Part I
| Page |
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| Item 1. | Business | 4 |
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| Item 1A. | Risk Factors | 4 |
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| Item 1B. | Unresolved Staff Comments | 13 |
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| Item 1C. | Cybersecurity | 31 |
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| Item 2. | Properties | 31 |
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| Item 3. | Legal Proceedings | 32 |
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| Item 4. | Mine Safety Disclosures | 33 |
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| PART II |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 35 |
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| Item 6. | Reserved | 36 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 37 |
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| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 54 |
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| Item 8. | Financial Statements and Supplementary Data | 55 |
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| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 55 |
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| Item 9A. | Controls and Procedures | 55 |
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| Item 9B. | Other Information | 55 |
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| PART III |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 56 |
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| Item 11. | Executive Compensation | 56 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stock Holder Matters | 56 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 56 |
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| Item 14. | Principal Accountant Fees and Services | 56 |
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| PART IV |
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| Item 15. | Exhibits and Financial Statement Schedules | 57 |
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| 60 | |
| Financial Statements | F-1 | |
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| Signatures |
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FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This Annual Report contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of Ceva to differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Forward-looking statements are generally written in the future tense and/or are preceded by words such as “will,” “may,” “should,” “could,” “expect,” “suggest,” “believe,” “anticipate,” “intend,” “plan,” or other similar words. Forward-looking statements include the following:
| ● | Our belief that the consumer Internet-of-Things (IoT), automotive, industrial and infrastructure markets represent significant opportunity for growth, that they, together with the mobile and personal computing (PC) markets will represent a $5 billion total addressable market by 2027; |
| ● | Our belief that 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, and our belief in the continued interest in our IP portfolio due to these trends, in both traditional and new areas; |
| ● | Our belief that our Bluetooth, Wi-Fi, Ultra Wide Band (UWB) and cellular IoT IP allow us to address the high volume IoT industrial, consumer and smart home markets, and our expectation that the overall addressable market size for this IP will be more than 16.5 billion devices annually by 2029 based on research from ABI Research; |
| ● | Our belief that Wi-Fi represents a significant royalty revenue opportunity in connection with our leading market position in licensing Wi-Fi 6 and our leadership position in Wi-Fi 7 IP; |
| ● | Our belief that our PentaG2 platform, including the recently announced Ceva-XC22 multi-thread DSP, ensures we offer one of the most comprehensive baseband processor IP platforms in the industry today, and that our 5G IP provides newcomers and incumbents with a customizable solution to address the need for 5G, 5G Advanced and other communications in data centers and infrastructure; |
| ● | Our belief that the high volume consumer audio markets, including True Wireless Stereo (TWS) earbuds, smartwatches, AR and VR headsets, and other wearable assisted devices, offers an incremental growth segment for our Bluetooth, Audio AI DSPs and software IP, and our belief in the capabilities of our RealSpace Spatial Audio & Head Tracking Solution and ClearVox voice input software to enhance the user experience and offer premium features; |
| ● | Our belief that our SensPro2 sensor hub AI DSP family can address the growing demand for efficient, high-performance signal processing in sensor-based applications across various industries for applications such as smartphones, automotive safety (ADAS), autonomous driving, drones, robotics, security and surveillance, augmented reality (AR) and virtual reality (VR), natural language processing and voice recognition, which enables us to address the transformation in devices enabled by these applications and expand our footprint and content in smartphones, drones, consumer cameras, surveillance, ADAS, voice-enabled devices and industrial IoT applications; |
| ● | Statements regarding third-party estimates of industry growth and future market conditions, including research from Bloomberg Intelligence which forecasts that hardware revenue associated with computer vision AI products and conversational AI devices will reach $58 billion and $110 billion, respectively, by 2032, indicating the size of the market opportunity; |
| ● | Our belief that our newest generation family of AI neural processing units (NPUs) present a highly efficient and high-performance architecture to enable generative and classic AI on any device including communication gateways, optically connected networks, cars, notebooks and tablets, AR/VR headsets, smartphones, and any other cloud or edge use case from the edge all the way to the cloud, and that more than 6 billion Edge AI hardware units will ship annually by 2030 based on research from Research and Markets; |
| ● | Our belief that our recently announced NeuPro-Nano family of AI NPUs present a compelling position to add a cost- and power-efficient processor to microcontrollorer units and SoC designs to handle the complete AI workloads on-device, and that based on research from ABI Research, by 2030, over 50% of TinyML shipments will be powered by dedicated TinyML hardware, representing billions of devices annually; |
| ● | Our belief that our sensor fusion and spatial audio application software allows us to address an important technology piece used in personal computers, robotics, TWS earbuds, smart TVs and many other smart sensing IP products, in addition to our existing portfolio for camera-based computer vision and AI processing, and microphone-based sound processing; |
| ● | Our belief that our customers can benefit from our capabilities as a one-stop-shop for processing many types of sensors; |
| ● | Our belief that we are well positioned for long-term growth in shipments and royalty revenues derived from smart edge products as a result of our focus on silicon and software IP solutions that enable products to connect, sense and infer data; |
| ● | Our belief that our ubiquitous technology and collaborative business model present a significant and secular growth prospect as digital transformation continues to drives industries to become connected and intelligent; |
| ● | Our intention 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, and to focus on four main markets which include consumer, automotive, industrial and infrastructure, and our belief that such markets are large, diversified and represent the greatest opportunities for long-term growth; |
| ● | Any statements regarding sales trends and financial results for 2025 and other future periods, including our expectations with respect to future customers, contracts, revenues and expenses, regarding our customer pipeline, that we expect our licensing and related revenues business will continue to expand into new markets and use cases for industrial IoT (IIoT) and consumer IoT devices, that we expect our connectivity products to continue to show strength in royalties in 2025, that a significant portion of our future revenues will continue to be generated by a limited number of customers in part due to consolidation in the semiconductor industry, that international customers will continue to account for a significant portion of our revenues for the foreseeable future, that an increasing portion of our new customers and revenues will be derived from international customers generally and sales to Asia Pacific in particular, and that we can expand our customer base and revenues in Europe and the U.S.; |
| ● | Our belief that our cash and cash equivalents, short-term bank deposits and marketable securities, along with cash from operations, will provide sufficient capital to fund our operations for at least the next 12 months; and |
| ● | Our belief that fluctuations in high interest rates within our investment portfolio will not have a material effect on our financial position on an annual or quarterly basis. |
Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The forward-looking statements contained in this report are based on information that is currently available to us and expectations and assumptions that we deem reasonable at the time the statements were made. We do not undertake any obligation to update any forward-looking statements in this report or in any of our other communications, except as required by law. All such forward-looking statements should be read as of the time the statements were made and with the recognition that these forward-looking statements may not be complete or accurate at a later date.
Many factors may cause actual results to differ materially from those expressed or implied by the forward-looking statements contained in this report. These factors include, but are not limited to, those risks set forth in Item 1A: Risk Factors.
This report contains market data prepared by third party research firms. Actual market results may differ from their projections. This report includes trademarks and registered trademarks of Ceva. Products or service names of other companies mentioned in this Annual Report on Form 10-K may be trademarks or registered trademarks of their respective owners.
