | |
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CEVA, INC. AND ITS SUBSIDIARIES
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(U.S. Dollars in thousands) | ||
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September 30, |
December 31, |
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2017 |
2016 (*) |
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Unaudited |
Unaudited |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ 22,931 |
$ 18,401 |
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Marketable securities and short term bank deposits |
115,425 |
108,115 |
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Trade receivables, net |
12,885 |
15,044 |
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Prepaid expenses and other current assets |
4,588 |
3,152 |
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Total current assets |
155,829 |
144,712 |
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Long-term assets: |
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Bank deposits |
39,214 |
29,977 |
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Severance pay fund |
9,243 |
7,941 |
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Deferred tax assets |
2,940 |
2,252 |
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Property and equipment, net |
6,698 |
4,805 |
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Goodwill |
46,612 |
46,612 |
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Intangible assets, net |
2,051 |
2,978 |
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Other long term assets |
4,588 |
3,218 |
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Total assets |
$ 267,175 |
$ 242,495 |
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LIABILITIES AND STOCKHOLDERS' EQUITY | ||
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Current liabilities: |
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Trade payables |
$ 468 |
$ 571 |
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Deferred revenues |
4,274 |
6,258 |
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Accrued expenses and other payables |
13,725 |
15,766 |
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Total current liabilities |
18,467 |
22,595 |
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Long-term liabilities: |
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Accrued severance pay |
9,752 |
8,349 |
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Total liabilities |
28,219 |
30,944 |
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Stockholders' equity: |
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Common stock: |
22 |
21 |
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Additional paid in-capital |
215,532 |
212,103 |
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Treasury stock |
(27,632) |
(39,507) |
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Accumulated other comprehensive loss |
(201) |
(497) |
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Retained earnings |
51,235 |
39,431 |
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Total stockholders' equity |
238,956 |
211,551 |
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Total liabilities and stockholders' equity |
$ 267,175 |
$ 242,495 |
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(*) Derived from audited financial statements |
View original content with multimedia: http://www.prnewswire.com/news-releases/ceva-inc-announces-third-quarter-2017-financial-results-300546958.html
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 |