8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 26, 2010

CEVA, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-49842	77-0556376
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2033 Gateway Place, Suite 150, San Jose, CA	95110
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 408/514-2900

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On October 26, 2010, CEVA, Inc. (the “Company”) announced its financial results for the quarter ended September 30, 2010. A copy of the press release, dated October 26, 2010, is attached and filed herewith as Exhibit 99.1. This information, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference to such filing.

In addition to the disclosure of financial results for the quarter ended September 30, 2010 in accordance with generally accepted accounting principles in the United States (“GAAP”), the press release also included non-GAAP net income and diluted net income per share for the quarter ended September 30, 2010 and 2009, that excluded equity-based compensation expenses for the respective periods. The Company believes that the reconciliation of financial measures in the press release is useful to investors in analyzing the results for the quarters ended September 30, 2010 and 2009 because the exclusion of such expenses may provide a more meaningful analysis of the Company’s core operating results. Further, the Company believes it is useful for investors to understand how the expenses associated with the application of SFAS 123(R) are reflected on its statements of income. The reconciliation of financial measures should be reviewed in addition to and in conjunction with results presented in accordance with GAAP, and are intended to provide additional insight into the Company’s operations that, when viewed with its GAAP results and the accompanying reconciliation, offer a more complete understanding of factors and trends affecting the Company’s business. The reconciliation of financial measures should not be viewed as a substitute for the Company’s reported GAAP results.

ITEM 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1   Press Release of CEVA, Inc., dated October 26, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CEVA, INC.
Date: October 26, 2010	By:	/s/ Yaniv Arieli
		Yaniv Arieli
		Chief Financial Officer

EX-99.1

Exhibit 99.1

CEVA, Inc. Announces Third Quarter 2010 Financial Results

• New license agreement for CEVA-XC with a major semiconductor company

• Q3 revenue up 11% year-over-year; royalty revenue increased 42% year-over-year

• Record high GAAP and non-GAAP operating margins of 21% and 26%, respectively

MOUNTAIN VIEW, Calif. — October 26, 2010 — CEVA, Inc. (NASDAQ: CEVA); (LSE: CVA), the leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for the mobile handsets, portable and consumer electronics markets, today announced its financial results for the third quarter ended September 30, 2010.

Total revenue for the third quarter of 2010 was a record $10.7 million, an increase of 11% compared to $9.7 million reported for the third quarter of 2009. Third quarter of 2010 licensing revenue was $4.5 million, a decrease of 15% compared to $5.2 million reported for the third quarter of 2009. Royalty revenue for the third quarter of 2010 was $5.2 million, an increase of 42% over $3.7 million reported for the third quarter of 2009. Revenue from services for the third quarter of 2010 was $1 million, an increase of 35% from $0.7 million reported for the third quarter of 2009.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated: “We are pleased with our solid performance in the third quarter, including a strategic agreement for the CEVA-XC DSP with a leading semiconductor company, a new power house in the wireless space. Our royalty revenue continues to grow, and we reached a new record high market share of 33% for the worldwide handset cellular baseband market.”

“Furthermore, due to projections for stronger than expected shipments of products incorporating our technologies by a few of our customers in the third quarter, we currently anticipate significant sequential increase in our fourth quarter royalty revenue,” continued Mr. Wertheizer.

U.S. GAAP net income for the third quarter of 2010 was $3.0 million, an increase of 71% compared to $1.8 million reported for the same period in 2009. U.S. GAAP diluted earnings per share for the third quarter of 2010 was $0.13, an increase of 44% compared to $0.09 reported for the third quarter of 2009.

Non-GAAP net income and diluted earnings per share for the third quarter of 2010 reached all time highs of $3.0 million and $0.14, respectively, representing an increase of 24% and 17%, respectively, over the $2.4 million and $0.12 reported for the third quarter of 2009.

Non-GAAP net income and diluted earnings per share for the third quarter of 2010 and 2009, excluded an aggregate equity-based compensation expense of $0.5 million and $0.7 million, respectively.

During the quarter, the Company concluded six new licensing agreements. Five agreements were for CEVA DSP cores, platforms and software, and one agreement was for CEVA Bluetooth technology.

