Total revenue for the third quarter of 2023 was $24.1 million, a 20% decrease compared to $30.0 million reported for the third quarter of 2022. Third quarter of 2023 licensing and related revenue was $13.9 million compared to $18.7 million reported for the same quarter a year ago but up 3% sequentially. Royalty revenue for the third quarter of 2023 was $10.1 million, a decrease of 11% when compared to $11.4 million reported for the third quarter of 2022, but up 8% sequentially.
Amir Panush, Chief Executive Officer of CEVA, remarked: "The CEVA team delivered solid third quarter results, with sequential improvements in both licensing and royalty revenues as we refocused all our efforts on driving the IP business following the sale of Intrinsix. In licensing, our wireless communications IPs continue to be in strong demand, underpinned by three more Wi-Fi & Bluetooth combo deals, including a customer for our new Wi-Fi 7 IP for Access Points. In royalties, we reported our second highest CEVA-powered device shipments in a quarter, totaling half a billion units. These results reflect robust restocking demand for consumer devices and illustrative of the strength of our customer base."
During the quarter, thirteen IP license agreements were concluded, targeting a wide variety of end markets and applications, including Wi-Fi 7, Wi-Fi 6 and Bluetooth 5 for connectivity chips targeting access points, smart home automation, smart wearables and single board computers, Bluetooth audio for a global leader in hearing care, and a communications DSP license targeting high-volume satellite communications. Four agreements were with first-time customers and two were with OEM customers.
GAAP gross margin for the third quarter of 2023 was 90% as compared to 81% in the third quarter of 2022. GAAP operating loss for the third quarter of 2023 was $2.7 million, as compared to a GAAP operating loss of $2.4 million for the same period in 2022. GAAP net loss for the third quarter of 2023 was $2.7 million, as compared to a GAAP net loss of $20.6 million reported for the same period in 2022. GAAP diluted losses per share for the third quarter of 2023 was $0.12, as compared to GAAP diluted losses per share of $0.89 for the same period in 2022.
GAAP net loss with the discontinued operations for the third quarter was $5.0 million, as compared to GAAP net loss with the discontinued operations of $22.3 million for the same quarter last year. GAAP diluted losses per share with the discontinued operations for the third quarter of 2023 was $0.21, as compared to GAAP diluted losses per share with the discontinued operations of $0.96 for the same period in 2022.
Non-GAAP gross margin for the third quarter of 2023 was 92%, as compared to 89% for the same period in 2022. Non-GAAP operating income for the third quarter of 2023 was $1.6 million, as compared to Non-GAAP operating income of $7.3 million reported for the third quarter of 2022. Non-GAAP net income and diluted income per share for the third quarter of 2023 were $1.4 million and $0.06, respectively, compared with Non-GAAP net income and diluted income per share of $5.2 million and $0.22, respectively, reported for the third quarter of 2022.
Non-GAAP net income with the discontinued operations for the third quarter of 2023 was $0.4 million, as compared to non-GAAP net income with the discontinued operations of $4.7 million for the same quarter last year. Non-GAAP diluted income per share with the discontinued operations for the third quarter of 2023 was $0.02, as compared to Non-GAAP diluted income per share of $0.20 for the same period in 2022.
Non-GAAP gross margin for the third quarter of 2023 excluded: (a) equity-based compensation expenses of $0.2 million and (b) amortization of acquired intangibles of $0.1 million. Non-GAAP gross margin for the third quarter of 2022 excluded: (a) equity-based compensation expenses of $0.2 million, (b) amortization of acquired intangibles of $0.2 million and (c) impairment charges of $2.0 million relating to discontinued Immervision technology and non-performing assets of certain NB-IoT technology.
Non-GAAP operating income for the third quarter of 2023 excluded: (a) equity-based compensation expenses of $4.0 million, (b) the impact of the amortization of acquired intangibles of $0.3 million, (c) $0.1 million of costs associated with business acquisitions. Non-GAAP operating income for the third quarter of 2022 excluded: (a) equity-based compensation expenses of $3.4 million, (b) the impact of the amortization of acquired intangibles of $0.8 million and (c) impairment charges of $5.5 million relating to discontinued Immervision technology and non-performing assets of certain NB-IoT technology.
