CEVA INC
For the period ended Mar 31, 2025. Filed May 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
CEVA$27.10+10.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001437749-24-034218
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001437749-25-015509
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 83 previous paragraphs and 90 current paragraphs.
39 unchanged; 37 reworded; 11 added; 7 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
For more than three decades, we have been a trusted partner to hundreds of leading semiconductor and original equipment manufacturer (OEM) companies servicing not just our largest target growth and incumbent markets, but also a wide variety of other end markets and applications, including smart-home, surveillance, robotics and medical. Our transformative semiconductor IP and embedded software offerings are incorporated by customers into application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs) to enable power-efficient, intelligent, secure and connected devices that connect, sense, and infer - the three critical pillars of the rapidly evolving era of AI-enabled smart edge technology.
Current report
● Scalable Edge AI capabilities: neural processing unit (NPU) IP to enable AI, on-device; and
Current report
Ceva is committed to being a responsible and respected global corporate citizen and a more sustainable company in the countries where we have operations and employees. We adhere to our Code of Business Conduct and Ethics and emphasize and focus on environmental controls, resource conservation and recycling and the welfare of our employees.
Current report
However, the global economy continues to be impacted by macroeconomic conditions, including as a volatile interest rate environment, ongoing inflation and recent changes in legislation and regulations, including enacted and proposed tariffs and other trade policies, have introduced additional uncertainty in the global economy. In periods of perceived or actual unfavorable economic conditions, our customers or potential customers could delay or re-evaluate their decisions to initiate various projects which in turn could result in a delay or cessation of engagement or other business activities with us, and which could result in lower licensing revenues. In addition, lower consumer demand may result in lower royalty revenues as our customers ship fewer units. These factors may make it difficult for us to forecast and plan future budgetary decisions or business activities accurately. Accordingly, while we do not currently expect our IP solutions will themselves be subject to tariffs, the indirect impact on consumer demand, among other factors, has increased the uncertainty about the year. Given these evolving dynamics, as well as our lower than anticipated revenues for the first quarter, we are adopting a more cautious outlook, and have lowered our revenue guidance for the 2025 fiscal year from around a high-single digits range to a low-single digits range for growth over 2024 annual revenues.
Current report
Licensing and related revenues were $15.0 million for the first quarter of 2025, representing an increase of 32%, as compared to the corresponding period in 2024. The increase in licensing and related revenues for the first quarter of 2025 was primarily due to the growing adoption of connectivity and inferencing technologies, which are the foundation pillars to our corporate strategy of innovation and market leadership in wireless connectivity, sensing and Edge AI technologies. On the connectivity front, we reinforced our industry leadership by securing several strategic agreements with key Bluetooth and Wi-Fi customers, solidifying our position in their long-term roadmaps by incorporating our new Wi-Fi 7 and Bluetooth 7 IP.
Current report
The second pillar enabling Edge AI is the inferencing use case. We signed a significant deal for our high-performance NeuPro-M edge AI NPU with a Korean automotive semiconductor company, for their next-generation ADAS solutions.
Current report
As for the sensing use case, we secured multiple deals, most notably an agreement for our RealSpace spatial audio software, which will be integrated into professional headsets and other audio devices from a leading PC OEM. This marks a significant milestone, as it validates the quality and robustness of our spatial audio software solution.
Current report
Licensing and related revenues accounted for 62% of our total revenues for the first quarter of 2025, as compared to 52% for the comparable period of 2024.
Current report
Royalty revenues were $9.2 million for the first quarter of 2025, representing a decrease of 14%, as compared to the corresponding period in 2024. The first quarter of 2024 included revenue of $1.0 million following the resolution of a royalty audit. Excluding this amount, the first quarter of 2025 would have been down by 5% as compared to the comparable period of 2024. Royalty revenues accounted for 38% of our total revenues for the first quarter of 2025, as compared to 48% for the comparable period of 2024. Despite a combination of soft low-cost smartphone shipments and an industrial customer experiencing a slower product ramp-up than in the prior year, shipment volume remained strong. While overall revenues declined for these reasons, we remain optimistic about the long-term potential of our royalty business, supported by continued demand and steady market adoption. Moreover, we received the first royalty report from a leading U.S. OEM using our technology in their in-house 5G modem. We anticipate this customer will significantly expand our market share in wireless communication IP and generate a meaningful, long-term royalty stream in the years to come. Our customers reported sales of 420 million chipsets incorporating our technologies for the first quarter of 2025, an increase of 13% from the corresponding period in 2024 for actual shipments reported.
