Building a Robust Earnings Strategy with Multimedia Distribution
CEVA is the leading licensor of signal processing intellectual property. The company designs and licenses processors and complementary Intellectual Property (“IP”) that is required in every multimedia device, from smartphones, and drones to wireless speakers and cars. Headquartered in Mountain View, California, CEVA has approximately 300 employees worldwide, with design centers in Israel, Ireland and France, and sales and support offices located in Europe, the U.S. and throughout Asia.
Building brand awareness in a niche, but significant industry
CEVA operates within a niche market within the larger semiconductor industry, known as semiconductor IP. As such, it must compete with larger, more visible organizations for attention during earnings periods. “This time is critical for us to gain exposure amongst investors and the financial community, many of whom aren’t aware of who we are or what we do,” said Richard Kingston, Vice President, Market Intelligence, Investor & Public Relations at CEVA, Inc. (click to tweet)
Another challenge the company faces with regards to investor perception is explaining and defending their market valuation. CEVA, like other IP type companies, carry a higher P/E multiple compared to many companies in the semiconductor industry. This is because, we license designs and not sell products, which creates high profitably margins, both on the gross margins as well as in the operating margins and net income. “It seems a lot higher than other companies in the industry, so we need to spend time making sure the market understands why this is the case,” said Kingston.
Execute an appealing and robust earnings distribution plan for current and prospective investors
CEVA’s communications strategy around earnings is clear: disclose as much information with investors as possible and full transparency, to help them manage their research and modeling. “Each quarter, we’ll send a document to our investors and post it on Twitter, which highlights what new devices are using our technologies, along with a quarterly update of all of our corporate releases and customer releases,” said Kingston.
The company leverages Cision Distribution by PR Newswire to maintain a regular cadence of communication with an international audience, especially during earnings season. Kingston has seen a lot of success with including CEVA’s infographics and multimedia assets with their earnings releases in the past few years.
“A couple of the mega size companies did it first, like Google and GE, but amongst our peer group, we were very early in adopting this best practice. We decided to make infographics a core element of our earnings release because they make things very clear for our investors,” said Kingston. “We condense key takeaways we want investors to digest quickly and easily.” (click to tweet)
Here are some of Kingston’s best practices for including infographics in your investor relations strategy (click to tweet):
- Less is more “Don’t crowd it with text, include images/graphs as much as possible.”
- Don’t stress over design details “The information will speak for itself.”
- Keep it relevant “Make sure the information you’re sharing is something that your investors and market are interested in understanding about your company.”
CEVA also includes traditional tables and graphs within earnings releases in order to appeal to investors that want to see detailed information presented in a familiar format. The company meets the needs of multiple investor types by including both kinds of visual data. For example, a prospective investor may be drawn to a summary infographic whereas a long-term investor may want to see the full details within the release.
The company follows up these earned media opportunities with a webcast and conference call, where it hopes to not only draw good attendance but also get the right kind of people attending.
Increased investor and industry interest
CEVA uses many Cision services within their earnings strategy such as IR Room, distribution, and earnings webcasts and conference calls. “It’s truly a one-stop shop, and I only need to talk to one person during earnings season, which is a big help,” said Kingston.
When submitting releases, CEVA has always had a top-notch experience with Cision’s editorial team. “Those who I speak to are always alert and aware of what CEVA is doing,” said Kingston. “I always feel like I’m in safe hands.”
CEVA’s earnings infographics have been viewed thousands of times, receiving consistent views outside of earnings period. The first earnings release that included an infographic saw 230% more release views than the previous quarter’s release. (click to tweet) “Tinfographicsaphic have been a very powerful tool in gaining exposure for us,” said Kingston.
A company on the hunt for more innovative IR solutions
Kingston says the company is always looking for new ideas, especially around multimedia use and conference call optimizations. “We recently used voice-over IP service with our last earnings call and had a much better experience than on traditional telephone. We will definitely use it more in the future.”
As for CEVA’s relationship with Cision and PR Newswire, Kingston see it as a long-term solution. “They are not just a vendor; this is more of a partnership. Other services don’t offer a comparable package that is so comprehensive,” said Kingston.