Press Releases

CEVA, Inc. Announces Fourth Quarter and Year End 2016 Financial Results

- All-time high quarterly revenues of $21.2 million, up 32% year-over-year

- All-time high quarterly royalty revenue of $12.9 million, up 60% year-over-year

- Annual revenue growth of 22% year-over-year

- Annual GAAP EPS growth of 103%, non-GAAP EPS growth of 75% year-over-year

MOUNTAIN VIEW, Calif., Feb. 1, 2017 /PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of signal processing IP for smarter, connected devices, today announced its financial results for the fourth quarter and year ended December 31, 2016.

CEVA, Inc. reported record Q4 2016 earnings with all-time high quarterly revenues of $21.2 million, non-GAAP EPS of $0.32 and CEVA-powered shipments totaling 343 million units. For the full year 2016, CEVA record all-time high total revenues of  $72.7 million, non-GAAP EPS of $0.93 and more than 1 billion CEVA-powered products shipped. For more information and highlights, view the infographic.

Total revenue for the fourth quarter of 2016 was $21.2 million, a 32% increase compared to $16.1 million reported for the fourth quarter of 2015. Fourth quarter 2016 licensing and related revenue was $8.3 million, an increase of 3% when compared to $8.0 million reported for the same quarter a year ago. Royalty revenue for the fourth quarter of 2016 was $12.9 million, an increase of 60% when compared to $8.0 million reported for the fourth quarter of 2015.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated: "CEVA had a strong fourth quarter, posting record revenues for the fourth quarter in succession. Licensing strength was underpinned by eight agreements for our imaging and vision technologies, further entrenching CEVA as a de-facto industry standard for intelligent vision processing. In royalties, we achieved record revenue and shipments driven by smartphones and Bluetooth-enabled devices."

Mr. Wertheizer continued: "2016 was an extraordinary year for CEVA where we exceeded our financial and strategic goals and delivered all-time high revenues. A record forty-nine licensing agreements were concluded, forty-five of which were for non-handset baseband and seventeen were with first-time customers. Our 2016 results illustrate that we have successfully transformed CEVA into a vertically integrated, one-stop IP house for wireless broadband and IoT-related technologies. Our unique portfolio of LTE-Advanced and 5G baseband, Bluetooth, Wi-Fi, imaging, vision and voice platforms continue to set new milestones in innovation and customer traction. As we look ahead, we are extremely well positioned to leverage our strengths to further expand our customer base and market share across the mobile, consumer and automotive industries and grow our licensing business and future royalty streams."

U.S. GAAP net income for the fourth quarter of 2016 increased 126% to $5.2 million, compared to $2.3 million reported for the same period in 2015. U.S. GAAP diluted earnings per share for the fourth quarter of 2016 increased 118% to $0.24 from $0.11 a year ago.

Non-GAAP net income and diluted earnings per share for the fourth quarter of 2016 were $7.0 million and $0.32, respectively, representing a 98% and 88% increase, respectively, over the $3.6 million and $0.17 reported for the fourth quarter of 2015. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2016 excluded: (a) equity-based compensation expense, net of taxes, of $1.5 million, and (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.3 million associated with the acquisition of RivieraWaves. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2015 excluded: (a) equity-based compensation expense, net of taxes, of $1.2 million, and (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.2 million associated with the acquisition of RivieraWaves.

During the quarter, CEVA completed fifteen license agreements. Nine of the agreements were for CEVA DSP cores, platforms and software and six were for CEVA connectivity IPs. Fourteen of the licensing agreements completed during the quarter were for non-handset baseband applications and one was for a handset baseband application. Four were with first-time customers for CEVA. Target applications for customer deployment are: imaging and vision processing in smartphones, automotive ADAS, smart surveillance cameras and mirrorless cameras; cellular baseband for smartphones; storage, Bluetooth 5 and Wi-Fi connectivity for various IoT devices. Geographically, four of the deals signed were in the U.S. and eleven were in the APAC region.

