CEVA (CEVA) 8-K CEVA, Inc. Announces Second Quarter 2018 Financial Results

Exhibit 99.1

CEVA, Inc. Announces Second Quarter 2018 Financial Results

• Third license agreement signed for NeuPro AI processor in the quarter

• Company repurchased approximately 270,000 shares for approximately $9 million

MOUNTAIN VIEW, Calif. – August 07, 2018–CEVA, Inc. (NASDAQ: CEVA), the leading licensor of signal processing platforms and artificial intelligence processors for smarter, connected devices, announced today its financial results for the second quarter ended June 30, 2018.

Total revenue for the second quarter of 2018 was $17.5 million, a 15% decrease compared to $20.6 million reported for the second quarter of 2017. Second quarter 2018 licensing and related revenue was $10.0 million, a decrease of 3% when compared to $10.3 million reported for the same quarter a year ago. Royalty revenue for the second quarter of 2018 was $7.5 million, a decrease of 27% when compared to $10.2 million reported for the second quarter of 2017.

Gideon Wertheizer, CEO of CEVA, stated: “Our licensing business continued on track in the second quarter, with healthy demand for our AI, computer vision and connectivity products. Our second quarter royalty revenue came in below expectations due to continued unexpected weakness with one of our large Chinese handset baseband customers. We now expect the weakness with this Chinese customer to continue for the rest of the year and have reduced our annual royalty expectations accordingly. With that said, we are encouraged by a new production ramp and share gain of a flagship smartphone and the continued expansion of ournon-handset baseband products. As a result, we expect royalties for the second half of the year to be both substantially stronger than the first half and deliver year-over-year growth with respect to the second half of 2018.”

GAAP net loss for the second quarter of 2018 was $2.1 million, compared to $3.9 million net income reported for the same period in 2017. GAAP diluted loss per share for the second quarter of 2018 was $0.09, compared to diluted earnings per share of $0.17 a year ago. GAAP net income and diluted earnings per share for the second quarter of 2017 included a tax benefit of approximately $1.8 million as a result of the successful conclusion of a tax audit.

Non-GAAP net income and diluted earnings per share for the second quarter of 2018 were $0.9 million and $0.04, respectively, compared to $6.3 millionnon-GAAP net income and $0.28 diluted earnings per share reported for the second quarter of 2017.Non-GAAP net income and diluted earnings per share for the second quarter of 2018 excluded: (a) equity-based compensation expense, net of taxes, of $2.7 million, and (b) the impact of the amortization of acquired intangibles of $0.3 million associated

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with the acquisition of RivieraWaves and NB-IoT technologies. Net income and diluted earnings per share for the second quarter of 2017 excluded: (a) equity-based compensation expense, net of taxes, of $2.1 million, and (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RivieraWaves.

During the quarter, CEVA completed nine license agreements. Four of the agreements were for CEVA DSP and AI platforms, including a third NeuPro AI license agreement, and five were for CEVA connectivity IPs. Eight of the agreements were fornon-handset baseband applications and three were with first-time customers of CEVA. Customers’ target markets for the licenses include advanced cameras, drones, smart speakers, smartphones, wireless headphones and IoT devices. Geographically, five of the deals signed were in China, one was in Europe and three were in the APAC region, including Japan.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: “Despite lower-than-expected royalty revenue for the second quarter, we were pleased to see continued progress in ournon-handset baseband customers, who shipped a new record level of 88 million CEVA-powered devices. On buyback, we purchased approximately 270,000 shares of our common stock in the second quarter for an aggregate consideration of approximately $9 million. In addition, our Board of Directors approved the expansion of this plan during the quarter, and as of June 30^th, we have a total of 700,000 shares of common stock available for repurchase. Moreover, CEVA’s cash and cash equivalent balances, marketable securities and bank deposits were approximately $173 million at the end of the quarter.”

