Ceva Inc. (Nasdaq:CEVA); LSE:CVA), which licenses signal processing IP, has reported a good first quarter and supplied positive guidance for the second quarter.
Total revenue for the first quarter of 2016 was $16.5 million, representing a 19% increase in comparison with the $13.8 million reported for the first quarter of 2015. First quarter 2016 licensing and related revenue was $8.6 million, 10% higher than the $7.8 million reported for the same quarter a year ago. Royalty revenue for the first quarter of 2016 was $7.9 million, 31% than the $6.0 million reported in the corresponding quarter
On a GAAP basis, Ceva posted a net profit of $1.8 million for the first quarter of 2016, representing a 270% increase from $0.5 million reported for the same period in 2015. GAAP-based diluted earnings per share for the first quarter of 2016 were $0.09, which compares with $0.02 for the first quarter of 2015.
On a non-GAAP basis, Ceva's net profit and diluted earnings per share for the first quarter of 2016 were $3.5 million and $0.17, which compare with $1.6 million and $0.08 for the first quarter of 2015. The non-GAAP profit figures for the first quarter of 2016 exclude equity-based compensation expense of $1.4 million, net of taxes, and the impact of the amortization of acquired intangibles and other costs of $0.3 million associated with the acquisition of RivieraWaves.
Since buying RivieraWaves in 2014 for up to $19 million, Ceva had made no further substantial acquisitions.
Ceva CEO Gideon Wertheizer said, "The licensing environment continued to be favorable, particularly for our vision products with three new vision deals signed. Our core business in cellular, together with a diversified portfolio of enabling technologies for smarter, connected devices, allows us to consistently outpace the growth of the overall semiconductor industry and deliver value for our stockholders."
Ceva CFO Yaniv Ariel said, "In addition to another strong licensing quarter, our market share expansion in LTE continues, with a record thirty five million shipped units reported in the quarter, resulting in 31% year-over-year royalty revenue growth. Reflecting our confidence in our business, we repurchased approximately 180,000 shares of our common stock during the quarter for an aggregate consideration of approximately $3.4 million. At the end of the quarter, our cash balance, marketable securities and bank deposits totaled $137 million."
Ceva expects further growth in the smartphone market, and to take a substantial slice of the fourth generation market of China Mobile through its major Chinese customers. Ceva also mentioned that its technology is installed in Samsung's new Galaxy devices.
In the conference call following the release of the results, Wertheizer mentioned the growth engines that the company has identified, among them artificial sight processors for autonomous vehicles and the Internet of Things.
In the second quarter, Ceva expects revenue of $16.5-17.5 million, 23.5-31% more than in the second quarter of 2015 and up to 6.1% more than in the first quarter of this year. It sees earnings per share of $0.17-0.19. The guidance is higher than the consensus analysts' estimate both for revenue and for earnings.
Ceva's share price is currently up 6.42% in New York, giving it a market cap of over $501 million.
Published by Globes [online], Israel business news - www.globes-online.com - on May 2, 2016
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