CEVA, Inc. Announces Fourth Quarter and 2015 Financial Results

- Quarterly revenues of $16.1 million, up 16% year-over-year

MOUNTAIN VIEW, Calif., Feb. 3, 2016 — (PRNewswire) —  CEVA, Inc. (NASDAQ: CEVA), the leading licensor of signal processing IP for smarter, connected devices, today announced its financial results for the fourth quarter and year ended December 31, 2015.

CEVA, Inc reports Q4 2015 total revenues of $16.1 million and non-GAAP earnings per share of 17 cents. On an annual basis, CEVA reported $59.5 million in total revenues and non-GAAP earnings per share of 53 cents. More than 917 million CEVA-powered devices shipped in 2015, including 297 million smartphones. For more highlights from 2015, including LTE and Bluetooth shipment updates, view the infographic.

Fourth Quarter 2015 
Total revenue for the fourth quarter of 2015 was $16.1 million, an increase of 16% compared to $13.8 million reported for the fourth quarter of 2014. Fourth quarter 2015 licensing and related revenue was $8.0 million, an increase of 9% compared to $7.4 million reported for the fourth quarter of 2014. Royalty revenue for the fourth quarter of 2015 was $8.1 million, an increase of 24% compared to $6.4 million reported for the fourth quarter of 2014.

Gideon Wertheizer, Chief Executive Officer, stated: "We are extremely pleased with our strong finish for the year, as both licensing and royalty revenues delivered year-over-year growth. In licensing, the adoption of our CEVA-XM4 imaging and vision DSP by five licensees during the quarter expands our footprint in the growing use of advanced camera processing in automotives, drones and smartphones. In royalties, our quarterly royalty revenues reached its highest total since 2012, driven by record CEVA-powered smartphone shipments of more than 92 million units."

Mr. Wertheizer continued: "Over the course of 2015, we signed a record forty-seven licensing deals, generating all-time high licensing revenues and exceeding our internal expectations. Of the forty-seven deals signed, forty-three of these were for non-baseband applications, illustrating the continued success of our investment and strategic initiatives to diversify and expand our business. Annual royalty growth of 22% was driven by a significant acceleration of CEVA-powered LTE smartphone shipments in the second half of the year, which enabled us to reach the high end of our LTE shipment target of 60 to 70 million units. Looking ahead, we are entering 2016 with a healthy industry backdrop for royalty growth, a stronger-than-ever licensing pipeline and a compelling product portfolio that is exceptionally well positioned to address the key technology trends driving the mobile, consumer and automotive industries."

U.S. GAAP net income for the fourth quarter of 2015 was $2.3 million, compared to net loss of $1.9 million reported for the same period in 2014. U.S. GAAP diluted net income per share for the fourth quarter of 2015 were $0.11, compared to net loss per share of $0.10 for the fourth quarter of 2014. U.S. GAAP net loss for the fourth quarter of 2014 also included a write off of a deferred tax asset in the U.S. of $3.4 million.

Non-GAAP net income and diluted earnings per share for the fourth quarter of 2015 were $3.6 million and $0.17, respectively, representing an increase of 106% and 113% over the $1.7 million and $0.08 reported for the fourth quarter of 2014, respectively. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2015 excluded: (a) equity-based compensation expense 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. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2014 excluded: (a) equity-based compensation expense of $1.0 million, (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.2 million associated with the acquisition of RivieraWaves, (c) $0.1 million of costs associated with the RivieraWaves acquisition, and (d) a write off of a deferred tax asset related to equity-based compensation of $2.2 million.

During the fourth quarter of 2015, the Company concluded thirteen new license agreements. Eight of the agreements were for CEVA DSP cores, platforms and software, and five were for CEVA connectivity IPs. Target applications for licensees include smartphones, drones, surveillance systems, macro base stations, audio devices and the connectivity for Internet of Things (IoT). Geographically, one of the deals signed was in Europe and twelve were in Asia, including Japan.

Full Year 2015 Review
Total revenue for 2015 was $59.5 million, an increase of 17% compared to $50.8 million reported for 2014. Royalty revenue for 2015 was $27.4 million, representing an increase of 22% compared to $22.5 million reported for 2014. Licensing and related revenue for 2015 was $32.1 million, an increase of 13% compared to $28.3 million reported for 2014.

U.S. GAAP net income and diluted net income per share for 2015 were $6.3 million and $0.30, respectively, compared to net loss of $0.8 million and diluted loss per share of $0.04 reported for 2014. U.S. GAAP net loss for 2014 also included (a) a write off of a deferred tax asset in the U.S. of $3.4 million, (b) a loss of $0.4 million from the sale of our minority equity holdings in Antcor in the third quarter, and (c) the impact of the amortization of acquired intangibles, net of taxes, of $0.4 million, associated with the acquisition of RivieraWaves.

Non-GAAP net income and diluted earnings per share for 2015 were $11.2 million and $0.53, respectively, representing an increase of 51% over both the $7.4 million and $0.35 reported for 2014. Non-GAAP net income and diluted earnings per share for 2015 excluded (a) equity-based compensation expense of $4.0 million, and (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.9 million associated with the acquisition of RivieraWaves. Non-GAAP net income and diluted earnings per share for 2014 excluded (a) equity-based compensation expense of $5.0 million, (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.4 million associated with the acquisition of RivieraWaves, (c) a loss of $0.4 million from the sale of our minority equity holdings in Antcor, (d) $0.5 million of costs associated with the RivieraWaves acquisition, and (e) a write off of a deferred tax asset related to equity-based compensation of $1.9 million.

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