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| PART I. | FINANCIAL INFORMATION | 6 |
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| Item 1. | Interim Condensed Consolidated Balance Sheets at June 30, 2025 (unaudited) and December 31, 2024 | 6 |
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| Interim Condensed Consolidated Statements of Loss (unaudited) for the three and six months ended June 30, 2025 and 2024 | 7 |
| Interim Condensed Consolidated Statements of Comprehensive Loss (unaudited) for the three and six months ended June 30, 2025 and 2024 | 8 |
| Interim Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three and six months ended June 30, 2025 and 2024 | 9 |
| Interim Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2025 and 2024 | 11 |
| Notes to the Interim Condensed Consolidated Financial Statements | 12 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 |
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| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 36 |
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| Item 4. | Controls and Procedures | 37 |
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| PART II. | OTHER INFORMATION | 37 |
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| Item 1. | Legal Proceedings | 37 |
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| Item 1A. | Risk Factors | 38 |
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| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 39 |
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| Item 3 | Defaults Upon Senior Securities | 39 |
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| Item 4 | Mine Safety Disclosures | 39 |
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| Item 5 | Other Information | 39 |
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| Item 6 | Exhibits | 40 |
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| SIGNATURES | 40 | |
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FORWARD-LOOKING STATEMENTS
FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This Quarterly 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 we power the connectivity, sensing and inference capabilities in today’s most advanced smart edge products across large, diversified markets covering the consumer Internet-of-Things (IoT), automotive, industrial and infrastructure markets, and that such markets represent significant opportunities for growth that together with the mobile and personal computing (PC) markets, will represent a $5 billion total addressable market by 2027 based on our research; |
| ● | Our belief that we have the broadest portfolio of comprehensive wireless communications, sensing, Edge AI IP platforms and embedded software solutions that address some of the most important megatrends, including 5G expansion, 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 execution of licensing agreements for the NeuPro family of AI neural processing units (NPUs) represents a pivotal moment for our AI business, and that we have entered the broad adoption phase of our Edge AI NPUs; |
| ● | 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 and digital signal processors (DSPs) for 5G mobile broadband and 5G RedCap, and our PentaG RAN platform for 5G RAN, including the recently announced Ceva-XC22 multi-thread DSP, are some of the most comprehensive baseband processor IP platforms in the industry today that provide newcomers and incumbents with comprehensive and customizable solutions to address the need for 5G processing for fixed wireless access, satellite communications and a range of connected devices such as robots, cars, smart cities and other devices for industrial applications, as well as 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, offer an incremental growth segment for our Bluetooth, Audio AI DSPs and NPUs and software IP, and our belief around the capabilities and market adoption of our RealSpace Spatial Audio & Head Tracking Solution; |
| ● | 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 NeuPro-M AI 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 AI is rapidly making its way into IoT devices in part due to the emergence of embedded AI, including tiny machine learning (TinyML), and that our recently announced NeuPro-Nano family of AI NPUs present a compelling proposition to add a cost- and power-efficient processor to microcontroller 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 drive 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 IoT, automotive, industrial and infrastructure, and our belief that such markets are large, diversified and represent the greatest opportunities for long-term growth; |
| ● | Any statements or guidance regarding sales trends and financial results for 2025 and other future periods, including our lowered revenue guidance for 2025, 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, our expectation that growth in royalties will continue through the rest of 2025, that we remain optimistic about the long-term potential of our royalty business supported by continued demand and steady market optimism, 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 expectations around the impact of elevated geopolitical tensions, volatility and uncertainty with respect to international trade policies, including tariffs, export controls or other trade measures on our business, our customers, the markets in which we compete and the global economy overall; |
| ● | Our expectations around the impact of future changes in tax laws, regulations, or interpretations in the United States, Israel, France, Ireland, or other jurisdictions where we operate on our effective tax rate and overall tax expense, including the potential for increased withholding tax expenses and changes to preferential tax regimes; |
| ● | 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 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 Part II – Item 1A – “Risk Factors” of this Form 10-Q.
This report contains market data prepared by third party research firm. Actual market results may differ from their projections.