Target applications for customer deployment are 3G/4G handset and mobile broadband processors, smart metering systems, and Android-based application processors for smartphones, tablets and e-readers. Geographically, two of the agreements signed were in the U.S., three were in Asia and one was in Europe.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: “Our third quarter financial performance demonstrated continued progress towards our long term profitability milestones. We reached a new record high royalty revenue for the fourth consecutive quarter and also recorded all-time highs for GAAP and non-GAAP operating margins, which was driven by solid top line growth aligned with on-going expense management. In addition, we continued to generate significant positive cash flow during the quarter which further enhances our already strong balance sheet. As of September 30, 2010, CEVA’s cash balance, marketable securities and bank deposits were $117.2 million, an increase of 8% from the second quarter of 2010.”

CEVA Conference Call

On October 26, 2010, CEVA management will conduct a conference call at 8:30 a.m. Eastern Time / 1.30 p.m. London time, to discuss the operating performance for the quarter.

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

• US Participants: Dial 1-877-493-9121 (Access Code: CEVA or 15781514)

• UK/Rest of World: Dial +44-800-051-3806 (Access Code: CEVA or 15781514)

The conference call will also be available live via the Internet at the following link: http://www.videonewswire.com/event.asp?id=72879. 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 1-800-642-1687 (passcode: 15781514) for US domestic callers and +44-800-917-2646 (passcode: 15781514) for international callers from two hours after the end of the call until 11:59 p.m. (Eastern Time) on November 2, 2010. The replay will also be available at CEVA’s web site www.ceva-dsp.com.

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For More Information Contact:

Yaniv Arieli, CFO	Richard Kingston
CEVA, Inc.	CEVA, Inc.
Tel: +1.650.417.7941	Tel: +1.650.417.7976
Email: yaniv.arieli@ceva-dsp.com	Email: richard.kingston@ceva-dsp.com

About CEVA, Inc.

CEVA is the world’s leading licensor of silicon intellectual property (SIP) DSP cores and platform solutions for the mobile handsets, portable and consumer electronics markets. CEVA’s IP portfolio includes comprehensive technologies for cellular baseband (2G / 3G / 4G), multimedia, HD video and audio, voice over packet (VoP), Bluetooth, Serial Attached SCSI (SAS) and Serial ATA (SATA). In 2009, CEVA’s IP was shipped in over 330 million devices, powering handsets from 7 out of the top 8 handset OEMs, including LG, Motorola, Nokia, Samsung, Sony Ericsson and ZTE. Today, one in every three handsets shipped worldwide is powered by a CEVA DSP core. For more information, visit www.ceva-dsp.com.

Forward-Looking Statements

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. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including Mr. Wertheizer’s statement about CEVA’s ability to achieve significant sequential increase in its fourth quarter 2010 royalty revenue. The risks, uncertainties and assumptions include: the ability of the CEVA DSP cores and other technologies to continue to be strong growth drivers; the ability of products incorporating CEVA’s technologies to achieve market acceptance; CEVA’s success in penetrating new markets and maintaining its market position in existing markets; the effect of intense industry competition and consolidation; the possibility that the markets for CEVA’s technologies may not develop as expected; CEVA’s ability to timely and successfully develop and introduce new technologies; and general market conditions and other risks relating to CEVA’s business, including, but not limited to, those that are described from time to time in its 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 OPERATIONS — U.S. GAAP
U.S. dollars in thousands, except per share data