Current report
Total operating expenses were $25.1 million for the first quarter of 2025, as compared to $24.5 million for the comparable period of 2024. The net increase for the first quarter of 2025 principally reflected higher salaries and employee-related costs, higher professional services costs and higher non-cash equity-based compensation expenses, partially offset by higher allocation of customization work for our licensees to cost of revenues.
Current report
Contractual Obligations and Commitments
Removed paragraphs (7)
Previous report
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 report
Ceva is a sustainability and environmentally conscious company. We have adopted both a Code of Business Conduct and Ethics and a Sustainability Policy, in which we emphasize and focus on environmental preservation, recycling, the welfare of our employees and privacy – which we promote on a corporate level. At Ceva, we are committed to social responsibility, values of preservation and consciousness towards these purposes.
Previous report
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 report
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 report
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 report
*) Less than 10%
Previous report
Total operating expenses were $25.9 million and $75.9 million for the third quarter and first nine months of 2024, respectively, as compared to $24.4 million and $74.5 million for the comparable periods of 2023. The net increase for both the third quarter and first nine months of 2024 principally reflected higher allowance for credit losses.
Reworded paragraphs (37)
Previous wording
Headquartered in Rockville, Maryland, Ceva is the leader in innovative silicon and software IP solutions that enable smart edge products to connect, sense, and infer data more reliably and efficiently. With the industry’s only portfolio of comprehensive communications and scalable edge AI IP, Ceva powers the connectivity, sensing, and inference in today’s most advanced smart edge products across consumer IoT, mobile, automotive, infrastructure, industrial, and personal computing. More than 18 billion of the world’s most innovative smart edge products from AI-infused smartwatches, IoT devices and wearables to autonomous vehicles, 5G mobile networks and more are powered by Ceva.
Current wording
Headquartered in Rockville, Maryland, we are the leader in innovative silicon and software IP solutions that enable smart edge products to connect, sense, and infer data more reliably and efficiently. Commanding 67% of the wireless connectivity market share based on IP design revenues in 2023, according to IPnest, we believe we have the industry’s broadest portfolio of comprehensive wireless communications and Edge AI IP platforms and embedded software solutions. We power the connectivity, sensing, and inference capabilities in today’s most advanced smart edge products across four large, diversified markets with significant opportunity for long-term growth, covering consumer IoT, automotive, industrial and infrastructure, as well as the mobile and PC markets where we have well established customers and presence Based on our research, we believe that these sectors will represent a $5 billion total addressable market by 2027. Since 2003, more than 19 billion of the world’s most innovative smart edge products from AI-infused smartwatches, IoT devices and wearables to autonomous vehicles, 5G mobile networks and more have been shipped with Ceva IP, with approximately 2 billion products shipped in 2024 alone.
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-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.
Current wording
Our wireless communications, sensing and edge AI technologies are at the heart of some of today’s most advanced smart edge products. Our comprehensive portfolio includes:
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, 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.
Current wording
We believe our portfolio of wireless communications, sensing and Edge AI technologies address some of the most important megatrends, including 5G expansion, 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 first quarter of 2025, we concluded eleven IP licensing deals for a range of wireless and smart sensing use cases, including notable strategic licensing deals for our Wi-Fi 7 IP with two of our current highest volume customers. We also signed significant agreements for our NeuPro-M Edge AI NPU with an automotive semiconductor company for their next-generation ADAS solutions and for our RealSpace spatial audio software to be integrated into PC headsets for a leading PC OEM.
Previous wording
As a result of our focus on silicon and software IP solutions that enable products to connect, sense, and infer data, we believe we are well positioned for long-term growth in shipments and royalty revenues derived from smart edge products. Royalty rates from these products are comprised of a range of ASPs, spanning from high volume Bluetooth and Wi-Fi to high value sensor fusion and base station RAN. The royalty ASP of our other products will be in between the two ranges.
