CEVA — CEVA, Inc.

CEVA Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: $28.4 million, up 4% year-over-year and 11% sequentially.
• Non-GAAP EPS: $0.11, exceeding expectations.
• Licensing Revenue: $16 million (56% of total revenue), a 3% year-over-year increase and 7% sequential increase.
• Royalty Revenue: $12.4 million, reflecting a 16% sequential increase and a 6% year-over-year increase.
• Gross Margin: 88% GAAP, 89% non-GAAP, slightly above guidance.
• Operating Expenses: $27.1 million, at the higher end of guidance.
• Net GAAP Loss: $2.5 million, compared to a loss of $1.3 million in Q3 2024.
• Cash Position: Approximately $152 million as of September 30, 2025.

2. Strategic Updates and Business Highlights:

• CEVA secured several strategic licensing agreements, particularly in AI, with Microchip adopting its full NPU portfolio, indicating strong demand for AI capabilities across various sectors.
• AI processor licensing now constitutes about one-third of licensing revenue, marking a significant shift in the business mix.
• Wireless connectivity remains a core growth driver, with new licenses for Wi-Fi 7 and Bluetooth high data throughput IP.
• Strong growth in royalties from Consumer IoT (9% year-over-year) and a notable 91% increase in revenues from 5G SWAN infrastructure customers.
• CEVA's wireless IP portfolio achieved its strongest royalty revenue quarter on record.

3. Forward Guidance and Outlook:

• For Q4 2025, total revenue is expected to range between $29 million and $33 million, with gross margins anticipated to remain stable at approximately 88%.
• Continued momentum in licensing and royalty revenue is expected, driven by seasonal trends and share gains from a U.S. OEM smartphone customer.
• CEVA maintains its full-year revenue guidance aligned with Street estimates.

4. Bad News, Challenges, or Points of Concern:

• GAAP operating loss of $2.1 million, although improved from the previous year, indicates ongoing challenges in achieving profitability.
• While the AI segment is growing, the time to market for new products (8 to 24 months) may delay revenue recognition from new licensing agreements.
• Increased operating expenses due to higher employee benefits could pressure margins if not managed carefully.

5. Notable Q&A Insights:

• The competitive landscape for NPUs is expected to favor licensing over in-house development, presenting opportunities for CEVA.
• The timeline for Microchip's MPU shipments to impact CEVA's royalty revenue is typically 2-3 years post-design.
• CEVA sees strong synergies between its NPU and connectivity technologies, which could enhance product offerings and market competitiveness.
• Management expressed optimism about sustaining growth in AI and wireless connectivity, with plans to invest strategically in these areas while maintaining expense discipline.

Overall, CEVA's Q3 2025 results reflect a strong performance driven by AI and wireless connectivity advancements, though challenges remain in achieving profitability and managing operating costs.