CEVA INC

Previous wording

Ceva is a trusted partner to over 400 of the leading semiconductor and original equipment manufacturer (OEM) companies targeting a wide variety of cellular and IoT end markets, including mobile, PC, consumer, automotive, smart-home, surveillance, robotics, industrial and medical. The customers incorporate our IP into application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs) that they manufacture, market and sell to consumer electronics companies. Our application software IP is licensed primarily to OEMs who embed it in their System on Chip (SoC) designs to enhance the user experience, and OEMs also license our hardware IP products and solutions for their SoC designs to create power-efficient, intelligent, secure and connected devices.

Current wording

Ceva is a trusted partner to over 400 of the leading semiconductor and original equipment manufacturer (OEM) companies targeting a wide variety of cellular and IoT end markets, including mobile, PC, consumer, automotive, smart-home, surveillance, robotics, industrial and medical. The customers incorporate our IP into application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs) that they manufacture, market and sell to OEMs and original design manufacturers. Our application software IP is licensed primarily to OEMs who embed it in their System on Chip (SoC) designs to enhance the user experience, and OEMs also license our hardware IP products and solutions for their SoC designs to create power-efficient, intelligent, secure and connected devices.

Previous wording

Ceva’s wireless communications, sensing and edge AI technologies are at the heart of some of today’s most advanced smart edge products. From Bluetooth connectivity, Wi-Fi, ultra-wide band (UWB) and 5G platform IP for ubiquitous, robust communications, to scalable edge AI neural processing unit (NPU) IPs, sensor fusion processors and embedded application software that make devices smarter.

Current wording

Ceva’s wireless communications, sensing and edge AI technologies are at the heart of some of today’s most advanced smart edge products. From Bluetooth connectivity, Wi-Fi, ultra-wide band (UWB) and 5G-Advanced platform IP for ubiquitous, robust communications, to scalable edge AI neural processing unit (NPU) IPs, sensor fusion processors and embedded application software that make devices smarter.

Previous wording

We believe our portfolio of wireless communications and sensing and edge AI technologies address some of the most important megatrends, including 5G, generative AI, industrial automation and vehicle electrification. We continue to experience strong interest across our IP portfolio due to these trends, in both traditional and new areas. In the second quarter of 2024, eleven IP licensing deals were concluded for a range of wireless and smart sensing use cases.

Current wording

We believe our portfolio of wireless communications and sensing and edge AI technologies address some of the most important megatrends, including 5G, generative AI, embedded AI, industrial automation and vehicle electrification. We continue to experience strong interest across our IP portfolio due to these trends, in both traditional and new areas. In the third quarter of 2024, ten IP licensing deals were concluded for a range of wireless and smart sensing use cases.

Previous wording

We believe that as the continuing digital transformation drives industries to become connected and intelligent, our ubiquitous technology and collaborative business model present a significant and secular growth prospect. We intend to continue to capitalize on the semiconductor momentum with our portfolio of technologies to enable three main use cases associated with smart edge devices: connect, sense and infer. We intend to focus on four main markets, which are consumer, automotive, industrial and infrastructure, which we believe are large, diversified and represent the greatest opportunities for long-term growth. We will also continue to serve the mobile and PC markets where we have established customers and market presence. We believe our key customers are keenly receptive to our products roadmap around connect, sense and infer, and that they are willing to expand the scope of engagements with us as our roadmap aligns with their technology needs. Furthermore, we anticipate that we can expand our customer base and revenues in Europe and the U.S., complementing our strong presence in China, Taiwan, Japan and the remainder of the APAC region.

Current wording

We believe that with digital transformation being a long-term trend that continues drives industries to become connected and intelligent, our ubiquitous technology and collaborative business model present a significant and secular growth prospect. We intend to continue to capitalize on the semiconductor momentum with our portfolio of technologies to enable three main use cases associated with smart edge devices: connect, sense and infer. We focus on four main markets, which are consumer, automotive, industrial and infrastructure, which we believe are large, diversified and represent the greatest opportunities for long-term growth. We will also continue to serve the mobile and PC markets where we have established customers and market presence. We believe our key customers are keenly receptive to our products roadmap around connect, sense and infer, and that they are willing to expand the scope of engagements with us as our roadmap aligns with their technology needs. Furthermore, we anticipate that we can expand our customer base and revenues in Europe and the U.S., as evidenced by our geography revenue split for the second and third quarters of 2024, complementing our strong presence in the APAC region.

Previous wording

In 2024, we believe our strategy will return Ceva to year-over-year revenue growth, with overall revenue expected to grow 4% to 8% over 2023. Most of this growth is expected to be concentrated in the second half of the year. In 2024, we expect our licensing and related revenues business will continue to expand into new markets and use cases in the industrial IoT (IIoT) and consumer IoT, offering connectivity platforms, sensing platforms and software, AI solutions (including AI engines, NPUs and software) and more. On royalties, we expect our connectivity products to continue to show strength in 2024, particularly related to our Bluetooth, Wi-Fi and cellular IoT business lines, with the expected ramp of automotive ADAS royalties in the second half of the year.

