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

ROCKVILLE, Md., Feb. 16, 2021 -- 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.

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.

Financial Tables

To read fiancial tables, click here

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/ .