Core Viewpoint - Ceva, Inc. has announced a public offering of 3,000,000 shares of its common stock at a price of $19.50 per share, aiming to raise approximately $58.5 million in gross proceeds before expenses [1][3]. Group 1: Offering Details - The public offering is expected to close on November 20, 2025, pending customary closing conditions [2]. - Ceva has granted underwriters a 30-day option to purchase an additional 450,000 shares at the public offering price [1]. - J.P. Morgan is the lead book-running manager, with UBS Investment Bank as the junior active book-running manager, and other firms acting as additional book-running managers [4]. Group 2: Purpose of the Offering - The primary purposes of the offering are to enhance financial flexibility, obtain additional capital, and increase the public float [3]. - Net proceeds from the offering will be used for potential acquisitions, investments in complementary technologies, working capital, capital expenditures, share repurchases, and other general corporate purposes [3]. Group 3: Regulatory Information - The offering is made under a shelf registration statement filed with the SEC, which became effective on August 16, 2024 [5]. - A preliminary prospectus supplement and accompanying prospectus have been filed with the SEC, with a final prospectus supplement to be made available [5].

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Core Viewpoint - Ceva, Inc. has initiated a public offering of 3,000,000 shares of its common stock, with an option for underwriters to purchase an additional 450,000 shares, aimed at enhancing financial flexibility and funding potential acquisitions [1][2]. Group 1: Offering Details - The public offering consists of 3,000,000 shares, with a 30-day option for underwriters to buy an additional 450,000 shares [1]. - The shares are expected to be listed on the Nasdaq Global Select Market [1]. - J.P. Morgan is the lead book-running manager, with UBS Investment Bank as the junior active book-running manager, and several other firms acting as additional book-running managers and co-managers [3]. Group 2: Purpose of the Offering - The primary purposes of the offering are to increase financial flexibility, obtain additional capital, and enhance the public float [2]. - Net proceeds from the offering will be used for potential acquisitions, investments in complementary technologies, working capital, capital expenditures, share repurchases, and other general corporate purposes [2]. Group 3: Company Overview - Ceva, Inc. specializes in wireless communications, sensing, and Edge AI technologies, powering over 20 billion smart edge products globally [5]. - The company offers a broad portfolio of IP solutions for various applications, including AI-infused devices, IoT, and 5G mobile networks [5].

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Core Insights - The collaboration between Ceva, Inc. and IntelPro Inc. has led to the launch of the IntelPro IPRO7AI system-on-chip (SoC), which integrates multiple technologies for smart home and industrial IoT applications [1][2] - The IPRO7AI chipset combines low-power wireless connectivity, security features, multimedia capabilities, and on-device AI processing, positioning it as a Matter-ready platform for various IoT devices [1][2] - This partnership aims to accelerate product development for customers by providing a comprehensive solution that enhances connectivity and intelligence in IoT devices [2] Company Overview - Ceva, Inc. is a leading licensor of silicon and software IP for the Smart Edge, focusing on wireless communications, sensing, and Edge AI technologies [4] - IntelPro Inc. is a Taiwan-based semiconductor and AIoT solutions provider, specializing in turnkey IC and chipset solutions for smart home, industrial, and consumer applications [3] - Both companies are committed to innovation in the IoT space, with Ceva powering over 20 billion smart edge products globally [4][5]