Current wording

We believe our strategy is returning Ceva to year-over-year revenue growth for 2024, with overall revenue now expected to grow 7% to 9% over 2023, versus the 4% to 8% we expected at the beginning of the year. This growth started in the second quarter of 2024, became more evident in the third quarter of the year, is expected to continue in the last quarter of the year. In 2024, we expect our licensing and related revenues business will continue to expand into new markets and use cases in the industrial IoT (IIoT) and consumer IoT, offering connectivity platforms, sensing platforms and software, AI solutions (including AI engines, NPUs and software) and more. On royalties, we expect our connectivity products to continue to show strength in 2024, particularly related to our Bluetooth, Wi-Fi and cellular IoT business lines (which recorded 400 million units in the third quarter of 2024), with the initial ramp of automotive ADAS royalties expected in the fourth quarter of the year.

Previous wording

Our operations in Israel remain largely unaffected by the war between Israel and Hamas that began on October 7, 2023, and we continue to drive our business and support our customers globally. However, a portion of our employees in Israel have been or are called to active reserve duty and additional employees may be called in the future, if needed. The Company has executed its business continuity plan with respect to those employees. It is possible that some of our operations in the region may be disrupted if this continues for a significant period of time or if the situation further deteriorates.

Current wording

Our operations in Israel remain largely unaffected by the war between Israel and Hamas that began on October 7, 2023 and escalated to conflicts with Lebanon and Hezbollah, and we continue to drive our business and support our customers globally. However, a portion of our employees in Israel have been or are called to active reserve duty and additional employees may be called in the future, if needed. The Company has executed its business continuity plan with respect to those employees. It is possible that some of our operations in the region may be disrupted if this continues for a significant period of time or if the situation further deteriorates.

Previous wording

Total revenues were $28.4 million and $50.5 million for the second quarter and first half of 2024, respectively, representing an increase of 24% and 3% as compared to the corresponding periods in 2023. The increase in total revenues for the second quarter of 2024 was due to higher licensing and related revenues and higher royalty revenues, as further described below. The increase in total revenues for the first half of 2024 was due to higher royalty revenues, offset by lower licensing and related revenues, as further described below.

Current wording

Total revenues were $27.2 million and $77.7 million for the third quarter and first nine months of 2024, respectively, representing an increase of 13% and 6% as compared to the corresponding periods in 2023. The increase in total revenues for the third quarter of 2024 was due to higher licensing and related revenues and higher royalty revenues, as further described below. The increase in total revenues for the first nine months of 2024 was due to higher royalty revenues, offset by lower licensing and related revenues, as further described below.

Previous wording

Our five largest customers accounted for 66% and 50% of our total revenues for the second quarter and first half of 2024, respectively, as compared to 49% and 33% for the comparable periods in 2023. Three customers accounted for 23%, 21% and 13% of our total revenues for the second quarter of 2024, as compared to three customers that accounted for 14%, 14% and 10% of our total revenues for the second quarter of 2023. Three customers accounted for 13%, 13% and 13% of our total revenues for the first half of 2024. There were no customers that accounted for more than 10% of our total revenues for the first half of 2023. Generally, the identity of our customers representing 10% or more of our total revenues varies from period to period, especially with respect to our IP licensing customers as we generate licensing revenues generally from new customers on a quarterly basis. With respect to our royalty revenues, two royalty paying customers represented 10% or more of our total royalty revenues for both the second quarter and first half of 2024, and collectively represented 45% and 43% of our total royalty revenues for the second quarter and first half of 2024, respectively. Two royalty paying customers represented 10% or more of our total royalty revenues for both the second quarter and first half of 2023, and collectively represented 47% and 38% of our total royalty revenues for the second quarter and first half of 2023, respectively. We expect that a significant portion of our future revenues will continue to be generated by a limited number of customers. The concentration of our customers is explainable in part by consolidation in the semiconductor industry.

Current wording

Our five largest customers accounted for 48% and 44% of our total revenues for the third quarter and first nine months of 2024, respectively, as compared to 53% and 30% for the comparable periods in 2023. Two customers accounted for 13% and 17% of our total revenues for the third quarter of 2024, as compared to three customers that accounted for 14%, 14% and 12% of our total revenues for the third quarter of 2023. One customer accounted for 13% of our total revenues for the first nine months of 2024, as compared to one customer that accounted for 10% of our total revenues for the first nine months of 2023. Sales to UNISOC (formerly Spreadtrum Communications, Inc. and RDA Corporation) represented 13% and 10% of our total revenues for the first nine months of 2024 and 2023, respectively. Generally, the identity of our customers representing 10% or more of our total revenues varies from period to period, especially with respect to our IP licensing customers as we generate licensing revenues generally from new customers on a quarterly basis. With respect to our royalty revenues, two royalty paying customers represented 10% or more of our total royalty revenues for both the third quarter and first nine months of 2024, and collectively represented 43% of our total royalty revenues for both the third quarter and first nine months of 2024. Two royalty paying customers represented 10% or more of our total royalty revenues for both the third quarter and first nine months of 2023, and collectively represented 46% and 41% of our total royalty revenues for the third quarter and first nine months of 2023, respectively. We expect that a significant portion of our future revenues will continue to be generated by a limited number of customers. The concentration of our customers is explainable in part by consolidation in the semiconductor industry.

