CEVA, Inc. Announces Second Quarter 2021 Financial Results

ROCKVILLE, Md., Aug. 9, 2021 /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, 2021.

CEVA, Inc. reported Q2 2021 record revenue of $30.5 million and non-GAAP EPS of $0.22. 17 new agreements were signed, including 6 first-time customers. Royalty revenue was $14.9 million, generated from 451 million CEVA-powered units, including a record 313 million units under the base station & IoT product category. For more information and highlights, view the infographic.

Total revenue for the second quarter of 2021 was an all-time record high $30.5 million,  up 29% year-over-year.

Total revenue for the second quarter of 2021 was an all-time record high $30.5 million, a 29% increase compared to $23.6 million reported for the second quarter of 2020. Second quarter 2021 licensing, non-recurring engineering (NRE) and related revenue was $15.5 million, an increase of 15% when compared to $13.5 million reported for the same quarter a year ago. Royalty revenue for the second quarter of 2021 was $14.9 million, an increase of 48% when compared to $10.1 million reported for the second quarter of 2020. Royalty revenue included a payment of $3.3 million upon the resolution of a disagreement on royalties for past shipments.

Seventeen license agreements were concluded during the quarter, out of which six were with first time customers. Customers' target applications and devices include True Wireless Stereo (TWS) earbuds, 5G smartphones, surveillance equipment, Wi-Fi 6 and 5G for telecom, enterprise and industrial markets, and a range of applications for IoT, consumer and medical. Geographically, nine of the deals signed were in China, two were elsewhere in the Asia-Pacific Region, five were in the U.S, and one was in Europe.

Gideon Wertheizer, CEO of CEVA, stated: "Our performance in the second quarter was exceptional, both in terms of financial metrics, with all-time high revenue, and in terms of market traction, where our IP portfolio continues to attract customers who rely on us to streamline and expedite their IoT and 5G strategies. With the acquisition of Intrinsix in the quarter, we are expanding our market reach to the large aerospace & defense space and enriching our business model, offering key customers optimized solutions that take advantage of our differentiated IP and competencies in RF, mixed-signal and security IP solutions. Our royalty mix continues to show strength in the base station and IoT category, with 5G base station radio access networks (RAN) returning to growth in the quarter and record shipments of Bluetooth, Wi-Fi and cellular IoT devices."

GAAP net income for the second quarter of 2021 was $0.3 million, as compared to a net loss of $1.1 million reported for the same period in 2020. GAAP diluted earnings per share for the second quarter of 2021 was $0.01, as compared to a GAAP diluted loss per share of ($0.05) for the same period in 2020.

Non-GAAP net income and diluted earnings per share for the second quarter of 2021 increased to $5.1 million and $0.22, respectively, from $2.9 million and $0.12 reported for the second quarter of 2020. Non-GAAP net income and diluted earnings per share for the second quarter of 2021 excluded: (a) equity-based compensation expense, net of taxes, of $2.9 million, (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.9 million associated with the acquisition of the Intrinsix and Hillcrest Labs business, investments in NB-IoT and Immervision technologies, and (c) $1.0 million of costs associated with the Intrinsix acquisition. 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, and (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.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: "Our outstanding second quarter financial performance generated top-line growth year-over-year of 29%, and non-GAAP EPS growth of 83%. Licensing, NRE and related revenue included NRE revenues for the first time, as we completed the acquisition of Intrinsix prior to the end of the quarter. Our blended corporate tax rate was back to its forecasted levels as our revenue deal mix was more balanced. At the end of June 2021, our cash and cash equivalent balances, marketable securities and bank deposits were approximately $137 million, with no debt."

CEVA Conference Call
On August 9, 2021, 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/984/42097. 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: 10158545) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 16, 2021. 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 regarding the impact of the Intrinsix acquisition on the Company's market reach and business model and demand for the Company's products. 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 CEVA DSP cores and other technologies to continue to be strong growth drivers for us; our success in penetrating new markets, including in the base station and IoT 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 maturation of the connectivity, IoT and 5G markets, the effect of intense industry competition and consolidation, global chip market trends, including supply chain issues as a result of COVID-19 and other factors, 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; our ability to successfully integrate Intrinsix into our business; 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 for a smarter, safer, connected world. We offer Digital Signal Processors, AI processors, cryptography cores, wireless platforms and complementary software for sensor fusion, image enhancement, computer vision, voice input and artificial intelligence, all of which are offered in conjunction with our Intrinsix chip design capabilities for complete IP solutions. We partner with semiconductor companies and OEMs worldwide to create power-efficient, intelligent, secure and connected devices for a range of end markets, including mobile, PC, consumer, automotive, robotics, industrial, aerospace & defense, medical and IoT. Our DSP-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 sensor fusion, 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 (low energy and dual mode), Wi-Fi 4/5/6 (802.11n/ac/ax), Ultra-wideband (UWB) and NB-IoT 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.