Current wording
As a result of our focus on silicon and software IP solutions that enable products to connect, sense, and infer data, we believe we are well positioned for long-term growth in shipments and royalty revenues derived from smart edge products. Royalty rates from these products comprise a range of ASPs, from high volume Bluetooth and Wi-Fi to high value sensor fusion and base station RAN. The royalty ASP of our other products will be in between the two ranges.
Previous 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.
Current wording
We believe that with digital transformation being a long-term trend that continues to drive 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 IoT, 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 complement our strong presence in the APAC region by further expanding our customer base and revenues in Europe and the U.S., as evidenced by our increasingly diversified revenue split by geography from 2022 through 2024.
Previous 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.
Current wording
Our strategy returned us to year-over-year revenue growth in 2024, with overall revenue growing 10% over 2023, outperforming the 4% to 8% we expected at the beginning of 2024. In 2025, 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, 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 also show growth in 2025, particularly related to our Bluetooth, Wi-Fi and cellular IoT business lines which enjoyed record shipments in 2024 and from an in-house 5G modem powered by our cellular DSP from a leading U.S. mobile OEM that launched its first smartphone based on the modem in the first quarter of 2025.
Previous 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.
Current wording
Total revenues were $24.2 million for the first quarter of 2025, representing an increase of 10% as compared to the corresponding period in 2024. The increase in total revenues for the first quarter of 2025 was due to higher licensing and related revenues, offset by lower royalty revenues, as further described below.
Previous 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.
Current wording
Our five largest customers accounted for 56% of our total revenues for the first quarter of 2025, as compared to 45% for the comparable period in 2024. One customer accounted for 24% of our total revenues for the first quarter of 2025, as compared to two customers that accounted for 14% and 15% of our total revenues for the first quarter of 2024. Sales to UNISOC (formerly Spreadtrum Communications, Inc. and RDA Corporation) represented 24% and 14% of our total revenues for the first three months of 2025 and 2024, 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 the first quarter of 2025 and collectively represented 30% of our total royalty revenues for the first quarter of 2025. Two royalty paying customers represented 10% or more of our total royalty revenues for the first quarter of 2024 and collectively represented 41% of our total royalty revenues for the first quarter of 2024. 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
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.
Current wording
During the quarter, eleven IP licensing agreements were concluded, targeting a wide range of end markets and applications, including Edge AI NPU for automotive ADAS, Wi-Fi 7 connectivity for AIoT, Bluetooth 6 and Wi-Fi 6 for combo connectivity products, 5G cellular IoT for industrial devices, audio for consumer devices and spatial audio for PC headsets. Two of the deals signed were with first-time customers.
Previous 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.
Current wording
The five largest royalty-paying customers accounted for 50% of our total royalty revenues for the first quarter of 2025, as compared to 58% for the comparable period of 2024.
Previous 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.
Current wording
Cost of revenues was $3.5 million for the first quarter of 2025, as compared to $2.5 million for the comparable period of 2024. Cost of revenues accounted for 14% of our total revenues for the first quarter of 2025, as compared to 11% for the comparable period of 2024. The increase for the first quarter of 2025 principally reflected higher strategically beneficial customization work associated with the strategic 5G-Advanced deals we signed in the second half of 2024. Included in cost of revenues for the first quarter of 2025 was a non-cash equity-based compensation expense of $159,000, as compared to $203,000 for the comparable period of 2024.
Previous 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.
Current wording
Gross margin for the first quarter of 2025 was 86%, as compared to 89% for the comparable period of 2024. The decrease for the first quarter of 2025 mainly reflected higher cost of revenues as set forth above, offset by higher total revenues.
Previous 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.
Current wording
Total research and development expenses, net were $17.6 million for the first quarter of 2025, as compared to $18.0 million for the comparable period of 2024. The decrease for the first quarter of 2025 principally reflected higher allocation of customization work for our licensees to cost of revenues, partially offset by higher non-cash equity-based compensation expenses. Included in research and development expenses for the first quarter of 2025 were non-cash equity-based compensation expenses of $2,466,000, as compared to $2,007,000 for the comparable period of 2024. Research and development expenses as a percentage of our total revenues were 73% for the first quarter of 2025, as compared to 82% for the comparable period of 2024. The percentage decrease for the first quarter of 2025, as compared to the comparable period of 2024, was mainly due to higher revenues.
Previous wording
The number of research and development personnel was 326 at September 30, 2024, as compared to 322 at September 30, 2023.
