Ceva Q3 beats analysts; sees further strong royalty growth

Gideon Wertheizer  photo: Eyal Izhar

Ceva CEO Gideon Wertheizer: We continue to make progress in growing our customer base, including comprehensive agreements with industry leaders in strategic markets such as ADAS.

Israeli fabless semiconductor company Ceva Inc. (Nasdaq:CEVA); LSE:CVA), which licenses wireless connectivity and smart sensing technologies, has reported third quarter revenue of $23.5 million, 10% more than in the third quarter of 2018. Non-GAAP net profit was $5.1 million ($0.22 per share), which compares with $5.2 million non-GAAP ($0.23 per share) in the third quarter of 2018. The third quarter 2019 results are ahead of the consensus analysts' estimate, which was revenue of $22.73 million and earnings per share of $0.17.

Licensing and related revenue grew 15% year-over-year to $11.3 million. Royalties grew 61% sequentially and 5% year-over-year to $12.2 million. Non-handset shipments reached a record 123 million units in the quarter.

On a GAAP basis, net profit for the third quarter of 2019 was $0.8 million ($0.03 per share), which compares with $2.5 million ($0.11 per share) for the same period in 2018. GAAP and non-GAAP net profit and diluted earnings per share for the third quarter of 2019 included a tax benefit of approximately $1 million as a result of the conclusion of a tax audit.

Ceva CEO Gideon Wertheizer said, "We continue to make progress in growing our customer base, including comprehensive agreements with industry leaders in strategic markets such as ADAS, hearing aids and cellular IoT. Our royalty revenue growth reflects good momentum in both the handset baseband and non-handset aspects of our business. Our handset baseband customers benefitted from the launch of premium smartphones and share gain in the low-cost smartphone market. Our non-handset business continues to grow with record high quarterly revenues and unit shipments of 123 million, including first-time contribution from our newly acquired Hillcrest Labs sensor fusion business."

Non-GAAP net profit and diluted earnings per share for the third quarter of 2019 excluded: (a) equity-based compensation expense, net of taxes, of $2.6 million (b) the impact of the amortization of acquired intangibles of $0.8 million associated with the acquisitions of RivieraWaves and the Hillcrest Labs business, and 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.

For the fourth quarter of this year, Ceva sees sequential growth in royalty revenue of 10% to a record $13.5 million, and gross profit of 89% of turnover.

Ceva CFO Yaniv Arieli said, " At the end of the third quarter, our cash and cash equivalent balances, marketable securities and bank deposits were approximately $148 million, following the acquisition of the Hillcrest Labs sensor fusion business and the technology investment in Immervision's wide-angle imaging IP during the quarter."

Published by Globes, Israel business news - en.globes.co.il - on November 7, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Gideon Wertheizer  photo: Eyal Izhar
Gideon Wertheizer photo: Eyal Izhar
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