CEVA, Inc. Announces Fourth Quarter and Year End 2020 Financial Results

ROCKVILLE, Md., Feb. 16, 2021 /PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of wireless connectivity and smart sensing technologies, today announced its financial results for the fourth quarter and year ended December 31, 2020.

CEVA, Inc. reported Q4 2020 earnings of $28.1 million and non-GAAP EPS of $0.20. 21 new agreements were signed. Royalty revenue was a record high $16.1 million. On an annual basis, total revenue was a record $100.3 million, up 15% year-over-year. CEVA-powered shipments were more than 1.3 billion units for 2020, including a record 750 million base station & IoT unit shipments. For more information and highlights, view the infographic.

Our licensing business had another record year as we grew our customer base in Wi-Fi, Bluetooth, 5G and automotive.

Total revenue for the fourth quarter of 2020 was $28.1 million, a slight decrease of 1%, when compared to $28.3 million reported for the fourth quarter of 2019. Fourth quarter 2020 licensing and related revenue was $12.1 million, a decrease of 18%, when compared to $14.8 million reported for the same quarter a year ago. Royalty revenue for the fourth quarter of 2020 was a record high of $16.1 million, an increase of 19%, when compared to $13.5 million reported for the fourth quarter of 2019.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated: "We are very pleased to end the year with another excellent quarter, in both licensing and royalties. We concluded 21 licensing agreements, including a strategic and comprehensive agreement with a top tier smartphone OEM who will develop a range of CEVA-based connectivity chips to serve its smartphone and wireless accessories product lines. Our record high royalty revenue reflects a particularly strong quarter in smartphone shipments and continued traction in our base station and IoT product category, which grew 50% year over year."

Mr. Wertheizer continued: "Our organization worldwide showed tremendous resilience and determination to cope with the challenges the COVID-19 pandemic presented. Our licensing business had another record year as we grew our customer base in Wi-Fi, Bluetooth, 5G and automotive. Our annual royalty business also reached an all-time high, driven by 72% year-over-year growth in base station and IoT royalty revenues, to contribute $22.3 million. We continue to benefit from the expedited deployment of 5G base station and growing use of smart TV, laptops and other IoT devices. We entered 2021 with strong momentum in both our licensing and royalty businesses as our primary markets are expected to continue to expand the adoption of wireless connectivity and smart sensing technologies."

During the quarter, CEVA completed 21 license agreements. Five of the agreements were for smart sensing products and 16 for connectivity products with seven first-time customers of CEVA. Customers' target products include 5G smartphones, TWS earbuds, cellular IoT devices and a wide variety of other IoT devices. Geographically, eight of the deals signed were in China, six were in the U.S., four in APAC and three were in Europe.

GAAP net income for the fourth quarter of 2020 decreased to $0.6 million, compared to $3.1 million reported for the same period in 2019. GAAP diluted earnings per share for the fourth quarter of 2020 decreased to $0.03 from $0.14 a year ago. The fourth quarter 2020 financials included a $2 million tax expense due to withholding taxes which cannot be utilized in future years.

Non-GAAP net income and diluted earnings per share for the fourth quarter of 2020 were $4.7 million and $0.20, respectively, comparing the $6.8 million and $0.30 reported for the fourth quarter of 2019. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2020 excluded: (a) equity-based compensation expense, net of taxes, of $3.4 million, and (b) the impact of the amortization of acquired intangible and other assets, net of taxes, of $0.7 million associated with the acquisition of the Hillcrest Labs business and investments in NB-IoT and Immervision technologies. Net income and diluted earnings per share for the fourth quarter of 2019 excluded: (a) equity-based compensation expense, net of taxes, of $2.8 million, and (b) the impact of the amortization of acquired intangible assets of $0.9 million associated with the acquisition of RivieraWaves and the Hillcrest Labs business, and investments in NB-IoT and Immervision technologies.

Full Year 2020 Review

Total revenue for 2020 was $100.3 million, an increase of 15%, when compared to $87.2 million reported for 2019. Licensing and related revenue for 2020 was a record $52.5 million, an increase of 10%, when compared to $47.9 million reported for 2019. Royalty revenue for 2020 was a record $47.8 million, representing an increase of 22%, as compared to $39.3 million reported for 2019.

