CEVA, Inc. Announces First Quarter 2022 Financial Results

  • Record total revenue of $34.4 million, up 35% year-over-year
  • Record high licensing, NRE and related revenue contribution of $22.4 million, up 56% year-over-year
  • GAAP operating income $0.5 million and Non-GAAP operating income of $5.5 million, compared to GAAP operating loss of $1.3 million and Non-GAAP operating income of $2.7 million for the first quarter of 2021

ROCKVILLE, Md., May 10, 2022 /PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of wireless connectivity and smart sensing technologies and integrated IP solutions, today announced its financial results for the first quarter ended March 31, 2022.

Our strong first quarter results and performance affirms our dominance in the ubiquitous wireless IP space.

Total revenue for the first quarter of 2022 was $34.4 million, a record high and a 35% increase compared to the first quarter of 2021. First quarter 2022 licensing, non-recurring engineering (NRE) and related revenue was $22.4 million, an increase of 56% when compared to $14.4 million reported for the same quarter a year ago. Royalty revenue for the first quarter of 2022 was $12 million, an increase of 9% when compared to $11 million reported for the first quarter of 2021.

During the quarter, fourteen IP license and NRE agreements were concluded, targeting a wide variety of smart and connected markets, including smartphones, smart home, PCs, ADAS, and 5G Low Earth Orbit (LEO) satellite communication. Three agreements were with first-time customers. Geographically, five of the deals signed were in China, four in the U.S., three in APAC, and two in Europe.

Gideon Wertheizer, CEO of CEVA, stated: "Our strong first quarter results and performance affirms our dominance in the ubiquitous wireless IP space and is the result of our excellence in execution and market reach. Our leading portfolio of wireless and Edge AI technologies provide huge market opportunities to scale our business, as illustrated by our record licensing, NRE and related revenue that grew 56% year-over-year. Our strong fundamentals are also evident through the progress of our royalty business that, despite the China COVID lockdowns which affected many of our customers, reached a new record of 531 million CEVA-powered unit shipments, including share gains in the smartphone space."

GAAP operating income for the first quarter was $0.5 million, as compared to a GAAP operating loss of $1.3 million for the same period in 2021. GAAP net loss for the first quarter of 2022 was $1.7 million, as compared to a GAAP net loss of $3.6 million reported for the same period in 2021. GAAP diluted loss per share for the first quarter of 2022 was $0.07, as compared to a GAAP diluted loss per share of $0.16 for the same period in 2021.

Non-GAAP operating income for the first quarter of 2022 more than doubled to $5.5 million from $2.6 million reported for the first quarter of 2021. Non-GAAP net income and diluted earnings per share for the first quarter of 2022 are $4.2 million and $0.18, respectively, compared with $0.3 million and $0.01 reported for the first quarter of 2021. 

Non-GAAP operating income for the first quarter of 2022 excluded: (a) equity-based compensation expenses of $3.4 million, (b) the impact of the amortization of acquired intangibles of $1.3 million associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies and (c) $0.3 million of costs associated with the Intrinsix acquisition. Non-GAAP operating income for the first quarter of 2021 excluded: (a) equity-based compensation expenses of $3.2 million and (b) the impact of the amortization of acquired intangibles 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 first quarter of 2022 excluded: (a) equity-based compensation expenses of $3.4 million, (b) the impact of the amortization of acquired intangibles of $1.3 million associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (c) $0.3 million of costs associated with the Intrinsix acquisition and (d) $0.9 million loss, net of taxes, associated with the remeasurement of marketable equity securities. Non-GAAP net income and diluted earnings per share for the first quarter of 2021 excluded: (a) equity-based compensation expenses of $3.2 million and (b) the impact of the amortization of acquired intangibles in the amount 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: "We are pleased with our strong financial performance in the first quarter, which produced record total revenue of $34.4 million and non-GAAP operating income more than doubled year-over-year to $5.5 million, boosted by operating efficiency initiatives. At the end of the quarter, our cash and cash equivalent balances, marketable securities and bank deposits were approximately $162 million."