Previous wording

Licensing and related revenues were $17.3 million and $28.7 million for the second quarter and first half of 2024, respectively, representing an increase of 28% and a decrease of 10%, as compared to the corresponding periods in 2023. The increase in licensing and related revenues for the second quarter of 2024 was mainly due to the signing of a number of strategic deals in the second quarter of 2024, including two deals with our large OEM customers in wireless infrastructure for their development of next-generation ASICs to address the incredible growth in network traffic and performance improvements required to support Generative AI and Hybrid AI systems. The decrease in licensing and related revenues for the first half of 2024 was mainly due to a decrease from our wireless communications IP portfolio, partially offset by the strategic deals signed in the second quarter of 2024 as explained above. Our backlog heading into the third quarter is healthy, on the back of signing some significant deals in the quarter, including one with a leading U.S. analog semiconductor company for our Bluetooth portfolio.

Current wording

Licensing and related revenues were $15.6 million and $44.3 million for the third quarter and first nine months of 2024, respectively, representing an increase of 12% and a decrease of 3%, as compared to the corresponding periods in 2023. The increase in licensing and related revenues for the third quarter of 2024 was mainly due to the signing of number of strategic deals in the third quarter of 2024 for the 5G-Advenced modem markets, including a strategic OEM customer deal for 5G-Advanced satellite communications, partially offset by a decrease from our wireless communications IP portfolio. The decrease in licensing and related revenues for the first nine months of 2024 was mainly due to a decrease in our wireless communications IP portfolio, partially offset by few strategic deals for the 5G-advenced modem markets signed in the first nine months of 2024.

Previous wording

During the second quarter of 2024, eleven IP licensing agreements were concluded, targeting a wide range of end markets and applications, including AI solutions for industrial and consumer edge AI devices, next-generation wireless infrastructure to enable ubiquitous AI, 5G satellite, 5G RedCap and Bluetooth connectivity for wearables and hearables. Five of the deals concluded in the second quarter of 2024 were with OEMs and one deal signed was with a first-time customer.

Current wording

During the quarter, ten IP licensing agreements were concluded, targeting a wide range of end markets and applications, including embedded AI solutions for consumer AIoT devices, 5G-Advanced satellite broadband for infrastructure and terminals, 5G for cellular IoT and V2X, spatial audio for headphones and TWS earbuds, and Bluetooth, Wi-Fi and UWB connectivity for wearables and hearables. Three of the deals signed in the quarter were with OEMs and three deals signed were with first-time customers.

Previous wording

Licensing and related revenues accounted for 61% and 57% of our total revenues for the second quarter and first half of 2024, respectively, as compared to 59% and 65% for the comparable periods of 2023.

Current wording

Licensing and related revenues accounted for 57% of our total revenues for both the third quarter and first nine months of 2024, as compared to 58% and 62% for the comparable periods of 2023.

Previous wording

Our customers reported sales of 461 million and 832 million chipsets incorporating our technologies for the second quarter and first half of 2024, respectively, an increase of 24% and 25% from the corresponding periods in 2023 for actual shipments reported.

Current wording

Royalty revenues were $11.6 million and $33.5 million for the third quarter and first nine months of 2024, respectively, representing an increase of 15% and 22%, as compared to the corresponding periods in 2023. The third quarter and first nine months of 2024 included revenue of $0.3 million and $2.0 million, respectively, following the resolution of royalty audits. Excluding these amounts, the third quarter and first nine months of 2024 would have been up by 12% and 14%, respectively, as compared to the comparable periods of 2023. Royalty revenues accounted for 43% of our total revenues for both the third quarter and first nine months of 2024, as compared to 42% and 38% for the comparable periods of 2023. The increase in royalty revenues for both the third quarter and first nine months of 2024 are attributed to the continued strength in consumer and industrial IoT end markets, which helped us to achieve 15% year-over-year royalty revenue growth and delivered the second highest quarterly unit shipments in Ceva’s history of 522 million units. Cellular IoT units were at an all-time record high, while Bluetooth and Wi-Fi continued to be very robust. Overall, combined shipments of Bluetooth, Wi-Fi and cellular IoT surpassed 400 million units in a quarter for the first time, an impressive milestone for our IoT connectivity product line. Moreover, we saw sequential and year-over-year growth of TVs and PCs powered by our sensor fusion software. Our customers reported sales of 522 million and 1,354 million chipsets incorporating our technologies for the third quarter and first nine months of 2024, respectively, an increase of 4% and 16% from the corresponding periods in 2023 for actual shipments reported.

