Matthew Ramsay - Canaccord Genuity Gary Mobley - The Benchmark Company LLC Joseph Wolf - Barclays Capital Suji De Silva - Topeka Capital Markets Anil Doradla - William Blair & Company Daniel Amir - Ladenburg Thalmann Matt Robison - Wunderlich Securities

Hello and welcome to the CEVA Inc.’s Third Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Richard Kingston. Mr. Kingston, please go ahead.

Thank you. Good morning, everyone, and welcome to CEVA’s third quarter 2015 earnings conference call. I’m joined today by Gideon Wertheizer, Chief Executive Officer at CEVA and Yaniv Arieli, Chief Financial Officer of CEVA. Gideon will cover the business aspects and the highlights on the quarter and general qualitative data. Yaniv will then cover the financial results for the third quarter and provide guidance for the fourth quarter and full-year of 2015. I will start with the forward-looking statements. Today’s conference call 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 our financial guidance for the fourth quarter and full-year of 2015, optimism about our ability to capitalize on trends relating to the continued is option of LTE and the internalization of smartphone SoC, our ability to become a diversified company leveraging our relationships with anchor customers and leading customers in the cellular space, expanding our IoT market share through excellence in our non-baseband technologies, exploration of strategic investments and continuations of our buyback program. The risks, uncertainties and assumptions include the ability of the CEVA DSP cores to continue to be strong growth drivers for us. The speed and extent of the expansion of the LTE network and the IoT space, our success in penetrating new markets specifically non-baseband markets and maintaining our market position in existing markets, the ability of new products incorporating our technologies to achieve market acceptance, the effect of intense industry competition and consolidation, global chip market trends 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. With that said, I would now like to turn the call over to Gideon.

Thank you, Richard, and good morning to everyone. I’m pleased to report an all-time record growth was driven by $16.2 million, up 5% on a year-over-year basis and 22% sequentially. This milestone is the result of robust licensing environment coupled with acceleration and shipments of LTE smartphone enabled our DSP, those of which are strategic objectives, which we said and successfully executed during the quarter. Licensing and other revenue was approximately $8.6 million, a decrease of 1% year-over-year and an increase of 12% sequentially. Royalty revenue was approximately $7.6 million, a 42% increase on a year-over-year basis and 34% sequential increase. During the third quarter, we completed eight new licensing deals, three of the deals were for CEVA DSP cores and platforms and five for connectivity product. Of the deals signed, one was for a first-time customer and six were for non-handset baseband applications. Target end products include its smartphones, tablets, small cell base stations and variety of connected devices. Geographically, three of the deals signed were in the U.S., one in Europe, and four in APAC. During the quarter, we strengthened our long-term relationship with an anchor customer by executing the comprehensive agreement for using several of our latest and more advanced dual speakers in a range of door next smartphone tablet and IoT chip designs. This symbiotic relationship are the cornerstone for the market success of our customer and consequently we’ll contribute to new royalty revenue streams for CEVA. Now, I would like to provide you with an update on the dynamics in the end market that we serve and the progress that we make in those markets, which has resulted in a 42% year-over-year royalty revenue growth and strong licensing performance. In the cellular baseband space, the growth of LTE shipment powered by our DSP has accelerated…