Current wording
The number of research and development personnel was 325 at March 31, 2025, as compared to 331 at March 31, 2024.
Previous 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.
Current wording
Our sales and marketing expenses were $3.4 million for the first quarter of 2025, as compared to $2.8 million for the comparable period of 2024. The increase for the first quarter of 2025 principally reflected higher salaries and employee-related costs, mainly due to a greater number of personnel, as well as higher non-cash equity-based compensation expenses. Included in sales and marketing expenses for the first quarter of 2025 were non-cash equity-based compensation expenses of $566,000, as compared to $365,000 for the comparable period of 2024. Sales and marketing expenses as a percentage of our total revenues were 14% for the first quarter of 2025, as compared to 13% for the comparable period of 2024.
Previous wording
The total number of sales and marketing personnel was 32 at September 30, 2024, as compared to 34 at September 30, 2023.
Current wording
The total number of sales and marketing personnel was 34 at March 31, 2025, as compared to 28 at March 31, 2024.
Previous 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.
Current wording
Our general and administrative expenses were $3.9 million for the first quarter of 2025, as compared to $3.6 million for the comparable period of 2024. The increase for the first quarter of 2025 primarily reflected higher professional services costs. Included in general and administrative expenses for the first quarter of 2025 were non-cash equity-based compensation expenses of $1,132,000, as compared to $996,000 for the comparable period of 2024. General and administrative expenses as a percentage of our total revenues were 16% for the first quarter of both 2025 and 2024.
Previous wording
The number of general and administrative personnel was 45 at September 30, 2024, as compared to 51 at September 30, 2023.
Current wording
The number of general and administrative personnel was 47 at March 31, 2025, as compared to 46 at March 31, 2024.
Previous 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.
Current wording
Our amortization charges were $0.1 million for the first quarter of both 2025 and 2024. The amortization charges for the first quarter of 2025 and 2024 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 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.
Current wording
The slight increase in interest income and gains and losses from marketable securities, net, during the first quarter of 2025 principally reflected higher yields, partially offset by lower combined bank deposits and marketable securities balances held.
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 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.
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 $0.60 million for the first quarter of 2025, as compared to a foreign exchange loss of $0.19 million for the comparable period of 2024.
Previous 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.
Current wording
We recorded a loss of $54,000 for the first quarter of 2025, as compared to a loss of $60,000 for the comparable period of 2024, related to remeasurement of marketable equity securities, which we hold at fair value. 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 $1.0 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).
Current wording
Our income tax expenses was $1.0 million for the first quarter of 2025, as compared to $1.7 million for the comparable period of 2024. The decrease for the first three months of 2025 primarily reflected lower withholding tax expenses in our Israeli subsidiary for which we will not be able to obtain a refund from the tax authorities, and lower tax expenses on income generated in our French subsidiary (under the French IP Box regime).
Previous wording
We are subject to income and other taxes in the United States and in numerous foreign jurisdictions. Our domestic and foreign tax liabilities are dependent on the jurisdictions in which profits are determined to be earned and taxed. Additionally, the amount of taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we operate. A number of factors influence our effective tax rate, including changes in tax laws and treaties as well as the interpretation of existing laws and rules. Federal, state, and local governments and administrative bodies within the United States, and other foreign jurisdictions have implemented, or are considering, a variety of broad tax, trade, and other regulatory reforms that may impact us. For example, the Tax Cuts and Jobs Act (the “U.S. Tax Reform”) enacted on December 22, 2017 resulted in changes in our corporate tax rate, our deferred income taxes, and the taxation of foreign earnings. It is not currently possible to accurately determine the potential comprehensive impact of these or future changes, but these changes could have a material impact on our business and financial condition.
Current wording
We are subject to income and other taxes in the United States and in numerous foreign jurisdictions. Our domestic and foreign tax liabilities are dependent on the jurisdictions in which profits are determined to be earned and taxed. Additionally, the amount of taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we operate. A number of factors influence our effective tax rate, including changes in tax laws and treaties as well as the interpretation of existing laws and rules. Federal, state, and local governments and administrative bodies within the United States, and other foreign jurisdictions have implemented, or are considering, a variety of broad tax, trade, and other regulatory reforms that may impact us. For example, the Tax Cuts and Jobs Act (the “U.S. Tax Reform”) enacted on December 22, 2017 resulted in changes in our corporate tax rate, our deferred income taxes, and the taxation of foreign earnings. It is not currently possible to accurately determine the potential comprehensive impact of future changes, but these changes could have a material impact on our business and financial condition.
