- Total revenue of $33.2
million, up 9% year-over-year
- Licensing, NRE and related revenue of $22.1 million, up 42% year-over-year
- Base station & IoT royalties of $7 million, up 6% year-over-year, highlighting
resilience in a challenging macroeconomic environment
ROCKVILLE, Md., Aug. 9, 2022
/PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of
wireless connectivity and smart sensing technologies and
co-creation solutions, today announced its financial results for
the second quarter ended June 30,
2022.
Our wireless connectivity IP continues to
drive our licensing business, as it is a cornerstone of the IoT
market.
Total revenue for the second quarter of 2022 was $33.2 million, a 9% increase compared to
$30.5 million reported for the
second quarter of 2021. Second quarter 2022 licensing,
non-recurring engineering (NRE) and related revenue was
$22.1 million, an increase of 42%
when compared to $15.5 million
reported for the same quarter a year ago. Royalty revenue for the
second quarter of 2022 was $11.1
million, a decrease of 26% when compared to $14.9 million reported for the second quarter a
year ago. Second quarter 2021 royalty revenue included revenue of
approximately $3.3 million following
the resolution of a disagreement on royalty rates with a customer.
Carving out the $3.3 million amount,
royalty revenue for the second quarter of 2022 was down 4% when
compared to the second quarter of 2021.
During the quarter, twenty-two IP license and NRE agreements
were concluded, targeting a wide variety of smart and connected
markets, including Wi-Fi 6 enabled-IoT devices, AI-driven sensors,
wireless audio and satellite communications. Five of the agreements
were with first-time customers. Geographically, eleven of the deals
signed were in China, five in the
U.S., three in APAC, and three in Europe.
Gideon Wertheizer, CEO of CEVA, stated: "We delivered solid
second quarter results against a challenging macroeconomic
backdrop. Our wireless connectivity IP continues to drive our
licensing business, as it is a cornerstone of the IoT market. We
continue to capitalize on our strength in wireless to make inroads
to a new customer base and add value via our co-creation business
proposition. In royalties, our base station & IoT category was
$7 million, highlighting our
resilience, as 5G RAN rollout in China and the rest of the world moves forward
and our Bluetooth, Wi-Fi and cellular IoT customers leverage our IP
to gain market share."
GAAP operating loss for the second quarter of 2022 was
$0.3 million, as compared to a GAAP
operating income of $1.6 million for
the same period in 2021. GAAP net loss for the second quarter of
2022 was $1.1 million, as compared to
GAAP net income of $0.3 million
reported for the same period in 2021. GAAP diluted loss per share
for the second quarter of 2022 was $0.05, as compared to a GAAP diluted income per
share of $0.01 for the same period in
2021.
Non-GAAP operating income for the second quarter of 2022 was
$4.6 million compared to $6.3 million reported for the second quarter of
2021. Non-GAAP net income and diluted earnings per share for the
second quarter of 2022 were $4.3
million and $0.18,
respectively, and $5.1 million and
$0.22 reported for the second quarter
of 2021.
Non-GAAP operating income for the second quarter of 2022
excluded: (a) equity-based compensation expenses of $3.3 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 second
quarter of 2021 excluded: (a) equity-based compensation expenses of
$2.9 million, (b) the impact of the
amortization of acquired intangibles of $0.9
million associated with the acquisition of the Intrinsix and
Hillcrest Labs business and
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 EPS for the second quarter of
2022 excluded: (a) equity-based compensation expenses of
$3.3 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) $0.5
million loss, net of taxes, associated with the
remeasurement of marketable equity securities. Net income and
diluted EPS for the second quarter of 2021 excluded: (a)
equity-based compensation expenses of $2.9
million, (b) the impact of the amortization of acquired
intangibles of $0.9 million
associated with the acquisition of the Intrinsix and Hillcrest Labs business and investments in
NB-IoT and Immervision technologies, and (c) $1.0 million of costs
associated with the Intrinsix acquisition.
Yaniv Arieli, Chief Financial
Officer of CEVA, stated: "Forty-two percent year-over-year growth
in licensing, NRE and related revenues in the second quarter
reflects our strength in the wireless space and the potential for
further royalty revenue growth, as these new customers reach
production. During the quarter, the company repurchased
approximately $4.5 million of its
common stock under its existing share repurchase program and ended
the quarter with cash and cash equivalent balances, marketable
securities and bank deposits of approximately $146 million."