Thank you, Gideon. I’ll start by reviewing the results for our operations for the third quarter of 2015. Revenue for the third quarter was $16.2 million, an all time record high. And as we announced earlier in the beginning of October above the high end of our guidance range, primarily due to strong licensing revenue and growing LTE shipments. The revenue breakdown is as follows. Licensing and related revenue was $8.6 million, reflecting 53% of total revenue, 1% lower as compared to the third quarter of 2014, but 12% sequentially higher. Royalty revenue was $7.6 million, reflecting 47% of total revenues, up 42% on a year-over-year basis and 34% higher on a sequential basis. Quarterly gross margins were 92% on both U.S. GAAP and non-GAAP basis. Non-GAAP quarterly gross margin excludes approximately $34,000 of equity-based compensation expenses. Our total operating expenses for the quarter were $11.5 million, $0.4 million below the lower range of our guidance. Total OpEx for the third quarter included an aggregate equity-based compensation expense of approximately $1.2 million and $0.3 million for the amortization of acquired intangibles and cost associated with the acquisition of RiveraWaves. Total non-GAAP operating expenses for the third quarter excluding equity-based compensation expenses and amortization were $10.1 million, also below the low end of our guidance range, due to the timing of receipt of normal R&D grant payments. Both GAAP and non-GAAP net income and EPS for the third quarter were the highest the company has posted in over three years. U.S. GAAP net income for the quarter was $3.3 million and diluted EPS was $0.16 per share. Non-GAAP net income and diluted earnings per share for the third quarter was $4.7 million and $0.22, respectively. Other related data, shipped units by CEVA licensees during the second quarter of 2015 were $225…

Yes. Thank you. We’ll now begin the question-and-answer session. [Operator Instructions] And the first question comes from Matt Ramsay with Canaccord.

Yes. Thank you very much. Good afternoon, guys, and good morning, everyone. Congratulations on a strong results. I wanted to ask a couple of questions, Gideon, on the royalty side. Obviously, growth has been quite robust with the emergence of LTE into your revenue mix. Maybe on a go-forward basis, you could talk about the puts and takes of growth for next year on the royalty side, particularly in LTE. I guess, on the positive side, folks like Spreadtrum doing well, some – maybe emergence from Intel, et cetera. And then maybe you could let us know how you’re thinking about the mix at Samsung, or I guess Samsung internal modems versus lots of speculation out there about Qualcomm potentially gaining some share back at Samsung? Thanks.

Yes, good morning, Matt, and thank you for – and let me say, let’s discuss here from our guidance first. We’re focusing 25% on a year-over-year basis with the market of about 10%. So this reflects the tariff that we have in a way that we are not just growing with the market, we’re actually a share gainer in different growth sectors in the market, specifically 28 [ph] as we speak, what we see, the dynamics in the market is as follows. At the low-end side of the market the exit of [indiscernible] of the market in a way play well for our customer. And they’re going to benefit from share gain in the lower end. The sweet spot of the market right now is in the mid-range, and we see it from – in a different way. The low-end guys, companies like Spreadtrum are basically rolling out 64 bit [APs] and in this way, they’re approaching the mid-range market. The other direction is the high-end guys like Samsung, for example, that cannot lose a product like the mobile app, which is a single chip. They’re benefiting from the high-end going down to the mid-range. So overall, some discussions that we have with customer, we are expecting talking from the next quarter to see acceleration in the LTE front.

I think we can also add that in the past we did discuss the first year of LTE ramp up, which is 2015, we’re talking about on 70 million units of royalty, up from a 11 a year ago. Next year, we’re probably looking at somewhere between 100 million to 200 million in general and of course, we’ll give you a little bit more color when go through the next quarter earrings call.

Great. That’s really helpful. And then one more on the modem side, I guess, when we had met in the past and had recent discussions that need to be quite a bit of movement, I mean, obviously the market is a bit slower now than it’s been in the past. But LTE connectivity into tablets, particularly in China, do you have any commentary about that and what part of the driver or your growth in LTE has been in the tablet market? Thanks.

Well, it’s – We see – other than smartphone, we see definitely in the tablet side the LTE growing there. It’s – the tablet in general is a decline in the market. We see in the lower end side, people are trying to recover this market recently. But we do see progress and expect this to accelerate what is called MPC or machine-to-machine. Here we see lot of dynamics products are coming, and our customers will soon be there with the product that are targeted specific in these markets.

And then one more, if I could. Yaniv, on OpEx, it looks like absent this R&D credit in this quarter the OpEx run rates are essentially unchanged, but could you talk a little bit about the dynamics of those R&D credits? How often and/or predictable they are and then just being dynamics about how we should think about those going forward if they recur or not? Thanks.

