CEVA (CEVA) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $28.4M, up 24% year-over-year, with licensing revenue up 28% and royalty revenue up 19% from 461M shipped units, driven by AI adoption and market share gains in IoT and smartphones.

• Eleven IP licensing deals were signed, including strategic agreements with infrastructure OEMs, a top-tier U.S. semiconductor company, and new customers in AI, wireless infrastructure, and Bluetooth.

• Launched two new IP products: NeuPro-Nano (TinyML NPU) and Ceva-Waves Links (multi-protocol wireless connectivity), surpassing 18B Ceva-powered devices shipped.

• Strategy focused on developing and licensing IPs for smart edge devices, leveraging AI adoption across industries and expanding in edge AI and IoT markets.

Financial highlights

• Q2 2024 revenue was $28.4M, up from $22.9M in Q2 2023; licensing revenue was $17.3M (61% of revenue), royalty revenue was $11.2M (39% of revenue).

• Gross margin improved to 90% GAAP and 91% non-GAAP, up from 85% and 86% last year.

• Non-GAAP operating margin was 15%, with non-GAAP net income of $4.2M and EPS of $0.17; GAAP net loss narrowed to $0.3M ($0.01/share).

• 461M units shipped by licensees in Q2, up 24% year-over-year, including 79M smartphones, 266M Bluetooth, 35M Wi-Fi, and 40M cellular IoT units.

• Cash, cash equivalents, marketable securities, and bank deposits totaled $158M at quarter-end.

Outlook and guidance

• Annual revenue expected at the mid to high end of 4%-8% growth guidance, with most growth in the second half of 2024.

• Non-GAAP operating margins and profits expected to more than double over 2023, with nearly double non-GAAP EPS.

• Q3 2024 revenue guidance: $26M–$28M; gross margin expected to remain at ~90% GAAP and ~91% non-GAAP.

• Non-GAAP OPEX for Q3 expected at $20.7M–$21.7M.

• Management believes current liquidity is sufficient to fund operations for at least the next 12 months.