CEVA Conference Call
On August 9, 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/Wq3Dd84dpw6. 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: 6812163) from one hour after the end of the call until
9:00 a.m. (Eastern Time) on
August 16, 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 regarding the
Company's wireless connectivity IP driving its licensing business
and the Company's ability to capitalize on strength in wireless to
make inroads to a new customer base and add value via the Company's
co-creation business proposition and Mr. Arieli's statements
regarding the potential for future royalty revenue growth. 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 and co-creation 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
(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.
CEVA, INC. AND ITS
SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (LOSS) – U.S.
GAAP
U.S. dollars in thousands, except per share data
|
|
|
Three months
ended
|
Six months
ended
|
|
June
30,
|
June
30,
|
|
2022
|
2021
|
2022
|
2021
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Revenues:
|
|
|
|
|
Licensing, NRE and
related revenues
|
$
22,123
|
$
15,535
|
$
44,516
|
$
29,932
|
Royalties
|
11,072
|
14,922
|
23,070
|
25,927
|
|
|
|
|
|
Total
revenues
|
33,195
|
30,457
|
67,586
|
55,859
|
|
|
|
|
|
Cost of
revenues
|
6,825
|
3,693
|
13,229
|
6,074
|
|
|
|
|
|
Gross profit
|
26,370
|
26,764
|
54,357
|
49,785
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Research and
development, net
|
19,538
|
17,457
|
39,748
|
35,050
|
Sales and
marketing
|
2,723
|
2,893
|
5,646
|
6,195
|
General and
administrative
|
3,635
|
4,159
|
7,271
|
7,039
|
Amortization of
intangible assets
|
750
|
667
|
1,500
|
1,243
|
|
|
|
|
|
Total operating
expenses
|
26,646
|
25,176
|
54,165
|
49,527
|
|
|
|
|
|
Operating income
(loss)
|
(276)
|
1,588
|
192
|
258
|
Financial income ,
net
|
413
|
356
|
695
|
392
|
Remeasurement of
marketable equity securities
|
(685)
|
—
|
(1,816)
|
—
|
|
|
|
|
|
Income (loss) before
taxes on income
|
(548)
|
1,944
|
(929)
|
650
|
Income tax
expense
|
575
|
1,629
|
1,890
|
3,965
|
|
|
|
|
|
Net Income
(loss)
|
$
(1,123)
|
$
315
|
$
(2,819)
|
$
(3,315)
|
|
|
|
|
|
Basic net income (loss)
per share
|
$
(0.05)
|
$
0.01
|
$
(0.12)
|
$
(0.15)
|
Diluted net income
(loss) per share
|
$
(0.05)
|
$
0.01
|
$
(0.12)
|
$
(0.15)
|
Weighted-average shares
used to compute net income
(loss) per share (in thousands):
|
|
|
|
|
Basic
|
23,174
|
22,823
|
23,139
|
22,685
|
Diluted
|
23,174
|
23,140
|
23,139
|
22,685
|
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,
|
|
2022
|
2021
|
2022
|
2021
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
GAAP net income
(loss)
|
$
(1,123)
|
$ 315
|
$
(2,819)
|
$
(3,315)
|
Equity-based
compensation expense included in cost of
revenues
|
344
|
119
|
683
|
262
|
Equity-based
compensation expense included in research
and development expenses
|
2,006
|
1,743
|
4,001
|
3,428
|
Equity-based
compensation expense included in sales
and marketing expenses
|
340
|
367
|
673
|
785
|
Equity-based
compensation expense included in general
and administrative expenses
|
613
|
677
|
1,335
|
1,629
|
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
|
851
|
2,564
|
1,537
|
Costs associated with
the Intrinsix acquisition
|
325
|
1,005
|
651
|
1,005
|
Income associated with
the remeasurement of marketable
equity securities, net of taxes.