Sure. Yes, we – the reinforce is that once a year in the beginning of the year, you’ll try for specific R&D program, it needs to be new technology, innovated technology that needs to pass to few parameters in LTE qualified to get these grants. Few months later, probably in the – along the May, June timeframe you get the result of the – if you have been – if you have submitted a proved or not and then payment starts usually later. So, in most of your receivables R&D grant, either in Q3 or Q4, you have a little bit less control where in each program gets paid, but what you do see the – usually the first two quarters of the year you don’t see that and in the later part of the year and it various from year to year whether is Q3, Q4, so we tried out best when we build the budgets to get that sometimes we miss by few 100,000. There’s no risk on an annual basis, but there could be some stair ship between Q3 and Q4 and easily those numbers will be slightly lower R&D wise by few hundred thousand dollars than the first two quarters of the year. And if you look at the non-GAAP numbers in Q1 and Q2, more in an average of $6.8 million per quarter and the second-half of the year, this Q3 looking at $6.1 million and Q4 is slightly higher than that, but still lower than the beginning of the year. So this is how it works.

Got it. Thank you and congrats again on the solid results.

Thank you.

Thank you. And the next question comes from Gary Mobley with Benchmark.

Hi, guys. Thanks for taking my question. Congrats on a strong third quarter and general strong fiscal year 2015 so far. I had a question about your licensing revenue, is implied in the fourth quarter guidance you’re looking for that at trend below just below $7.5 million. And that’s $500,000 or $600,000 below what you have been averaging for the past six quarters. Is that indicative of a weakening licensing pipeline or is that just you trying to be little bit more conservative. And as a follow-up that I know as your deferred revenue declined fair amount on a sequential basis and I’m just curious whether or not it had to do with a specific core that a customer had licensed and you finally delivered in the quarter or any color there would be helpful?

Okay, Gary hi, it’s Gideon. In general we said that – and for 2015 our comfort zone are – our licensing comfort zone, licensing guidelines should be possible as always for position about 25% of higher than our traditional rate, which was $5 million to $6 million and now we speak about $6 million to $7.5 million. And in the last, maybe $6 million, and you’re right, we’re doing very well. In general, the pipeline is very good and we don’t see – for now we don’t see any weakening in this respect, on the contrary we see customers are now starting [five] genius designs, we see lot of vision we signed already in this quarter to vision there it’s in automotive space and for rolling space, connectivity side, so all good. The consumer licensing is a lumpy business in the 7 – if you do the math we’re about $7.5 million already in our guidance, which is the top end. And, but it could be higher like in other quarters at this stage we don’t know it all depends on the deals that we sign during the quarter.

On your second part, first of all one more comment to what Gideon explained, if you look at annual, I mean, we moved the mid-range of the number that just came you just mentioned we’re looking at about $31.5 million if we compare that to the historical number just before we acquired with RivieraWaves for many years, probably about $22.5 million. And last year we did better about 25% higher than that traditional zone. And this year it all works fair well, talking about 40% higher licensing revenue from that $22.5 traditional range. So on an annual basis and not looking in specific quarter that number for us is quite robust. On the deferred revenue, if you look at Q2 you’ll see our cost of goods is higher than normal with about $1.5 million non-GAAP that is because we have one or two agreements that we’re doing some customization work and then this is why we got paid ahead of time, but haven’t recognized the licensing agreement and we’re doing it over few quarters. This is why eating up the deferred revenue until we finish the project and you recognize the full amount and for those amounts we already got paid. So nothing to be alone now just two specific deal that we do is more work than off the shop type of a – of a deal.

Okay, good thank you for that color. It looks like your non-based and royalty units are going to perhaps even more than double in 2015 versus 2014. Any color as to how you’re non-based and royalties will trend in 2016 will be helpful whether or not it will continue to see 100% like growth or maybe even some acceleration on top of that and will it be – will there be additional layers on top of the Bluetooth strong positive trend that you’ve seen so far in 2015 and what was sort of incremental driver on the non-based insight would be helpful?