U.S. GAAP net loss and diluted loss per share for 2020 were $2.4 million and $0.11, respectively, compared to U.S GAAP net income and diluted earnings per share of $0.0 million and $0.00, respectively reported for 2019.

Non-GAAP net income and diluted earnings per share for 2020 were $13.7 million and $0.60, respectively, representing an increase of 3% and 2%, respectively, over $13.4 million and $0.59 reported for 2019, respectively. Non-GAAP net income and diluted earnings per share for 2020 excluded (a) equity-based compensation expense, net of taxes, of $13.4 million, and (b) the impact of the amortization of acquired intangible assets, net of taxes, of $2.7 million associated with the acquisition of the Hillcrest Labs business, and investments in NB-IoT and Immervision technologies. Non-GAAP net income and diluted earnings per share for 2019 excluded (a) equity-based compensation expense, net of taxes, of $10.1 million, (b) the impact of the amortization of acquired intangible assets of $2.3 million associated with the acquisitions of RivieraWaves and the Hillcrest Labs business, and the investments in NB-IoT and Immervision technologies, and (c) deal expenses and write-off of an acquired lease associated with the Hillcrest Labs transaction of $0.8 million.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: "We are extremely proud of our performance in 2020, highlighted by the numerous records achieved in the fourth quarter and the full year. These include record royalty revenue for the fourth quarter and the full year 2020 of $16.1 million and $47.8 million, respectively, generated from a record 484 million and 1.3 billion CEVA-powered devices, respectively. We also managed to deliver non-GAAP EPS of $0.60 for the full year, despite recent foreign exchange headwinds. At the end of the year, our cash and cash equivalent balances, marketable securities and bank deposits were approximately $160 million, with no debt."

CEVA Conference Call

On February 16, 2021, 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://www.webcaster4.com/Webcast/Page/984/39449. 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: 10151090) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on February 23, 2021. The replay will also be available at CEVA's web site www.ceva-dsp.com.

About CEVA, Inc.
CEVA is the leading licensor of wireless connectivity and smart sensing technologies. We offer Digital Signal Processors, AI processors, wireless platforms and complementary software for sensor fusion, image enhancement, computer vision, voice input and artificial intelligence, all of which are key enabling technologies 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, robotics, industrial and IoT. Our ultra-low-power IPs include comprehensive DSP-based platforms for 5G baseband processing in mobile and infrastructure, advanced imaging and computer vision for any camera-enabled device and 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 IMU solutions for AR/VR, robotics, remote controls, and IoT. For artificial intelligence, we offer a family of AI processors capable of handling the complete gamut of neural network workloads, on-device. For wireless IoT, we offer the industry's most widely adopted IPs for Bluetooth (low energy and dual mode), Wi-Fi 4/5/6 (802.11n/ac/ax) and NB-IoT.

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 https://www.ceva-dsp.com/ and follow us on Twitter, YouTube, Facebook, LinkedIn and Instagram.

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 about optimism regarding the continued traction in CEVA's base station and IoT product category, benefits derived from the expedited deployment of 5G base station and growing use of smart TV, laptops and other IoT devices, as well as the strong momentum in CEVA's licensing and royalty businesses in 2021 as its primary markets are expected to continue to expand the adoption of wireless connectivity and smart sensing technologies. 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 non-baseband 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, 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


Three months ended

Year ended


December 31,

December 31,


2020

2019

2020

2019


Unaudited

Revenues:



Licensing and related revenues

$  12,068

$  14,806

$    52,513

$    47,890

Royalties

16,077

13,506

47,813

39,262






Total revenues

28,145

28,312

100,326

87,152






Cost of revenues

2,490

2,823

10,749

10,106






Gross profit

25,655

25,489

89,577

77,046






Operating expenses:





Research and development, net

16,315

14,250

62,010

52,843

Sales and marketing

3,135

3,554

11,907

12,363

General and administrative

3,223

3,481

14,116

11,841

Amortization of intangible assets

575

746

2,307

1,923






Total operating expenses

23,248

22,031

90,340

78,970






Operating income (loss)

2,407

3,458

(763)