Previous wording

The five largest royalty-paying customers accounted for 63% and 59% of our total royalty revenues for the second quarter and first half of 2024, respectively, as compared to 64% and 53% for the comparable periods of 2023.

Current wording

The five largest royalty-paying customers accounted for 61% and 60% of our total royalty revenues for the third quarter and first nine months of 2024, respectively, as compared to 60% and 55% for the comparable periods of 2023.

Previous wording

Cost of revenues was $2.9 million and $5.4 million for the second quarter and first half of 2024, respectively, as compared to $3.5 million and $7.0 million for the comparable periods of 2023. Cost of revenues accounted for 10% and 11% of our total revenues for the second quarter and first half of 2024, respectively, as compared to 15% and 14% for the comparable periods of 2023. The decrease for the second quarter of 2024 principally reflected lower customization work for our licensees. The decrease for the first half of 2024 principally reflected lower customization work for our licensees and lower cost of unit shipments related to our sensor fusion chip business. Included in cost of revenues for the second quarter and first half of 2024 was a non-cash equity-based compensation expense of $191,000 and $394,000, respectively, as compared to $214,000 and $420,000 for the comparable periods of 2023.

Current wording

Cost of revenues was $4.0 million and $9.4 million for the third quarter and first nine months of 2024, respectively, as compared to $2.4 million and $9.4 million for the comparable periods of 2023. Cost of revenues accounted for 15% and 12% of our total revenues for the third quarter and first nine months of 2024, respectively, as compared to 10% and 13% for the comparable periods of 2023. The increase for the third quarter of 2024 principally reflected higher strategically beneficial customization work associated with the strategic 5G-Advanced deals we signed recently, as well as higher third-party IP costs (associated mainly with the Mobile and Infrastructure technology customers), higher revenue and the cost of unit shipments related to our sensor fusion chip business, and higher payments to the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel (the IIA). Included in cost of revenues for the third quarter and first nine months of 2024 was a non-cash equity-based compensation expense of $176,000 and $570,000, respectively, as compared to $216,000 and $636,000 for the comparable periods of 2023.

Previous wording

Gross margin for the second quarter and first half of 2024 was 90% and 89%, respectively, as compared to 85% and 86% for the comparable periods of 2023. The increase for both the second quarter and first half of 2024 mainly reflected lower cost of revenues as set forth above, as well as higher total revenues. The gross margin for the second quarter and first half of 2023 reflects historical period on a re-cast basis excluding the Intrisix business as a discontinued operation, is also illustrative of our decision to return to pure IP licensing and royalty business model.

Current wording

Gross margin for the third quarter and first nine months of 2024 was 85% and 88%, respectively, as compared to 90% and 87% for the comparable periods of 2023. The decrease for the third quarter of 2024 mainly reflected higher cost of revenues as set forth above, offset by higher total revenues. The increase for the first nine months of 2024 mainly reflected higher total revenues. The gross margin for the third quarter and first nine months of 2023 reflects historical period on a re-cast basis excluding the Intrisix business as a discontinued operation, is also illustrative of our decision to return to pure IP licensing and royalty business model.

Previous wording

Total research and development expenses, net were $18.8 million and $36.7 million for the second quarter and first half of 2024, respectively, as compared to $18.1 million and $36.7 million for the comparable periods of 2023. The increase for the second quarter of 2024 principally reflected lower research grants received, mainly from the IIA, and lower customization work for our licensees, partially offset by lower salaries and related costs. Included in research and development expenses for the second quarter and first half of 2024 were non-cash equity-based compensation expenses of $2,438,000 and $4,445,000, respectively, as compared to $2,344,000 and $4,446,000 for the comparable periods of 2023. Research and development expenses as a percentage of our total revenues were 66% and 73% for the second quarter and first half of 2024, respectively, as compared to 79% and 75% for the comparable periods of 2023. The percentage decrease for both the second quarter and first half of 2024, as compared to the comparable periods of 2023, was mainly due to higher revenues.

Current wording

Total research and development expenses, net were $18.0 million and $54.7 million for the third quarter and first nine months of 2024, respectively, as compared to $17.8 million and $54.5 million for the comparable periods of 2023. The slight increase for the third quarter of 2024 principally reflected higher retention costs and higher project related costs, partially offset by higher allocation of customization work for our licensees to cost of revenues. The slight increase for the first nine months of 2024 principally reflected lower research grants received, mainly from the IIA, and lower allocation of customization work for our licensees to cost of revenues, partially offset by lower project related costs. Included in research and development expenses for the third quarter and first nine months of 2024 were non-cash equity-based compensation expenses of $2,421,000 and $6,866,000, respectively, as compared to $2,257,000 and $6,703,000 for the comparable periods of 2023. Research and development expenses as a percentage of our total revenues were 66% and 70% for the third quarter and first nine months of 2024, respectively, as compared to 74% for both the comparable periods of 2023. The percentage decrease for both the third quarter and first nine months of 2024, as compared to the comparable periods of 2023, was mainly due to higher revenues.

