CEVA (CEVA) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 13% year-over-year to $27.2 million, driven by strong licensing and royalty streams, with robust performance in both segments and record device shipments exceeding 400 million Bluetooth, Wi-Fi, and cellular IoT units.

• Signed ten IP licensing deals in Q3, including strategic agreements in 5G, AI, satellite, and connectivity, with three deals involving OEMs and the first NeuPro-Nano AI NPU license.

• Raised full-year 2024 guidance due to improved backlog and pipeline, reflecting healthy momentum into Q4 and 2025, and expanded the share repurchase program by 700,000 shares.

• Strategic focus on smart-edge device IP and embedded AI, with high customer engagement and long-term partnerships driving higher licensing fees and royalties.

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

Financial highlights

• Q3 2024 revenue was $27.2 million, up from $24.1 million in Q3 2023; licensing revenue $15.6 million (+12%), royalty revenue $11.6 million (+15%).

• Non-GAAP net income rose 137% to $3.4 million, with diluted EPS up to $0.14; GAAP net loss narrowed to $1.3 million.

• Gross margin declined to 85% GAAP and 87% non-GAAP, mainly due to customization work for key 5G Advanced deals.

• Non-GAAP operating income increased 30% to $2.1 million; GAAP operating loss was $2.6 million.

• Cash, equivalents, and marketable securities totaled $158 million at quarter end, with no debt.

Outlook and guidance

• Full-year 2024 revenue growth expected in the 7%-9% range, higher than previous guidance, with non-GAAP fully diluted EPS projected to double year-over-year.

• Q4 2024 revenue projected at $26.5–$28.5 million; gross margin expected at 88% GAAP and 89% non-GAAP.

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