CEVA (CEVA) Q3 2024 earnings summary

Executive summary

• Achieved strong Q3 2024 results with 13% year-over-year revenue growth to $27.2 million, exceeding projections and driven by robust licensing and royalty performance.

• Signed 10 key licensing deals, including first NeuPro-Nano AI NPU, 5G Advanced, spatial audio, and satellite communications agreements, reinforcing leadership in smart-edge device IP.

• Shipped 522 million units, including a record 400 million Bluetooth, Wi-Fi, and cellular IoT shipments, up 4% year-over-year.

• Raised full-year 2024 guidance due to improved backlog and pipeline, reflecting healthy business fundamentals and strategic execution.

• Completed the sale of Intrinsix, with discontinued operations showing a net loss of $5.3M for the nine months.

Financial highlights

• Total revenue: $27.2 million, up 13% year-over-year; licensing revenue: $15.6 million (up 12% YoY); royalty revenue: $11.6 million (up 15% YoY).

• Non-GAAP net income: $3.4 million (up 137% YoY); non-GAAP diluted EPS: $0.14 (up 133% YoY); GAAP net loss: $1.3 million, improved from $2.8 million loss YoY.

• Gross margin: 85% GAAP (down from 90% YoY), 87% non-GAAP (down from 92% YoY), impacted by strategic 5G Advanced customization work.

• Non-GAAP operating income: $2.1 million (up 30% YoY); non-GAAP operating margin: 8% (up from 7% YoY).

• Cash, equivalents, and marketable securities: $158 million as of September 30, 2024, with no debt.

Outlook and guidance

• Full-year 2024 revenue growth expected in the 7%-9% range, higher than previous guidance; non-GAAP EPS and operating margins expected to double over 2023.

• Q4 2024 revenue guidance: $26.5–$28.5 million; gross margin: ~88% GAAP, ~89% non-GAAP.

• Anticipates continued strength in connectivity royalties, with automotive ADAS royalties ramping in Q4.

• Licensing and related revenues expected to expand into new industrial and consumer IoT markets.