CEVA
$36.64
Ceva
($.55)
(1.48%)
Earnings Details
2nd Quarter June 2020
Monday, August 10, 2020 7:00:00 AM
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Summary

Ceva Beats

Ceva (CEVA) reported 2nd Quarter June 2020 earnings of $0.11 per share on revenue of $23.6 million. The consensus earnings estimate was $0.04 per share on revenue of $20.7 million. The Earnings Whisper number was $0.06 per share. Revenue grew 28.3% on a year-over-year basis.

CEVA Inc is a licensor of silicon intellectual property mainly for the handsets, portable multimedia and consumer electronics markets.

Results
Reported Earnings
$0.11
Earnings Whisper
$0.06
Consensus Estimate
$0.04
Reported Revenue
$23.6 Mil
Revenue Estimate
$20.7 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CEVA, Inc. Announces Second Quarter 2020 Financial Results

MOUNTAIN VIEW, Calif., Aug. 10, 2020 /PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of wireless connectivity and smart sensing technologies, today announced its financial results for the second quarter ended June 30, 2020.

Total revenue for the second quarter of 2020 was $23.6 million, a 28% increase compared to $18.4 million reported for the second quarter of 2019. Second quarter 2020 licensing and related revenue was $13.5 million, an increase of 25% when compared to $10.8 million reported for the same quarter a year ago. Royalty revenue for the second quarter of 2020 was $10.1 million, an increase of 33% when compared to $7.6 million reported for the second quarter of 2019.

Eight license agreements were concluded during the quarter, of which three were for smart sensing products and five were for connectivity products. One of the agreements was with a first-time customer. Customers' target markets include automotive powertrain, wearables, true wireless stereo earbuds and a range of IoT devices. Geographically, seven of the deals signed were in China, and one was in the U.S.

Gideon Wertheizer, CEO of CEVA, stated: "We produced our highest second quarter revenue on record  despite the uncertain environment created by the COVID-19 pandemic. We are consistently growing our licensee base and expanding our market reach into new lucrative areas such as automotive powertrain where we concluded a key design win this quarter. Royalty revenues came in ahead of our expectations, driven by revenues from our base station and IoT product line that is up 77% year-over-year to $4.3 million. We continuously monitor developments relating to the spread of the pandemic and U.S. tensions with China, and remain focused on serving our customers and executing on our growth strategy. The dedication and efficiency of our employees, combined with our diverse portfolio of technology, continue to provide us with the foundation to go from strength to strength as a leader in our industry."

GAAP net loss for the second quarter of 2020 was $1.1 million, as compared to a GAAP net loss of $1.5 million reported for the same period in 2019. GAAP diluted loss per share for the second quarter of 2020 was ($0.05), as compared to a GAAP diluted loss per share of ($0.07) for the same period in 2019.

Non-GAAP net income and diluted earnings per share for the second quarter of 2020 increased 130% and 140% respectively, to $2.9 million and $0.12, respectively, from $1.2 million and $0.05 reported for the second quarter of 2019. Non-GAAP net income and diluted earnings per share for the second quarter of 2020 excluded: (a) equity-based compensation expenses, net of taxes, of $3.3 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 second quarter of 2019 excluded: (a) equity-based compensation expenses, net of taxes, of $2.5 million, and (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RivieraWaves and an investment in NB-IoT technologies.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: "Our business continued to show strength in the second quarter, as we managed to exceed all key financial metrics for the quarter and post 28% revenue growth year-over-year. Of note, our Bluetooth and Wi-Fi royalties reached all-time record highs as a result of many new IoT production ramp-ups. With economic uncertainty still persisting, we remain prudent with regards to expenses and maintain a strong balance sheet. Our business generated $12.6 million of cash from operations in the first half of 2020, taking our cash and cash equivalent balances, marketable securities and bank deposits to approximately $157 million at the end of the quarter, with no debt."

CEVA Conference Call
On August 10, 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/984/35676. 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: 10146084) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 24, 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 that (i) we are consistently growing our licensee base and expanding our market reach into new lucrative areas; (ii) notwithstanding the pandemic and U.S. tensions with China, the company is focused on serving customers and executing on its growth strategy ; and (iii) the dedication and efficiency of CEVA's employees and diverse portfolio of technology provide the foundation to go from strength to strength as a leader in the industry. 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 shelter-in-place and other 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 signal processing platforms and artificial intelligence processors 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 cellular IoT (NB-IoT and Cat-M) enabled devices, 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 artificial intelligence, we offer a family of AI processors capable of handling the complete gamut of neural network workloads, on-device. For connectivity, we offer the industry's most widely adopted IPs for Bluetooth (low energy and dual mode) and Wi-Fi (Wi-Fi 4 (802.11n), Wi-Fi 5 (802.11ac) and Wi-Fi 6 (802.11ax) up to 4x4). 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