(1,924)

Financial  income , net

595

992

3,284

3,291











Income before taxes on income

3,002

4,450

2,521

1,367

 Income taxes

2,367

1,388

4,900

1,339






Net income (loss)

$635

$3,062

($2,379)

$28






Basic net income (loss) per share

 

 

$0.03

 

 

$0.14

 

 

($0.11)

 

 

$0.00

Diluted net income (loss) per share

$0.03

$0.14

($0.11)

$0.00

Weighted-average number of Common Stock
used in computation of net income (loss)  per
share (in thousands):





Basic

22,249

21,920

22,107

21,932

Diluted

22,911

22,373

22,107

22,323






 

 

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

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



Three months ended

Year ended


December 31

December 31,


2020

2019

2020

2019


Unaudited






GAAP net income (loss)

$635

$3,062

($2,379)

$28

Equity-based compensation expense included in
  cost of revenue

166

166

639

630

Equity-based compensation expense included in
  research and development expenses

1,759

1,543

6,874

5,857

Equity-based compensation expense included in
  sales and marketing expenses

542

383

2,038

1,495

Equity-based compensation expense included in
  general and administrative expenses

1,099

779

4,085

2,736

Income tax benefit related to equity-based
  compensation expenses

(196)

(101)

(256)

(574)

Amortization of intangible assets, net of taxes,
  related to acquisitions of RivieraWaves and
  Hillcrest Labs business, investments in NB-IoT
  and Immervision technologies, and deal costs
  and write off of an acquired lease related the
  Hillcrest Labs transaction

685

945

2,746

3,203


̶

̶

̶

̶

Non-GAAP net income

$4,690

$6,777

$13,747

$13,375







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

22,911

22,373

22,107

22,323






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

305

462

979

475

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

23,216

22,835

23,086

22,798






GAAP diluted net income (loss) per share

$0.03

$0.14

($0.11)

$0.00

Equity-based compensation expense, net of taxes

$0.14

$0.12

$0.59

$0.45

Amortization of intangible assets, net of taxes,
  related to acquisitions of RivieraWaves and
  Hillcrest Labs business, investments in NB-IoT
  and Immervision technologies, and deal costs and
  write off of an acquired lease related the Hillcrest
  Labs transaction

$0.03

$0.04

$0.12

$0.14


̶

̶

̶

̶

Non-GAAP diluted net income per share

$0.20

$0.30

$0.60

$0.59






 

 

CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)


December 31,

December 31,


2020

2019 (*)


Unaudited

Unaudited 

ASSETS



Current assets:



Cash and cash equivalents

$           21,143

$           22,803

Marketable securities and short term bank deposits

108,987

121,782

Trade receivables, net

14,765

11,066

Unbilled receivables

16,459

17,241

Prepaid expenses and other current assets

6,205

5,660

Total current assets

167,559

178,552

Long-term assets:



Bank deposits

29,529

5,368

Severance pay fund

10,535

9,881

Deferred tax assets

10,826

10,605

Property and equipment, net

7,586

7,879

Operating lease right-of-use assets

9,052

11,066

Goodwill

51,070

51,070

Intangible assets, net

10,836

13,424

Other long term assets

9,959

9,176

Total assets

$        306,952

$        297,021


LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:



Trade payables

$           894

$           701

Deferred revenues

2,434

3,642

Accrued expenses and other payables

21,883

19,642

Operating lease liabilities

2,969

2,393

Total current liabilities

28,180

26,378




Long-term liabilities:



Accrued severance pay

11,226

10,551

Operating lease liabilities

5,772

8,273

Other accrued liabilities

885

662

Total liabilities

46,063

45,864




Stockholders' equity:



Common stock:

22

22

Additional paid in-capital

233,172

228,005

Treasury stock

(30,133)

(39,390)

Accumulated other comprehensive income

478

94

Retained earnings

57,350

62,426

Total stockholders' equity

260,889

251,157

Total liabilities and stockholders' equity

$   306,952

$   297,021


(*) Derived from audited financial statements

 

CEVA - a global leader in signal processing IP for everything smart and connected. (PRNewsFoto/CEVA, Inc.)

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SOURCE CEVA, Inc.

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