ROCKVILLE, Md., Aug. 9, 2023
/PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading
licensor of wireless connectivity and smart sensing technologies
and custom SoC solutions, today announced its financial
results for the second quarter ended June 30, 2023.
Total revenue for the second quarter of 2023 was $26.2 million, a 21% decrease compared to
$33.2 million reported for the second
quarter of 2022. Second quarter 2023 licensing, non-recurring
engineering (NRE) and related revenue was $16.8 million, a decrease of 24% when compared to
$22.1 million reported for the same
quarter a year ago. Royalty revenue for the second quarter of 2023
was $9.4 million, a decrease of 15%
when compared to $11.1 million
reported for the second quarter of 2022, but up 17%
sequentially.
Amir Panush, Chief Executive
Officer of CEVA, remarked: "Our second quarter results reflect a
challenging and dynamic environment, where our licensing business
was impacted by a slowdown in funding of semiconductor startups
that limited our ability to conclude certain anticipated customer
licensing agreements. Nevertheless, we had a number of noteworthy
licensing achievements in the quarter, including three customers
for Wi-Fi & Bluetooth combos and four new agreements with
customers targeting automotive applications. We are also encouraged
by the sequential recovery in our royalty business, with strong
shipments of smartphones for emerging markets and inventory
restocking across PCs, 5G RAN and the broad IoT markets which we
serve. We believe we are well positioned to capitalize on the
insatiable demand to connect everything and deploy generative AI
everywhere with our unrivalled portfolio of wireless connectivity
and sensing AI technologies."
During the quarter, seventeen IP license and NRE agreements were
concluded, targeting a wide variety of end markets and
applications, including Wi-Fi 6 and Bluetooth 5 for combo
connectivity chips targeting consumer, smart home and industrial
IoT, 5G Redcap and cellular IoT wireless communications for
industrial, UWB for digital car keys and in-cabin radar in
automotive, AI for automotive ADAS and sensor fusion for digital
pens. Five agreements were with first-time customers.
GAAP gross margin for both the second quarters of 2023 and 2022
was 79%. GAAP operating loss for the second quarter of 2023 was
$6.3 million, as compared to a GAAP
operating loss of $0.3 million for
the same period in 2022. GAAP net loss for the second quarter of
2023 was $5.8 million, as compared to
a GAAP net loss of $1.1 million
reported for the same period in 2022. GAAP diluted losses per share
for the second quarter of 2023 was $0.25, as compared to a GAAP diluted losses per
share of $0.05 for the same period in
2022.
Non-GAAP gross margin for both the second quarters of 2023 and
2022 was 82%. Non-GAAP operating loss for the second quarter of
2023 was $1.1 million, as compared to
Non-GAAP operating profit of $4.6
million reported for the second quarter of 2022. Non-GAAP
net loss and diluted losses per share for the second quarter of
2023 were $0.5 million and
$0.02, respectively, compared with
Non-GAAP net income and diluted income per share of $4.3 million and $0.18, respectively, reported for the second
quarter of 2022.
Non-GAAP gross margin for the second quarter of 2023
excluded: (a) equity-based compensation expenses of $0.4 million and (b) amortization of acquired
intangibles of $0.4 million. Non-GAAP
gross margin for the second quarter of 2022 excluded: (a)
equity-based compensation expenses of $0.3
million and (b) amortization of acquired intangibles of
$0.5 million.
Non-GAAP operating loss for the second quarter of 2023 excluded:
(a) equity-based compensation expenses of $4.2 million, (b) the impact of the amortization
of acquired intangibles of $0.7
million associated with the acquisition of the Intrinsix,
VisiSonics and Hillcrest Labs
businesses as well as investments in NB-IoT technologies, and (c)
$0.3 million of costs associated with
the Intrinsix and VisiSonics business acquisitions. 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 business and investments in
NB-IoT and Immervision technologies and (c) $0.3 million of costs associated with the
Intrinsix acquisition.
