CEVA, Inc. Announces Second Quarter 2016 Financial Results

MOUNTAIN VIEW, Calif., Aug. 3, 2016 -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of signal processing IP for smarter, connected devices, today announced its financial results for the second quarter ended June 30, 2016.

Total revenue for the second quarter of 2016 was $17.1 million, a 28% increase compared to $13.4 million reported for the second quarter of 2015. Second quarter 2016 licensing and related revenue was $7.5 million, a decrease of 3% when compared to $7.7 million reported for the same quarter a year ago. Royalty revenue for the second quarter of 2016 was $9.6 million, an increase of 69% when compared to $5.7 million reported for the second quarter of 2015.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated: "We are very pleased with our performance for the quarter. We delivered record revenue for the second quarter in succession as royalties derived from LTE smartphones powered by our DSPs grew considerably. We continue to experience a healthy licensing environment and a stronger-than-normal sales pipeline as we capitalize on the accelerated industry transition towards ubiquitous connectivity and machine learning."

U.S. GAAP net income for the second quarter of 2016 was $2.7 million, compared to $0.2 million reported for the same period in 2015. U.S. GAAP diluted earnings per share for the second quarter of 2016 were $0.13, an increase of 1200% compared to $0.01 reported for the second quarter of 2015.

Non-GAAP net income and diluted earnings per share for the second quarter of 2016 were $4.6 million and $0.21, respectively, representing a 263% and 250% increase, respectively over the $1.3 million and $0.06 reported for the second quarter of 2015. Non-GAAP net income and diluted earnings per share for the second quarter of 2016 excluded: (a) equity-based compensation expense, net of taxes, of $1.6 million, and (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.3 million associated with the acquisition of RivieraWaves. Non-GAAP net income and diluted earnings per share for the second quarter of 2015 excluded: (a) equity-based compensation expense, net of taxes, of $0.8 million, and (b) the impact of the amortization of acquired intangibles and other costs, net of taxes, of $0.3 million associated with the acquisition of RivieraWaves.

During the quarter, CEVA completed ten license agreements. Four of the agreements were for CEVA DSP cores, platforms and software and six of the agreements were for CEVA connectivity IPs. All ten of the licensing agreements signed during the quarter were for non-handset baseband applications and three were with first-time customers for CEVA. Target applications for customer deployment are vision processing for a virtual reality product, 5G base stations, voice processors, Bluetooth low energy and Bluetooth 5 connectivity for various IoT devices and storage drives. Geographically, four of the deals signed were in the U.S., four were in the APAC region and two were in Europe.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: "With a record fifty-six million CEVA-powered LTE chips shipped in the quarter, we were able to more than offset the traditional seasonal weakness of the second quarter and deliver a 23% sequential increase in royalty revenues, which contributed to overall profitability. At the end of the quarter, our cash balance, marketable securities and bank deposits totaled $138 million."

CEVA Conference Call

On Aug 3, 2016 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 1-866-364-3869 (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/984/16067. 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: 10089128) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 10, 2016. The replay will also be available at CEVA's investor web site investors.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 a/b/g/n/ac up to 4x4) and serial storage (SATA and SAS). Visit us at www.ceva-dsp.com .