Full Year 2018 Revenue Guidance and Commentary

As a result of the lower royalty revenue for the first half of 2018, the expectation of continued weakness with the Chinese handset baseband customer for the remainder of 2018, and the lack of visibility and uncertainty for the timing of resumption of royalties with the well-publicized ban of a Chinese base station customer, the company is lowering 2018 annual royalty guidance to a level representing a 10% decrease from 2017 royalty revenue. While it is encouraging that the base station customer has resumed operations, it’s assumed, that it will take them a few months to rebuild their supply chain and to get back to full production and shipments. In light of the above and to be prudent, the company now projects total annual revenue to be approximately $80 million.

CEVA Conference Call

On August 07, 2018 CEVA management will conduct a conference call at 8:30 a.m. Eastern Time to discuss the operating performance for the quarter.

The conference call will be available via the following dial in numbers:

• U.S. Participants: Dial1-844-435-0316 (Access Code: CEVA)

• International Participants: Dial+1-412-317-6365 (Access Code: CEVA)

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The conference call will also be available live via webcast at the following link:https://www.webcaster4.com/Webcast/Page/984/26513. Please go to the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software.

For those who cannot access the live broadcast, a replay will be available by dialing+1-877-344-7529 or+1-412-317-0088 (access code: 10122115) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 14, 2018. The replay will also be available at CEVA’s web sitewww.ceva-dsp.com.

For More Information, Contact:

Yaniv Arieli CEVA, Inc. CFO +1.650.417.7941 yaniv.arieli@ceva-dsp.com Richard Kingston CEVA, Inc. VP Market Intelligence, Investor & Public Relations +1.650.417.7976 richard.kingston@ceva-dsp.com

About CEVA, Inc.

CEVA is the leading licensor of signal processing platforms and artificial intelligence processors for a smarter, connected world. We partner with semiconductor companies and OEMs worldwide to create power-efficient, intelligent and connected devices for a range of end markets, including mobile, consumer, automotive, industrial and IoT. Ourultra-low-power IPs for vision, audio, communications and connectivity include comprehensiveDSP-based platforms forLTE/LTE-A/5G baseband processing in handsets, infrastructure and cellular IoT enabled devices, advanced imaging and computer vision for any camera-enabled device, audio/voice/speech andultra-low poweralways-on/sensing applications for multiple IoT markets. For artificial intelligence, we offer a family of AI processors capable of handling the complete gamut of neural network workloads,on-device. For connectivity, we offer the industry’s most widely adopted IPs for Bluetooth (low energy and dual mode) andWi-Fi (802.11 a/b/g/n/ac/ax up to 4x4). Visit us atwww.ceva-dsp.com and follow us onTwitter,YouTube,Facebook andLinkedIn.

Forward Looking Statement

This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions. Forward-looking statements include Mr. Wertheizer’s statements about the second half of the year being substantially stronger in royalty revenue due to a new flagship smartphone and continued expansion of CEVA’snon-handset baseband products, the revised annual revenue and annual royalty revenue guidance and the rationale for such revised guidance in the section entitled, “Full Year 2018 Revenue Guidance and Commentary,” as well as any potential prospects of share buybacks. The risks, uncertainties and assumptions that could cause differing CEVA results include: the ability of the CEVA DSP cores and other technologies to continue to be strong growth drivers for

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us; our success in penetrating new markets, including innon-baseband markets, and maintaining our market position in existing markets; our ability to diversify the company’s royalty streams, the ability of products incorporating our technologies to achieve market acceptance, the speed and extent of the expansion of the 4G, 5G and LTE networks, the maturation of the IoT market, the effect of intense industry competition and consolidation, global chip market trends, the possibility that markets for CEVA’s 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.

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CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME – U.S. GAAP