Previous wording
We have significant operations in Israel and operations in France and the Republic of Ireland. A substantial portion of our taxable income is generated in Israel and France, as well as potentially in the U.S. due to global intangible low-taxed income (GILTI) and the requirement to capitalize R&D expenditures under IRC Section 174 over 5 years if sourced from the U.S. and over 15 years if sourced internationally. Although our Israeli and Irish subsidiaries, and, from 2022 onward, our French subsidiary, are taxed at rates substantially lower than U.S. tax rates, the tax rates in these jurisdictions could nevertheless result in a substantial increase as a result of withholding tax expenses with respect to which we are unable to obtain a refund from the relevant tax authorities.
Current wording
We have significant operations in Israel and operations in France and the Republic of Ireland. A substantial portion of our taxable income is generated in Israel and France, as well as potentially in the U.S. due to GILTI and the requirement to capitalize research and development expenditures under IRC Section 174 over 5 years if sourced from the U.S. and over 15 years if sourced internationally. Although our Israeli, French and Irish subsidiaries are taxed at rates substantially lower than U.S. tax rates, the tax rates in these jurisdictions could nevertheless result in a substantial increase as a result of withholding tax expenses with respect to which we are unable to obtain a refund from the relevant tax authorities.
Previous wording
Our French subsidiary is entitled to a tax benefit of 10% applied to specific revenues under the French IP Box regime. The French IP Box regime applies to net income derived from the licensing, sublicensing or sale of several IP rights such as patents and copyrighted software, including royalty revenues. This elective regime requires a direct link between the income benefiting from the preferential treatment and the R&D expenditures incurred and contributing to that income. Qualifying income may be taxed at a favorable 10% CIT rate (plus social surtax, hence 10.3% in total).
Current wording
Our French subsidiary is entitled to a tax benefit of 10% applied to specific revenues under the French IP Box regime. The French IP Box regime applies to net income derived from the licensing, sublicensing or sale of several IP rights such as patents and copyrighted software, including royalty revenues. This elective regime requires a direct link between the income benefiting from the preferential treatment and the research and development expenditures incurred and contributing to that income. Qualifying income may be taxed at a favorable 10% CIT rate (plus social surtax, hence 10.3% in total). Income not eligible for a tax benefit under the French IP Box regime is taxed at a regular rate of 25%.
Previous wording
The new tax track under the Amendment, which is applicable to our Israeli subsidiary, is the “Technological Preferred Enterprise”. Technological Preferred Enterprise is an enterprise for which total consolidated revenues of its parent company and all subsidiaries are less than 10 billion New Israeli Shekel (NIS). A Technological Preferred Enterprise, as defined in the Amendment, that is located in the center of Israel (where our Israeli subsidiary is currently located), is taxed at a rate of 12% on profits deriving from intellectual property. Any dividends distributed to “foreign companies”, as defined in the Amendment, deriving from income from technological enterprises will be taxed at a rate of 4%. We are applying the Technological Preferred Enterprise tax track for our Israeli subsidiary from tax year 2020 and onwards.
Current wording
The tax track under the Amendment, which is applicable to our Israeli subsidiary, is the “Technological Preferred Enterprise”. Technological Preferred Enterprise is an enterprise for which total consolidated revenues of its parent company and all subsidiaries are less than 10 billion New Israeli Shekel (NIS). A Technological Preferred Enterprise, as defined in the Amendment, that is located in the center of Israel (where our Israeli subsidiary is currently located), is taxed at a rate of 12% on profits deriving from IP. Any dividends distributed to “foreign companies”, as defined in the Amendment, deriving from income from technological enterprises will be taxed at a rate of 4%.
Previous wording
We believe that the assumptions and estimates associated with revenue recognition, fair value of financial instruments, equity-based compensation and income taxes have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.
Current wording
We believe that the assumptions and estimates associated with revenue recognition, equity-based compensation and credit losses have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.
Previous 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.