Core Insights - United Micro Technology and Ceva, Inc. have launched the HyperMotion 5G Redcap Automotive IoT Platform, which integrates Ceva's PentaG Lite 5G modem technology to provide cost-efficient and scalable connectivity for next-generation vehicles [1][2][3] Group 1: Product Overview - The HyperMotion platform is designed to optimize automotive telematics control units (T-Box) and C-V2X applications, facilitating the transition from 4G LTE to 5G RedCap technology [2][3] - 5G RedCap is positioned as a cost-optimized solution for the automotive industry, expected to exceed 700 million global connections by 2030, with automotive being one of the fastest-growing segments [2][3] - The platform includes features such as eCall/NG eCall, TSN, and hardware-accelerated network offloading, ensuring reliability and security for automotive applications [3][6] Group 2: Market Context - The adoption of 5G RedCap is accelerating, with 34 operators in 24 countries currently evaluating or testing the technology, indicating strong infrastructure readiness [2] - The technology is expected to replace LTE Cat-1 to Cat-4 in cost-sensitive vehicle platforms, making it ideal for applications like telematics and fleet management [2][3] Group 3: Strategic Partnerships - United Micro's CEO, Hui Fu, emphasized the importance of the partnership with Ceva in developing a reliable and efficient 5G RedCap solution tailored for automotive needs [4] - Ceva's PentaG Lite technology is highlighted as a key enabler for secure and efficient automotive platforms, supporting the industry's rapid transformation towards connected vehicles [4][8]

Revenue Performance - Total revenues for Q3 2025 were $28.4 million, representing a 4% increase compared to Q3 2024, while revenues for the first nine months of 2025 were $78.3 million, reflecting a 1% increase year-over-year [114]. - The company achieved a year-over-year revenue growth of 10% in 2024, surpassing initial expectations of 4% to 8% [109]. - The five largest customers accounted for 45% of total revenues in Q3 2025, down from 48% in Q3 2024, indicating a slight diversification in customer base [115]. - The "Connect" segment (baseband for devices, Bluetooth, Wi-Fi, and NB-IoT) represented 71% of total revenues for the first nine months of 2025, down from 83% in the same period of 2024 [116]. - The "Sense & Infer" segment (sensor fusion, audio, sound, imaging, vision, and AI) accounted for 29% of total revenues for the first nine months of 2025, up from 17% in the same period of 2024 [116]. Licensing and Royalties - The company signed twelve IP licensing agreements in Q3 2025, including a comprehensive deal with Microchip for the NeuPro NPU portfolio and multiple agreements for SensPro AI DSPs [104]. - Licensing and related revenues were $16.0 million and $46.1 million for Q3 and the first nine months of 2025, representing increases of 3% and 4% compared to the same periods in 2024 [117]. - Licensing revenues accounted for 56% and 59% of total revenues for Q3 and the first nine months of 2025, compared to 57% for the same periods in 2024 [119]. - Royalty revenues were $12.4 million and $32.2 million for Q3 and the first nine months of 2025, reflecting increases of 6% and decreases of 4% year-over-year, respectively [120]. - Consumer IoT drove a 9% year-over-year growth in royalties, supported by record shipments in cellular IoT and Wi-Fi [120]. - The five largest royalty-paying customers accounted for 54% of total royalty revenues for Q3 and the first nine months of 2025, down from 61% and 60% in the comparable periods of 2024 [121]. Financial Outlook and Guidance - The company anticipates continued growth in royalties from connectivity platforms, particularly Bluetooth, Wi-Fi, and cellular IoT, which achieved record shipments in 2024 [110]. - The company has adopted a more cautious outlook for 2025, lowering revenue guidance from a high-single digits range to a low-single digits range for growth over 2024 annual revenues [112]. - The total addressable market for Physical AI and Edge AI is projected to reach $170 billion by 2030 [100]. Operating Expenses and Margins - Gross margin for Q3 and the first nine months of 2025 was 88% and 87%, respectively, compared to 85% and 88% for the same periods in 2024 [124]. - Total operating expenses were $27.1 million and $78.8 million for Q3 and the first nine months of 2025, compared to $25.9 million and $75.9 million for the same periods in 2024 [125]. - Research and development expenses were $19.5 million and $55.9 million for Q3 and the first nine months of 2025, compared to $18.0 million and $54.7 million for the same periods in 2024 [126]. Cash Flow and Investments - As of September 30, 2025, the company had approximately $152.1 million in cash, cash equivalents, bank deposits, and marketable securities, a decrease from $163.6 million at December 31, 2024 [149]. - Cash used in operating activities for the first nine months of 2025 was $12.1 million, consisting of a net loss of $9.5 million and adjustments for non-cash items of $15.7 million [153]. - The company repurchased 340,295 shares of common stock for an aggregate consideration of approximately $7.2 million during the first nine months of 2025 [158]. - The company invested $52.5 million in bank deposits and marketable securities with maturities up to 36 months during the first nine months of 2025 [151]. - Net cash provided by investing activities for the first nine months of 2025 was $14.6 million, compared to a net cash outflow of $1.1 million for the same period in 2024 [156]. Taxation and Financial Position - The company’s Irish subsidiary qualified for a 12.5% tax rate on its trade, while interest income is taxed at 25% [142]. - The French subsidiary benefits from a 10% tax rate under the French IP Box regime, applicable to specific revenues [143]. - The Israeli subsidiary is taxed at a rate of 12% on profits deriving from IP as a Technological Preferred Enterprise [145]. - The company believes its cash and cash equivalents, along with cash from operations, will provide sufficient capital to fund operations for at least the next 12 months [160]. Market and Currency Risks - The company expects to continue experiencing fluctuations in operating results due to currency fluctuations on an annual and quarterly basis [164]. - The company is primarily exposed to fluctuations in U.S. interest rates, which may impact fixed interest investments negatively if rates rise [168]. - The company follows a foreign currency cash flow hedging program to mitigate risks associated with non-U.S. dollar payroll expenses [164]. - The company anticipates that fluctuations in interest rates will not have a material effect on its financial position on an annual or quarterly basis [168].

