CEVA (CEVA) Q2 2025 earnings summary

Executive summary

• Achieved strong licensing execution with 13 agreements, including five first-time and four OEM customers, reflecting robust demand for edge AI NPUs and IP portfolio.

• Four new NPU licensing deals and two strategic automotive IP agreements were signed, highlighting increased adoption of edge AI technologies.

• Device shipments reached 488 million units in Q2, surpassing 20 billion cumulative shipments, underscoring foundational technology leadership.

• Saw a healthy sequential rebound in royalty business, up 16% sequentially, though down 5% year-over-year due to softness in low-end smartphones.

• Marked a pivotal moment in customer adoption of edge AI technologies, with strong momentum in consumer IoT and Wi-Fi 6 shipments.

Financial highlights

• Q2 2025 revenue was $25.7 million, down 10% year-over-year; licensing revenue was $15 million (59% of total), down 13% year-over-year; royalty revenue was $10.7 million (41% of total), up 16% sequentially but down 5% year-over-year.

• Gross margins: 86% GAAP, 87% non-GAAP, compared to 90% and 91% a year ago.

• GAAP operating loss was $4.5 million; non-GAAP operating income was $0.8 million (3% margin).

• GAAP net loss was $3.7 million ($0.15 per share); non-GAAP net income was $1.8 million ($0.07 per share).

• Cash, equivalents, and marketable securities at quarter end totaled $157 million; $6.2 million was used to repurchase 300,000 shares, with 724,781–725,000 shares remaining available for repurchase.

Outlook and guidance

• Licensing pipeline, especially for edge AI, remains healthy entering Q3 and H2 2025.

• Royalty revenue expected to grow sequentially in H2, with strong Q4 momentum anticipated.

• Revenue guidance for 2025 was lowered from high-single digits to low-single digits growth over 2024, citing macroeconomic uncertainty and lower-than-expected Q1 revenues.

• Management expects sequential and year-over-year growth in the second half of 2025, reiterating a double-digit percentage increase in non-GAAP net income and EPS for 2025 over 2024.