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| PART I. | FINANCIAL INFORMATION | 6 |
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| Item 1. | Interim Condensed Consolidated Balance Sheets at September 30, 2025 (unaudited) and December 31, 2024 | 6 |
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| Interim Condensed Consolidated Statements of Loss (unaudited) for the three and nine months ended September 30, 2025 and 2024 | 7 |
| Interim Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and nine months ended September 30, 2025 and 2024 | 8 |
| Interim Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three and nine months ended September 30, 2025 and 2024 | 9 |
| Interim Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 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 are the leader in silicon and software IP enabling Physical AI, and our view that Physical AI represents the natural evolution of Edge AI, unifying connectivity, sensing and inference to enable intelligent interaction between devices, the physical environment and the cloud, and that we are uniquely positioned as the only company with leadership in innovative silicon and software IP solutions across all three layers; |
| ● | Our belief that our technologies power the connectivity, perception, and intelligence in today’s most advanced smart edge products across large, diversified markets covering the consumer Internet-of-Things (IoT), automotive, industrial and infrastructure, and mobile and personal computing (PC) markets, and that these sectors will represent a $170 billion total addressable market for Physical AI and Edge AI by 2030 based on our market research; |
| ● | Our belief that our portfolio of technologies comprised of connectivity, sensing and inference positions us at the center of the most important megatrends shaping the semiconductor industry, including 5G expansion, generative and embedded AI, industrial automation and vehicle electrification, and our belief that demand across these areas continues to drive strong interest in our IP portfolio, both in established markets and in new, emerging use cases; |
| ● | Our belief that our execution of licensing agreements for the NeuPro family of AI neural processing units (NPUs), our SensPro AI digital signal processors (DSPs) and our WiFi 7 and Bluetooth High Data Throughput IP reinforces our role as the enabler of Physical AI across consumer, automotive, industrial and infrastructure markets; |
| ● | 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, with our leadership in Wi-Fi 6 and Wi-Fi 7 IP, we are positioned to capture higher royalty revenues as customers transition to newer standards; |
| ● | Our belief that our PentaG2 platform and DSPs for 5G mobile broadband and 5G RedCap, and our PentaG RAN platform for 5G RAN, including the Ceva-XC22 multi-thread DSP, are some of the industry’s most comprehensive baseband IP solutions enabling fixed wireless access, satellite communications, robotics, automotive and industrial applications, and extend our leadership into 5G RAN and 5G Advanced for data centers and infrastructure enabling scalable, customizable solutions for next-generation networks; |
| ● | Our belief that the high-volume consumer audio markets, including True Wireless Stereo (TWS) earbuds, Augmented Reality (AR) and Virtual Reality (VR) headsets, and wearables represent incremental growth opportunities for our Bluetooth, Audio AI DSPs, NPUs and RealSpace Spatial Audio & Head Tracking software; |
| ● | Our belief that the combination of our MotionEngine software, SensPro DSPs and NeuPro NPUs positions us as a one-stop shop for sensor processing and AI-driven user experiences across robotics, smartphones, laptops, TWS earbuds and other connected devices; |
| ● | 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 across devices from gateways and notebooks to AR/VR and smartphones; |
| ● | Our belief that our NeuPro-Nano NPUs enable cost and power-efficient embedded AI and TinyML capabilities in microcontrollers and systems-on-chips (SoCs), supporting the growth of artificial IoT (AIoT) devices for applications such as sound, vision, vibration and health monitoring, and that based on research from ABI Research, by 2030, more than 50% of TinyML shipments will be powered by dedicated embedded AI hardware such as NeuPro-Nano; |
| ● | Our belief that our SensPro2 sensor hub AI DSP family can address the growing demand for efficient, high-performance AI signal processing across sensor-rich applications, from smartphones and drones to automotive ADAS and industrial IoT (IIoT); |
| ● | 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, underscoring the scale of the market opportunity; |
| ● | Our belief that our diversified royalty streams, spanning high-volume Bluetooth and Wi-Fi connectivity platforms, higher-value inference engines and AI DSPs such as NeuPro and SensPro, and infrastructure-class platforms like PentaG-RAN, together with our focus on silicon and software IP solutions across the connectivity, sensing and inference layers of Physical AI, position us for sustained, long-term growth in shipments and royalty revenues across consumer, automotive, industrial and infrastructure markets; |
| ● | Our belief that digital transformation is entering a new era defined by Physical AI, where intelligence is embedded directly into devices that connect, sense and interact with the real world, and that our ubiquitous technology, broad IP portfolio and collaborative licensing model position us to capture significant, secular growth as industries continue to become increasingly connected and intelligent; |
| ● | 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 as Physical AI adoption accelerates into new markets and use cases, particularly for 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.
PART I. FINANCIAL INFORMATION