Previous wording

The number of research and development personnel was 332 at June 30, 2024, as compared to 337 at June 30, 2023.

Current wording

The number of research and development personnel was 326 at September 30, 2024, as compared to 322 at September 30, 2023.

Previous wording

Our sales and marketing expenses were $3.1 million and $5.9 million for the second quarter and first half of 2024, respectively, as compared to $2.6 million and $5.4 million for the comparable periods of 2023. The increase for both the second quarter and first half of 2024 principally reflected higher commission expenses as well as higher sales training and higher marketing and trade shows events. Included in sales and marketing expenses for the second quarter and first half of 2024 were non-cash equity-based compensation expenses of $451,000 and $816,000, respectively, as compared to $449,000 and $827,000 for the comparable periods of 2023. Sales and marketing expenses as a percentage of our total revenues were 11% and 12% for the second quarter and first half of 2024, respectively, as compared to 11% for both the comparable periods of 2023.

Current wording

Our sales and marketing expenses were $3.1 million and $9.0 million for the third quarter and first nine months of 2024, respectively, as compared to $2.9 million and $8.2 million for the comparable periods of 2023. The slight increase for the third quarter of 2024 principally reflected higher commission expenses. The increase for the first nine months of 2024 principally reflected higher commission expenses as well as higher sales training and higher marketing and trade shows events. Included in sales and marketing expenses for the third quarter and first nine months of 2024 were non-cash equity-based compensation expenses of $491,000 and $1,307,000, respectively, as compared to $478,000 and $1,305,000 for the comparable periods of 2023. Sales and marketing expenses as a percentage of our total revenues were 11% and 12% for the third quarter and first nine months of 2024, respectively, as compared to 12% and 11% for the comparable periods of 2023.

Previous wording

The total number of sales and marketing personnel was 30 at June 30, 2024, as compared to 33 at June 30, 2023.

Current wording

The total number of sales and marketing personnel was 32 at September 30, 2024, as compared to 34 at September 30, 2023.

Previous wording

Our general and administrative expenses were $3.5 million and $7.1 million for the second quarter and first half of 2024, respectively, as compared to $3.9 million and $7.7 million for the comparable periods of 2023. The decrease for both the second quarter and first half of 2024 primarily reflected lower professional services cost. Included in general and administrative expenses for the second quarter and first half of 2024 were non-cash equity-based compensation expenses of $820,000 and $1,816,000, respectively, as compared to $897,000 and $1,758,000 for the comparable periods of 2023. General and administrative expenses as a percentage of our total revenues were 12% and 14% for the second quarter and first half of 2024, respectively, as compared to 17% and 16% for the comparable periods of 2023.

Current wording

Our general and administrative expenses were $4.6 million and $11.8 million for the third quarter and first nine months of 2024, respectively, as compared to $3.6 million and $11.3 million for the comparable periods of 2023. The increase for the third quarter of 2024 primarily reflected higher allowance for credit losses and higher professional services costs. The increase for the first nine months of 2024 primarily reflected higher allowance for credit losses. Included in general and administrative expenses for the third quarter and first nine months of 2024 were non-cash equity-based compensation expenses of $1,120,000 and $2,936,000, respectively, as compared to $1,018,000 and $2,787,000 for the comparable periods of 2023. General and administrative expenses as a percentage of our total revenues were 17% and 15% for the third quarter and first nine months of 2024, respectively, as compared to 15% for both the comparable periods of 2023.

Previous wording

The number of general and administrative personnel was 45 at June 30, 2024, as compared to 42 at June 30, 2023.

Current wording

The number of general and administrative personnel was 45 at September 30, 2024, as compared to 51 at September 30, 2023.

Previous wording

Our amortization charges were $0.1 million and $0.3 million for the second quarter and first half of 2024, respectively, as compared to $0.1 million and $0.3 million for the comparable periods of 2023. The amortization charges for the second quarter and first half of 2024 and 2023 were incurred in connection with the amortization of intangible assets associated with the acquisitions of the Hillcrest Labs and VisiSonics business.

Current wording

Our amortization charges were $0.1 million and $0.4 million for the third quarter and first nine months of 2024, respectively, as compared to $0.1 million and $0.4 million for the comparable periods of 2023. The amortization charges for the third quarter and first nine months of 2024 and 2023 were incurred in connection with the amortization of intangible assets associated with the acquisitions of the Hillcrest Labs and VisiSonics business.

