Strategic Agreements Concluded with Leading Japanese and European Customers; Pro forma non-GAAP net income triples from Q2-2006, royalty revenue up 33% YoY
SAN JOSE, Calif., July 24, 2007 -- CEVA, Inc. (NASDAQ: CEVA)(LSE: CVA), a leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for mobile, consumer electronics and storage applications, today announced its financial results for the quarter ended June 30, 2007.
Total revenue for the second quarter of 2007 was $8.5 million, a slight increase of 1% compared to $8.4 million reported for the second quarter of 2006 and a sequential increase of 10% from $7.7 million for the first quarter of 2007. Second quarter of 2007 licensing revenue was $5.5 million, a decrease of 8% from $6.0 million reported for the second quarter of 2006 and a sequential increase of 19% from $4.6 million for the first quarter of 2007. Royalty revenue for the second quarter of 2007 was $1.9 million, an increase of 33% over $1.4 million for the second quarter of 2006 and slightly lower by 2.0% from the traditionally strong first quarter of 2007 in which royalty revenue was $2.0 million. Revenue from services for the first and second quarters of 2007 was $1.1 million, an increase of 11% compared to $1.0 million reported for the second quarter of 2006.
Net income for the second quarter of 2007 was $0.4 million, compared to a net loss of $0.2 million for the second quarter of 2006. Net income per share for the second quarter of 2007 was $0.02 per share, compared to net loss of $0.01 per share for the second quarter of 2006.
In the second quarter of 2007 and 2006, the Company recognized an equity-based compensation charge of $0.5 million pursuant to the adoption of SFAS 123R. Pro forma non-GAAP net income and net income per share for the second quarter of 2007, excluding the equity-based compensation expense, increased 308% and 400% to $0.9 million and $0.05, respectively, compared to the second quarter of 2006. Pro forma non-GAAP net income and net income per share for the second quarter of 2006, excluding the equity-based compensation expense and a gain of $0.1 million reported in interest and other income related to the disposal of an investment, was $0.2 million and $0.01, respectively.
During the second quarter of 2007, the Company concluded eight new license agreements. Six agreements were for CEVA DSP cores and platforms, one agreement was for CEVA SATA technology and one agreement was for CEVA Bluetooth 2.0+EDR technology. Target applications for customer deployment are Digital TV, DVD and HD-DVD, ultra low cost phones, 3G phones, smart phones and portable multimedia players. Geographically, three of the eight deals concluded were in the U.S., one was in Europe and four were in the Asia Pacific region.
During the quarter, CEVA concluded another major strategic licensing agreement for its newest DSP core, the CEVA-TeakLite-III. The new customer is one of the largest, branded, consumer electronics vendors in Japan that has adopted the CEVA-TeakLite-III for its next generation of integrated Digital TVs. This represents another major design win for CEVA in the home entertainment segment and continues the Company's expansion beyond the mobile market into a larger market composed of Digital TVs, HD-DVD / Blu-ray DVDs, IPTV and set-top boxes.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated: "The second quarter of 2007 was a strong quarter for the main aspects of our business, including total revenue reached, the backlog and pipeline build up and the increase in royalty revenue which was 33% higher compared to the equivalent quarter last year. We are also particularly pleased with the continued success of our newest generation CEVA-TeakLite-III DSP core in penetrating the home entertainment market, as well as the strategic decision made by one of the largest European semiconductor companies to broadly use our technology over its internally developed DSP solution."
Yaniv Arieli, Chief Financial Officer of CEVA, stated: "Our revenue for the second quarter of 2007 was closer to the higher end of our guidance through a combination of strong royalties reported by our customers and good licensing performance. This revenue performance along with continued focus on our growth engines enabled us to report significant sequential profits growth. Non-GAAP pro forma net income and fully diluted EPS for the second quarter of 2007 compared to the first quarter of 2007 grew 100% and 96%, respectively. We also generated positive cash flow of approximately $0.5 million and as of June 30, 2007, CEVA's cash balances and marketable securities were $64.9 million."
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CEVA Conference Call
On July 24, 2007 CEVA management will conduct a conference call at 8:30 a.m. Eastern Time / 1:30 p.m. London time, to discuss the operating performance for the quarter.
The conference call will be available via the following dial-in numbers:
-- US Participants: Dial 1-877-493-9121 (Access Code: CEVA)
-- UK/Rest of World: Dial +44-800-032-3836 (Access Code: CEVA)
The conference call will also be available live via the Internet at the following link: http://www.videonewswire.com/event.asp?id=40804. Please go to the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software.
For those who cannot access the live broadcast, a replay will be available by dialing 1-877-519-4471 (passcode: 8982532) for US domestic callers and +44-800-169-3875 (passcode: 8982532) for international callers from two hours after the end of the call until 11:59 p.m. (Eastern Time) on July 31, 2007. The replay will also be available at CEVA's web site http://www.ceva-dsp.com/.
About CEVA, Inc.
Headquartered in San Jose, Calif., CEVA is a leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for mobile, consumer electronics and storage applications. CEVA's IP portfolio includes comprehensive solutions for multimedia, audio, voice over packet (VoP), Bluetooth, Serial Attached SCSI (SAS) and Serial ATA (SATA), and a wide range of programmable DSP cores and subsystems with different price/performance metrics serving multiple markets. In 2006, CEVA's IP was shipped in over 190 million devices. For more information, visit http://www.ceva-dsp.com/