Ceva, Inc. Announces Second Quarter 2024 Financial Results

- Licensing and related revenues $17.3 million, up 28% year-over-year
- Royalty revenue $11.2 million, up 19% year-over-year, generated from 461 million shipped units, up 24% year-over-year
- Long-term roadmap deals signed with 2 infrastructure OEMs developing custom silicon driven by rise in AI-related traffic on wireless networks
- Strategic deal signed with leading U.S. analog semiconductor company for Ceva-Waves Bluetooth portfolio

ROCKVILLE, Md., Aug. 7, 2024 /PRNewswire/ -- Ceva, Inc. (NASDAQ: CEVA), the leading licensor of silicon and software IP that enables Smart Edge devices to connect, sense and infer data more reliably and efficiently, today announced its financial results for the second quarter ended June 30, 2024. Financial results for the second quarter ended June 30, 2023, reflect Ceva's continuing operations only, with the Intrinsix business reflected as a discontinued operation, unless otherwise noted.

Operational Highlights:

• Launched Ceva-Waves-Links, a Multi-Protocol wireless platform IP family to accelerate enhanced connectivity in MCUs and SOCs for IoT and Smart Edge AI applications
• Extended its Smart Edge IP leadership with Ceva-NeuPro-Nano, a TinyML Optimized family of NPUs for AIoT devices
• Achieved an important milestone of surpassing 18 billion Ceva-powered devices shipped

Total revenue for the second quarter of 2024 was $28.4 million, up 24%, compared to $22.9 million reported for the second quarter of 2023. Licensing and related revenue for the second quarter of 2024 was $17.3 million, up 28%, compared to $13.6 million reported for the same quarter a year ago. Royalty revenue for the second quarter of 2024 was $11.2 million, up 19%, compared to $9.4 million reported for the same quarter a year ago.

Amir Panush, Chief Executive Officer of Ceva, commented: "We are pleased to report strong execution and results for the second quarter that exceeded our estimates, with licensing revenue and royalty revenue growing 28% and 19%, respectively, year over-year. In licensing, customer demand for our IP portfolio is being driven by the growing adoption of AI across every industry and every device. We signed a number of strategic deals in the quarter, including one with a leading U.S. analog semiconductor company for our Bluetooth portfolio and two with our large OEM customers in wireless infrastructure for their development of next-generation ASICs to address the incredible growth in network traffic and performance improvements required to support Generative AI and Hybrid AI systems. Our royalty business grew on the back of broad market strength and market share gains in IoT, and strong growth in the smartphone market."

During the quarter, eleven IP licensing agreements were concluded, targeting a wide range of end markets and applications, including AI solutions for industrial and consumer edge AI devices, next-generation wireless infrastructure to enable ubiquitous AI, 5G satellite, 5G RedCap and Bluetooth connectivity for wearables and hearables. Five of the deals signed in the quarter were with OEMs and one deal signed was with a first-time customer.

GAAP gross margin for the second quarter of 2024 was 90%, as compared to 85% in the second quarter of 2023. GAAP operating loss for the second quarter of 2024 was $0.04 million, as compared to a GAAP operating loss of $5.3 million for the same period in 2023. GAAP net loss for the second quarter of 2024 was $0.3 million, as compared to a GAAP net loss of $4.9 million reported for the same period in 2023. GAAP diluted loss per share for the second quarter of 2024 was $0.01, as compared to GAAP diluted loss per share of $0.21 for the same period in 2023.

GAAP net loss with the discontinued operation for the second quarter of 2023 was $5.8 million. GAAP diluted loss per share with the discontinued operation for the second quarter of 2023 was $0.25.

Non-GAAP gross margin for the second quarter of 2024 was 91%, as compared to 86% for the same period in 2023. Non-GAAP operating income for the second quarter of 2024 was $4.4 million, as compared to non-GAAP operating loss of $1.1 million reported for the second quarter of 2023. Non-GAAP net income and diluted income per share for the second quarter of 2024 were $4.2 million and $0.17, respectively, compared with non-GAAP net loss and diluted loss per share of $0.5 million and $0.02, respectively, reported for the second quarter of 2023. 

Non-GAAP net loss including the discontinued operation for the second quarter of 2023 was $0.5 million. Non-GAAP diluted loss per share including the discontinued operation for the second quarter of 2023 was $0.02.

Yaniv Arieli, Chief Financial Officer of Ceva, stated: "Our excellent second quarter performance generated top line growth of 24% year-over-year and coupled with disciplined expense control, enabled us to expand our adjusted operating margin to 15%. We are encouraged by the strength of our licensing pipeline and royalty growth potential from our broad and diversified customer base and reflecting this, we continued to buy back the company's stock during the quarter, repurchasing approximately 100,000 shares for approximately $2 million under our stock repurchase program. At the end of the quarter, our cash and cash equivalent balances, marketable securities and bank deposits were approximately $158 million, which we can leverage to grow our share in edge AI and other high-growth markets."

