CEVA(CEVA) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $24.2 million, representing a 10$22.2 million in Q1 2024 [13] - Licensing revenue increased by 32% to $15 million, accounting for 62$11.4 million in Q1 2024 [13] - Royalty revenue decreased by 14% to $9.2 million, reflecting 38$10.7 million in the same quarter last year [14] - GAAP net loss for Q1 2025 was $3.3 million, with a diluted loss per share of$0.14, compared to a net loss of $5.4 million and a diluted loss per share of$0.23 in Q1 2024 [17] Business Line Data and Key Metrics Changes - Royalty revenue from WiFi increased by 183% year over year, driven by a 12% increase in unit shipments, particularly in the consumer and industrial IoT markets [10][19] - Shipments of Bluetooth units were 233 million, up 15% from 202 million in Q1 2024 [18] - Cellular IoT shipments increased by 31% year over year to 48 million units [18] Market Data and Key Metrics Changes - Shipments in the consumer IoT market rose by 19% to 337 million units, while industrial IoT shipments increased by 26% to 30 million units [18] - The overall market for low-cost smartphones experienced a slowdown, impacting royalty revenue expectations [19] Company Strategy and Development Direction - The company aims to continue innovating for customers, deepen technology leadership, and build a strong future royalty stream while managing expenses [12] - The focus remains on expanding market share in wireless communication IP and diversifying the royalty customer base [2][12] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook for the remainder of the year, lowering 2025 revenue guidance from a high single-digit range to a low single-digit range for growth over 2024 [21] - The company anticipates sequential growth in royalties due to seasonality and the expansion of CEVA-powered 5G smartphone modems [20] Other Important Information - The company reported a cash balance of approximately $158 million as of March 2025 [19] - Total gross operating expenses for Q1 were at the low end of guidance at$25.1 million [14] Q&A Session Summary Question: Can you clarify the significance of the AI NPU ADAS win? - The design win is with a tier one supplier that has secured OEM customers, indicating potential for multiple platforms [26] Question: Is there an increase in ASPs with WiFi 7? - The transition from WiFi 6 to WiFi 7 is expected to bring a significant uplift in ASPs, similar to the previous transition [28] Question: What is the competitive environment around the ADAS win? - The competitive landscape includes a shift towards advanced models using vision transformers, with CEVA's technology excelling in power efficiency and low latency [34][35] Question: What caused the softness in the low-end smartphone market? - The slowdown was attributed to supply chain issues and is expected to recover as customers ramp up production [41][42] Question: How is the licensing pipeline looking? - The licensing pipeline remains strong, with no significant postponements in deals despite macroeconomic concerns [46][76] Question: Are there any impacts from tariffs on licensing? - There is no direct impact from tariffs, but customers are exhibiting cautious behavior due to uncertainty in the market [75][76] Question: How are WiFi royalty units tracking? - WiFi royalty units are ramping up successfully, with many customers integrating technology into production [78]