- Shipped 500 million
CEVA-powered devices in the quarter, up 35% sequentially and up 40%
year-over-year
- GAAP and Non-GAAP gross
margins reach 90% and 92%, respectively in the quarter, reflecting
Company's decision to return to pure IP licensing and royalty
business model
- Announces expansion of
existing share repurchase program with an additional 700,000
shares
- Strengthened the
Company's focus on IP for high-growth smart edge technologies
addressing wireless communications, sensing and AI with divestiture
of the Intrinsix US Aerospace & Defense (A&D) design
services business
- Company to host
investor day in person in New York
and live via webcast on December
6
ROCKVILLE, Md., Nov. 8, 2023
/PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading
licensor of wireless connectivity and smart sensing technologies
which have powered more than 16 billion devices, today announced
its financial results for the third quarter ended September 30, 2023. Financial results for the
third quarter and all periods presented reflect CEVA's continuing
operations only, with the Intrinsix business reflected as a
discontinued operation, unless otherwise noted.
The CEVA team delivered solid third quarter
results, with sequential improvements in both licensing and royalty
revenues
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 irceva@ceva-dsp.com.
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 CONSOLIDATED STATEMENTS OF LOSS – U.S. GAAP
U.S. dollars in thousands, except per share data
|
|
|
Three months
ended
|
Nine months
ended
|
|
Sept
30,
|
Sept
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Revenues:
|
|
|
|
|
Licensing and related
revenues
|
$
13,940
|
$
18,658
|
$
45,739
|
$
55,771
|
Royalties
|
10,133
|
11,392
|
27,518
|
34,462
|
|
|
|
|
|
Total
revenues
|
24,073
|
30,050
|
73,257
|
90,233
|
|
|
|
|
|
Cost of
revenues
|
2,357
|
5,661
|
9,389
|
11,837
|
|
|
|
|
|
Gross profit
|
21,716
|
24,389
|
63,868
|
78,396
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
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
|
|
|
|
|
|
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)
|
|
|
|
|
|
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
|
|
|
|
|
|
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)
|
|
|
|
|
|
Basic and diluted net
loss per share:
|
|
|
|
|
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
share (in thousands):
|
|
|
|
|
Basic and
diluted
|
23,605
|
23,211
|
23,473
|
23,163
|
Unaudited
Reconciliation of GAAP to Non-GAAP Financial
Measures U.S. Dollars in thousands, except per share
amounts
|
|
|
Three months
ended
|
Nine months
ended
|
|
Sept
30,
|
Sept
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
GAAP net
loss
|
$
(4,957)
|
$
(22,304)
|
$
(15,647)
|
$
(25,123)
|
Equity-based
compensation expense included in cost of
revenues
|
216
|
187
|
636
|
511
|
Equity-based
compensation expense included in research
and development expenses
|
2,257
|
2,105
|
6,703
|
5,988
|
Equity-based
compensation expense included in sales
and marketing expenses
|
478
|
380
|
1,305
|
1,030
|
Equity-based
compensation expense included in general
and administrative expenses
|
1,018
|
699
|
2,787
|
2,004
|
Amortization,
Impairment and Write-off of intangible
assets
|
278
|
6,273
|
753
|
7,793
|
Costs associated with
business acquisitions
|
100
|
-
|
195
|
-
|
Income (loss)
associated with the remeasurement of
marketable equity securities.
|
(160)
|
455
|
76
|
2,271
|
Income tax expense as a
result of a write off of a
deferred tax asset and withholding tax that can't be
utilized
|
-
|
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
used in computation of diluted net loss and loss per share
(in thousands)
|
23,605
|
23,211
|
23,473
|
23,163
|
Weighted-average number
of shares related to
outstanding stock-based awards (in thousands)
|
1,304
|
872
|
1,172
|
821
|
Weighted-average number
of Common Stock used in
computation of diluted earnings per share, excluding the
above (in thousands)
|
24,909
|
24,083
|
24,645
|
23,984
|
|
|
|
|
|
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
assets, net of taxes
|
$ 0.01
|
$ 0.27
|
$ 0.03
|
$ 0.33
|
Costs associated with
business acquisitions
|
-
|
-
|
$ 0.01
|
-
|
Loss associated with
the remeasurement of marketable
equity securities.
|
-
|
$ 0.01
|
-
|
$ 0.10
|
Income tax expense as a
result of a write off of a
deferred tax asset and withholding tax that can't be
utilized
|
-
|
$ 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
|
|
|
|
Three months
ended
|
Nine months
ended
|
|
Sept
30,
|
Sept
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
GAAP Operating
Income (loss)
|
$
(2,717)
|
$
(2,359)
|
$
(10,680)
|
$
2,887
|
Equity-based
compensation expense included in cost of
revenues
|
216
|
187
|
636
|
511
|
Equity-based
compensation expense included in
research and development expenses
|
2,257
|
2,105
|
6,703
|
5,988
|
Equity-based
compensation expense included in sales
and marketing expenses
|
478
|
380
|
1,305
|
1,030
|
Equity-based
compensation expense included in
general and administrative expenses
|
1,018
|
699
|
2,787
|
2,004
|
Amortization,
Impairment and Write-off of intangible
assets
|
278
|
6,273
|
753
|
7,793
|
Costs associated with
business acquisitions
|
100
|
|
195
|
|
Total non-GAAP
Operating Income
|
$
1,630
|
$
7,285
|
$
1,699
|
$
20,213
|
|
|
|
Three months
ended
|
Nine months
ended
|
|
Sept
30,
|
Sept
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP Gross
Profit
|
$
21,716
|
$
24,389
|
$
63,868
|
$
78,396
|
GAAP Gross
Margin
|
90 %
|
81 %
|
87 %
|
87 %
|
|
|
|
|
|
Equity-based
compensation expense included in cost of
revenues
|
216
|
187
|
636
|
511
|
Amortization,
Impairment and Write-off of intangible
assets
|
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 CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
|
|
|
|
September
30,
|
December
31,
|
|
|
2023
|
2022
(*)
|
|
|
Unaudited
|
Unaudited
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
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:
|
|
|
|
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
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
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:
|
|
|
|
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:
|
|
|
|
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
|
|
(*) Derived from
audited financial statements.
|
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SOURCE CEVA, Inc.