Non-GAAP net income and diluted income per share for the third quarter of 2023 excluded: (a) equity-based compensation expenses of $4.0 million, (b) the impact of the amortization of acquired intangibles of $0.3 million, (c) $0.1 million of costs associated with business acquisitions and (d) $0.2 million income associated with the reevaluation of an investment in another company. Non-GAAP net income and diluted earnings per share for the third quarter of 2022 excluded: (a) equity-based compensation expenses of $3.4 million, (b) the impact of the amortization of acquired intangibles of $0.8 million, (c) $0.5 million loss associated with the remeasurement of marketable equity securities, (d) impairment charges of $5.5 million relating to discontinued Immervision technology and non-performing assets of certain NB-IoT technology and (e) a $15.7 million write-off of a deferred tax asset, including withholding tax assets that we will not be able to utilize as a tax credit.
Yaniv Arieli, Chief Financial Officer of CEVA, stated: "Following the sale of Intrinsix, our gross margins have returned to our historic levels. Reaching 90% and 92% on a GAAP and non-GAAP basis, respectively, in the quarter. We have also recorded lower OPEX for the quarter, which we'll continue to monitor and manage closely. In addition, proceeds from the sale of the Intrinsix business have increased our cash and cash equivalent balances to $160 million in early October, some of which will be used to execute on our expanded share repurchase plan announced today."
CEVA Conference Call
On November 8, 2023, 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://app.webinar.net/BOnmpeNLrwY. 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 (conference replay code: 5006273) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on November 15, 2023. The replay will also be available at CEVA's web site www.ceva-dsp.com.
CEVA Investor Day
CEVA management will host an Investor Day at the Nasdaq MarketSite in New York City on Wednesday, December 6, 2023,
This event will highlight CEVA's growth strategy with a presentation by CEVA CEO Amir Panush, followed by market and technology overviews and a longer-term financial outlook. Presentations will be followed by a Q&A session.
A live webcast of the event will be available through the CEVA Investor Relations website beginning at approximately 9:00 a.m. Eastern Time. A replay of the webcast and supporting materials will be available after the conclusion of the event.
For more information, contact Email Contact.
About CEVA, Inc.
CEVA is the leading licensor of
wireless connectivity and smart sensing technologies for a smarter, safer, connected world. We provide Digital Signal Processors, AI engines, wireless platforms and complementary embedded software for
sensor fusion, image enhancement,
computer vision,
spatial audio, voice input and artificial intelligence. Leveraging our technologies, many of the world's leading semiconductors, system companies and OEMs create power-efficient, intelligent, secure and connected devices for a range of end markets, including mobile, consumer, automotive, robotics, industrial and IoT.
Our DSP and AI based solutions include platforms for 5G baseband processing in mobile, IoT and infrastructure, advanced imaging and computer vision for any camera-enabled device, audio/voice/speech and ultra-low-power always-on/sensing applications for multiple IoT markets. For motion sensing solutions, our Hillcrest Labs sensor processing technologies provide a broad range of sensor fusion software and inertial measurement unit ("IMU") solutions for markets including hearables, wearables, AR/VR, PC, robotics, remote controls and IoT. For wireless IoT, our platforms for Bluetooth connectivity (low energy and dual mode), Wi-Fi 4/5/6 (802.11n/ac/ax), Ultra-wideband ( UWB), NB-IoT and GNSS are the most broadly licensed connectivity platforms in the industry.
CEVA is a sustainable and environmentally conscious company, adhering to our Code of Business Conduct and Ethics. As such, we emphasize and focus on environmental preservation, recycling, the welfare of our employees and privacy – which we promote on a corporate level. At CEVA, we are committed to social responsibility, values of preservation and consciousness towards these purposes.
Visit us at www.ceva-dsp.com and follow us on Twitter, YouTube, Facebook,, LinkedIn and Instagram.