Well, so for 2016, we didn’t do the book and app analysis is what we see today definitely Bluetooth will continue to grow there, not just product but this Bluetooth between – in growth market specific. Other things that we expect to see, audio is the market that we want to see contribution from customers, vision in some of the market segments and Wi-Fi. So you’ll have to see along the day, but throughout the year how things shape up, but in general, I expect further contribution, I mean, contribution not just from Bluetooth next year.

All right.

And, of course, if you look at the, Gary, if you look at the 46 million this quarter and annualize those numbers of non-baseband, we’ll be ramping up to a much more significant number either for next year.

Okay. All right. Thank you, guys. That’s it from me.

Thanks.

Thank you. And the next question comes from Joseph Wolf from Barclays.

Thanks. You mentioned of the design wins, there’s one new customer, if I heard that properly. And I’m wondering as you – as we go through these licensing deals, if you could talk about the opportunity. How many of the repeat customer are you having, and how are you structuring these deals in the past with the handset side of the business there was the single use and the multi-use. And are your vendors on the non-handset side coming back and how are you structuring those deals across, what seems to be a broader portfolio of potential product?

Hey, Joseph, let me start with the technicality and then give good mention about the licensing pipeline environment, the model hasn’t changed. We still have a single use and multi-use. You’re right that for New Year, there’s a new first-half, second-half, we would see probably more single use type of deals, they want to check out the technology, they want to come up with the chip, is that chip and roadmap is at search for whether some of these deals that Gideon mentioned even that we signed now, in Q4 as vision base technology for the latest market are surveillance. Of course, and if that chip is successful, of course, those customers would come back for the next-generation chip or the year or even for future. And then after one or two addition years, we see a trend that this technology is successful within that, so you come up with it or again, they may choose to move to a multi-year agreement, and then every few years, they could come in a year with that agreement or come in license the new next-generation type of core. So that hasn’t changed because of the company they’re much more diversified, there are new players -smaller players than the traditional – than there is – where in the baseband business, we see this trend and this is why the deal count has also increased over the last 18 months or so, because we’re tackling much more, some small [vendors], but many more designs and many more skews.

One thing that I would add, I think that has come out of the way most of the things that you’re asking, but since the company has a broader portfolio, we’re leveraging on the fact that we have already customer relationship to license other products. So a customer, the DSP customer knows us, and we have credibility there and we’ll license Bluetooth, Wi-Fi, this usually goes together.

Okay. Thank you. You mentioned that you haven’t yet looked at the 2016 on a bottoms-up basis. But I’m assuming with all of these design wins, I think over 30 are already – well over 30 on those non-handset side. How are you putting some, when you give the guidance next year, I assume the fourth quarter doesn’t assume anything beyond Bluetooth. How are you – are you doing a probability waiting of all of these multiple products seeing success in the field, are you waiting to see specific products start to take off? It feels like, you’ve got a good feeling about a couple of vision products. But I’m wondering how you’re going to monitor that and help us see how the business expands into this broad – this broad new end market?

This is a difficult part. You may call this to help us out in those analysis because that’s the tougher part of the business. Yes, the way we do, of course, we have the different regions, each region is focusing and has own capabilities and expertise. In different areas, we see some markets that are much focused than vision. This is Bluetooth to Wi-Fi connectivity. What we will do, we will explain, bottoms-up, we will look around for the market, the customer and we align them, we talk with the local sales people get their inputs and what could be closed earlier or later or what product lines are more mature with customers and more or less matured, and we come with a number. If you look historically, you’ll see that – our licensing on the many year type basis has been pretty flattish before we went to the airways and before we went into these LAN baseband. And from there on we came up with a much higher level of – whether it’s 28 or 30ish this year and $1 million per year and of course this what we want to continue going forward, which will be asset basis of potentially much higher royalty. So, I don’t think we’re going to change the model with – starting on every year different number in licensing, but we’ll do our best efforts to keep that licensing number on the very healthy side last year we explained in last year and obviously this year.

