CEVA, Inc. Announces Third Quarter 2020 Financial Results
MOUNTAIN VIEW, Calif., Nov. 5, 2020 /PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of wireless connectivity and smart sensing technologies, today announced its financial results for the third quarter ended September 30, 2020.
Total revenue for the third quarter of 2020 was $25.0 million, a 6% increase compared to $23.5 million reported for the third quarter of 2019. Third quarter 2020 licensing and related revenue was $12.4 million, an increase of 10% when compared to $11.3 million reported for the same quarter a year ago. Royalty revenue for the third quarter of 2020 was $12.5 million, an increase of 3% when compared to $12.2 million reported for the third quarter of 2019.
Thirteen license agreements were concluded during the quarter, of which eight were for smart sensing products and five were for connectivity products. Six of the agreements were with first-time customers. Customers' target applications include ADAS, digital imaging, true wireless stereo earbuds, digital conferencing systems for home office upgrades and a range of other smart IoT devices. Geographically, six of the deals signed were in APAC, four in the U.S, and three were in China.
Gideon Wertheizer, CEO of CEVA, stated: "Our third quarter results are a firm endorsement of our technology strengths and the hard work of our employees. We have made tremendous progress in our base station and IoT product category, whose royalty revenues grew 86% sequentially and 105% year-over-year, reflecting the fast deployment of 5G base stations in China and record contributions from our Bluetooth, Wi-Fi and sensor fusion technologies. We continue to capitalize on our broad portfolio and industry reach to expand our customer base and future royalty potential. Of note, we signed a strategic agreement with a leading automotive semiconductor player for driver assistance capabilities in new cars, further reinforcing our leadership position in this highly lucrative market."
GAAP net loss for the third quarter of 2020 was $0.7 million, as compared to a GAAP net income of $0.8 million reported for the same period in 2019. GAAP diluted loss per share for the third quarter of 2020 was $0.03, as compared to a GAAP diluted earnings per share of $0.03 for the same period in 2019. Third quarter 2020 financials included a $1 million tax expense due to withholding tax which cannot be utilized in future years. Third quarter 2019 financials included a tax benefit of approximately $1 million as a result of the successful conclusion of a tax audit.
Non-GAAP net income and diluted earnings per share for the third quarter of 2020 decreased 29% and 27%, respectively, to $3.6 million and $0.16, respectively, from $5.1 million and $0.22 reported for the third quarter of 2019. Non-GAAP net income and diluted earnings per share for the third quarter of 2020 excluded: (a) equity-based compensation expenses, net of taxes, of $3.7 million, (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.7 million associated with the acquisition of the Hillcrest Labs business and investments in NB-IoT and Immervision technologies. Non-GAAP net income and diluted earnings per share for the third quarter of 2019 excluded: (a) equity-based compensation expense, net of taxes, of $2.6 million, (b) the impact of the amortization of acquired intangibles of $0.8 million associated with the acquisitions of RivieraWaves and the Hillcrest Labs business, and investments in NB-IoT and Immervision technologies, and (c) deal expenses and write-off of an acquired lease associated with the Hillcrest Labs transaction of $0.8 million.
Yaniv Arieli, Chief Financial Officer of CEVA, stated: "We are pleased with our strong financial performance in the third quarter, the highest third quarter revenue on record. The royalty contribution from base station & IoT product category was a record $7.9 million, derived from an all-time quarterly high 200 million units shipped in this product category. At the end of the quarter, our cash and cash equivalent balances, marketable securities and bank deposits were approximately $153 million, with no debt."
CEVA Conference Call
On November 5, 2020 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/984/37971. 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: 10148556) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on November 12, 2020. The replay will also be available at CEVA's web site www.ceva-dsp.com.
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 (i) optimism associated with CEVA's base station and IoT product category that capitalizes on the fast deployment of 5G base stations in China and record contributions from its Bluetooth, Wi-Fi and sensor fusion technologies, (ii) capitalizing on CEVA's broad portfolio and industry reach to expand its customer base and future royalty potential, and (iii) reinforcing CEVA's leadership position in the highly lucrative automotive semiconductor market. The risks, uncertainties and assumptions that could cause differing CEVA results include: the scope and duration of the COVID-19 pandemic; the extent and length of the restrictions associated with the COVID-19 pandemic and the impact on customers, consumer demand and the global economy generally; the ability of the CEVA DSP cores and other technologies to continue to be strong growth drivers for us; our continued success in penetrating new 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 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.
About CEVA, Inc.
CEVA is the leading licensor of wireless connectivity and smart sensing technologies. We offer Digital Signal Processors, AI processors, wireless platforms and complementary software for sensor fusion, image enhancement, computer vision, voice input and artificial intelligence, all of which are key enabling technologies 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, robotics, industrial and IoT. Our ultra-low-power IPs include comprehensive DSP-based platforms for 5G baseband processing in mobile and infrastructure, advanced imaging and computer vision for any camera-enabled device and audio/voice/speech and ultra-low power always-on/sensing applications for multiple IoT markets. For sensor fusion, our Hillcrest Labs sensor processing technologies provide a broad range of sensor fusion software and IMU solutions for AR/VR, robotics, remote controls, and IoT. For artificial intelligence, we offer a family of AI processors capable of handling the complete gamut of neural network workloads, on-device. For wireless IoT, we offer the industry's most widely adopted IPs for Bluetooth (low energy and dual mode), Wi-Fi 4/5/6 (802.11n/ac/ax) and NB-IoT. Visit us at www.ceva-dsp.com and follow us on Twitter, YouTube, Facebook, LinkedIn and Instagram.
