In the press release accompanying its third quarter financials last week, Israeli wireless connectivity and smart sensing technology company Ceva (Nasdaq: CEVA) said that it had signed a license agreement with a first-time customer in ADAS (advanced driver assistance systems) chips. Elaborating in the company's conference call, CEO Gideon Wertheizer said, "We signed in the quarter with a major semiconductor player in the automotive space. This agreement is based on a project our customer won with a very large automotive manufacturer in Japan, for an ADAS solution for new L2+ and L3 cars, which are projected to start production by 2025."

"The digital transformation in the automotive industry, of which ADAS is a key driver, has led to a dramatic increase in the usage of software and AI to analyze data collected by the cameras and radar sensors surrounding the car. Furthermore, among the push by players, such as NVIDIA and Mobileye, of their own closed and vertically integrated solutions, automotive Tier one and OEMs are seeking or an open high-performance technology where they can take advantage of their in-house excellence while not being locked into a certain vendor," Wertheizer explained.

Ceva reported revenue of $25 million for the third quarter, representing a 6% increase compared with $23.5 million reported for the third quarter of 2019. On a non-GAAP basis, net profit was $3.6 million, or $0.16 per share, down from $5.1 million, or $0.22 per share, in the third quarter of 2019.

The company posted a GAAP-based net loss for the third quarter of 2020 of $0.7 million, which compares with a profit of $0.8 million reported for the corresponding quarter of 2019.

The third quarter 2020 financials included a $1 million tax expense due to withholding tax which cannot be utilized in future years. The third quarter 2019 financials included a tax benefit of approximately $1 million as a result of the successful conclusion of a tax audit.

At the end of the quarter, Ceva had cash and cash equivalent balances of $153 million, with no debt.

Published by Globes, Israel business news - en.globes.co.il - on November 9, 2020

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