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $28.4 million, up 4% year-over-year from $27.2 million and up 11% sequentially [12] - Non-GAAP EPS for the quarter was $0.11, exceeding expectations [4] - Gross margin improved to 88% on a GAAP basis and 89% on a non-GAAP basis, compared to 85% and 87% respectively a year ago [13] Business Line Data and Key Metrics Changes - Licensing and related revenue totaled $16 million, representing 56% of total revenue, reflecting a 3% year-over-year increase and a 7% sequential increase [12] - AI processor licensing contributed roughly one-third of licensing revenue in both Q2 and Q3 2025, marking a significant impact on the licensing mix [8][12] - Royalty revenue for Q3 was $12.4 million, reflecting 44% of total revenue, a 16% sequential increase, and a 6% year-over-year increase [13] Market Data and Key Metrics Changes - Consumer IoT posted 9% year-over-year growth, supported by record shipments in cellular IoT and Wi-Fi [13] - 5G WAN infrastructure revenues increased by 91% compared to last year [10] - Mobile royalties grew 4% year-over-year and 7% sequentially, driven by recovering low-end smartphone segments [10] Company Strategy and Development Direction - The company is focused on expanding its market-leading position in wireless connectivity and accelerating growth in AI [4] - CEVA aims to lead the transition to NPUs as a foundational technology for AI inference, similar to the licensing model of CPUs and GPUs [5][6] - The strategy includes leveraging a unified software framework and tools to enhance customer differentiation and experience [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in AI-led licensing momentum and wireless connectivity, highlighting a robust pipeline and deal flow [18] - The company expects seasonal momentum in Q4, driven by share gains at a US OEM smartphone customer and strong ramps in Wi-Fi and cellular IoT [18] - The guidance for Q4 total revenue is expected to be in the range of $29-$33 million [19] Other Important Information - CEVA's cash and cash equivalents were approximately $152 million as of September 30, 2025 [17] - The company repurchased approximately 340,000 shares for about $7.2 million in 2025 [17] - Shipped units by CEVA's licensees during Q3 2025 were 559 million units, up 19% sequentially and 11% year-over-year [15] Q&A Session Summary Question: Can you describe the performance of other segments besides smartphones? - Management noted growth momentum in mobile, Wi-Fi shipments, cellular IoT, and automotive ADAS solutions, all contributing to royalty growth [22][24] Question: What is the timeline for Microchip NPU shipments to impact CEVA's royalty revenue? - Typical licensing agreements last a few years, with royalties expected to materialize within two to three years after productization [31] Question: What does the competitive landscape look like for the Microchip deal? - The competitive landscape includes other potential IP vendors, but CEVA's comprehensive NPU portfolio and advanced software stack provided a competitive advantage [44][45]

