CEVA INC

Previous wording

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.

Current wording

For more than three decades, we have been a trusted partner to hundreds of leading semiconductor and original equipment manufacturer (OEM) companies, serving not only our largest target growth markets but also a wide variety of other 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.

Previous wording

We believe the following key elements represent significant growth drivers for the company:

Current wording

We believe the following key elements represent significant growth drivers for Ceva as the leader in silicon and software IP enabling Physical AI, spanning the three foundational layers of connectivity, sensing and inference:

Previous wording

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

Current wording

Our operations in Israel remain largely unaffected by the war between Israel and Hamas that began on October 7, 2023 and escalated to conflicts with Lebanon, Hezbollah and Iran. Despite the evolving geopolitical situation, we continue to drive our business and support our customers globally. However, a portion of our employees in Israel have been or are called to active reserve duty and additional employees may be called in the future, if needed. We have executed our business continuity plan with respect to those employees. It is possible that some of our operations in the region may be disrupted if this continues for a significant period of time or if the situation further deteriorates. Although certain ceasefire agreements have been reached with Hamas and Lebanon (with respect to Hezbollah), and some Iranian proxies have declared a halt to their attacks, there is no assurance that these agreements will be upheld. In October 2025, a ceasefire agreement was reached between Israel and Hamas, leading to a cessation of direct conflict between these parties. However, the situation remains volatile, with the potential for renewed escalation, particularly with escalated tensions between the U.S., Iran and Israel. While there are currently attempts for diplomatic solution, there can be no assurance that such solution will be reached and that there will not be further escalations to the situation. The intensity and duration of these conflicts, as well as their economic implications for the Company and Israel’s economy, remain difficult to predict. For more information, please refer to the risk factor titled “Our operations in Israel may be adversely affected by instability in the Middle East region” in Part I—Item 1A—“Risk Factors” of this annual report.

Previous wording

The following is a description of principal activities from which we generate revenue. Revenues are recognized when control of the promised goods or services are transferred to the customers in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

Current wording

The following is a description of principal activities from which we generate revenue. Revenues are recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

Previous wording

We generate our revenues from (1) licensing intellectual properties, which in certain circumstances are modified for customer-specific requirements, (2) royalty revenues and (3) other revenues, which include revenues from support, training and sale of development systems and chips. We license our IP to semiconductor companies throughout the world. These semiconductor companies then manufacture, market and sell custom-designed chipsets to OEMs of a variety of consumer electronics products. We also license our technology directly to OEMs, which are considered end users.

Current wording

We generate our revenues from (1) licensing intellectual property, which in certain circumstances are modified for customer-specific requirements, (2) royalty revenues and (3) other revenues, which include revenues from support, professional services, training and sale of development systems and chips. We license our IP to semiconductor companies throughout the world. These semiconductor companies then manufacture, market and sell custom-designed chipsets to OEMs of a variety of consumer electronics products. We also license our IP directly to OEMs, which are considered end users.

Previous wording

We account for our IP license revenues and related services, which provide our customers with rights to use our IP, in accordance with ASC 606, "Revenue from Contracts with Customers" (ASC 606"). A license may be perpetual or time limited in its application. In accordance with ASC 606, we recognize revenue from IP license at the time of delivery when the customer obtains control of the IP, as the IP is functional without professional services, updates and technical support. We have concluded that our IP licenses are distinct as the customer can benefit from the licenses on their own.

Current wording

We account for our IP license revenues and related services, which provide our customers with rights to use our IP, in accordance with ASC 606, "Revenue from Contracts with Customers" (ASC "606"). A license may be perpetual or time limited in its application. In accordance with ASC 606, we recognize revenue from IP license at the point in time when the IP license is made available to the customer, as the IP license is functional without professional services, updates and technical support. We have concluded that our IP licenses are distinct as the customer can benefit from the licenses on their own.

Previous wording

Most of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Stand-alone selling prices of IP licenses are typically estimated using the residual approach, since the selling price is uncertain. Stand-alone selling prices of services are typically estimated based on observable transactions when these services are sold on a standalone basis. Standalone selling prices of significant customization of our IP to customer-specific specifications are typically estimated based on expected cost plus normal profit margin approach.

Current wording

Most of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Stand-alone selling prices of IP licenses are typically estimated using the residual approach, since the selling price is uncertain. Stand-alone selling prices of services are typically estimated based on observable transactions when these services are sold on a standalone basis. Standalone selling prices of significant customization of our IP to customer-specific specifications and professional services are typically estimated based on expected cost plus normal profit margin approach.