All right. Thanks. And just one last question quickly with the stock price where it is and the average of what you guys bought back stock last quarter. How are you feeling about the share buyback aggressively are not right now?

I don’t think, we’re going to change the strategy, because – specifically because of the stock price right now. There are two factors that we look whether it’s accretive for us of course and where we think that the company could grow EPS wise and earnings wise over the next couple of years. And coming out of the recent numbers and guidance for the rest of the year we feel comfortable that we’re on the right track here. And now there is a dilution and want to try to keep shareholders under units and auction exercise and the like and I think you will take those two into consideration whatever price the stock price we’re at. Taking again a little bit of historically look if you look at the last couple of years when we had started to do five years or so we have bought back more than $80 million worth of those shares, I think it’s about five million overall. So we have been active in the past and I believe we will continue to be one quarter could be stronger than the other that we still think that there’s a lot of assertiveness in even in today’s prices.

All right. Thank you guys.

Thanks Joseph.

Thank you. And the next question comes from Suji De Silva with Topeka.

Hi, good evening, congratulations on the record quarter here. The growth of smartphones overall 10% year-over-year you guys are outgrowing gaining share. How sustainable is that trend and what can you do to drive continued share gains here as the smartphone markets seems to be moderating overall growth?

The same thing that we’re expecting is due to the fact that the growth is in China and now moving to India that and I did not only spoke about it for a while here we’re in key advantages, because due to our technologies ourselves and the customers that are targeting into this space. And if you see where our customers you’ll see that they – this is their main focus in low and mid-range smartphones.

And really just if you look at the numbers and quite a few market datas out there, I think the smartphone is anticipated to grow for somewhere in the neighborhood of just over a $1 billion and something last year to over $2 billion in 2012 for example. So you do see an increase in specifically in the smartphone space over the next couple of years and that’s where you will of course take a significant play these days.

Okay and then somewhat of a follow-up there you’ve benefited from the trend that people bringing the baseband in-house Samsung, perhaps tell me Leadcore any – are you seeing that trend accelerating and are you seeing these companies staying committed to doing their own versus merchant solutions what are you seeing in that front and then what’s CEVAs advantage in that marketplace because you hinted very well there?

It’s not well a certain size to take these kinds of decisions to internalize modem. We see by the way other companies smaller in the size that are internalizing vision and audio in application processor. We have few companies in the pipeline and all of these new designs OEMs that use vision technology. Again, when it comes to modern world, there is a cost and size and we know Samsung is now doing it and Huawei is doing, and of course. So we’ll have to see along the way how we do. By the way, when it comes to China, because we have a strong relationship with Leadcore. They are the only – today, the only viable solution provider for LTE mobile.

Okay, great. Thanks, guys.

Thank you.

Thank you. And the next question comes from Anil Doradla with William Blair.

Hey, guys. Thanks a lot and congrats on the great quarter. Gideon, a couple of questions. You guys are very strong in Spreadtrum and a trend that we’re seeing with Spreadtrum is that, they’re integrating their baseband with that processor also transceivers and these, and they’re offering these very integrated solutions. So the question is basically, do you see opportunities beyond the baseband and that processor at some of the customers like Spreadtrum?

Well, today SOC in – for smartphones and that Spreadtrum is going also in public and natural evolution will be IoT. So not just the modem itself, it’s a full system we have and audio eye length, we have the vision eye length. Of course, you have the connectivity and the Bluetooth, all these things are applicable to Spreadtrum and many others today in the market. In the past, even today MediaTek is giving us CDMA type of thing. So all the portfolio that we’re offering today are candidate for any customers who are seeing.

