CEVA, Inc. Announces Third Quarter 2017 Financial Results
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CEVA, Inc. Announces Third Quarter 2017 Financial Results

- 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.

CEVA, Inc. reported record revenues of $24 million for Q3 2017, including all-time high quarterly licensing revenues of $14 million. Non-GAAP EPS was also an all-time high at $0.36 and CEVA-powered shipments totaled 250 million units. Non-baseband royalty revenue approximately doubled on a year-over-year basis, contributing approximately $2 million of the royalty revenues in the quarter. For more information and highlights, view the infographic.

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:

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.


CEVA, INC. AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF INCOME – U.S. GAAP
U.S. dollars in thousands, except per share data



Three months ended

Nine months ended


September 30,

September 30,


2017

2016

2017

2016


Unaudited

Revenues:





Licensing and related revenues

$  14,021

$  7,456

$    33,893

$    23,576

Royalties

10,023

10,390

32,013

27,881






Total revenues

24,044

17,846

65,906

51,457






Cost of revenues

1,726

1,422

5,030

4,453






Gross profit

22,318

16,424

60,876

47,004






Operating expenses:





Research and development, net

10,031

7,346

30,413

23,071

Sales and marketing

3,057

2,763

9,422

8,463

General and administrative

2,711

2,218

7,388

6,286

Amortization of intangible assets

309

309

927

927






Total operating expenses

16,108

12,636

48,150

38,747






Operating income

6210

3,788

12,726

8,257

Financial  income , net

821

615

2,147

1,617






Income  before taxes on income

7,031

4,403

14,873

9,874

 Income taxes 

1,181

1,015

1,008

1,975






Net income

5,850

3,388

13,865

7,899






Basic net income per share

$0.27

$0.16

$0.64

$0.38

Diluted  net income per share

$0.26

$0.15

$0.62

$0.37

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





Basic

21,946

21,025

21,687

20,718

Diluted

22,683

21,883

22,480

21,395

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
U.S. Dollars in thousands, except per share amounts



Three months  ended

Nine months ended


September 30

September 30


2017

2016

2017

2016


Unaudited

GAAP net income

$5,850

$3,388

$13,865

$7,899

Equity-based compensation expense included in cost of revenue

125

65

330

179

Equity-based compensation expense included in research and development expenses

991

741

2,834

2,162

Equity-based compensation expense included in sales and marketing expenses

381

179

1,040

681

Equity-based compensation expense included in general and administrative expenses

722

580

2,142

1,626

Income tax benefit related to equity-based compensation expenses

(84)

(51)

(268)

(148)

Amortization of intangible assets related to RivieraWaves transaction

309

309

927

927

Non-GAAP net income

$8,294

$5,211

$20,870

$13,326






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






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

273

267

301

354

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






GAAP diluted net income per share

$0.26

$0.15

$0.62

$0.37

Equity-based compensation expense, net of taxes

$0.09

$0.07

$0.26

$0.20

Amortization of intangible assets related to RivieraWaves transaction

$0.01

$0.02

$0.04

$0.04

Non-GAAP diluted net income per share

$0.36

$0.24

$0. 92

$0. 61






 

CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS


(U.S. Dollars in thousands)





September 30,

December 31,


2017

2016 (*)


Unaudited

Unaudited

ASSETS



Current assets:



Cash and cash equivalents

$        22,931

$        18,401

Marketable securities and short term bank deposits

115,425

108,115

Trade receivables, net

12,885

15,044

Prepaid expenses and other current assets

4,588

3,152

Total current assets

155,829

144,712

Long-term assets:



Bank deposits

39,214

29,977

Severance pay fund

9,243

7,941

Deferred tax assets

2,940

2,252

Property and equipment, net

6,698

4,805

Goodwill

46,612

46,612

Intangible assets, net

2,051

2,978

Other long term assets

4,588

3,218

Total assets

$        267,175

$        242,495


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:



Trade payables

$           468

$           571

Deferred revenues

4,274

6,258

Accrued expenses and other payables

13,725

15,766

Total current liabilities

18,467

22,595




Long-term liabilities:



Accrued severance pay

9,752

8,349




Total liabilities

28,219

30,944




Stockholders' equity:



Common stock:

22

21

Additional paid in-capital

215,532

212,103

Treasury stock

(27,632)

(39,507)

Accumulated other comprehensive loss

(201)

(497)

Retained earnings

51,235

39,431

Total stockholders' equity

238,956

211,551

Total liabilities and stockholders' equity

$   267,175

$   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