	Quarter ended					Nine months ended
	September 30,					September 30,
	2010			2009		2010		2009
	Unaudited			Unaudited		Unaudited		Unaudited
Revenues:
Licensing	$	4,459		$	5,242	$	13,774	$	14,059
Royalties		5,238			3,694		15,372		11,403
Other revenues		978			723		2,739		2,820
Total revenues		10,675			9,659		31,885		28,282
Cost of revenues		1,001			849		2,578		3,211
Gross profit		9,674			8,810		29,307		25,071
Operating expenses:
Research and development, net		4,129			4,061		13,243		12,132
Sales and marketing		1,664			1,628		5,248		4,914
General and administrative		1,593			1,525		4,709		4,555
Total operating expenses		7,386			7,214		23,200		21,601
Operating income		2,288			1,596		6,107		3,470
Interest and other income, net		493			551		1,591		3,402
Income before income tax		2,781			2,147		7,698		6,872
Income tax expense (income)		(208	)		394		527		1,436
Net income		2,989			1,753		7,171		5,436
Basic net income per share	$	0.14		$	0.09	$	0.34	$	0.28
Diluted net income per share	$	0.13		$	0.09	$	0.32	$	0.27
Weighted-average number of Common Stock used in computation of net income per share (in thousands):
Basic		21,244			19,689		20,989		19,588
Diluted		22,356			20,492		22,114		20,087

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Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(U.S. Dollars in thousands, except per share amounts)

	Quarter ended					Nine months ended
	September 30,					September 30,
	2010			2009		2010			2009
	Unaudited			Unaudited		Unaudited			Unaudited
GAAP net income		2,989			1,753		7,171			5,436
Equity-based compensation expense included in cost of revenue		23			21		56			90
Equity-based compensation expense included in research and development expenses		183			197		489			689
Equity-based compensation expense included in sales and marketing expenses		92			138		300			442
Equity-based compensation expense included in general and administrative expenses		239			329		816			989
Other income		—			—		—			(1,901	)(1)
Income tax expense (income)		(500	)(2)		—		(500	)(2)		543	(1)
Non-GAAP net income		3,026			2,438		8,332			6,288
GAAP weighted-average number of Common Stock used in computation of diluted net income per share (in thousands)		22,356			20,492		22,114			20,087
Weighted-average number of shares related to outstanding options		41			96		64			36
Weighted-average number of Common Stock used in computation of diluted net income per share, excluding equity-based compensation expense; capital gains associated with the divestment of CEVA’s equity investment in GloNav Inc., net and tax income (in thousands)		22,397			20,588		22,178			20,123
GAAP diluted net income per share	$	0.13		$	0.09	$	0.32		$	0.27
Equity-based compensation expense	$	0.03		$	0.03	$	0.08		$	0.10
Other income		—			—		—			(0.09	)(1)
Income tax expense (income)		($0.02	)(2)		—	$	(0.02	)(2)	$	0.03	(1)
Non-GAAP diluted net income per share	$	0.14		$	0.12	$	0.38		$	0.31

(1)	Results for the nine months ended September 30, 2009 included a capital gain of $1.9 million reported in interest and other income, net, and the applicable tax expense of $0.5 million reported in taxes on income, related to the divestment of CEVA’s equity interest in GloNav Inc. to NXP Semiconductors.
(2)	Results for the three months and the nine months ended September 30, 2010 included $0.5 million of tax income associated with adjustments related to international cost allocations, as well as tax planning strategies to utilize certain deferred tax assets.

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CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. Dollars in Thousands

	September 30,			December 31,
	2010			2009
	Unaudited			Audited
ASSETS
Current assets:
Cash and cash equivalents	$	23,134		$	12,104
Marketable securities and short term bank deposits		78,888			88,494
Trade receivables, net		5,000			5,995
Deferred tax assets		964			1,096
Prepaid expenses and other accounts receivables		5,507			5,345
Total current assets		113,493			113,034
Long-term investments:
Long-term bank deposits		15,153			—
Severance pay fund		5,144			4,455
Deferred tax assets		456			309
Property and equipment, net		1,462			1,148
Goodwill		36,498			36,498
Total assets	$	172,206		$	155,444
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade payables	$	526		$	530
Deferred revenues		766			432
Accrued expenses and other payables		9,598			9,735
Deferred tax liabilities		989			1,168
Total current liabilities		11,879			11,865
Accrued severance pay		5,253			4,483
Total liabilities		17,132			16,348
Stockholders’ equity:
Common Stock		21			20
Additional paid in-capital		167,549			158,325
Other comprehensive income		421			251
Accumulated deficit		(12,917	)		(19,500	)
Total stockholders’ equity		155,074			139,096
Total liabilities and stockholders’ equity	$	172,206		$	155,444

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