CEVA, Inc. Announces Second Quarter 2019 Financial Results

MOUNTAIN VIEW, Calif., August 8, 2019 - 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, 2019.

Total revenue for the second quarter of 2019 was $18.4 million, a 5% increase compared to $17.5 million reported for the second quarter of 2018. Second quarter 2019 licensing and related revenue was $10.8 million, an increase of 8% when compared to $10.0 million reported for the same quarter a year ago. Royalty revenue for the second quarter of 2019 was $7.6 million, a 2% increase compared to $7.5 million reported for the second quarter of 2018.

Gideon Wertheizer, CEO of CEVA, stated: “I am very pleased with our performance in the second quarter. We continued to expand our licensee base and diversify our revenue sources, capitalizing on our excellence in wireless connectivity and smart sensing technologies. In royalties, our handset baseband shipments showed pronounced sequential growth following a period of market softness and excess inventories. Our non-handset baseband royalties continue to show solid growth, driven by base station RAN and Bluetooth.”

Mr. Wertheizer continued: “Our recent acquisition of the Hillcrest Labs business and the technology investment we made in Immervision, Inc. will enable us to further expand our product offerings and customer reach. These investments are important landmarks in our strategic plan to broaden our technology portfolio, while also allowing us to move up the value chain and create tighter relationships with semiconductor companies and OEMs.”

Of the nine license agreements completed during the quarter, three were for smart sensing products and six were for connectivity products. All of the licensing agreements signed during the quarter were for non-handset baseband applications and four were with first-time customers of CEVA. Customers’ target markets include cellular IoT, sound and Bluetooth for wireless earbuds, AI and computer vision for consumer and surveillance products, and Wi-Fi access points. Geographically, three of the deals signed were in China, two were in the U.S. and four were in the APAC region, including Japan.

GAAP net loss for the second quarter of 2019 was $1.5 million, 28% lower than net loss of $2.1 million reported for the same period in 2018. GAAP diluted loss per share for the second quarter of 2019 was $0.07, compared to diluted loss per share of $0.09 a year ago.

Non-GAAP net income and diluted earnings per share for the second quarter of 2019 were $1.2 million and $0.05, respectively, up 42% and 25%, respectively, from the $0.9 million and $0.04 reported for both income and diluted earnings per share for the second quarter of 2018. Non-GAAP net income and diluted earnings per share for the second quarter of 2019 excluded: (a) equity-based compensation expense, net of taxes, of $2.5 million, (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. Non-GAAP net income and diluted earnings per share for the second quarter of 2018 excluded: (a) equity-based compensation expense, net of taxes, of $2.7 million, and (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RivieraWaves and NB-IoT technologies.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: “We are encouraged by the sequential increase of 27% in our royalty revenue, reflecting an uptick in handset inventory build up in advance of the high season. Also, second quarter non-GAAP net income and non-GAAP fully diluted earnings per share showed year-over-year growth for the first time in five quarters. We continued our buyback plan, repurchasing approximately $2.3 million of our common stock under our existing share repurchase program. At the end of the quarter, our cash balance, marketable securities and bank deposits totaled $166 million, with no debt."