Six months ended


June 30,

June 30,


2020

2019

2020

2019


Unaudited

Unaudited

Unaudited

Unaudited

Revenues:





Licensing and related revenues

$   13,530

$  10,804

$   28,025

$  21,815

Royalties

10,076

7,596

19,196

13,554






Total revenues

23,606

18,400

47,221

35,369






Cost of revenues

3,005

2,493

5,756

4,516






Gross profit

20,601

15,907

41,465

30,853






Operating expenses:





Research and development, net

14,979

12,390

30,092

24,720

Sales and marketing

2,893

2,956

6,061

5,977

General and administrative

3,663

2,534

7,327

4,851

Amortization of intangible assets

575

210

1,157

420






Total operating expenses

22,110

18,090

44,637

35,968






Operating loss

(1,509)

(2,183)

(3,172)

(5,115)

Financial income, net

838

896

1,669

1,696






Loss before taxes on income

(671)

(1,287)

(1,503)

(3,419)

Taxes on income

419

225

772

390






Net loss

$  (1,090)

$  (1,512)

$  (2,275)

$  (3,809)






Basic and diluted net loss per share

($0.05)

($0.07)

($0.10)

($0.17)

Weighted-average shares used to compute net loss per share (in thousands):





Basic

22,017

21,936

22,006

21,927

Diluted

22,017

21,936

22,006

21,927


 

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,


2020

2019

2020

2019


Unaudited

Unaudited

Unaudited

Unaudited

GAAP net loss

$  (1,090)

$ (1,512)

$  (2,275)

$ (3,809)

Equity-based compensation expense included in cost of revenues

156

160

314

296

Equity-based compensation expense included in research and development expenses

1,722

1,458

3,345

2,820

Equity-based compensation expense included in sales and marketing expenses

512

394

963

750

Equity-based compensation expense included in general and administrative expenses

1,027

667

1,902

1,229

Income tax benefit related to equity-based compensation expenses

(135)

(207)

(184)

(344)

Amortization of intangible assets, net of taxes, related to acquisitions of RivieraWaves and Hillcrest Labs business, investments in NB-IoT and Immervision technologies

 

684

289

 

1,377

 

578

Non-GAAP net income

$  2,876

$  1,249

$  5,442

$  1,520






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

22,017

21,936

 

 

22,006

21,927

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

1,015

837

 

973

805

 

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

 

 

23,032

 

 

22,773

 

 

 

22,979

 

 

22,732











GAAP diluted loss per share

($ 0.05)

($ 0.07)

($ 0.10)

($ 0.17)

Equity-based compensation expense, net of taxes

$  0.14

$  0.11

$  0.28

$  0.21

Amortization of intangible assets, net of taxes, related to acquisitions of RivieraWaves and Hillcrest Labs business, investments in NB-IoT and Immervision technologies

 

 

 

 

$  0.03

 

 

 

$  0.01

 

 

 

$  0.06

 

$  0.03

 

Non-GAAP diluted earnings per share

$  0.12

$  0.05

$  0.24

$  0.07





 

CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 


(U.S. Dollars in thousands)



June 30,

December 31,


2020

2019 (*)


Unaudited

Unaudited

ASSETS



Current assets:



Cash and cash equivalents

$        29,979

$           22,803

Marketable securities and short-term bank deposits

126,131

121,782

Trade receivables, net

7,055

11,066

Unbilled receivables

12,726

17,241

Prepaid expenses and other current assets

6,585

5,660

Total current assets

182,476

178,552

Long-term assets:



Bank deposits

1,336

5,368

Severance pay fund

9,697

9,881

Deferred tax assets, net

13,068

10,605

Property and equipment, net

7,843

7,879

Operating lease right-of-use assets

10,260

11,066

Goodwill

51,070

51,070

Intangible assets, net

12,126

13,424

Other long-term assets

8,430

9,176

Total assets

$        296,306

$        297,021


LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:



Trade payables

$           1,290

$           701

Deferred revenues

3,821

3,642

Accrued expenses and other payables

3,227

3,660

Accrued payroll and related benefits

14,405

15,894

Taxes payable

103

88

Operating lease liabilities

2,232

2,393

Total current liabilities

25,078

26,378




Long-term liabilities:



Accrued severance pay

10,541

10,551

Operating lease liabilities

7,547

8,273

Other accrued liabilities

759

662

Total liabilities

43,925

45,864




Stockholders' equity:



Common stock

22

22

Additional paid in-capital

228,494

228,005

Treasury stock

(35,197)

(39,390)

Accumulated other comprehensive income

433

94

Retained earnings

58,629

62,426

Total stockholders' equity

252,381

251,157

Total liabilities and stockholders' equity

$   296,306

$   297,021



(*) Derived from audited financial statements

 

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SOURCE CEVA, Inc.