 

 

 

CEVA, INC. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME – U.S. GAAP

U.S. dollars in thousands, except per share data



Three months ended
June 30,

Six months ended
June 30,


2021

2020

2021

2020


Unaudited

Unaudited

Unaudited

Unaudited

Revenues:





Licensing, NRE and related revenues

$  15,535

$   13,530

$  29,932

$   28,025

Royalties

14,922

10,076

25,927

19,196






Total revenues

30,457

23,606

55,859

47,221






Cost of revenues

3,693

3,005

6,074

5,756






Gross profit

26,764

20,601

49,785

41,465






Operating expenses:





Research and development, net

17,457

14,979

35,050

30,092

Sales and marketing

2,893

2,893

6,195

6,061

General and administrative

4,159

3,663

7,039

7,327

Amortization of intangible assets

667

575

1,243

1,157






Total operating expenses

25,176

22,110

49,527

44,637






Operating income (loss)

1,588

(1,509)

258

(3,172)

Financial income, net

356

838

392

1,669






Income (loss) before taxes on income

1,944

(671)

650

(1,503)

Taxes on income

1,629

419

3,965

772






Net income (loss)

$  315

$  (1,090)

$  (3,315)

$  (2,275)






Basic and diluted net income (loss) per share

$0.01

($0.05)

($0.15)

($0.10)

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





Basic

22,823

22,017

22,685

22,006

Diluted

23,140

22,017

22,685

22,006

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

U.S. Dollars in thousands, except per share amounts



Three months ended
June 30,

Six months ended
June 30,


2021

2020

2021

2020


Unaudited

Unaudited

Unaudited

Unaudited

GAAP net income (loss)

$ 315

($ 1,090)

($3,315)

($2,275)

Equity-based compensation expense included in cost of revenues

119

156

262

314

Equity-based compensation expense included in research and development
   expenses

1,743

1,722

3,428

3,345

Equity-based compensation expense included in sales and marketing
   expenses

367

512

785

963

Equity-based compensation expense included in general and administrative
   expenses

677

1,027

1,629

1,902

Income tax benefit related to equity-based compensation
   expenses

(135)

(184)

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

851

684

1,537

1,377

Costs associated with the Intrinsix acquisition

1,005

1,005

Non-GAAP net income

$ 5,077

$ 2,876

$ 5,331

$ 5,442






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

23,140

22,017

22,685

22,006

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

343

1,015

739

973

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

23,483

23,032

23,424

22,979











GAAP diluted net income (loss) per share

$  0.01

($ 0.05)

($ 0.15)

($ 0.10)

Equity-based compensation expense, net of taxes

$  0.13

$  0.14

$  0.27

$  0.28

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

$  0.04

$  0.03

$  0.07

$  0.06

Costs associated with the Intrinsix acquisition

$  0.04

$  0.04

Non-GAAP diluted earnings per share

$  0.22

$  0.12

$  0.23

$  0.24





 

CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


(U.S. Dollars in thousands)



June 30,
2021

December 31,
2020 (*)


Unaudited

Unaudited 

ASSETS



Current assets:



Cash and cash equivalents

$        26,706

$           21,143

Marketable securities and short-term bank deposits

100,394

108,987

Trade receivables, net

10,484

14,765

Unbilled receivables

16,213

16,459

Prepaid expenses and other current assets

7,451

6,205

Total current assets

161,248

167,559

Long-term assets:



Bank deposits

10,167

29,529

Severance pay fund

10,210

10,535

Deferred tax assets, net

13,220

10,826

Property and equipment, net

7,421

7,586

Operating lease right-of-use assets

8,211

9,052

Goodwill

75,979

51,070

Intangible assets, net

14,753

10,836

Other long-term assets

9,416

9,959

Total assets

$        310,625

$        306,952


LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:



Trade payables

$           2,077

$           894

Deferred revenues

4,382

2,434

Accrued expenses and other payables

19,759

21,883

Operating lease liabilities

3,063

2,969

Total current liabilities

29,281

28,180




Long-term liabilities:



Accrued severance pay

10,606

11,226

Operating lease liabilities

4,718

5,772

Other accrued liabilities

1,004

885

Total liabilities

45,609

46,063




Stockholders' equity:



Common stock

23

22

Additional paid in-capital

230,083

233,172

Treasury stock

(17,210)

(30,133)

Accumulated other comprehensive income

239

478

Retained earnings

51,881

57,350

Total stockholders' equity

265,016

260,889

Total liabilities and stockholders' equity

$   310,625

$   306,952


(*) Derived from audited financial statements

 

CEVA - a global leader in signal processing IP for everything smart and connected. (PRNewsFoto/CEVA, Inc.)

 

SOURCE CEVA, Inc.