CEVA (CEVA) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $28.4M, up 24% year-over-year, driven by strong licensing execution and royalty growth from IoT and smartphone markets, with 461M units shipped and 18B devices shipped to date.

• Eleven IP licensing deals were signed, including strategic agreements with infrastructure OEMs, a top-tier U.S. semiconductor company, and five OEMs, spanning AI, wireless, and smart sensing.

• 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 high-growth markets.

• Royalty revenues grew 19% in Q2 2024, driven by increased shipments in Bluetooth, Wi-Fi, and cellular IoT.

Financial highlights

• Q2 2024 revenue was $28.4M, up from $22.9M in Q2 2023; licensing revenue rose 28% to $17.3M, and royalty revenue increased 19% to $11.2M.

• GAAP gross margin improved to 90% from 85% year-over-year; non-GAAP gross margin rose to 91% from 86%.

• 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 or $0.01 per share.

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

• $2M returned to shareholders via repurchase of 100,000 shares in Q2; 542,697–553,000 shares remain available for buyback.

Outlook and guidance

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

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

• Q3 revenue guidance: $26M–$28M; gross margin ~90% GAAP, ~91% non-GAAP; non-GAAP OPEX for Q3 expected at $20.7M–$21.7M.

• Management expects continued licensing and royalty growth, supported by a strong pipeline and capital resources.

• Current liquidity is sufficient to fund operations for at least the next 12 months.