CEVA Inc (CEVA) Reports Decline in Q3 2023 Revenue and Earnings Amid Strategic Refocus
CEVA Inc (NASDAQ:CEVA) announced a 20% year-over-year decrease in total revenue for Q3 2023, with a reported $24.1 million compared to $30.0 million in Q3 2022.
GAAP gross margin improved to 90% in Q3 2023 from 81% in the same period last year, while non-GAAP gross margin reached 92%.
GAAP net loss narrowed to $2.7 million in Q3 2023 from $20.6 million in Q3 2022, with non-GAAP net income at $1.4 million, down from $5.2 million year-over-year.
CEVA Inc (NASDAQ:CEVA) concluded thirteen IP license agreements during the quarter, including deals for Wi-Fi 7 and Bluetooth 5 technologies.
CEVA Inc (NASDAQ:CEVA), a leading licensor of wireless connectivity and smart sensing technologies, released its financial results for the third quarter ended September 30, 2023, on November 8, 2023. The company reported a decrease in total revenue, with $24.1 million for Q3 2023, a 20% drop from the $30.0 million reported in the same quarter of the previous year. Licensing and related revenue also fell to $13.9 million from $18.7 million year-over-year but showed a 3% sequential increase. Royalty revenue experienced an 11% year-over-year decrease to $10.1 million, yet it increased by 8% sequentially.
Financial Performance and Management Commentary
CEVA's GAAP gross margin for Q3 2023 was 90%, up from 81% in Q3 2022. The GAAP operating loss was slightly higher at $2.7 million compared to $2.4 million for the same period last year. The GAAP net loss significantly improved to $2.7 million in Q3 2023 from a substantial loss of $20.6 million in Q3 2022, with diluted losses per share decreasing to $0.12 from $0.89.
On a non-GAAP basis, the gross margin for Q3 2023 was 92%, compared to 89% in Q3 2022. Non-GAAP operating income was $1.6 million, a decrease from $7.3 million reported for the same quarter last year. Non-GAAP net income and diluted income per share for Q3 2023 were $1.4 million and $0.06, respectively, compared to $5.2 million and $0.22 in Q3 2022.
Amir Panush, Chief Executive Officer of CEVA, commented on the results: "The CEVA team delivered solid third quarter results, with sequential improvements in both licensing and royalty revenues as we refocused all our efforts on driving the IP business following the sale of Intrinsix."
Yaniv Arieli, Chief Financial Officer of CEVA, stated: "Following the sale of Intrinsix, our gross margins have returned to our historic levels, reaching 90% and 92% on a GAAP and non-GAAP basis, respectively, in the quarter."
Operational Highlights and Future Outlook
CEVA concluded thirteen IP license agreements during Q3 2023, targeting various end markets and applications. Four agreements were with first-time customers, and two were with OEM customers. The company's wireless communications IPs, including new Wi-Fi 7 IP for Access Points, continue to see strong demand.
CEVA also announced an expanded share repurchase plan, with proceeds from the sale of the Intrinsix business increasing cash and cash equivalent balances to $160 million in early October.
Looking ahead, CEVA will host an Investor Day on December 6, 2023, to highlight its growth strategy and provide a longer-term financial outlook. The event will be available via live webcast through the CEVA Investor Relations website.
Balance Sheet and Shareholder Value
As of September 30, 2023, CEVA's balance sheet reflected cash and cash equivalents of $17.1 million and marketable securities and short-term bank deposits of $114.6 million. The company's commitment to shareholder value is evident in its share repurchase plan and its focus on maintaining high gross margins and managing operating expenses.
CEVA's financial results reflect the challenges of a dynamic market but also demonstrate the company's resilience and strategic focus on its core IP business. With a strong portfolio of wireless connectivity and smart sensing technologies, CEVA is well-positioned to capitalize on the growing demand for intelligent, connected devices.
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Explore the complete 8-K earnings release (here) from CEVA Inc for further details.
This article first appeared on GuruFocus.
