CEVA (CEVA) investor relations material

Executive summary

• Total Q2 2025 revenue was $25.7M, down 10% year-over-year but up 6% sequentially, with 13 licensing agreements including five first-time and four OEM customers.

• Four new edge AI NPU licensing deals and two strategic automotive IP agreements were signed, reflecting strong demand for AI and automotive technologies.

• Device shipments reached 488M units in Q2, surpassing 20B cumulative shipments, underscoring technology leadership.

• Marked a pivotal moment in customer adoption of edge AI technologies and record shipments in cellular IoT and Wi-Fi 6.

• Repurchased 300,000 shares for $6.2M during the quarter; over 700,000 shares remain available under the buyback program.

Financial highlights

• Licensing revenue was $15M (59% of total), down 13% year-over-year; royalty revenue was $10.7M, down 5% year-over-year but up 16% sequentially.

• GAAP gross margin was 86% (down from 90%); non-GAAP gross margin was 87% (down from 91%).

• GAAP net loss was $3.7M ($0.15/share) vs. $0.3M ($0.01/share) last year; non-GAAP net income was $1.8M ($0.07/share), down from $4.2M ($0.17/share) last year.

• Non-GAAP operating income was $0.8M vs. $4.4M last year; GAAP operating loss was $4.5M vs. $35K loss last year.

• Cash, equivalents, and marketable securities at quarter end were $157M; no debt.

Outlook and guidance

• Licensing pipeline, especially for Edge AI, remains healthy; five consecutive quarters with ~$15M+ licensing revenue.

• Royalty revenue expected to grow sequentially in H2, driven by holiday season and share gains at a US OEM smartphone customer.

• Management expects sequential and year-over-year growth in the second half of 2025, but overall 2025 revenue guidance was lowered to low-single digits growth due to macroeconomic uncertainty.

• Q3 revenue expected between $26M-$30M; gross margin to improve by 1% sequentially; OpEx to remain stable.

• Expect double-digit percentage increase in non-GAAP net income and EPS vs. 2024.