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, 2020 2019 2020 2019 --- Unaudited Unaudited Unaudited Unaudited Revenues: Licensing and related revenues $12,420 $11,269 $40,445 $33,084 Royalties 12,540 12,202 31,736 25,756 --- Total revenues 24,960 23,471 72,181 58,840 --- Cost of revenues 2,503 2,767 8,259 7,283 --- Gross profit 22,457 20,704 63,922 51,557 --- Operating expenses: Research and development, net 15,603 13,873 45,695 38,593 Sales and marketing 2,711 2,832 8,772 8,809 General and administrative 3,566 3,509 10,893 8,360 Amortization of intangible assets 575 757 1,732 1,177 Total operating expenses 22,455 20,971 67,092 56,939 --- Operating income (loss) 2 (267) (3,170) (5,382) Financial income, net 1,020 603 2,689 2,299 Income (loss) before taxes on income 1,022 336 (481) (3,083) Income tax expense (benefit) 1,761 (439) 2,533 (49) --- Net income (loss) $(739) $775 $(3,014) $(3,034) Basic net income (loss) per share $(0.03) $0.04 $(0.14) $(0.14) === Diluted net income (loss) per share $(0.03) $0.03 $(0.14) $(0.14) === Weighted-average shares used to compute net income (loss) per share (in thousands): Basic 22,163 21,953 22,059 21,936 === Diluted 22,163 22,404 22,059 21,936 ===
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, 2020 2019 2020 2019 --- Unaudited Unaudited Unaudited Unaudited GAAP net income (loss) $(739) $775 $(3,014) $(3,034) Equity-based compensation expense included in cost of revenues 159 168 473 464 Equity-based compensation expense included in research and development 1,770 5,115 expenses 1,494 4,314 Equity-based compensation expense included in sales and marketing 533 1,496 expenses 362 1,112 Equity-based compensation expense included in general and administrative 1,084 2,986 expenses 728 1,957 Income tax (benefit) expense related to equity-based compensation 124 (129) (60) (473) expenses Amortization of intangible assets, net of taxes, related to acquisitions of RivieraWaves and Hillcrest Labs business, investments in NB-IoT and Immervision technologies and deal costs and write off of an acquired lease related the Hillcrest Labs transaction 684 1,680 2,061 2,258 Non-GAAP net income $3,615 $5,078 $9,057 $6,598 GAAP weighted-average number of Common Stock used in computation 22,163 22,404 22,059 21,936 of diluted net income (loss) and earning per share (in thousands) Weighted-average number of shares related to outstanding stock-based 1,004 489 850 awards (in thousands) 983 --- Weighted-average number of Common Stock used in computation of 23,167 diluted earnings per share, excluding the above (in thousands) 22,893 23,042 22,786 GAAP diluted income (loss) earnings per share $(0.03) 0.03 $(0.14) $(0.14) Equity-based compensation expense, net of taxes $0.16 $0.12 $0.44 $0.32 Amortization of intangible assets, net of taxes, related to acquisitions of RivieraWaves and Hillcrest Labs business, investments in NB-IoT and $0.03 $0.07 $0.09 $0.11 Immervision technologies and deal costs and write off of an acquired lease related the Hillcrest Labs transaction Non-GAAP diluted earnings per share $0.16 $0.22 $0.39 $0.29
CEVA, INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. Dollars in thousands) September 30, December 31, 2020 2019 (*) Unaudited Unaudited --- ASSETS Current assets: Cash and cash equivalents $22,067 $22,803 Marketable securities and short-term bank deposits 119,664 121,782 Trade receivables, net 15,538 11,066 Unbilled receivables 13,441 17,241 Prepaid expenses and other current assets 6,888 5,660 Total current assets 177,598 178,552 Long-term assets: Bank deposits 11,376 5,368 Severance pay fund 9,624 9,881 Deferred tax assets, net 12,317 10,605 Property and equipment, net 8,084 7,879 Operating lease right-of-use assets 10,824 11,066 Goodwill 51,070 51,070 Intangible assets, net 11,481 13,424 Other long-term assets 9,190 9,176 Total assets $301,564 $297,021 === LIABILITIES AND STOC KHOLDERS' EQUITY Current liabilities: Trade payables $862 $701 Deferred revenues 2,777 3,642 Accrued expenses and other payables 3,421 3,660 Accrued payroll and related benefits 15,991 15,894 Taxes payable 335 88 Operating lease liabilities 2,505 2,393 Total current liabilities 25,891 26,378 Long-term liabilities: Accrued severance pay 10,328 10,551 Operating lease liabilities 7,960 8,273 Other accrued liabilities 814 662 Total liabilities 44,993 45,864 Stockholders' equity: Common stock 22 22 Additional paid in-capital 230,032 228,005 Treasury stock (30,754) (39,390) Accumulated other comprehensive income 361 94 Retained earnings 56,910 62,426 Total stockholders' equity 256,571 251,157 Total liabilities and stockholders' equity $301,564 $297,021 ===
(*) Derived from audited financial statements
View original content to download multimedia:http://www.prnewswire.com/news-releases/ceva-inc-announces-third-quarter-2020-financial-results-301166956.html
SOURCE CEVA, Inc.