Current wording
As of March 31, 2025, we had approximately $18.8 million in cash and cash equivalents, $2.0 million in bank deposits, and $137.5 million in marketable securities, totaling $158.3 million, as compared to $163.6 million at December 31, 2024. The decrease for the first three months of 2025 principally reflected cash used in operating activities.
Previous 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.
Current wording
Out of total cash, cash equivalents, bank deposits and marketable securities of $158.3 million, $134.3 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 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.
Current wording
During the first three months of 2025, we invested $29.1 million of cash in marketable securities with maturities up to 36 months from the balance sheet date. In addition, during the same period, marketable securities were redeemed for cash amounting to $35.7 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 three months of 2025 was immaterial. For more information about our marketable securities, see Note 6 to the interim condensed consolidated financial statements for the three months ended March 31, 2025.
Previous 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).
Current wording
Cash used in operating activities for the first three months of 2025 was $7.4 million and consisted of net loss of $3.3 million, adjustments for non-cash items of $4.4 million, and changes in operating assets and liabilities of $8.5 million. Adjustments for non-cash items primarily consisted of $0.9 million of depreciation and amortization of intangible assets, and $4.3 million of equity-based compensation expenses, partially offset by $0.2 million of amortization of premiums on available-for-sale marketable securities and $0.6 million of unrealized foreign exchange gain. The decrease in operating assets and liabilities primarily consisted of an increase in trade receivables of $3.5 million, and an increase in prepaid expenses and other assets of $3.7 million (mainly as a result of payment of a yearly design tool subscription), as well as a decrease in deferred revenues of $0.6 million, a decrease in accrued expenses and other payables of $1.1 million, a decrease in accrued payroll and related benefits of $0.8 million (mainly due to partial yearly bonus payments), partially offset by an increase in trade payables of $1.4 million.
Previous 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.
Current wording
Cash used in operating activities for the first three months of 2024 was $7.3 million and consisted of net loss of $5.4 million, adjustments for non-cash items of $4.6 million, and changes in operating assets and liabilities of $6.5 million. Adjustments for non-cash items primarily consisted of $1.0 million of depreciation and amortization of intangible assets, and $3.6 million of equity-based compensation expenses. The decrease in operating assets and liabilities primarily consisted of an increase in trade receivables of $3.0 million, an increase in prepaid expenses and other assets of $3.2 million (mainly as a result of payment of a yearly design tool subscription), a decrease in deferred revenues of $0.5 million, and a decrease in accrued expenses and other payables of $1.0 million, partially offset by an increase in accrued payroll and related benefits of $0.5 million and an increase in trade payables of $0.4 million.
Previous 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.
Current wording
Net cash provided by investing activities for the first three months of 2025 was $6.2 million, compared to $5.1 million of net cash provided by investing activities for the comparable period of 2024. We had a cash outflow of $29.1 million and a cash inflow of $35.7 million with respect to investments in marketable securities during the first three months of 2025, as compared to a cash outflow of $12.7 million and a cash inflow of $18.9 million with respect to investments in marketable securities during the first three months of 2024. We had a cash outflow of $0.3 million and $0.9 million during the first three months of 2025 and 2024, respectively, from purchase of property and equipment. For the first three 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.
Previous 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.
Current wording
Net cash provided by financing activities for the first three months of 2025 was $1.4 million, as compared to net cash provided by financing activities in the amount of $0.3 million for the comparable period of 2024.
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 7,800,000 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.
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. There were no repurchases of our common stock during the three months ended March 31, 2025. During the first three months ended March 31, 2024, we repurchased 56,872 shares of common stock at an average purchase price of $22.48 per share for an aggregate purchase price of $1,278. As of March 31, 2025, we had 1,024,781 shares available for repurchase.
Previous 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.
Current wording
During the first three months of 2025, we received $1.4 million from the exercise of stock-based awards, as compared to $1.6 million received for the comparable period of 2024.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
● Advanced wireless connectivity solutions: Bluetooth, Wi-Fi, Ultra-Wideband (UWB), and 5G-Advanced platform IP for ubiquitous and robust communication;
Current report — wording carried from elsewhere
● Sensor fusion processors and embedded application software that make devices smarter and more responsive.
Current report — wording carried from elsewhere
We believe that our contractual obligations and commitments have not changed materially from those included in our Annual Report on Form 10-K for the year ended December 31, 2024.