So the other point that you mentioned was India was very strong and that’s clearly an indication. Now, India tends to be sub-$30, sub-$20 markets, which will be very strong and dominated by some of your licensees. So I think the question I have is, if I were to just look at 4G kind of apples-to-apples, what is the pricing dynamic there? No doubt, there’s going to be a very strong volume growth. But if I look at the 4G pricing today, and call it, six months from now or three months from now, how was the pricing environment looking on that front?

Yes, you took it right and I think I referred it in the first question. What see today is at the low segment. And this is usually – when it comes to LTE, this is India. The mid-range segment is replacing a cycle that is going in China. And now differences between the chips that goes to the neighborhood is the low-end of the mid-range. The differences are not necessarily on the LTE side, but more in the LP application processor side. So plus we’re kind of agnostic between the two markets, of course, the neighboring side we go as fast as the LTE-Advanced like the high-end stuff. So the pricing difference between the low and mid-range relate to the fact that the ARM version, present version, Version 8, which is smaller in die size, but not necessarily on us.

Okay, great. And finally, Yaniv, if I don’t mind squeezing one in. As we get into 2016, obviously, the business fundamentals are improving. Is there any possibility that CEVA will reinstate some kind of early guidance?

The reason we stopped that is not because the business environment is really worse for us, and royalties declined. The reason we stopped is that our customers, even though LAN customers did not give. If you ask Intel has a prime Broadcom, or of course, Spreadtrum, or Leadcore, any of these customers, the public are all thriving for their guidance on the handset space, you won’t get any answers. So for us to go and to niche front to guess where the industry is going to be at, I think, we have our own internal thought, and we do all that homework and we have a pretty good understanding of it handset market and the different players. But to put that in front a number that Intel talks about or does not talk about would be a little bit strange from our point of view. And I think this is the only reason we stopped giving annual guidance. We did give this year qualitative data on an annual basis just to remind you both from licensing and of course in the beginning of the year when we had no LTE ramp up, nothing, we just knew that who our customers are. We knew that for the last three years that we’re not able to gain significant market share. We came out and said 10% to 30% growth in royalties, and this is Q1 that only 4 million LTE devices Q2 was up to 11 million, and only now only the end of the this year with 27 million, and a very strong Q4. We’re looking at finally just the second-half of this year of this new LTE ramp-up that we’ve been talking about for the last couple of years. So we’ll see what will be at the end of January of the next call. We don’t have an idea yet. But, I think, we did try to share as much as we can to be wide range, maybe we’ll try to little bit say for next year, but give us few more month to see how this evolves, and we’ll come back to you with an answer.

Great, guys, and good job.

Thanks, Anil.

Thank you.

And the next question comes from Daniel Amir with Ladenburg Thalmann.

Thanks a lot. Thanks for taking my call. So the call is fairly detailed, but there’s a question around Wi-Fi. I was interested in kind of getting an idea from how you project a bit kind of the Wi-Fi opportunity here, given the success that you’ve had in Bluetooth. I mean, what needs to happen here in order to get to see the Wi-Fi opportunity as big a Bluetooth here in the next number of quarters? Thanks.

Well, the Wi-Fi marketplace by the way is very big. And from the most serviceable addressable market standpoint – from our standpoint, it is as big as the Bluetooth. Now, the reason that we don’t see Wi-Fi progressing as fast as Bluetooth, because the Wi-Fi system is much more complicated, and it takes more time to customers to get there. But we do have a design win, and we do have progress, I don’t recall now substantial advantage coming from this time this way. But as I said is a month of [indiscernible], we expect to see it in 2016.

One customer that we did announce in the past and again it takes time to get to production as when it launched, for example, that moving our Wi-Fi to a Smart Ready system. So this is pretty new and the Wi-Fi shipments a year ago was essentially zero. This year the growth we’ve seen the smaller number maybe few 100,000, but still very small compared to Bluetooth, which were already in a run rate of – on an annual run rate of somewhere between $100 million to $200 million just in the Bluetooth side.