Forward Looking Statements
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 statements regarding demand for CEVA's portfolio of technologies, CEVA's refocusing of efforts on its IP business following the sale of Intrinsix and potential use of cash balances to expand on the CEVA's share repurchase program. The risks, uncertainties and assumptions that could cause differing CEVA results include: the effect of intense industry competition; the ability of CEVA's technologies and products incorporating CEVA's technologies to achieve market acceptance; CEVA's ability to meet changing needs of end-users and evolving market demands; the cyclical nature of and general economic conditions in the semiconductor industry; CEVA's ability to diversify its royalty streams and license revenues; CEVA's ability to continue to generate significant revenues from the handset baseband market and to penetrate new markets; instability and disruptions related to the ongoing Israel-Gaza conflict; and general market conditions and other risks relating to CEVA's 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
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| Three months ended | Nine months ended | ||
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| Sept 30, | Sept 30, | ||
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| 2023 | 2022 | 2023 | 2022 |
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| Unaudited | Unaudited | Unaudited | Unaudited |
Revenues: |
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Licensing and related revenues | $ 13,940 | $ 18,658 | $ 45,739 | $ 55,771 |
Royalties | 10,133 | 11,392 | 27,518 | 34,462 |
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Total revenues | 24,073 | 30,050 | 73,257 | 90,233 |
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Cost of revenues | 2,357 | 5,661 | 9,389 | 11,837 |
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Gross profit | 21,716 | 24,389 | 63,868 | 78,396 |
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Operating expenses: |
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Research and development, net | 17,814 | 16,488 | 54,544 | 52,270 |
Sales and marketing | 2,862 | 2,876 | 8,213 | 8,014 |
General and administrative | 3,608 | 3,253 | 11,346 | 9,943 |
Amortization of intangible assets | 149 | 575 | 445 | 1,726 |
Impairment of assets | - | 3,556 | - | 3,556 |
Total operating expenses | 24,433 | 26,748 | 74,548 | 75,509 |
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Operating income (loss) | (2,717) | (2,359) | (10,680) | 2,887 |
Financial income, net | 924 | 108 | 3,497 | 803 |
Remeasurement of marketable equity securities | 160 | (455) | (76) | (2,271) |
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Income (loss) before taxes on income | (1,633) | (2,706) | (7,259) | 1,419 |
Income tax expense | 1,117 | 17,926 | 3,080 | 19,816 |
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Net loss from continuing operations | (2,750) | (20,632) | (10,339) | (18,397) |
Net loss from discontinued operations | (2,207) | (1,672) | (5,308) | (6,726) |
Net loss | $ (4,957) | $ (22,304) | $ (15,647) | $ (25,123) |
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Basic and diluted net loss per share: |
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Continuing operations | (0.12) | (0.89) | (0.44) | (0.79) |
Discontinued operations | (0.09) | (0.07) | (0.23) | (0.29) |
Basic and diluted net loss per share | $ (0.21) | $ (0.96) | $ (0.67) | $ (1.08) |
Weighted-average shares used to compute net loss per
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Basic and diluted | 23,605 | 23,211 | 23,473 | 23,163 |
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
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| Three months ended | Nine months ended | ||
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| Sept 30, | Sept 30, | ||
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| 2023 | 2022 | 2023 | 2022 |
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| Unaudited | Unaudited | Unaudited | Unaudited |
GAAP net loss | $ (4,957) | $ (22,304) | $ (15,647) | $ (25,123) |
Equity-based compensation expense included in cost of
| 216 | 187 | 636 | 511 |
Equity-based compensation expense included in research
| 2,257 | 2,105 | 6,703 | 5,988 |
Equity-based compensation expense included in sales
| 478 | 380 | 1,305 | 1,030 |
Equity-based compensation expense included in general
| 1,018 | 699 | 2,787 | 2,004 |
Amortization, Impairment and Write-off of intangible
| 278 | 6,273 | 753 | 7,793 |
Costs associated with business acquisitions | 100 | - | 195 | - |
Income (loss) associated with the remeasurement of
| (160) | 455 | 76 | 2,271 |
Income tax expense as a result of a write off of a
| - | 15,741 | - | 15,323 |
Non-GAAP from discontinued operations | 1,184 | 1,169 | 3,233 | 3,436 |
Non-GAAP net income | $414 | $ 4,705 | $ 41 | $ 13,233 |
GAAP weighted-average number of Common Stock
| 23,605 | 23,211 | 23,473 | 23,163 |
Weighted-average number of shares related to
| 1,304 | 872 | 1,172 | 821 |
Weighted-average number of Common Stock used in
| 24,909 | 24,083 | 24,645 | 23,984 |
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GAAP diluted loss per share | $ (0.21) | $ (0.96) | $ (0.67) | $ (1.08) |