Previous wording

Revenues from contracts that involve significant customization of our IP to customer-specific specifications are considered as one performance obligation satisfied over-time. Revenue related to these projects is recognized over time, usually based on a percentage that incurred labor effort to date bears to total projected labor effort. Incurred effort represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. When total cost estimates for these types of arrangements exceed revenues in a fixed-price arrangement, the estimated losses are recognized immediately. Significant judgment is required when estimating total labor effort and progress to completion on these arrangements.

Current wording

Revenues from contracts that involve significant customization of our IP to customer-specific specifications are considered as one performance obligation satisfied over-time. Revenue related to these projects is recognized over time, usually based on a percentage that incurred labor effort to date bears to total projected labor effort. The Company believes that incurred effort represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. When total cost estimates for these types of arrangements exceed revenues in a fixed-price arrangement, the estimated losses are recognized immediately. Significant judgment is required when estimating total labor effort and progress to completion on these arrangements.

Previous wording

Contracts with customers generally contain an agreement to provide for training and post contract support, which consists of telephone or e-mail support, correction of errors (bug fixing) and unspecified updates and upgrades. Fees for post contract support, which takes place after delivery to the customer, are specified in the contract and are generally mandatory for the first year. After the mandatory period, the customer may extend the support agreement on similar terms, usually on an annual basis. We consider the post contract support performance obligation as a distinct performance obligation that is satisfied over time, and as such, we recognize revenue for post contract support on a straight-line basis over the period for which technical support is contractually agreed to be provided to the licensee (typically 12 months, since the services have a consistent continuous pattern of transfer to the customers). Revenues from the sale of development systems and chips are recognized when control of the promised goods or services are transferred to the customers.

Current wording

Contracts with customers generally contain an agreement to provide for training and post contract support, which consists of remote support, correction of errors (bug fixing) and unspecified updates and upgrades. Fees for post contract support, which takes place after delivery to the customer, are specified in the contract and are generally mandatory for the first year. After the mandatory period, the customer may extend the support agreement on similar terms, usually on an annual basis. We consider the post contract support performance obligation as a distinct performance obligation that is satisfied over time, and as such, we recognize revenue for post contract support on a straight-line basis over the period for which technical support is contractually agreed to be provided to the licensee (typically 12 months, since the services have a consistent continuous pattern of transfer to the customers).

Previous wording

When contracts involve a significant financing component, we adjust the promised amount of consideration for the effects of the time value of money if the timing of payments agreed to by the parties to the contract (either explicitly or implicitly) provide the customer with a significant benefit of financing, unless the financing period is under one year and only after the products or services were provided, as we elected to use the practical expedient under ASC 606.

Current wording

When contracts involve a significant financing component, we adjust the promised amount of consideration for the effects of the time value of money if the timing of payments agreed to by the parties to the contract (either explicitly or implicitly) provide the customer with a significant benefit of financing, unless the financing period is under one year and only after the products or services were provided, as we elected to use the practical expedient under ASC 606. Revenue is recognized net of any indirect taxes collected from customers which are subsequently remitted to governmental entities.

Previous wording

We capitalize sales commission as costs of obtaining a contract when they are incremental and, if they are expected to be recovered, amortized in a manner consistent with the pattern of transfer of the good or service to which the asset relates. If the expected amortization period is one year or less, the commission fee is expensed when incurred.

Current wording

We capitalize sales commission as costs of obtaining a contract when they are incremental and, if they are expected to be recovered, amortized in a manner consistent with the pattern of transfer of the good or service to which the asset relates. Sales commissions for the renewal of a contract are considered commensurate with the sales commissions paid for the acquisition of the initial contract. If the expected amortization period is one year or less, the commission fee is expensed when incurred.

Previous wording

We account for equity-based compensation in accordance with FASB ASC No. 718, “Stock Compensation” which requires the recognition of compensation expenses based on estimated fair values for all equity-based awards made to employees and non-employee directors. Equity-based compensation primarily includes restricted stock unit (RSUs), as well as options, stock appreciation right (SAR), performance-based stock units (PSUs) and employee stock purchase plan awards.

Current wording

We account for equity-based compensation in accordance with FASB ASC No. 718, “Stock Compensation” which requires the recognition of compensation expenses based on estimated fair values for all equity-based awards made to employees and non-employee directors. Equity-based compensation primarily includes restricted stock units (RSUs), as well as options, performance-based stock units (PSUs) and employee stock purchase plan awards.