U.S. dollars in thousands, except per share data

	Three months ended						Six months ended
	June 30,						June 30,
	2018			2017			2018			2017
	Unaudited
Revenues:
Licensing and related revenues	$	10,038		$	10,337		$	20,121		$	19,872
Royalties		7,456			10,238			14,942			21,990
Total revenues		17,494			20,575			35,063			41,862
Cost of revenues		1,988			1,608			3,960			3,304
Gross profit		15,506			18,967			31,103			38,558
Operating expenses:
Research and development, net		11,843			10,509			23,859			20,382
Sales and marketing		3,399			3,427			6,575			6,365
General and administrative		2,833			2,552			5,787			4,677
Amortization of intangible assets		92			309			451			618
Total operating expenses		18,167			16,797			36,672			32,042
Operating income (loss)		(2,661	)		2,170			(5,569	)		6,516
Financial income, net		777			755			1,704			1,326
Income (loss) before taxes on income		(1,884	)		2,925			(3,865	)		7,842
Income taxes expense (benefit)		206			(983	)		407			(173	)
Net income (loss)	$	(2,090	)	$	3,908		$	(4,272	)	$	8,015
Basic net income (loss) per share	($	0.09	)	$	0.18		($	0.19	)	$	0.37
Diluted net income (loss) per share	($	0.09	)	$	0.17		($	0.19	)	$	0.36
Weighted-average number of Common Stock used in computation of net income (loss) per share (in thousands):
Basic		22,129			21,712			22,139			21,556
Diluted		22,129			22,563			22,139			22,376

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Unaudited Reconciliation of GAAP toNon-GAAP Financial Measures

U.S. Dollars in thousands, except per share amounts

	Three months ended						Six months ended
	June 30						June 30
	2018			2017			2018			2017
	Unaudited
GAAP net income (loss)	($	2,090	)	$	3,908		($	4,272	)	$	8,015
Equity-based compensation expense included in cost of revenue		168			114			325			205
Equity-based compensation expense included in research and development expenses		1,359			972			2,628			1,843
Equity-based compensation expense included in sales and marketing expenses		423			370			877			659
Equity-based compensation expense included in general and administrative expenses		895			722			1,786			1,420
Income tax benefit related to equity-based compensation expenses		(153	)		(69	)		(282	)		(184	)
Amortization of intangible assets related to RivieraWaves transaction and in 2018 NB-Iot technologies		275			309			634			618
Non-GAAP net income	$	877		$	6,326		$	1,696		$	12,576
GAAP weighted-average number of Common Stock used in computation of diluted net income (loss) per share (in thousands) Weighted-average number of shares related to outstanding stock-based awards (in thousands)		22,129 903			22,563 269			22,139 935			22,376 315
Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands )		23,032			22,832			23,074			22,691
GAAP diluted earnings (loss) per share	($	0.09	)	$	0.17		($	0.19	)	$	0.36
Equity-based compensation expense, net of taxes	$	0.12		$	0.10		$	0.23		$	0.16
Amortization of intangible assets related to RivieraWaves transaction and in 2018 NB-IoT technologies	$	0.01		$	0.01		$	0.03		$	0.03
Non-GAAP diluted earnings per share	$	0.04		$	0.28		$	0.07		$	0.55

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CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)

	June 30,			December 31,
	2018			2017 (*)
	Unaudited			Unaudited
ASSETS
Current assets:
Cash and cash equivalents	$	10,700		$	21,739
Marketable securities and short term bank deposits		114,995			117,096
Trade receivables		9,246			14,480
Accrued revenues		8,753			2,014
Prepaid expenses and other current assets		6,244			3,747
Total current assets		149,938			159,076
Long-term assets:
Bank deposits		47,134			44,518
Severance pay fund		9,022			8,910
Deferred tax assets		4,454			3,643
Property and equipment, net		8,100			6,926
Goodwill		46,612			46,612
Intangible assets, net		3,307			1,742
Other long term assets		6,250			5,385
Total assets	$	274,817		$	276,812
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade payables	$	1,034		$	392
Deferred revenues		2,717			4,399
Accrued expenses and other payables		17,099			18,004
Total current liabilities		20,850			22,795
Long-term liabilities:
Accrued severance pay		9,601			9,347
Total liabilities		30,451			32,142
Stockholders’ equity:
Common stock:		22			22
Additional paidin-capital		219,333			217,417
Treasury stock		(31,640	)		(26,056	)
Accumulated other comprehensive loss		(1,417	)		(586	)
Retained earnings		58,068			53,873
Total stockholders’ equity		244,366			244,670
Total liabilities and stockholders’ equity	$	274,817		$	276,812

(*) Derived from audited financial statements

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