Full Year 2016 Review

Total revenue for 2016 was $72.7 million, an increase of 22% compared to $59.5 million reported for 2015. Royalty revenue for 2016 was $40.8 million, representing an increase of 49% compared to $27.4 million reported for 2015. Licensing and related revenue for 2016 was $31.9 million as compared to $32.1 million reported for 2015.

U.S. GAAP net income and diluted net income per share for 2016 were $13.1 million and $0.61, respectively, an increase of 109% and 103%, respectively, compared to $6.3 million and $0.30, respectively reported for 2015.

Non-GAAP net income and diluted earnings per share for 2016 were $20.4 million and $0.93, respectively, also representing an increase of 82% and 75%, respectively, over $11.2 million and $0.53 reported for 2015. Non-GAAP net income and diluted earnings per share for 2016 excluded (a) equity-based compensation expense, net of taxes, of $6.0 million, and (b) the impact of the amortization of acquired intangibles, net of taxes, of $1.2 million associated with the acquisition of RivieraWaves. Non-GAAP net income and diluted earnings per share for 2015 excluded (a) equity-based compensation expense, net of taxes, of $4.0 million, (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.9 million associated with the acquisition of RivieraWaves, and (c) $0.1 million, costs associated with the acquisition of RivieraWaves.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: "We are extremely proud of our financial performance in 2016. We delivered annual revenue growth of 22% and non-GAAP diluted EPS growth of 75% year-over-year. We continued to strengthen our balance sheet in 2016 with our cash balance, marketable securities and bank deposits growing annually by $17 million to reach $156 million at the end of the year, after buyback activity of $3.4 million and the final payments relating to the acquisition of RivieraWaves of $2.2 million. All in all, we are encouraged by a healthy outlook on the back of a robust licensing environment and new production ramps from our non-handset baseband customers."

CEVA Conference Call

On February 1, 2017 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 1-866-364-3869 (Access Code: CEVA)
  • International Participants: Dial +1-412-902-4215 (Access Code: CEVA)

The conference call will also be available live via the Internet at the following link: https://www.webcaster4.com/Webcast/Page/984/19106. 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: 10098567) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on February 08, 2017. The replay will also be available at CEVA's web site www.ceva-dsp.com.

About CEVA, Inc.

CEVA is the leading licensor of signal processing IP for a smarter, connected world. We partner with semiconductor companies and OEMs worldwide to create power-efficient, intelligent and connected devices for a range of end markets, including mobile, consumer, automotive, industrial and IoT. Our ultra-low-power IPs for vision, audio, communications and connectivity include comprehensive DSP-based platforms for LTE/LTE-A/5G baseband processing in handsets, infrastructure and machine-to-machine devices, advanced imaging, computer vision and deep learning for any camera-enabled device, audio/voice/speech and ultra-low power always-on/sensing applications for multiple IoT markets. For connectivity, we offer the industry's most widely adopted IPs for Bluetooth (low energy and dual mode), Wi-Fi (802.11 a/b/g/n/ac up to 4x4) and serial storage (SATA and SAS). Visit us at www.ceva-dsp.com and follow us on Twitter, YouTube and LinkedIn.

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 CEVA's imaging and vision technologies being a de-facto industry standard for intelligent vision processing; CEVA is transforming into an one-stop IP house for wireless broadband and IoT-related technologies; CEVA being well positioned to expand its customer base and market share across the mobile, consumer and automotive industries and grow its licensing business and future royalty streams; and a healthy outlook for CEVA for continued licensing and royalty growth due to a robust licensing environment and new production ramp-ups by non-baseband customers. The risks, uncertainties and assumptions include: the ability of the CEVA DSP cores and other technologies to continue to be strong growth drivers for us; our success in penetrating new markets and maintaining our market position in existing markets; the ability of products incorporating our technologies to achieve market acceptance, the speed and extent of the expansion of the 4G, 5G and LTE networks, the maturation of the IoT market, 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.

