CEVA revenues leaped 19% to $16.5 million

5 May, 2016

CEVA's DSP technology supports Samsung’s Galaxy 8’s LTE modem. Its strategic vision is to expand into Artificial Vision in smart cars, Robotics and IoT

CEVA’s DSP technology supports Samsung’s Galaxy 8’s LTE modem. Its strategic vision is to expand into Artificial Vision in smart cars, Robotics and IoT

CEVA-XM4 Development board

Over the last few weeks, evidence of an ongoing slump in the global semiconductor market have been reflected in almost every earning report published. CEVA is one of the exceptions – the Herzliya, Israel, based supplier of intellectual property for semiconductor manufacturers has reported 19% leap in Q1 2016 revenues, to $16.5 million. Net profit totaled $1.8 million, a 270% increase compare to a $0.5 in the same quarter last year.

Ceva CEO Gideon Wertheizer

The company also supplied a favorable guidance for the second quarter, based on the growth of its Chinese mobile market and the expansion into new markets, such as Artificial Vision and IoT. The company expects 23%-31% increase in revenues of $16.4-17.5 million in the second quarter, a  compared to Q2 2015.

CEVA operates in two distinct models: licensing and royalty fees. The income from licensing in Q1 2016 totaled $8.6 million, a 10% increase compared to the same quarter last year. Royalty revenues were $7.9 million, a 31% increase. During the first quarter, the company signed 11 new licensing agreements for semiconductor design: 6 agreements for its Digital Signal Processors (DSP) and 5 agreements connectivity technology.

CEVA’s core business is in the cellular. Its DSP technology supports Samsung’s Galaxy 8’s LTE modem, but the strategic vision is to expand to Artificial Vision in smart cars, Robotics and IoT. In the passing quarter, the company has signed 3 licensing agreements for its computer vision sensors.

CEVA stock in NASDAQ
CEVA stock in NASDAQ

In December 2015 it has signed an agreement to supply LG with artificial vision processors for smartphones. The processor supplied to LG were ISO 26262 certifide – the international standard for functional safety of electrical or electronic systems in automobiles. This certification boosts CEVA’s efforts to penetrate the growing Advanced Driver Assistance Systems market.

CEO Gideon Wertheizer, said that the company’s activity in a wide range of fields has helped it to grow faster than many companies in the semiconductor market, especially considering the latest slump due to the cooling of the mobile market. “The licensing environment continued to be favorable, particularly for our vision products with three new vision deals signed”.

CEVA’s share price surged by following the publication of the favorable report and is currently (5/3/2016) traded for $26.7. Analyst reiterated CEVA stock rating as “buy”, expecting the stock price to rise further to $28.0.

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