|
527
|
—
|
1,398
|
—
|
NRE revenues associated
with the purchase price
allocation (PPA) related to Intrinsix acquisition
|
—
|
—
|
42
|
—
|
|
|
|
|
|
Non-GAAP net
income
|
$
4,314
|
$
5,077
|
$
8,528
|
$
5,331
|
GAAP weighted-average
number of Common Stock used
in computation of diluted net income (loss) and earning
per share (in thousands)
|
23,174
|
23,140
|
23,139
|
22,685
|
Weighted-average number
of shares related to
outstanding stock-based awards (in thousands)
|
820
|
343
|
795
|
739
|
Weighted-average number
of Common Stock used in
computation of diluted earnings per share, excluding the
above (in thousands)
|
23,994
|
23,483
|
23,934
|
23,424
|
|
|
|
|
|
GAAP diluted
earnings (loss) per share
|
$
(0.05)
|
$ 0.01
|
$
(0.12)
|
$
(0.15)
|
Equity-based
compensation expense, net of taxes
|
$ 0.14
|
$ 0.13
|
$ 0.28
|
$ 0.27
|
Amortization of
intangible assets, net of taxes, related to
acquisition of Intrinsix and Hillcrest Labs business,
investments in NB-IoT and Immervision technologies
|
$ 0.06
|
$ 0.04
|
$ 0.11
|
$ 0.07
|
Costs associated with
the Intrinsix acquisition
|
$ 0.01
|
$ 0.04
|
$ 0.03
|
$ 0.04
|
Income associated with
the remeasurement of marketable
equity securities, net of taxes.
|
$ 0.02
|
—
|
$ 0.06
|
—
|
Non-GAAP diluted
earnings per share
|
$ 0.18
|
$ 0.22
|
$ 0.36
|
$ 0.23
|
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,
|
|
2022
|
2021
|
2022
|
2021
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
GAAP Operating
Income (loss)
|
$
(276)
|
$
1,588
|
$
192
|
$
258
|
Adjustments:
|
|
|
|
|
Stock
compensation
|
3,303
|
2,906
|
6,692
|
6,104
|
Amortization of
intangible assets
|
1,282
|
851
|
2,564
|
1,612
|
Aquisition related cost
- Intrinsix
|
325
|
1,005
|
651
|
1,005
|
Purchase price
allocation (PPA) for the Intrinsix
acquisition
|
—
|
—
|
42
|
—
|
Total non-GAAP
Operating Income
|
$
4,634
|
$
6,350
|
$
10,141
|
$
8,979
|
CEVA, INC. AND ITS
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
|
|
|
|
June
30,
|
December
31,
|
|
|
2022
|
2021(*)
|
|
|
Unaudited
|
Unaudited
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
|
$
19,289
|
$
33,153
|
Marketable securities
and short-term bank deposits
|
|
118,759
|
121,708
|
Trade receivables,
net
|
|
16,013
|
14,644
|
Unbilled
receivables
|
|
11,949
|
12,805
|
Prepaid expenses and
other current assets
|
|
7,562
|
6,670
|
Total current
assets
|
|
173,572
|
188,980
|
Long-term
assets:
|
|
|
|
Bank
deposits
|
|
8,052
|
—
|
Severance pay
fund
|
|
8,604
|
10,175
|
Deferred tax assets,
net
|
|
20,629
|
15,850
|
Property and equipment,
net
|
|
7,610
|
6,765
|
Operating lease
right-of-use assets
|
|
7,767
|
8,827
|
Investment in
marketable equity security
|
|
1,103
|
2,919
|
Goodwill
|
|
74,777
|
74,777
|
Intangible assets,
net
|
|
12,272
|
14,607
|
Other long-term
assets
|
|
5,021
|
5,759
|
Total assets
|
|
$
319,407
|
$
328,659
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Trade
payables
|
|
$
2,241
|
$
1,464
|
Deferred
revenues
|
|
4,546
|
8,661
|
Accrued expenses and
other payables
|
|
22,113
|
22,041
|
Operating lease
liabilities
|
|
2,689
|
3,274
|
Total current
liabilities
|
|
31,589
|
35,440
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
Accrued severance
pay
|
|
9,182
|
10,551
|
Operating lease
liabilities
|
|
4,329
|
5,130
|
Other accrued
liabilities
|
|
592
|
806
|
Total
liabilities
|
|
45,692
|
51,927
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock
|
|
23
|
23
|
Additional paid
in-capital
|
|
237,379
|
235,386
|
Treasury
stock
|
|
(11,691)
|
(13,790)
|
Accumulated other
comprehensive loss
|
|
(4,525)
|
(372)
|
Retained
earnings
|
|
52,529
|
55,485
|
Total stockholders'
equity
|
|
273,715
|
276,732
|
Total liabilities and
stockholders' equity
|
|
$
319,407
|
$
328,659
|
|
(*) Derived from
audited financial statements
|
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SOURCE CEVA, Inc.