Non-GAAP net loss and diluted loss per share for the second
quarter of 2023 excluded: (a) equity-based compensation expenses of
$4.2 million, (b) the impact of the
amortization of acquired intangibles of $0.7
million associated with the acquisition of the Intrinsix,
VisiSonics and Hillcrest Labs
businesses as well as investments in NB-IoT technologies, (c)
$0.3 million of costs associated with
the Intrinsix and VisiSonics business acquisitions and (d)
$0.1 million associated with the
reevaluation of an investment in another company. Non-GAAP net
income and diluted earnings per share 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 reevaluation
of an investment in another company.
Yaniv Arieli, Chief Financial
Officer of CEVA, stated: "As we navigate the current macroeconomic
conditions, we have implemented cost-saving initiatives to reduce
expense levels for the remainder of the year. We believe these
initiatives will enable us to remain lean and dynamic, which
combined with our strong balance sheet will allow us to act
decisively to support our future growth strategy."
CEVA Conference Call
On August 9, 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/ZBNxQXMOR09. 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: 5117586) from one hour after the end of the call until
9:00 a.m. (Eastern Time) on
August 16, 2023. The replay will also
be available at CEVA's web site www.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 CEVA's ability to
capitalize on demand with its portfolio of technologies, the impact
of CEVA's cost-savings initiatives, and CEVA's growth prospects and
potential. 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; 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.
About CEVA, Inc.
CEVA is the leading licensor of wireless connectivity and smart
sensing technologies and custom SoC solutions for a smarter, safer,
connected world. We provide Digital Signal Processors, AI engines,
wireless platforms, cryptography cores and complementary embedded
software for sensor fusion, image enhancement, computer vision,
spatial audio, 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 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.
CEVA, INC. AND ITS
SUBSIDIARIES
|
CONSOLIDATED STATEMENTS
OF LOSS – U.S. GAAP
|
U.S. dollars in
thousands, except per share data
|
|
|
Three months
ended
|
Six months
ended
|
|
Jun
30,
|
Jun
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Revenues:
|
|
|
|
|
Licensing, NRE and
related revenues
|
$
16,801
|
$
22,123
|
$
37,522
|
$
44,516
|
Royalties
|
9,371
|
11,072
|
17,385
|
23,070
|
|
|
|
|
|
Total
revenues
|
26,172
|
33,195
|
54,907
|
67,586
|
|
|
|
|
|
Cost of
revenues
|
5,572
|
6,825
|
10,887
|
13,229
|
|
|
|
|
|
Gross profit
|
20,600
|
26,370
|
44,020
|
54,357
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Research and
development, net
|
19,594
|
19,538
|
40,385
|
39,748
|
Sales and
marketing
|
2,795
|
2,723
|
5,840
|
5,646
|
General and
administrative
|
4,169
|
3,635
|
8,217
|
7,271
|
Amortization of
intangible assets
|
316
|
750
|
645
|
1,500
|
Total operating
expenses
|
26,874
|
26,646
|
55,087
|
54,165
|
|
|
|
|
|
Operating income
(loss)
|
(6,274)
|
(276)
|
(11,067)
|
192
|
Financial income,
net
|
1,121
|
413
|
2,576
|
695
|
Reevaluation of
marketable equity securities
|
(119)
|
(685)
|
(236)
|
(1,816)
|
|
|
|
|
|
Loss before taxes on
income
|
(5,272)
