Ceva’s record year points to future direction
IP developer Ceva saw record results for 2021, with license deals pointing to the key areas of future growth in chip designs.
“2021 was a transformative year for Ceva as we expanded our technology proposition to address the abundant opportunities for comprehensive solutions that involve the combination of IP and chip design,” said Gideon Wertheizer, CEO of Ceva. “Our record year is the result of our long-term strategic mission to grow and diversify our business and customer base beyond handset modems. This can be clearly seen by secular growth in our base station and IoT royalties, which grew 28% year over year to $28.6 million, resulting from 1.3 billion CEVA-powered devices, which more than offset the ramp down of 4G smartphones by the large Tier 1 OEM.
Total revenue for the fourth quarter of 2021 was $34.1 million, an all-time record high and a 21% increase compared to $28.1 million for the fourth quarter of 2020.
Fourth quarter 2021 licensing, non-recurring engineering (NRE) and related revenue was $21.3 million, an increase of 77% when compared to $12.1 million reported for the same quarter a year ago. However royalties fell 21% to $12.7m as a result of the shift from 4G.
“Our record fourth quarter revenue and strong overall performance highlight the incredible demand for our comprehensive IP and chip design portfolio. In licensing, we concluded strategic agreements in 5G Fixed Wireless Access, Wi-Fi 7, Edge AI and the first integrated IP solution agreement combining IP and Intrinsix chip design,” said Wertheizer. “Royalties were impacted by the continued ramp down of 4G smartphones by a large Tier 1 OEM, but our base station & IoT product category continued to thrive, with quarterly revenue up 21% year-over-year from more than 330 million Ceva-powered smart and connected devices.”
Total revenue for 2021 was $122.7 million, up 22% from 2020. Licensing, NRE and related revenue for 2021 was a record $72.8 million, an increase of 39%. Royalty revenue for 2021 was a record $49.9 million, up 4% on the previous year.
“We continue forming tighter relationships with key customers that trust our excellence and are interested in expanding the scope of business beyond IP licensing toward integrated IP solutions, where we benefit from a higher revenue share. This is evident in our record licensing, NRE and related revenue, which grew 39% year-over-year to $72.8 million.
During the quarter, the company signed 20 IP license and NRE agreements, including 5G for fixed wireless access, next-generation Wi-Fi 7 for access points, Edge AI for ADAS, 3D audio headsets, wireless audio and Bluetooth and Wi-Fi connectivity for a broad range of IoT applications. Four agreements were with first-time customers. Geographically, seven of the deals signed were in China, six in the US, six in Asia and one in Europe.
The year saw the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies.
“2021 was a remarkable year for CEVA as our business continues to benefit from accelerated digitalization of everything. To expedite our growth and further exploit the opportunities for a broader offering of IP and chip design, we acquired Intrinsix,” said Yaniv Arieli, Chief Financial Officer of Ceva. “With this acquisition, we also strengthened our presence in the U.S., gained access to the lucrative aerospace and defense markets and diversified our revenue streams geographically. At the end of the year, our balance sheet remains very strong, with our cash and cash equivalent balances, marketable securities and bank deposits of approximately $155 million, and no debt.”
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