CEVA, Inc. Announces Fourth Quarter and 2015 Financial Results

MOUNTAIN VIEW, Calif., Feb. 3, 2016 -- 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, 2015.

Fourth Quarter 2015
Total revenue for the fourth quarter of 2015 was $16.1 million, an increase of 16% compared to $13.8 million reported for the fourth quarter of 2014. Fourth quarter 2015 licensing and related revenue was $8.0 million, an increase of 9% compared to $7.4 million reported for the fourth quarter of 2014. Royalty revenue for the fourth quarter of 2015 was $8.1 million, an increase of 24% compared to $6.4 million reported for the fourth quarter of 2014.

Gideon Wertheizer, Chief Executive Officer, stated: "We are extremely pleased with our strong finish for the year, as both licensing and royalty revenues delivered year-over-year growth. In licensing, the adoption of our CEVA-XM4 imaging and vision DSP by five licensees during the quarter expands our footprint in the growing use of advanced camera processing in automotives, drones and smartphones. In royalties, our quarterly royalty revenues reached its highest total since 2012, driven by record CEVA-powered smartphone shipments of more than 92 million units."

Mr. Wertheizer continued: "Over the course of 2015, we signed a record forty-seven licensing deals, generating all-time high licensing revenues and exceeding our internal expectations. Of the forty-seven deals signed, forty-three of these were for non-baseband applications, illustrating the continued success of our investment and strategic initiatives to diversify and expand our business. Annual royalty growth of 22% was driven by a significant acceleration of CEVA-powered LTE smartphone shipments in the second half of the year, which enabled us to reach the high end of our LTE shipment target of 60 to 70 million units. Looking ahead, we are entering 2016 with a healthy industry backdrop for royalty growth, a stronger-than-ever licensing pipeline and a compelling product portfolio that is exceptionally well positioned to address the key technology trends driving the mobile, consumer and automotive industries."

U.S. GAAP net income for the fourth quarter of 2015 was $2.3 million, compared to net loss of $1.9 million reported for the same period in 2014. U.S. GAAP diluted net income per share for the fourth quarter of 2015 were $0.11, compared to net loss per share of $0.10 for the fourth quarter of 2014. U.S. GAAP net loss for the fourth quarter of 2014 also included a write off of a deferred tax asset in the U.S. of $3.4 million.

Non-GAAP net income and diluted earnings per share for the fourth quarter of 2015 were $3.6 million and $0.17, respectively, representing an increase of 106% and 113% over the $1.7 million and $0.08 reported for the fourth quarter of 2014, respectively. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2015 excluded: (a) equity-based compensation expense 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. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2014 excluded: (a) equity-based compensation expense of $1.0 million, (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.2 million associated with the acquisition of RivieraWaves, (c) $0.1 million of costs associated with the RivieraWaves acquisition, and (d) a write off of a deferred tax asset related to equity-based compensation of $2.2 million.

During the fourth quarter of 2015, the Company concluded thirteen new license agreements. Eight of the agreements were for CEVA DSP cores, platforms and software, and five were for CEVA connectivity IPs. Target applications for licensees include smartphones, drones, surveillance systems, macro base stations, audio devices and the connectivity for Internet of Things (IoT). Geographically, one of the deals signed was in Europe and twelve were in Asia, including Japan.

Full Year 2015 Review
Total revenue for 2015 was $59.5 million, an increase of 17% compared to $50.8 million reported for 2014. Royalty revenue for 2015 was $27.4 million, representing an increase of 22% compared to $22.5 million reported for 2014. Licensing and related revenue for 2015 was $32.1 million, an increase of 13% compared to $28.3 million reported for 2014.

U.S. GAAP net income and diluted net income per share for 2015 were $6.3 million and $0.30, respectively, compared to net loss of $0.8 million and diluted loss per share of $0.04 reported for 2014. U.S. GAAP net loss for 2014 also included (a) a write off of a deferred tax asset in the U.S. of $3.4 million, (b) a loss of $0.4 million from the sale of our minority equity holdings in Antcor in the third quarter, and (c) the impact of the amortization of acquired intangibles, net of taxes, of $0.4 million, associated with the acquisition of RivieraWaves.

Non-GAAP net income and diluted earnings per share for 2015 were $11.2 million and $0.53, respectively, representing an increase of 51% over both the $7.4 million and $0.35 reported for 2014. Non-GAAP net income and diluted earnings per share for 2015 excluded (a) equity-based compensation expense of $4.0 million, and (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.9 million associated with the acquisition of RivieraWaves. Non-GAAP net income and diluted earnings per share for 2014 excluded (a) equity-based compensation expense of $5.0 million, (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.4 million associated with the acquisition of RivieraWaves, (c) a loss of $0.4 million from the sale of our minority equity holdings in Antcor, (d) $0.5 million of costs associated with the RivieraWaves acquisition, and (e) a write off of a deferred tax asset related to equity-based compensation of $1.9 million.

Yaniv Arieli, Chief Financial Officer, stated, "2015 was an outstanding year for CEVA, as we returned to top-line and bottom-line growth for the first time in three years, as well as significantly outperformed the growth rates of the smartphone market and the overall semiconductor industry. We continued to actively execute our share repurchase program throughout the year, buying back approximately 509,000 shares for a total consideration of $10.1 million. At the end of 2015, CEVA's cash and cash equivalent balances, marketable securities and bank deposits were approximately $139 million."

Financial Tables

To read financial tables, click here

CEVA Conference Call
CEVA management will conduct a conference call today, February 3rd 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/984/12568. 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: 10078329) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on February 11, 2016. 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, computer vision and computational photography 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 (Smart and Smart Ready), Wi-Fi (802.11 b/g/n/ac up to 4x4) and serial storage (SATA and SAS). Visit us at www.ceva-dsp.com .