Equity-based compensation expense | $ 0.17 | $ 0.15 | $ 0.49 | $ 0.40 |
Amortization, Impairment and Write-off of intangible
| $ 0.01 | $ 0.27 | $ 0.03 | $ 0.33 |
Costs associated with business acquisitions | - | - | $ 0.01 | - |
Loss associated with the remeasurement of marketable
| - | $ 0.01 | - | $ 0.10 |
Income tax expense as a result of a write off of a
| - | $ 0.68 | - | $ 0.66 |
Non-GAAP from discontinued operations | $ 0.05 | $ 0.05 | $ 0.14 | $ 0.14 |
Non-GAAP diluted earnings per share | $ 0.02 | $ 0.20 | $ 0.00 | $ 0.55 |
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| Three months ended | Nine months ended | ||
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| Sept 30, | Sept 30, | ||
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| 2023 | 2022 | 2023 | 2022 |
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| Unaudited | Unaudited | Unaudited | Unaudited |
GAAP Operating Income (loss) | $ (2,717) | $ (2,359) | $ (10,680) | $ 2,887 |
Equity-based compensation expense included in cost of
| 216 | 187 | 636 | 511 |
Equity-based compensation expense included in
| 2,257 | 2,105 | 6,703 | 5,988 |
Equity-based compensation expense included in sales
| 478 | 380 | 1,305 | 1,030 |
Equity-based compensation expense included in
| 1,018 | 699 | 2,787 | 2,004 |
Amortization, Impairment and Write-off of intangible
| 278 | 6,273 | 753 | 7,793 |
Costs associated with business acquisitions | 100 |
| 195 |
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Total non-GAAP Operating Income | $ 1,630 | $ 7,285 | $ 1,699 | $ 20,213 |
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| Three months ended | Nine months ended | ||
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| Sept 30, | Sept 30, | ||
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| 2023 | 2022 | 2023 | 2022 |
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| Unaudited | Unaudited | Unaudited | Unaudited |
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GAAP Gross Profit | $ 21,716 | $ 24,389 | $ 63,868 | $ 78,396 |
GAAP Gross Margin | 90 % | 81 % | 87 % | 87 % |
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Equity-based compensation expense included in cost of
| 216 | 187 | 636 | 511 |
Amortization, Impairment and Write-off of intangible
| 129 | 2,142 | 308 | 2,511 |
Total Non-GAAP Gross profit | 22,061 | 26,718 | 64,812 | 81,418 |
Non-GAAP Gross Margin | 92 % | 89 % | 88 % | 90 % |
CEVA, INC. AND ITS SUBSIDIARIES
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| September 30, | December 31, |
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| 2023 | 2022 (*) |
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| Unaudited | Unaudited |
ASSETS |
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Current assets: |
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Cash and cash equivalents |
| $ 17,082 | $ 20,116 |
Marketable securities and short-term bank deposits |
| 114,630 | 118,194 |
Trade receivables, net |
| 7,997 | 11,136 |
Unbilled receivables |
| 23,066 | 18,694 |
Prepaid expenses and other current assets |
| 6,828 | 6,789 |
Current assets held for sale |
| 1,659 | 2,696 |
Total current assets |
| 171,262 | 177,625 |
Long-term assets: |
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Bank deposits |
| - | 8,205 |
Severance pay fund |
| 6,411 | 8,475 |
Deferred tax assets, net |
| 9,989 | 8,484 |
Property and equipment, net |
| 6,733 | 6,624 |
Operating lease right-of-use assets |
| 7,973 | 8,485 |
Investment in marketable equity securities |
| 332 | 408 |
Goodwill |
| 58,308 | 56,794 |
Intangible assets, net |
| 3,245 | 2,392 |
Other long-term assets |
| 7,993 | 6,291 |
Long-term assets held for sale |
| 23,741 | 24,659 |
Total assets |
| $ 295,987 | $ 308,442 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Trade payables |
| $ 1,221 | $ 1,859 |
Deferred revenues |
| 3,994 | 3,098 |
Accrued expenses and other payables |
| 17,247 | 24,049 |
Operating lease liabilities |
| 2,569 | 2,680 |
Current liabilities held for sale |
| 655 | 1,592 |
Total current liabilities |
| 25,686 | 33,278 |
Long-term liabilities: |
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Accrued severance pay |
| 7,131 | 9,064 |
Operating lease liabilities |
| 4,590 | 5,207 |
Other accrued liabilities |
| 575 | 526 |
Long-term liabilities held for sale |
| 1,305 | 1,496 |
Total liabilities |
| 39,287 | 49,571 |
Stockholders' equity: |
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Common stock |
| 24 | 23 |
Additional paid in-capital |
| 248,743 | 242,841 |
Treasury stock |
| (2,996) | (9,904) |
Accumulated other comprehensive loss |
| (5,469) | (6,249) |
Retained earnings |
| 16,398 | 32,160 |
Total stockholders' equity |
| 256,700 | 258,871 |
Total liabilities and stockholders' equity |
| $ 295,987 | $ 308,442 |
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(*) Derived from audited financial statements. |
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SOURCE CEVA, Inc.
| Contact: |
| Company Name: CEVA, Inc.
Yaniv Arieli, CEVA, Inc., CFO Phone: +1.650.417.7941, yaniv.arieli@ceva-dsp.com; Richard Kingston, CEVA, Inc., VP Market Intelligence, Investor & Public Relations Phone: +1.650.417.7976, richard.kingston@ceva-dsp.com Financial data for CEVA, Inc. |
