CEVA Inc. (CEVA)
Q2 2011 Earnings Call
July 26, 2011 8:30 AM ET
Richard Kingston – Director, Marketing and IR
Gideon Wertheizer – Chief Executive Officer
Yaniv Arieli – Chief Financial Officer
Joseph Wolf – Barclays
Matt Robison – Wunderlich
Anil Doradla – William Blair & Company
Daniel Meron – RBC Capital Markets
Gary Mobley – Benchmark
Jay Srivatsa – Chardan
Vijay Rakesh – Agee
Suji De Silva – ThinkEquity
Previous Statements by CEVA
» CEVA's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» CEVA, Inc. CEO Discusses Q4 2010 Results - Earnings Call Transcript
» CEVA CEO Discusses Q3 2010 Results - Earnings Call Transcript
I will now turn the call over to Richard Kingston, Director of Marketing and Investor Relations. Please go ahead, sir.
Thank you and good morning, everyone. Welcome to CEVA’s second quarter 2011 earnings conference call. This conference call will be conducted by Gideon Wertheizer, Chief Executive Officer of CEVA; Yaniv Arieli, Chief Financial Officer of CEVA; and I, Richard Kingston, Director of Marketing and Investor Relations.
Gideon will cover the business aspects and the highlights on the quarter, followed by Yaniv who will cover the financial results for the second quarter and will provide guidance for the third quarter and fiscal 2011.
I will start with the forward-looking statements. Today’s conference call contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect would cause the results of CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions.
Forward-looking statements include financial guidance for the third quarter and fiscal 2011, market data from Strategy Analytics, IDC, China’s MIIT and certain customers incorporated herein, optimism about our customers product pipelines and market penetration, optimism about our products including the CEVA-XC and CEVA-MM3000 product line, projections relating to LTE and smartphone expansion, as well as the 3G expansion in China and trends relating to Internet-enabled HDTV and 3-DTV, a machine-to-machine devices, optimism about our ability to penetrate new markets beyond the cellular baseband market, as well as the positive impact on our business of these various factors.
The risks, uncertainties and assumptions include the ability of the CEVA DSP cores and other technologies to continue to be strong growth drivers for us, our success in penetrating new markets and maintaining our market position in existing markets, the ability of products incorporating our technologies to achieve market acceptance, the effect of intense industry competition and consolidation, the possibility that markets for our technologies may not develop as expected or that products incorporating our technologies do not achieve market acceptance, our ability to timely and successfully develop and introduce new technologies and general market conditions and other risks relating to our business, including but not limited to those that are described from time to time in our SEC filings.
CEVA assumes no obligation to update any forward-looking statements or information which speak as of their respective dates.
With that said, I would now like to turn the call over to Gideon.
Thank you, Richard. Good morning, everyone and thank you for joining us today. I hope you had the opportunity to review our press release with the financial results for the second quarter of 2011.
We are very pleased with our second quarter results as we delivered revenue of $14.4 million which was at the high-end of our guidance and recorded a 36% increase over the second quarter of 2010. Whereas the revenue for the second quarter of 2011 was $8.3 million, a 60% increase over the second quarter of last year. Earnings per share on a non-GAAP basis were $0.22, 83% higher compared to the second quarter of last year.
During the second quarter we concluded eight license agreements. Seven of the agreements were for our DSP cores, platforms and software and one agreement were for our SATA/SAS product lines. Geographically, four of the license agreements were in the U.S. and four entire Asia.
Target applications for customer deployment are 4G and 3G baseband processors for handsets, infrastructure and smart grid, portable game console and SSD drives.
The second quarter was an outstanding period for CEVA. Our result re-experienced this unique trend that has accelerated our growth in recent years and our testament to our robust product portfolio and noteworthy customer relationships.
Our strong licensing revenue was a growing adoption of our CEVA-XC DSP core included -- including three new agreements for product targeting 4G equipment. Also our other DSP products were selected for new designs of mark-to-market 3G phones and portable game consoles.
On the royalty revenue, we saw a strong increase of 60% compared to the second quarter of last year. Shipment volumes increased approximately 5% sequentially, mainly due to increase in the lucrative 3G smartphone and TD-SCDMA market segments, which helps to offset other traditional of (inaudible) seasonality effect in the 2G space.
Let me take few moments to provide some additional details on our licensing revenue. As I mentioned, we concluded three new CEVA-XC agreements in the second quarter. The new CEVA-XC agreements are Tier 1 OEM in semiconductor company, who claim to use the technology for 4G smartphone and smart grid equipments. The common thing with this design win is the capability of the CEVA-XC to enable unified software-based architecture, which has to process multiple radio protocol such as LTE, HSPA+, CDMA, GSM with one DSP.