Previous wording

The increase in interest income and gains and losses from marketable securities, net, during both the second quarter and first half of 2024 principally reflected higher combined bank deposits and marketable securities balances held (mainly because of cash received from the sale of Intrinsix in October 2023) and higher yields.

Current wording

The increase in interest income and gains and losses from marketable securities, net, during both the third quarter and first nine months of 2024 principally reflected higher combined bank deposits and marketable securities balances held (mainly because of cash received from the sale of Intrinsix in October 2023) and higher yields.

Previous wording

We review our monthly expected major non-U.S. dollar denominated expenditures and look to hold equivalent non-U.S. dollar cash balances to mitigate currency fluctuations. However, our Euro cash balances increase significantly on a quarterly basis beyond our Euro liabilities, mainly from applicable French research tax credits, which are generally refunded every three years. This has resulted in a foreign exchange loss of $0.09 million and $0.28 million for the second quarter and first half of 2024, respectively, as compared to foreign exchange gain of $0.09 million and $0.36 million for the comparable periods of 2023.

Current wording

We review our monthly expected major non-U.S. dollar denominated expenditures and look to hold equivalent non-U.S. dollar cash balances to mitigate currency fluctuations. However, our Euro cash balances increase significantly on a quarterly basis beyond our Euro liabilities, mainly from applicable French research tax credits, which are generally refunded every three years. This has resulted in a foreign exchange gain of $0.80 million and $0.52 million for the third quarter and first nine months of 2024, respectively, as compared to foreign exchange gain of $0.03 million and $0.39 million for the comparable periods of 2023.

Previous wording

We recorded a loss of $0.1 million for both the second quarter and first half of 2024 as compared to a loss of $0.1 million and $0.2 million for the comparable periods of 2023, related to remeasurement of marketable equity securities, which we hold at cost. Over time, other income (expense), net, may be affected by market dynamics and other factors. Equity values generally change daily for marketable equity securities and upon the occurrence of observable price changes or upon impairment of marketable equity securities. In addition, volatility in the global economic climate and financial markets could result in a significant change in the value of our investments.

Current wording

We recorded an income of $21,000 and a loss of $97,000 for the third quarter and first nine months of 2024, respectively, as compared to an income of $160,000 and a loss of $76,000 for the comparable periods of 2023, related to remeasurement of marketable equity securities, which we hold at cost. Over time, other income (expense), net, may be affected by market dynamics and other factors. Equity values generally change daily for marketable equity securities and upon the occurrence of observable price changes or upon impairment of marketable equity securities. In addition, volatility in the global economic climate and financial markets could result in a significant change in the value of our investments.

Previous wording

Our income tax expenses was $1.6 million and $3.3 million for the second quarter and first half of 2024, respectively, as compared to $0.5 million and $2.0 million for the comparable periods of 2023. The increase for both the second quarter and first half of 2024 primarily reflected higher withholding tax expenses in our Israeli subsidiary for which we will not be able to obtain a refund from the tax authorities and the effect of the capitalization of R&D expenditures under IRC Section 174.

Current wording

Our income tax expenses was $1.0 million and $4.3 million for the third quarter and first nine months of 2024, respectively, as compared to $1.1 million and $3.1 million for the comparable periods of 2023. The increase for the first nine months of 2024 primarily reflected higher withholding tax expenses in our Israeli subsidiary for which we will not be able to obtain a refund from the tax authorities and the effect of the capitalization of R&D expenditures under IRC Section 174, partially offset by lower tax expenses on income generated in our French subsidiary (under the French IP Box regime).

Previous wording

As of June 30, 2024, we had approximately $24.7 million in cash and cash equivalents, $2.1 million in bank deposits, and $131.6 million in marketable securities, totaling $158.4 million, as compared to $166.5 million at December 31, 2023. The decrease for the first six months of 2024 principally reflected cash used in operating activities and funds used to repurchase 157,303 shares of common stock for an aggregate consideration of approximately $3.3 million, partially offset by cash proceeds from exercise of stock-based awards.

Current wording

As of September 30, 2024, we had approximately $13.2 million in cash and cash equivalents, $2.0 million in bank deposits, and $142.9 million in marketable securities, totaling $158.1 million, as compared to $166.5 million at December 31, 2023. The decrease for the first nine months of 2024 principally reflected cash used in operating activities and funds used to repurchase 343,604 shares of common stock for an aggregate consideration of approximately $7.5 million, partially offset by cash proceeds from exercise of stock-based awards.

Previous wording

Out of total cash, cash equivalents, bank deposits and marketable securities of $158.4 million, $133.3 million was held by our foreign subsidiaries. Our intent is to permanently reinvest earnings of our foreign subsidiaries and our current operating plans do not demonstrate a need to repatriate foreign earnings to fund our U.S. operations. However, if these funds were needed for our operations in the United States, we would be required to accrue and pay taxes to repatriate these funds. The determination of the amount of additional taxes related to the repatriation of these earnings is not practicable, as it may vary based on various factors such as the location of the cash and the effect of regulation in the various jurisdictions from which the cash would be repatriated.

