CEVA(US:CEVA)2021-05-10 19:25Financial Data and Key Metrics Changes - Total revenue for Q1 2021 was $25.4 million, up 8% year-over-year from $23.6 million in Q1 2020 [7][15] - Licensing revenue was approximately $14.4 million, down 1% year-over-year, while royalty revenue reached $11 million, up 21% year-over-year [15][9] - Quarterly gross margin was 91% on a GAAP basis and 92% on a non-GAAP basis, both better than projected [15][16] - US GAAP net loss for the quarter was $3.6 million, with a diluted loss per share of $0.16, compared to a net loss of $1.2 million and a diluted loss per share of $0.05 in Q1 2020 [17] Business Line Data and Key Metrics Changes - Licensing revenue accounted for 57% of total revenues, while royalty revenue accounted for 43% [15] - Shipped units by CEVA's licensees were 341 million units, down 30% sequentially but up 31% year-over-year [17] - Base station and IoT product shipments were 212 million units, down 21% sequentially but up 41% year-over-year [17] Market Data and Key Metrics Changes - China remains a strong market for wireless connectivity technologies, with increasing interest in 5G technologies, particularly the new RedCap provision for IoT devices [7][8] - The Ultra WideBand (UWB) market is expected to see 285 million devices shipped in 2021, forecasted to reach 1 billion devices by 2025 [8] Company Strategy and Development Direction - The acquisition of Intrinsix aims to expand CEVA's market reach into the Aerospace and Defense sector, which is forecasted to reach $6 billion in annual semiconductor spending [10] - CEVA plans to offer a turnkey IP platform that combines connectivity and smart sensing IP with Intrinsix's chip design expertise [10][11] - The introduction of the BlueBud platform IP targets the growing True Wireless earbuds market, expected to reach 600 million units by 2022 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for CEVA's technologies despite industry-wide supply constraints [14][20] - The company expects the Intrinsix acquisition to contribute $10 million to $11 million to CEVA's top line in the second half of the year and to be accretive as early as 2021 on a non-GAAP basis [20] - CEVA forecasts total revenue for 2021 to be between $116 million to $117 million, compared to about $100 million in 2020 [20] Other Important Information - CEVA's cash and cash equivalents were $174 million at the end of Q1 2021, with no buyback program exercised during the quarter due to the focus on the Intrinsix acquisition [18] - The company is monitoring the impact of industry-wide supply constraints and is committed to helping customers mitigate risks [14] Q&A Session Summary Question: Background on Intrinsix and its relevance to CEVA - Management highlighted Intrinsix's unique skill set in complex design and its established relationships in the Aerospace and Defense market, which CEVA aims to leverage for growth [24][25] Question: Financial implications of the Intrinsix acquisition - Management indicated that the acquisition is expected to add $10 million to $11 million in revenue in the second half of the year, with operating margins around 10% [30][36] Question: Trends in the wireless infrastructure market - Management noted positive trends in the wireless infrastructure market, with growth in both year-over-year and quarter-over-quarter metrics, although at a slower pace than anticipated [44][46] Question: Growth expectations for Intrinsix - Management expects Intrinsix to contribute significantly to CEVA's growth, with potential revenues doubling in the following year due to synergies and customer overlap [50][52] Question: Licensing results and deal count - Management clarified that the strong licensing revenue was driven by a few large agreements, despite a lighter deal count, indicating a healthy pipeline for future quarters [53][54] Question: Development of Bluetooth LE audio - Management confirmed that the BlueBud platform supports both BLE audio and classical Bluetooth, with expectations for BLE audio to become mainstream in the coming years [60]