Siva topped forecasts for the quarter and grew 28% in revenue

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The deployment of the 5th generation networks in China is accelerating, and the Israeli technology company Siva Enjoy this trend. The company, which provides connectivity technologies in the field of chips, today published the second quarter reports in which it surpassed the forecasts The analysts. Revenue was $ 23.6 million, up 28.4% from the same quarter last year and 14% higher than analysts’ forecasts. Bottom line, non-GAAP net income reached 12 cents, while analysts expected only 4 cents a share.

Siva’s revenues are divided into two areas: the sale of licenses for its technology, and royalties received by the company when a device that includes its technology is sold to the end consumer. Similar to the previous quarter in which it suspended its annual forecast, this time too Siva does not provide a forecast for 2020, but reiterates the forecast for the licensing area where it expects revenue of $ 51 million increase from revenue in 2019. As for royalties, the company only notes that revenues in the second half will be higher than the first half – that is, over $ 19.2 million, so it can be understood that the entire year will end with revenues of at least $ 90 million (similar to analysts’ forecasts), compared to 2019 when revenues were 87.2 million dollar.

In the third quarter, operating expenses are expected to be slightly lower than in the first quarters of the year and to a gross profit of 89%, similar to the second quarter.

In the second quarter, Siva recorded revenue of $ 23.6 million, of which $ 13.5 million was revenue from licensing and $ 10.1 million was revenue from royalties. Under GAAP, it posted a net loss of $ 1.1 million, compared to a loss of $ 1.5 million in the same quarter last year. On a non-GAAP basis, excluding miscellaneous accounting expenses, quarterly net income was $ 2.9 million, up from $ 1.2 million in the same quarter last year.

In the first half, the company’s revenues grew by 33.5% to $ 47.2 million, while the growth in licensing revenues was 28.5% and the growth in royalties revenues was 41.6%. The net loss GAAP decreased compared to the corresponding period and amounted to $ 2.3 million, and on a non-GAAP basis a net profit of $ 5.4 million was recorded, compared to a profit of $ 1.5 million in the corresponding period.

Siva updated that during the second quarter it signed 8 new licensing agreements, one of them with a new customer. Seven of the agreements were in China and one in the U.S. According to company CEO Gideon Wertheiser, “Our customer base is growing steadily and we are expanding into new and profitable markets such as automotive propulsion control systems, where we signed a significant agreement during the quarter. 77% in royalties from cellular base stations and IoT products, which reached $ 4.3 million. ”

He added that in the smartphone market, Siva enjoyed the success of a new model from a leading American manufacturer, whose sales volume largely offset the overall decline in the smartphone market.

In a conference call following the release of the reports, Wertheiser said a royalty increase is expected to be stepped up starting in the third quarter as a result of the rapid deployment of 5th generation mobile base stations in China. In the US, Siva is expected to benefit from the administration’s decision to encourage “open” 5th generation networks (O-RANs), which allow cellular operators to integrate hardware and software components from a variety of US vendors, such as Intel, Facebook, Cisco and Microsoft – allowing Siva to expand its US customer base. B. We also noted in Siva that the move to 5th generation networks serves well the expanding trend of working and studying from home, and supports the expansion of the use of robotics, medical diagnoses and remote patient care.

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