|
(548)
|
(8,727)
|
(929)
|
Income tax
expense
|
546
|
575
|
1,963
|
1,890
|
|
|
|
|
|
Net loss
|
$
(5,818)
|
$
(1,123)
|
$
(10,690)
|
$
(2,819)
|
|
|
|
|
|
Basic and diluted net
loss per share
|
$
(0.25)
|
$
(0.05)
|
$
(0.46)
|
$
(0.12)
|
Weighted-average shares
used to compute net loss per
share (in thousands):
|
|
|
|
|
Basic and
diluted
|
23,476
|
23,174
|
23,405
|
23,139
|
Unaudited
Reconciliation of GAAP to Non-GAAP Financial
Measures
|
U.S. Dollars in
thousands, except per share amounts
|
|
|
Three months
ended
|
Six months
ended
|
|
Jun
30,
|
Jun
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
GAAP net
loss
|
$
(5,818)
|
$
(1,123)
|
$
(10,690)
|
$
(2,819)
|
Equity-based
compensation expense included in cost of
revenues
|
390
|
344
|
794
|
683
|
Equity-based
compensation expense included in research
and development expenses
|
2,420
|
2,006
|
4,593
|
4,001
|
Equity-based
compensation expense included in sales
and marketing expenses
|
468
|
340
|
861
|
673
|
Equity-based
compensation expense included in general
and administrative expenses
|
927
|
613
|
1,816
|
1,335
|
Amortization of
intangible assets related to acquisition
of Intrinsix, VisiSonics business in 2023 and Hillcrest
Labs business, and investments in NB-IoT and
Immervision technologies
|
702
|
1,282
|
1,379
|
2,564
|
Costs associated with
the Intrinsix and VisioSonics
business acquisition
|
312
|
325
|
638
|
651
|
Loss associated with
the remeasurement of marketable
equity securities, net of taxes.
|
119
|
527
|
236
|
1,398
|
NRE revenues associated
with the purchase price
allocation (PPA) related to Intrinsix acquisition
|
0
|
0
|
0
|
42
|
Non-GAAP net income
(loss)
|
$
(480)
|
$
4,314
|
$
(373)
|
$
8,528
|
GAAP weighted-average
number of Common Stock
used in computation of diluted net loss and loss per share
(in thousands)
|
23,476
|
23,174
|
23,405
|
23,139
|
Weighted-average
number of shares related to
outstanding stock-based awards (in thousands)
|
—
|
820
|
—
|
795
|
Weighted-average number
of Common Stock used in
computation of diluted earnings per share, excluding the
above (in thousands)
|
23,476
|
23,994
|
23,405
|
23,934
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted loss
per share
|
$
(0.25)
|
$
(0.05)
|
$
(0.46)
|
$
(0.12)
|
Equity-based
compensation expense
|
$ 0.18
|
$ 0.14
|
$ 0.34
|
$ 0.28
|
Amortization of
intangible assets related to acquisition of
Intrinsix, VisiSonics business in 2023 and Hillcrest Labs
business, and investments in NB-IoT and Immervision
technologies
|
$ 0.03
|
$ 0.06
|
$ 0.06
|
$ 0.11
|
Costs associated with
the Intrinsix and VisioSonics
business acquisitions
|
$ 0.01
|
$ 0.01
|
$ 0.03
|
$ 0.03
|
Loss associated with
the remeasurement of marketable
equity securities, net of taxes.
|
$ 0.01
|
$ 0.02
|
$ 0.01
|
$ 0.06
|
Non-GAAP diluted
earnings (loss) per share
|
$
(0.02)
|
$ 0.18
|
$
(0.02)
|
$ 0.36
|
|
Three months
ended
|
Six months
ended
|
|
Jun
30,
|
Jun
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
GAAP Operating
Income (loss)
|
$
(6,274)
|
$
(276)
|
$
(11,067)
|
$
192
|
Equity-based
compensation expense included in cost of
revenues
|
390
|
344
|
794
|
683
|
Equity-based
compensation expense included in
research and development expenses
|
2,420
|
2,006
|
4,593
|
4,001
|
Equity-based
compensation expense included in sales
and marketing expenses
|
468
|
340
|
861
|
673
|
Equity-based
