CEVA(US:CEVA)2025-05-08 20:16Revenue Performance - Total revenues for Q1 2025 were $24.2 million, representing a 10% increase compared to Q1 2024[95]. - The five largest customers accounted for 56% of total revenues in Q1 2025, up from 45% in Q1 2024[96]. - Licensing and related revenues increased, while royalty revenues decreased, impacting overall revenue growth[95]. - Licensing and related revenues increased by 32% to $15.0 million in Q1 2025, accounting for 62% of total revenues, up from 52% in Q1 2024[98][102]. - Royalty revenues decreased by 14% to $9.2 million in Q1 2025, representing 38% of total revenues, down from 48% in Q1 2024[103][105]. Market Outlook - The addressable market for Bluetooth, Wi-Fi, UWB, and cellular IoT is expected to exceed 16.5 billion devices annually by 2029[89]. - The company anticipates a low-single digits revenue growth for 2025, down from a high-single digits range due to macroeconomic conditions[93]. - The company expects continued growth in connectivity products, particularly in Bluetooth, Wi-Fi, and cellular IoT business lines[92]. Product Development and Innovation - In Q1 2025, the company signed eleven IP licensing deals, including significant agreements for Wi-Fi 7 and NeuPro-M Edge AI NPU[87]. - The PentaG2 platform and DSPs for 5G mobile broadband are positioned as comprehensive solutions for various connected devices[89]. - The NeuPro-M AI NPUs are designed to enable generative and classic AI across a wide range of devices, with a projected shipment of over 6 billion Edge AI hardware units annually by 2030[89]. - The MotionEngine software has shipped in over 400 million devices, indicating strong market traction[90]. - Eleven IP licensing agreements were concluded in Q1 2025, including deals for Edge AI NPU and Wi-Fi 7 connectivity[101]. Financial Performance - The company reported sales of 420 million chipsets incorporating its technologies in Q1 2025, a 13% increase from Q1 2024[104]. - Gross margin for Q1 2025 was 86%, down from 89% in Q1 2024, primarily due to higher cost of revenues[108]. - Total operating expenses rose to $25.1 million in Q1 2025, compared to $24.5 million in Q1 2024, driven by higher salaries and professional services costs[109]. - Research and development expenses decreased to $17.6 million in Q1 2025, representing 73% of total revenues, down from 82% in Q1 2024[110]. - Financial income, net increased to $2.10 million in Q1 2025, up from $1.26 million in Q1 2024, with a foreign exchange gain of $0.60 million[117][119]. Cash and Investments - The company had approximately $158.3 million in cash, cash equivalents, bank deposits, and marketable securities as of March 31, 2025, down from $163.6 million at the end of 2024[131]. - Total cash, cash equivalents, bank deposits, and marketable securities amounted to $158.3 million, with $134.3 million held by foreign subsidiaries[132]. - Cash used in operating activities for Q1 2025 was $7.4 million, consisting of a net loss of $3.3 million and adjustments for non-cash items of $4.4 million[135]. - Net cash provided by investing activities for Q1 2025 was $6.2 million, compared to $5.1 million for the same period in 2024[138]. - Net cash provided by financing activities for Q1 2025 was $1.4 million, an increase from $0.3 million in Q1 2024[139]. - Unrealized losses associated with investments were approximately $0.8 million as of March 31, 2025, due to changes in the interest rate environment[148]. - Interest income and net gains and losses from marketable securities were $1.50 million for Q1 2025, reflecting higher yields compared to $1.45 million in Q1 2024[149]. - Cash flows from operating activities are primarily affected by payroll-related costs and obligations under property leases and design tool licenses[137]. - The company believes its cash and cash equivalents, short-term bank deposits, and marketable securities will provide sufficient capital for at least the next 12 months[142]. - The company occasionally evaluates potential acquisitions, which may require substantial capital resources and additional financing[143]. - A foreign exchange gain of $600,000 was recorded for Q1 2025, compared to a loss of $193,000 for the same period in 2024[145]. Workforce and R&D - The number of research and development personnel decreased to 325 as of March 31, 2025, from 331 a year earlier[111].