Core Insights - Ceva (CEVA) reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of $0.10 per share, but down from $0.14 per share a year ago, representing an earnings surprise of +10.00% [1] - The company achieved revenues of $28.38 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.21% and up from $27.21 million year-over-year [2] - Ceva has outperformed consensus revenue estimates three times in the last four quarters [2] Earnings Performance - The company has surpassed consensus EPS estimates two times over the last four quarters [2] - The earnings surprise in the previous quarter was +40%, with actual earnings of $0.07 per share compared to an expected $0.05 [1] Stock Performance - Ceva shares have declined approximately 17.1% since the beginning of the year, contrasting with the S&P 500's gain of 14.4% [3] - The current Zacks Rank for Ceva is 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $31.39 million, and for the current fiscal year, it is $0.44 on revenues of $109.34 million [7] - The outlook for the Electronics - Semiconductors industry, where Ceva operates, is currently in the top 38% of Zacks industries, suggesting a favorable environment for stock performance [8] Industry Context - GlobalFoundries Inc. (GFS), another company in the same industry, is expected to report quarterly earnings of $0.38 per share, reflecting a year-over-year decline of -7.3% [9] - GlobalFoundries' anticipated revenues are $1.68 billion, down 3.7% from the previous year [10]

Financial Performance - Total revenue for Q3 2025 was $28.4 million, an increase of 11% sequentially and 4% year-over-year[3]. - Licensing and related revenue for Q3 2025 was $16.0 million, up from $15.6 million in Q3 2024, while royalty revenue increased to $12.4 million from $11.6 million[3]. - GAAP gross margin for Q3 2025 was 88%, compared to 85% in Q3 2024, while non-GAAP gross margin improved to 89% from 87%[6][7]. - GAAP net loss for Q3 2025 was $2.5 million, compared to a net loss of $1.3 million in Q3 2024, with diluted loss per share of $0.10[6]. - Non-GAAP net income for Q3 2025 was $2.7 million, with diluted income per share of $0.11, down from $3.4 million and $0.14 in Q3 2024[7]. - GAAP operating loss for Q3 2025 was $2,084 million, an improvement from a loss of $2,624 million in Q3 2024, showing a decrease of 20.6%[26]. - Total non-GAAP operating income for Q3 2025 was $3,142 million, up from $2,114 million in Q3 2024, an increase of 48.3%[26]. - GAAP gross profit for Q3 2025 was $24,992 million, compared to $23,246 million in Q3 2024, reflecting a growth of 7.5%[26]. Revenue Breakdown - AI processor licensing contributed approximately one-third of licensing revenue in Q2 and Q3 2025, marking a significant milestone for the AI business[5][8]. - Royalty revenue grew 16% sequentially and 6% year-over-year, driven by record wireless IoT shipments[8]. Shareholder Activities - The company was active in its share repurchase program, buying back 40,295 shares for approximately $1 million in the quarter[8]. Asset and Liability Overview - Total current assets as of September 30, 2025, were $214,406 million, slightly down from $216,341 million at the end of 2024[28]. - Total liabilities decreased to $37,295 million as of September 30, 2025, from $42,392 million at the end of 2024, a reduction of 12.5%[28]. - Cash and cash equivalents were $17,270 million as of September 30, 2025, down from $18,498 million at the end of 2024[28]. - Total stockholders' equity increased to $268,719 million as of September 30, 2025, compared to $266,556 million at the end of 2024, an increase of 0.8%[28]. Strategic Developments - Ceva signed a strategic NeuPro NPU portfolio license with Microchip and three new AI DSP agreements, expanding its reach in consumer and automotive markets[4].