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Published: 2023-11-08 09:15:11 ET
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EX-99.1 2 ex_592001.htm EXHIBIT 99.1 ex_592001.htm

Exhibit 99.1

 

 

 

a01.jpg

 

CEVA, Inc. Announces Third Quarter 2023 Financial Results

 

 

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 Companys 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 Companys 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., November 8, 2023 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.

 

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.

 

1

 

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 and (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 will 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.

 

Source: CEVA, Inc.

 

 

 

For More Information Contact:

 

 

Yaniv Arieli

CEVA, Inc.

CFO

+1.650.417.7941

yaniv.arieli@ceva-dsp.com

Richard Kingston

CEVA, Inc.

VP Market Intelligence, Investor & Public Relations

+1.650.417.7976

richard.kingston@ceva-dsp.com

 

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.

 

 

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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.