CEVA, Inc. Announces Third Quarter 2017 Financial Results

MOUNTAIN VIEW, Calif. -- Nov. 1, 2017 -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of signal processing IP for smarter, connected devices, today announced its financial results for the third quarter ended September 30, 2017.

Total revenue for the third quarter of 2017 was $24 million, a 35% increase compared to $17.8 million reported for the third quarter of 2016. Third quarter 2017 licensing and related revenue was $14 million, an increase of 88% when compared to $7.5 million reported for the same quarter a year ago. Royalty revenue for the third quarter of 2017 was $10 million, a decrease of 4% when compared to $10.4 million reported for the third quarter of 2016.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated: "Our third quarter record revenues considerably exceeded our expectations, driven by outstanding licensing execution and unprecedented demand for our IP. It is evident that our customers are increasingly placing greater value on our platform-based product strategy that expedites their development of high entry barrier technologies, including 5G, neural networks and short-range wireless. Furthermore, our design wins and customer relationships set the foundations for future royalty revenue streams as our licensees ship the next wave of smart and connected devices."

GAAP net income for the third quarter of 2017 increased 73% to $5.8 million, compared to $3.4 million reported for the same period in 2016. GAAP diluted earnings per share for the third quarter of 2017 also increased 73%, to $0.26 from $0.15 a year ago.

Non-GAAP net income and diluted earnings per share for the third quarter of 2017 were $8.3 million and $0.36, respectively, representing a 59% and 50% increase, respectively, over the $5.2 million and $0.24 reported for the third quarter of 2016. Non-GAAP net income and diluted earnings per share for the third quarter of 2017 excluded: (a) equity-based compensation expense, net of taxes, of $2.1 million, and (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RivieraWaves. Net income and diluted earnings per share for the third 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 of $0.3 million associated with the acquisition of RivieraWaves.

During the quarter, CEVA completed eight license agreements. Two of the agreements were for CEVA DSP cores, platforms and software and six were for CEVA connectivity IPs. All of the licensing agreements signed during the quarter were for non-handset baseband applications and three were with first-time customers of CEVA. Customers' target markets for the licenses include 5G base stations, A.I. for smartphones and consumer and industrial IoT. Geographically, two of the deals signed were in China, three were in the U.S. and three were in the APAC region.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: "Our exceptional third quarter set new record highs across multiple key financial metrics, including total revenue, licensing revenue, operating income, GAAP and non-GAAP net income and non-GAAP fully diluted earnings per share. We also generated $7.1 million in the quarter from operating cash flow that continued to strengthen our balance sheet with our cash balance, marketable securities and bank deposits totaling approximately $178 million, with no debt."

Financial Tables

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CEVA Conference Call

On November 01, 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 1-844-435-0316 (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/984/22872. 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: 10112881) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on November 8, 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