CEVA(US:CEVA)2024-03-06 16:00Revenue and Market Growth - Ceva expects overall revenue growth of 4% to 8% for 2023, with most growth concentrated in the second half of the year [199]. - In 2023, Ceva signed 37 deals for its Bluetooth, Wi-Fi, UWB, and cellular IoT IPs, reinforcing its market-leading position [190]. - The addressable market size for Bluetooth, Wi-Fi, UWB, and cellular IoT is projected to exceed 15 billion devices annually by 2027 [190]. - The company completed 17 IP licensing deals in Q4 2023, indicating strong interest across its IP portfolio [189]. - Ceva's royalty rates from smart edge products are expected to show strength, particularly in Bluetooth, Wi-Fi, and cellular IoT business lines [199]. - The company has a dominant market position in licensing Wi-Fi 6 with over 40 customers and leadership in Wi-Fi 7 IP [190]. - Cellular IoT royalty revenues reached an all-time high, up 47% year-over-year, while Audio AI DSP royalty revenues increased by 111% year-over-year [246]. - The company expects to continue generating significant revenue from its technology portfolio, particularly in Wi-Fi and Bluetooth markets [240]. Financial Performance - Total revenue for 2023 was $97.4 million, a decrease of 19% compared to 2022, primarily due to a return to a normal licensing environment after a surge in demand during the pandemic [235]. - Licensing and related revenue was $57.6 million in 2023, down 23% year-over-year, with 53 licensing agreements signed, a decrease from 60 in the previous year [241]. - Royalty revenues totaled $39.9 million in 2023, down 12% year-over-year, with a significant decline in mobile and 5G RAN related royalties, which were down 22% year-over-year [243][244]. - The company shipped 1.6 billion units in 2023, a slight decrease from 1.7 billion in 2022, equating to approximately 50 Ceva-powered devices sold every second [245]. - Operating income for 2023 was 6.2%, an increase from 3.3% in 2022, indicating improved operational efficiency [233]. - Total operating expenses for 2023 were $99.2 million, a decrease of 2.3% from 2022, primarily due to a $3.6 million impairment charge recorded in 2022 [254]. - Research and development expenses for 2023 were $72.7 million, representing a 3.4% increase year-on-year, with R&D expenses accounting for 74.6% of total revenues [257]. - Sales and marketing expenses decreased to $11.0 million in 2023, down 3.8% from 2022, with sales and marketing expenses as a percentage of total revenues at 11.3% [260]. - General and administrative expenses increased to $14.9 million in 2023, a 5.1% increase from 2022, with these expenses representing 15.3% of total revenues [263]. Cash Flow and Investments - In 2023, the company had approximately $166.5 million in cash and cash equivalents, an increase from $146.5 million in 2022, primarily due to $30.0 million received from the sale of Intrinsix [282]. - Cash used in operating activities in 2023 was $6.3 million, consisting of a net loss of $11.9 million and adjustments for non-cash items of $8.8 million [287]. - The company invested $42.0 million in bank deposits and marketable securities in 2023, compared to $63.9 million in 2022 [285]. - Net cash provided by investing activities in 2023 was $10.8 million, a significant improvement from net cash used in investing activities of $15.1 million in 2022 [292]. - The company had a cash outflow of $3.6 million in 2023 for the acquisition of VisiSonics [292]. Tax and Accounting - The provision for income taxes includes reserves for uncertain tax positions, which may be adjusted based on audits and changes in tax laws [218]. - The effective tax rate for the French subsidiary was reduced to 10% under the French IP Box regime, compared to a corporate tax rate of 26.5% in 2021 [277]. - The company recorded tax expenses of $10.2 million in 2023, a decrease from $18.1 million in 2022, primarily due to a valuation allowance recorded in 2022 [271]. - The company is currently evaluating the impact of new accounting standards issued by the FASB, including ASU 2023-07 and ASU 2023-09 [230][231]. Impairment and Asset Management - In 2022, an impairment charge of $3,556,000 was recorded for Immervision technology, ceasing its development [216]. - The company evaluates the recoverability of intangible assets and recorded impairment charges totaling $1,958,000 in 2022 related to certain technologies [216]. - No impairment of goodwill has been identified for the years ended December 31, 2023, 2022, and 2021 [215]. Shareholder Activities - In 2023, the company repurchased 278,799 shares at an average price of $22.11 per share, totaling $6.2 million [294]. - The company has 700,000 shares available for repurchase as of December 31, 2023 [294]. Miscellaneous - The company recorded a foreign exchange gain of $0.69 million in 2023, compared to a loss of $1.27 million in 2021 [301]. - The company expects to continue experiencing fluctuations in operating results due to currency exchange rate volatility [302]. - The company has no long-term debt or capital lease obligations as of December 31, 2023 [299].