compensation expense included in
general and administrative expenses
|
927
|
613
|
1,816
|
1,335
|
Amortization of
intangible assets related to acquisition
of Intrinsix, VisiSonics business in 2023 and Hillcrest
Labs business, and investments in NB-IoT and
Immervision technologies
|
702
|
1,282
|
1,379
|
2,564
|
Costs associated with
the Intrinsix and VisiSonics
business acquisitions
|
312
|
325
|
638
|
651
|
NRE revenues associated
with the purchase price
allocation (PPA) related to Intrinsix acquisition
|
0
|
0
|
0
|
42
|
Total non-GAAP
Operating Income (Loss)
|
$
(1,055)
|
$
4,634
|
$
(986)
|
$
10,141
|
|
Three months
ended
|
Six months
ended
|
|
Jun
30,
|
Jun
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP Gross
Profit
|
$
20,600
|
$
26,370
|
$
44,020
|
$
54,357
|
GAAP Gross
Margin
|
79 %
|
79 %
|
80 %
|
80 %
|
|
|
|
|
|
Additional NRE revenues
associated with the purchase
price allocation (PPA) related to Intrinsix acquisition
|
0
|
0
|
0
|
42
|
Equity-based
compensation expense included in cost of
revenues
|
390
|
344
|
794
|
683
|
Amortization of
intangible assets related to acquisition
of Intrinsix, acquisition of VisiSonics business in
2023,
and investments in NB-IoT and
Immervision
technologies
|
386
|
532
|
734
|
1,064
|
Total Non-GAAP Gross
profit
|
21,376
|
27,246
|
45,548
|
56,146
|
Non-GAAP Gross
Margin
|
82 %
|
82 %
|
83 %
|
83 %
|
CEVA, INC. AND ITS
SUBSIDIARIES
|
CONDENSED CONSOLIDATED
BALANCE SHEETS
|
|
(U.S. Dollars in
thousands)
|
|
|
|
June
30,
|
December
31,
|
|
|
2023
|
2022
(*)
|
|
|
Unaudited
|
Unaudited
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
|
$
27,511
|
$
21,285
|
Marketable securities
and short-term bank deposits
|
|
108,136
|
118,194
|
Trade receivables,
net
|
|
13,502
|
12,297
|
Unbilled
receivables
|
|
18,370
|
18,953
|
Prepaid expenses and
other current assets
|
|
7,753
|
6,896
|
Total current
assets
|
|
175,272
|
177,625
|
Long-term
assets:
|
|
|
|
Bank
deposits
|
|
—
|
8,205
|
Severance pay
fund
|
|
7,916
|
8,475
|
Deferred tax assets,
net
|
|
8,936
|
8,599
|
Property and equipment,
net
|
|
6,868
|
7,099
|
Operating lease
right-of-use assets
|
|
9,836
|
10,283
|
Investment in
marketable equity securities
|
|
172
|
408
|
Goodwill
|
|
76,771
|
74,777
|
Intangible assets,
net
|
|
6,907
|
6,680
|
Other long-term
assets
|
|
7,595
|
6,291
|
Total assets
|
|
$
300,273
|
$
308,442
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS'
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Trade
payables
|
|
$
1,104
|
$
1,995
|
Deferred
revenues
|
|
3,788
|
3,168
|
Accrued expenses and
other payables
|
|
18,340
|
25,133
|
Operating lease
liabilities
|
|
2,895
|
2,982
|
Total current
liabilities
|
|
26,127
|
33,278
|
Long-term
liabilities:
|
|
|
|
Accrued severance
pay
|
|
8,702
|
9,064
|
Operating lease
liabilities
|
|
6,239
|
6,703
|
Other accrued
liabilities
|
|
621
|
526
|
Total
liabilities
|
|
41,689
|
49,571
|
Stockholders'
equity:
|
|
|
|
Common stock
|
|
24
|
23
|
Additional paid
in-capital
|
|
244,250
|
242,841
|
Treasury
stock
|
|
(1,462)
|
(9,904)
|
Accumulated other
comprehensive loss
|
|
(5,583)
|
(6,249)
|
Retained
earnings
|
|
21,355
|
32,160
|
Total stockholders'
equity
|
|
258,584
|
258,871
|
Total liabilities and
stockholders' equity
|
|
$
300,273
|
$
308,442
|
(*) Derived from
audited financial statements.
|
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SOURCE CEVA, Inc.