 

CEVA, INC. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME – U.S. GAAP

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



Quarter ended

Year ended


December 31,

December 31,


2016

2015

2016

2015


Unaudited

Unaudited

Unaudited

Audited

Revenues:





Licensing and related revenues

$  8,298

$  8,027

$    31,874

$    32,135

Royalties

12,898

8,044

40,779

27,364






Total revenues

21,196

16,071

72,653

59,499






Cost of revenues

1,633

1,408

6,086

5,424






Gross profit

19,563

14,663

66,567

54,075






Operating expenses:





Research and development, net

7,767

6,938

30,838

28,113

Sales and marketing

3,077

2,810

11,540

10,168

General and administrative

2,281

2,363

8,567

8,184

Amortization of intangible assets

309

324

1,236

1,298






Total operating expenses

13,434

12,435

52,181

47,763






Operating income

6,129

2,228

14,386

6,312

Financial  income, net

422

426

2,039

1,069






Income before taxes on income

6,551

2,654

16,425

7,381

Taxes on income

1,350

350

3,325

1,114






Net income

$5,201

$2,304

$13,100

$6,267






Basic net income per share

$0.24

$0.11

$0.63

$0.31






Diluted net income per share

$0.24

$0.11

$0.61

$0.30

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





Basic

21,239

20,491

20,850

20,480

Diluted

22,068

21,203

21,565

20,989







 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

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





Quarter  ended

Year ended


December 31

December 31


2016

2015

2016

2015


Unaudited






GAAP net income

$5,201

$2,304

$13,100

$6,267

Equity-based compensation expense included in cost of revenue

67

44

246

155

Equity-based compensation expense included in research and development expenses

698

515

2,860

1,838

Equity-based compensation expense included in sales and marketing expenses

241

173

922

568

Equity-based compensation expense included in general and administrative expenses

582

488

2,208

1,454

 Income tax expense (benefit) related to equity-based compensation expenses

(54)

(31)

(202)

52

 Costs associated with the RivieraWaves acquisition




147

 Amortization of intangible assets related to RivieraWaves transaction, net of taxes

309

216

1,236

861

 Income tax benefit related to RivieraWaves acquisition

-

(151)

-

(151)

Non-GAAP net income

$7,044

$3,558

$20,370

$11,191







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

22,068

21,203

 

21,565

 

20,989






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

247

206

327

211

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

22,315

21,409

21,892

21,200






GAAP diluted net income per share

$0.24

$0.11

$0.61

$0.30

Equity-based compensation expense, net of taxes

$0.07

$0.06

$0.27

$0.19

Costs associated with the RivieraWaves acquisition

-

-

-

$0.01

Amortization of intangible assets related to RivieraWaves transaction, net of taxes

$0.01

$0.01

$0.05

$0.04

Income taxes related to RivieraWaves acquisition

-

($0.01)

-

($0.01)

Non-GAAP diluted net income  per share

$0.32

$0.17

$0. 93

$0.53






 

CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)



December 31,

December 31,


2016

2015 (*)


Unaudited

Unaudited

ASSETS






Current assets:



Cash and cash equivalents

$        18,401

$        18,909

Marketable securities and short term bank deposits

108,115

79,033

Trade receivables, net

15,044

4,068

Prepaid expenses and other current assets

4,564

4,017

Total current assets

146,124

106,027

Long-term assets:



Long term bank deposits

29,977

41,334

Severance pay fund

7,941

7,297

Deferred tax assets

2,252

1,628

Property and equipment, net

4,805

3,731

Goodwill

46,612

46,612

Intangible assets, net

2,978

4,214

Investments in other company

1,806

1,806

Total assets

$        242,495

$        212,649







LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:



Trade payables

$           571

$           693

Deferred revenues

6,258

2,763

Accrued expenses and other payables

15,766

15,527

Total current liabilities

22,595

18,983




Long-term liabilities:



Accrued severance pay

8,349

7,571




Total liabilities

30,944

26,554




Stockholders' equity:



Common stock:

21

21

Additional paid in-capital

212,103

208,744

Treasury stock

(39,507)

(51,798)

Accumulated other comprehensive loss

(497)

(419)

Retained earnings

39,431

29,547

Total stockholders' equity

211,551

186,095

Total liabilities and stockholders' equity

$   242,495

$   212,649


(*) Derived from audited financial statements

 

SOURCE CEVA, Inc.


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