Current wording

Out of total cash, cash equivalents, bank deposits and marketable securities of $158.1 million, $133.3 million was held by our foreign subsidiaries. Our intent is to permanently reinvest earnings of our foreign subsidiaries and our current operating plans do not demonstrate a need to repatriate foreign earnings to fund our U.S. operations. However, if these funds were needed for our operations in the United States, we would be required to accrue and pay taxes to repatriate these funds. The determination of the amount of additional taxes related to the repatriation of these earnings is not practicable, as it may vary based on various factors such as the location of the cash and the effect of regulation in the various jurisdictions from which the cash would be repatriated.

Previous wording

During the first six months of 2024, we invested $30.0 million of cash in marketable securities with maturities up to 33 months from the balance sheet date. In addition, during the same period, marketable securities were sold or redeemed for cash amounting to $31.9 million. All of our marketable securities are classified as available-for-sale. The purchase and sale or redemption of available-for-sale marketable securities are considered part of investing cash flow. Available-for-sale marketable securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of stockholders’ equity, net of taxes. Realized gains and losses on sales of investments, as determined on a specific identification basis, are included in the interim condensed consolidated statements of loss. The amount of credit losses recorded for the first six months of 2024 was immaterial. For more information about our marketable securities, see Note 7 to the interim condensed consolidated financial statements for the three and six months ended June 30, 2024.

Current wording

During the first nine months of 2024, we invested $41.3 million of cash in marketable securities with maturities up to 30 months from the balance sheet date. In addition, during the same period, marketable securities were sold or redeemed for cash amounting to $34.4 million. All of our marketable securities are classified as available-for-sale. The purchase and sale or redemption of available-for-sale marketable securities are considered part of investing cash flow. Available-for-sale marketable securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of stockholders’ equity, net of taxes. Realized gains and losses on sales of investments, as determined on a specific identification basis, are included in the interim condensed consolidated statements of loss. The amount of credit losses recorded for the first nine months of 2024 was immaterial. For more information about our marketable securities, see Note 7 to the interim condensed consolidated financial statements for the three and nine months ended September 30, 2024.

Previous wording

Cash used in operating activities for the first six months of 2024 was $5.0 million and consisted of net loss of $5.7 million, adjustments for non-cash items of $9.3 million, and changes in operating assets and liabilities of $8.6 million. Adjustments for non-cash items primarily consisted of $2.0 million of depreciation and amortization of intangible assets, and $7.5 million of equity-based compensation expenses. The decrease in operating assets and liabilities primarily consisted of an increase in trade receivables of $5.0 million, an increase in prepaid expenses and other assets of $2.2 million (mainly related to unbilled receivables of $2.1 million classified as “other long-term assets” in the Interim Condensed Consolidated Balance Sheets), and a decrease in accrued payroll and related benefits of $2.0 million (mainly as a result of a yearly bonus payments), partially offset by a decrease in accrued interest on bank deposits in the amount of $0.4 million.

Current wording

Cash used in operating activities for the first nine months of 2024 was $4.6 million and consisted of net loss of $7.0 million, adjustments for non-cash items of $13.6 million, and changes in operating assets and liabilities of $11.2 million. Adjustments for non-cash items primarily consisted of $3.0 million of depreciation and amortization of intangible assets, and $11.7 million of equity-based compensation expenses, partially offset by $0.7 million of amortization of premiums on available-for-sale marketable securities and $0.5 million of unrealized foreign exchange gain. The decrease in operating assets and liabilities primarily consisted of an increase in trade receivables of $7.8 million, and an increase in prepaid expenses and other assets of $3.7 million (mainly related to unbilled receivables of $2.7 million classified as “other long-term assets” in the Interim Condensed Consolidated Balance Sheets).

Previous wording

Cash used in operating activities for the first six months of 2023 was $9.9 million and consisted of net loss of $10.7 million, adjustments for non-cash items of $10.7 million, and changes in operating assets and liabilities of $9.9 million. Adjustments for non-cash items primarily consisted of $2.8 million of depreciation and amortization of intangible assets, and $8.1 million of equity-based compensation expenses. The decrease in operating assets and liabilities primarily consisted of an increase in trade receivables of $0.7 million, an increase in prepaid expenses and other assets of $2.0 million (mainly as a result of payment of a yearly design tool subscription in the first quarter of 2023, and an increase in applicable French research tax credits), an increase in deferred taxes, net of $0.4 million, a decrease in trade payables of $0.9 million, a decrease in accrued expenses and other payables of $1.2 million, and a decrease in accrued payroll and related benefits of $5.5 million (mainly as a result of a yearly bonus payments), partially offset by an increase in deferred revenues of $0.6 million.