Okay, great, And just one follow-up. On the non-baseband business, I mean, do you expect any changes in the royalty rates in the next couple of years, I guess, in the vision, or Bluetooth, or Wi-Fi audio, or do you expect to kind of to be continuing in the ranges that you provided before?

Yes. There’s nothing that came to our attention to say anything changed. And we’re just in the infancy stage of ramping these product out. A year ago, Bluetooth was few handful of million up to 30 million accruals tat they’re just starting. When we do get to those or close to those 700 million to 900 million units on non-baseband units a year, I think, that pressure maybe relevant than it completely immature for now just because the volumes are safe now and we’re just making our first step.

Okay, great. Thanks.

Thank you.

Thank you. And the next question comes from Matt Robison with Wunderlich.

Hey, thanks, and congrats. Gideon, when you look at the sequential LTE growth you’re expecting from your latest reports, should we look at that as largely driven by expansion in the models like J2 at Samsung, or are you starting to see the China business becoming significant?

It’s all of the above. In China, we see an acceleration and moving, the reason is just moving our customer moving from the low end, which goes now to India to the mid-range, we choose the market. In China, they’re well involved with this new product 64 bits ARM, just by the way ARM has a [indiscernible] we see this trend. And then we see at Samsung, Samsung is the – I mean, they’re shipping about 86 million to 90 million units a quarter or phones a quarter. And they’re by themselves now putting more attention on their mid-range segment. And this the phones that you mentioned there and the fact that they’re now will be single chip help them to adjust the markets there.

Yes. I know the commentary was related to fourth quarter was giving some – giving up some share to Apple that in their commentary. But, obviously, the mid-range and the low-end is really, really moving in it. And as you mentioned, I guess, care too much where it comes from, but have you started to see the mod apps ship – product shipping already?

Yes, I don’t recall. To review the report they just came the last night till then, so we didn’t have the chance to thoroughly review the results. But definitely, the chip is valuable and they should – if they didn’t ship over this, they should be able to next quarter.

I think their mass production, but we don’t know the numbers either.

A quick follow-up to Daniel’s question on the non-baseband products, when do we start to see the high ASP products like vision and infrastructure products start to impact over royalty stream. Is that still multiple quarters away, or can we think in terms of mid-2016 for that helping you?

So we have one design that and will be started to ramp up production. It’s nothing, I don’t think it’s a matter of timing for now, it’s a matter of volumes production. So the good news is that, we have now chips in the market – chips available in the market with current hands of customers. And we have customers in drones and we have customers in surveillance, and we have customer – one customer that in the smartphone side. And while there’s – these are long cycles. These are next-generation products. And the question when you’re going to see a size again? We’re going to see them next year in the market, how big is the market, this is something that we have to see.

How about your big base – your big infrastructure starts with strategic license form three years ago?

They’re in the – they have the silicon now, which they’re testing, and they – when they went with the introduction, I think this is more 2017.

2017?

Yes.

Thank you.

Yes. By the way we did come with this some new press releases in the last two weeks companies like Fortune Mix [ph] and Novatek, these are some of the examples that company that design the thing already, and even the example that Gideon refereed to also as soon as they get into the production and hopefully, we could see some chips May in 2016, specifically from the ones that are more mature. And this will be the first royalty control with over these higher royalty low levels and new markets, it’s not just Bluetooth, but the new interesting market in non-baseband.

Thank you, Yaniv.

Sure. Thank you.

Thank you. And this concludes our question-and-answer session. I would like to turn the call back over to Richard Kingston for any closing remarks.

Thank you very much, operator. Thank you, everyone, for joining us today and for your continued interest and support in CEVA. We will be attending the following upcoming conferences; The ROTH Technology Corporate Access Day on Wednesday November 18, in New York; The Raymond James 2015 Technology Investors Conference on Monday December 7, in New York; and the Barclays Global Technology Media and Communications Conference, December 9, in San Francisco. Some of these presentations will be webcast. So please visit the Investor Relations section of our website for additional information on this. Thank you, and goodbye.

Thank you. The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.