CEVA Conference Call

On May 10, 2022, 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/Jz4NXQP1d0o. 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: 8707737) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on May 17, 2022. 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 market opportunities to scale CEVA's business provided by CEVA's wireless and Edge AI technologies.  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 and integrated IP solutions for a smarter, safer, connected world. We provide Digital Signal Processors, AI engines, wireless platforms, cryptography cores and complementary software for sensor fusion, image enhancement, computer vision, voice input and artificial intelligence. These technologies are offered in combination with our Intrinsix IP integration services, helping our customers address their most complex and time-critical integrated circuit design projects. Leveraging our technologies and chip design skills, 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, aerospace & defense 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 4/5/6/6E (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 LOSS – U.S. GAAP

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



Three months ended


March 31,


2022


2021


Unaudited


Unaudited

Revenues:




Licensing, NRE and related revenues

$22,393


$14,397

Royalties

11,998


11,005





Total revenues

34,391


25,402





Cost of revenues

6,404


2,381





Gross profit

27,987


23,021





Operating expenses:




Research and development, net

20,210


17,593

Sales and marketing

2,923


3,302

General and administrative

3,636


2,880

Amortization of intangible assets

750


576





Total operating expenses

27,519


24,351





Operating income (loss)

468


(1,330)

Financial income , net

282


36

Remeasurement of marketable equity securities

(1,131)






Loss before taxes on income

(381)


(1,294)

Income tax expense

1,315


2,336





Net loss

($1,696)


($3,630)





Basic loss per share

($0.07)


($0.16)

Diluted loss per share

($0.07)


($0.16)

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




Basic

23,103


22,546

Diluted

23,103


22,546




Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

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



Three months ended


March 31,


2022


2021


Unaudited


Unaudited

GAAP net loss

($1,696)


($3,630)

Equity-based compensation expense included in cost of revenues

339


143

Equity-based compensation expense included in research and development expenses




1,995


1,685

Equity-based compensation expense included in sales and marketing expenses




333


418

Equity-based compensation expense included in general and administrative expenses




722


952




Amortization of intangible assets, net of taxes, related to acquisition of Intrinsix in 2021 and Hillcrest Labs business, investments in NB-IoT and Immervision technologies




1,282


686




Costs associated with the Intrinsix acquisition

326


Loss associated with the remeasurement of marketable equity securities, net of taxes.

871


NRE revenues associated with the purchase price allocation (PPA) related to Intrinsix acquisition

42



Non-GAAP net income

$4,214


$254

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

23,103


22,546

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

772


819

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

23,875


23,365





GAAP diluted loss per share

($0.07)


($0.16)

Equity-based compensation expense

$0.14


$0.14

Amortization of intangible assets, net of taxes, related to acquisition of Intrinsix in 2021 and Hillcrest Labs business, investments in NB-IoT and Immervision technologies

$0.06


$0.03

Costs associated with the Intrinsix acquisition

$0.01


Loss associated with the remeasurement of marketable equity securities, net of taxes.

$0.04


Non-GAAP diluted earnings per share

$0.18


$0.01






Three months ended


March 31,


2022


2021


Unaudited


Unaudited

GAAP Operating Income (loss)

$468


($1,330)

Equity-based compensation expense included in cost of revenues

339


143

Equity-based compensation expense included in research and development expenses

1,995


1,685

Equity-based compensation expense included in sales and marketing expenses

333


418

Equity-based compensation expense included in general and administrative expenses

722


952

Amortization of intangible assets related to acquisition of Intrinsix in 2021 and Hillcrest Labs business, investments in NB-IoT and Immervision technologies

1,282


761

Costs associated with the Intrinsix acquisition

326


Purchase price allocation (PPA) for the Intrinsix acquisition

42


Total non-GAAP Operating Income

$5,507


$2,629










CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)



March 31,


December 31,


2022


2021 (*)


Unaudited


Unaudited

ASSETS




Current assets:




Cash and cash equivalents

$39,778


$33,153

Marketable securities and short-term bank deposits

122,597


121,708

Trade receivables, net

12,063


14,644

Unbilled receivables

11,445


12,805

Prepaid expenses and other current assets

11,421


6,670

     Total current assets

197,304


188,980

Long-term assets:




Severance pay fund

10,011


10,175

Deferred tax assets, net

17,502


15,850

Property and equipment, net

7,842


6,765

Operating lease right-of-use assets

8,402


8,827

Investment in marketable equity securities

1,788


2,919

Goodwill

74,777


74,777

Intangible assets, net

13,440


14,607

Other long-term assets

3,974


5,759

     Total assets

$335,040


$328,659





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Trade payables

$3,176


$1,464

Deferred revenues

8,731


8,661

Accrued expenses and other payables

25,731


22,041

Operating lease liabilities

3,149


3,274

     Total current liabilities

40,787


35,440





Long-term liabilities:




Accrued severance pay

10,666


10,551

Operating lease liabilities

4,707


5,130

Other accrued liabilities

801


806

     Total liabilities

56,961


51,927





Stockholders' equity:




Common stock

23


23

Additional paid in-capital

235,563


235,386

Treasury stock

(8,828)


(13,790)

Accumulated other comprehensive loss

(2,438)


(372)

Retained earnings

53,759


55,485

     Total stockholders' equity

278,079


276,732

     Total liabilities and stockholders' equity

$335,040


$328,659

(*) Derived from audited financial statements

SOURCE CEVA, Inc.