Previous wording

For each reporting period, we evaluate whether declines in fair value below the amortized cost are due to expected credit losses, as well as our ability and intention to hold the investment until a forecasted recovery occurs, in accordance with ASC 326. Allowance for credit losses on available for sale debt securities are recognized as a charge in financial income on the consolidated statements of income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss). For the years ended December 31, 2024, 2023 and 2022, credit losses were immaterial.

Current wording

For each reporting period, we evaluate whether declines in fair value below the amortized cost are due to expected credit losses, as well as our ability and intention to hold the investment until a forecasted recovery occurs. Allowance for credit losses on available for sale debt securities are recognized as a charge in financial income on the consolidated statements of income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss). For the years ended December 31, 2025 and 2024, credit losses were immaterial.

Previous wording

For the years ended December 31, 2024 and 2023, allowance for credit losses amounted to $2,626 and $288, respectively. The increase in the credit loss allowance as of December 31, 2024 is due to a specific credit loss provision recorded during the year ended December 31, 2024 for a customer that has experienced financial difficulties.

Current wording

For the years ended December 31, 2025 and 2024, allowance for credit losses amounted to $288 and $2,626, respectively. The decrease in the credit loss allowance as of December 31, 2025 is due to a specific write-off recorded during the year ended December 31, 2025 for a customer that has experienced financial difficulties.

Previous wording

We derive a significant amount of revenues from a limited number of customers. Sales to UNISOC represented 15%, 13% and 16% of our total revenues for 2024, 2023 and 2022, respectively. Generally, the identity of our other customers representing 10% or more of our total revenues varies from period to period, especially with respect to our 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 each represented 10% or more of our total royalty revenues for 2024, and collectively represented 46% of our total royalty revenues for 2024. Two royalty paying customers each represented 10% or more of our total royalty revenues for 2023, and collectively represented 45% of our total royalty revenues for 2023. Two royalty paying customers each represented 10% or more of our total royalty revenues for 2022, and collectively represented 46% of our total royalty revenues for 2022. 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. The loss of any significant customer could adversely affect our near-term future operating results.

Current wording

We derive a significant amount of revenues from a limited number of customers. Sales to UNISOC represented 15% and 15% of our total revenues for 2025 and 2024, respectively. Generally, the identity of our other customers representing 10% or more of our total revenues varies from period to period, especially with respect to our 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 each represented 10% or more of our total royalty revenues for 2025, and collectively represented 39% of our total royalty revenues for 2025. Two royalty paying customers each represented 10% or more of our total royalty revenues for 2024, and collectively represented 46% of our total royalty revenues for 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. The loss of any significant customer could adversely affect our near-term future operating results.

Previous wording

This deal breakdown also indicates the benefits of our focus on the end markets with the largest licensing base and the greatest projected growth potential. In 2024, we experienced increased licensing revenue in the U.S., due to a few significant design wins in the second half of the year. We also witnessed good design activity for advanced 5G cellular technologies for multiple end markets. Moreover, we concluded multiple deals or upgrades and new deals for our Wi-Fi and Bluetooth 6 and 7 platforms with customers in consumer and industrials end markets. In 2023, we experienced a decrease in licensing revenue attributed to a slowdown in new design activity due to various reasons, including lack of funding of semiconductor companies, in part due to the higher interest rate environment, as well as the end of a period of exceptional consumer end market demand related to COVID spending following the substantial completion of most companies’ shift to hybrid work environments.

Current wording

In 2024, we experienced increased licensing revenue in the U.S., due to a few significant design wins in the second half of the year. We also witnessed good design activity for advanced 5G cellular technologies for multiple end markets. Moreover, we concluded multiple deals or upgrades and new deals for our Wi-Fi and Bluetooth 6 and 7 platforms with customers in consumer and industrials end markets.

Previous wording

Licensing and related revenue accounted for 56.1% of our total revenues for 2024, compared with 59.1% and 62.4% of our total revenues for 2023 and 2022, respectively.

Current wording

Licensing and related revenue accounted for 58.0% of our total revenues for 2025, compared with 56.1% of our total revenues for 2024.

Previous wording

We generate royalty revenues from our customers who ship units of chips incorporating our technologies. Our royalty revenues represent what our customers shipped during any quarter, or our best estimates for such shipments. The royalty rate is based either on a certain percent of the chipset price or a fixed amount per unit basis.

Current wording

We generate royalty revenues from our customers who ship units of chips incorporating our technologies. Our royalty revenues represent what our customers shipped during any quarter, or our best estimates for such shipments. The royalty rate is based either on a certain percentage of the chipset price or on a fixed amount per unit basis.