Current wording

Cash used in operating activities for the first nine months of 2023 was $11.1 million and consisted of net loss of $15.6 million, adjustments for non-cash items of $16.1 million, and changes in operating assets and liabilities of $11.6 million. Adjustments for non-cash items primarily consisted of $3.9 million of depreciation and amortization of intangible assets (including $1.1 million from discontinued operations), and $12.3 million of equity-based compensation expenses. The decrease in operating assets and liabilities primarily consisted of an increase in trade receivables of $0.8 million, an increase in prepaid expenses and other assets of $2.0 million (mainly as a result of an increase in applicable French research tax credits), an increase in deferred taxes, net of $1.5 million, a decrease in trade payables of $0.8 million, a decrease in accrued payroll and related benefits of $6.2 million (mainly as a result of a yearly bonus payments), and a decrease of income tax payable of $1.4 million, partially offset by an increase in deferred revenues of $1.0 million.

Previous wording

Net cash provided by investing activities for the first six months of 2024 was $8.2 million, compared to $14.4 million of net cash provided by investing activities for the comparable period of 2023. We had a cash outflow of $30.0 million and a cash inflow of $31.9 million with respect to investments in marketable securities during the six months of 2024, as compared to a cash outflow of $2.5 million and a cash inflow of $17.7 million with respect to investments in marketable securities during the first six months of 2023. For the first half of 2024, we had proceeds of $8.0 million from bank deposits, as compared to proceeds of $4.0 million from bank deposits for the comparable period of 2023. We had a cash outflow of $1.5 million and $1.2 million during the first six months of 2024 and 2023, respectively, from purchase of property and equipment. For the first six months of 2024, we had a cash inflow of $0.5 million in connection with the sale of Intrinsix, and a cash outflow of $0.8 million for the acquisition of a Greek-based company. For the first six months of 2023, we had a cash outflow of $3.6 million for the acquisition of the VisiSonics business.

Current wording

Net cash used in investing activities for the first nine months of 2024 was $1.1 million, compared to $7.2 million of net cash provided by investing activities for the comparable period of 2023. We had a cash outflow of $41.3 million and a cash inflow of $34.4 million with respect to investments in marketable securities during the first nine months of 2024, as compared to a cash outflow of $10.5 million and a cash inflow of $19.5 million with respect to investments in marketable securities during the first nine months of 2023. For the first nine months of 2024, we had net proceeds of $8.0 million from bank deposits, as compared to net proceeds of $4.0 million from bank deposits for the comparable period of 2023. We had a cash outflow of $1.9 million and $2.1 million during the first nine months of 2024 and 2023, respectively, from purchase of property and equipment. For the first nine months of 2024, we had a cash inflow of $0.5 million in connection with the sale of Intrinsix, and a cash outflow of $0.8 million for the acquisition of a Greek-based company. For the first nine months of 2023, we had a cash outflow of $3.6 million for the acquisition of the VisiSonics business.

Previous wording

Net cash used in financing activities for the first six months of 2024 was $1.7 million, as compared to net cash provided by financing activities in the amount of $1.7 million for the comparable period of 2023.

Current wording

Net cash used in financing activities for the first nine months of 2024 was $4.6 million, as compared to net cash provided by financing activities in the amount of $0.4 million for the comparable period of 2023.

Previous wording

In August 2008, we announced that our board of directors approved a share repurchase program for up to one million shares of common stock pursuant to Rule 10b-18 of the Exchange Act, which was extended by an additional 7,100,000 shares collectively across further approvals in 2010, 2013, 2014, 2018, 2020 and 2023. During the first six months ended June 30, 2024, we repurchased 157,303 shares of common stock at an average purchase price of $20.83 per share for an aggregate purchase price of $3,276. There were no repurchases of our common stock during the six months ended June 30, 2023. As of June 30, 2024, we had 542,697 shares available for repurchase.

Current wording

In August 2008, we announced that our board of directors approved a share repurchase program for up to one million shares of common stock pursuant to Rule 10b-18 of the Exchange Act, which was extended by an additional 7,800,000 shares collectively across further approvals in 2010, 2013, 2014, 2018, 2020, 2023 and November 2024. During the first nine months ended September 30, 2024, we repurchased 343,604 shares of common stock at an average purchase price of $21.70 per share for an aggregate purchase price of $7,456. During the first nine months ended September 30, 2023, we repurchased 135,078 shares of common stock at an average purchase price of $22.23 per share for an aggregate purchase price of $3,003. As of September 30, 2024, we had 356,396 shares available for repurchase, with 700,000 additional shares being approved by our board of directors for repurchase on November 7, 2024, bringing the aggregate to approximately 1,056,000 shares available for repurchase as of that date.

Previous wording

During the first six months of 2024, we received $1.6 million from the exercise of stock-based awards, as compared to $1.7 million received for the comparable period of 2023.

Current wording

During the first nine months of 2024, we received $2.9 million from the exercise of stock-based awards, as compared to $3.4 million received for the comparable period of 2023.