CEVA, Inc. Announces Third Quarter 2016 Financial Results

MOUNTAIN VIEW, Calif. -- Nov. 2, 2016 -- 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, 2016.

Total revenue for the third quarter of 2016 was $17.8 million, a 10% increase compared to $16.2 million reported for the third quarter of 2015. Third quarter 2016 licensing and related revenue was $7.5 million, a decrease of 13% when compared to $8.6 million reported for the same quarter a year ago. Royalty revenue for the third quarter of 2016 was $10.4 million, an increase of 36% when compared to $7.6 million reported for the third quarter of 2015.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated: "CEVA delivered another exceptional quarter of growth and profitability, resulting in all-time record high total revenues. In the quarter, we solidified partnerships with key customers, including the signing of our first portfolio license agreement and a new DSP agreement with a tier one handset OEM customer for its 5G New Radio platform. This, together with our recent 5G base station design win, positions us as the only end-to-end DSP provider for 5G."

U.S. GAAP net income for the third quarter of 2016 was $3.4 million, compared to $3.3 million reported for the same period in 2015. U.S. GAAP diluted earnings per share for the third quarter of 2016 and 2015 were $0.15 and $0.16, respectively.

Non-GAAP net income and diluted earnings per share for the third quarter of 2016 were $5.2 million and $0.24, respectively, representing a 10% and 9% increase, respectively over the $4.7 million and $0.22 reported for the third quarter of 2015. Non-GAAP 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, net of taxes, of $0.3 million associated with the acquisition of RivieraWaves. Non-GAAP net income and diluted earnings per share for the third quarter of 2015 excluded: (a) equity-based compensation expense, net of taxes, 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.

During the quarter, CEVA completed thirteen license agreements. Four of the agreements were for CEVA DSP cores, platforms and software, eight were for CEVA connectivity IPs and one was a portfolio license agreement. Ten of the licensing agreements signed during the quarter were for non-handset baseband applications and two were for handset baseband applications. Six were with first-time customers for CEVA. Target applications for customer deployment are 5G basebands, vision processing surveillance cameras and 3D consumer products, and Bluetooth including the upcoming new standard BT5 and Wi-Fi connectivity for various IoT devices. Geographically, four of the deals signed were in the U.S., seven were in the APAC region and two were in Europe.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: "Shipments from both our baseband and non-baseband licensees showed impressive growth in the quarter, contributing to the highest royalty revenue in the Company's history and the highest non-GAAP earnings per share for more than four years. We continued to strengthen our balance sheet with our cash balance, marketable securities and bank deposits totaling $145 million at the end of the quarter with no debt."

Financial Tables

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CEVA Conference Call

On November 2nd, 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 webcast at the following link: https://www.webcaster4.com/Webcast/Page/984/17667. 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: 10094357) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on November 9, 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 (BLE and Dual Mode), Wi-Fi (802.11a/b/g/n/ac up to 4x4) and serial storage (SATA and SAS). Visit us at www.ceva-dsp.com.