Ceva Conference Call

On August 7, 2024, 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://app.webinar.net/8mGNyBxXMLR. Please go to the web site at least fifteen minutes prior to the call to register.

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: 2162644) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on Aug 14, 2024. The replay will also be available at Ceva's web site www.ceva-ip.com.

Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of Ceva to differ materially from those expressed or implied by such forward-looking statements and assumptions. Forward-looking statements include statements regarding the customer demand for Ceva's IP portfolio being driven by the growing adoption of AI across every industry and every device, the strength of Ceva's licensing pipeline and royalty growth potential, and Ceva's ability to leverage its capital resources to grow its share in edge AI and other high-growth markets. The risks, uncertainties and assumptions that could cause differing Ceva results include: the effect of intense industry competition; the ability of Ceva's technologies and products incorporating Ceva's technologies to achieve market acceptance; Ceva's ability to meet changing needs of end-users and evolving market demands; the cyclical nature of and general economic conditions in the semiconductor industry; Ceva's ability to diversify its royalty streams and license revenues; Ceva's ability to continue to generate significant revenues from the handset baseband market and to penetrate new markets; instability and disruptions related to the ongoing Israel-Gaza conflict; and general market conditions and other risks relating to Ceva's business, including, but not limited to, those that are described from time to time in our SEC filings. Ceva assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Non-GAAP Financial Measures

Non-GAAP gross margin for both the second quarters of 2024 and 2023 excluded: (a) equity-based compensation expenses of $0.2 million and (b) amortization of acquired intangibles of $0.1 million.

Non-GAAP operating income for the second quarter of 2024 excluded: (a) equity-based compensation expenses of $3.9 million, (b) the impact of the amortization of acquired intangibles of $0.3 million, and (c) $0.3 million of costs associated with business acquisitions. Non-GAAP operating loss for the second quarter of 2023 excluded: (a) equity-based compensation expenses of $3.9 million, (b) the impact of the amortization of acquired intangibles of $0.3 million, and (c) $0.1 million of costs associated with business acquisitions.

Non-GAAP net loss and diluted loss per share for the second quarter of 2024 excluded: (a) equity-based compensation expenses of $3.9 million, (b) the impact of the amortization of acquired intangibles of $0.3 million, (c) $0.3 million of costs associated with business acquisitions and (d) $0.1 million loss associated with the remeasurement of marketable equity securities. Non-GAAP net loss and diluted loss per share for the second quarter of 2023 excluded: (a) equity-based compensation expenses of $3.9 million, (b) the impact of the amortization of acquired intangibles of $0.3 million, (c) $0.1 million of costs associated with business acquisitions and (d) $0.1 million loss associated with the remeasurement of marketable equity securities.

Non-GAAP net loss including the discontinued operation and diluted loss per share including the discontinued operation for the second quarter of 2023 excluded: (a) equity-based compensation expenses of $3.9 million, (b) the impact of the amortization of acquired intangibles of $0.3 million, (c) $0.1 million of costs associated with business acquisitions, (d) $0.1 million loss associated with the remeasurement of marketable equity securities and (e) $1.0 million loss associated with discontinued operations.

About Ceva, Inc.

At Ceva, we are passionate about bringing new levels of innovation to the smart edge. Our wireless communications, sensing and Edge AI technologies are at the heart of some of today's most advanced smart edge products. From Bluetooth connectivity, Wi-Fi, UWB and 5G platform IP for ubiquitous, robust communications, to scalable Edge AI NPU IPs, sensor fusion processors and embedded application software that make devices smarter, we have the broadest portfolio of IP to connect, sense and infer data more reliably and efficiently. We deliver differentiated solutions that combine outstanding performance at ultra-low power within a very small silicon footprint. Our goal is simple – to deliver the silicon and software IP to enable a smarter, safer, and more interconnected world. This philosophy is in practice today, with Ceva powering more than 18 billion of the world's most innovative smart edge products from AI-infused smartwatches, IoT devices and wearables to autonomous vehicles and 5G mobile networks.

Our headquarters are in Rockville, Maryland with a global customer base supported by operations worldwide. Our employees are among the leading experts in their areas of specialty, consistently solving the most complex design challenges, enabling our customers to bring innovative smart edge products to market.

Ceva is a sustainability- 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.

Ceva: Powering the Smart Edge™

Visit us at www.ceva-ip.com and follow us on LinkedIn, X, YouTube, Facebook, and Instagram.

SOURCE Ceva, Inc.