Previous wording

The five largest royalty-paying customers accounted for 61% of our total royalty revenues for 2024, compared to 58% of our total royalty revenues for 2023 and 64% of our total royalty revenues for 2022.

Current wording

The five largest royalty-paying customers accounted for 57% of our total royalty revenues for 2025, compared to 61% of our total royalty revenues for 2024.

Previous wording

A majority of our revenues during the past three years have originated in the APAC region, with China representing the largest revenue share of countries in the APAC region. The decrease in revenues in absolute dollars in APAC from 2022 to 2023 was partially attributed to the slowdown in the start of new design activity. The decrease in revenues in absolute dollars in APAC from 2023 to 2024 was partially attributed to China, were we witnessed slower design starts, continued geopolitical tensions and the continued impact of the prior year’s slowdown in the local macroeconomic environment.

Current wording

A majority of our revenues during the past two years have originated in the APAC region, with China representing the largest revenue share of countries in the APAC region. The increase in revenues in absolute dollars in APAC from 2024 to 2025 was mainly due to our Bluetooth and Wi-Fi IPs, to which we continue to see strong demand as customers upgrade to Wi-Fi 7 and Bluetooth High Data Throughput, with fourth quarter of 2025 including three Bluetooth/Wi-Fi combo deals and a multi-use Bluetooth HDT agreement.

Previous wording

The increase in revenues in absolute dollars in the United States from 2023 to 2024 was primarily driven by few key agreements signed with U.S.-based customers. One of them a long-term licensing agreement with a leading U.S. OEM to incorporate our technology into their in-house 5G modem. The decrease in revenues in absolute dollars in the United States from 2022 to 2023 was mainly attributed to a large, non-recurring licensing deal in our BlueBud platform, as well as the continued decrease in Intel based royalties post their divestment from the modem business. Moreover, we witnessed lower royalties from our sensor fusion empowered chips.

Current wording

The decrease in revenues in absolute dollars in the United States from 2024 to 2025 was primarily driven by few key agreements signed with U.S.-based customers in 2024, partially offset by the comprehensive NeuPro portfolio license with Microchip.

Previous wording

Cost of revenues equaled 11.9% of our total revenues for 2024, compared to 12.0% of our total revenues for 2023 and 12.5% of our total revenues for 2022. The absolute dollar increases in cost of revenues for 2024 as compared to 2023 principally reflected higher strategically beneficial customization work associated with the strategic 5G-Advanced deals we signed in the second half of 2024. The absolute dollar decreases in cost of revenues for 2023 as compared to 2022 principally reflected impairment charges, incurred in 2022, of prepaid assets with respect to (1) Immervision-related assets and services, and (2) certain non-performing assets related to NB-IoT technology, as well as lower customization work for our licensees.

Current wording

Cost of revenues equaled 12.9% of our total revenues for 2025, compared to 11.9% of our total revenues for 2024. The absolute dollar increases in cost of revenues for 2025 as compared to 2024 principally reflected higher strategically beneficial customization and implementation work associated with the strategic 5G-Advanced deals we signed in the second half of 2024, partially offset by lower payments to the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel (IIA).

Previous wording

Cost of revenues includes labor-related costs and, where applicable, costs related to overhead, subcontractors, materials, travel, royalty expenses payments to the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel (IIA), amortization of acquired assets and non-cash equity-based compensation expenses. Non-cash equity-based compensation expenses included in cost of revenues for the years 2024, 2023 and 2022 were $713,000, $826,000 and $687,000, respectively. Royalty expenses relate to royalties payable to the IIA that amount to 3%-3.5% of the actual sales of certain of our products, the development of which previously included grants from the IIA. The obligation to pay these royalties is contingent on actual sales of these products. Amortization of acquired assets related to the purchase of a license of NB-IoT technologies in the first quarter of 2018 and to certain intangible assets associated with the VisiSonics acquisition in the second quarter of 2023. Our amortization charges were $0.5 million, $0.4 million and $0.6 million for 2024, 2023 and 2022, respectively. In 2022 we recorded impairment charges of $2.0 relating to discontinued Immervision technology and non-performing assets of certain NB-IoT technology.

Current wording

Cost of revenues includes labor-related costs and, where applicable, costs related to overhead, subcontractors, materials, travel, royalty expenses payments to the IIA, amortization of acquired assets and non-cash equity-based compensation expenses. Non-cash equity-based compensation expenses included in cost of revenues for the years 2025 and 2024 were $0.7 million and $0.7 million, respectively. Royalty expenses relate to royalties payable to the IIA that amount to 3%-3.5% of the actual sales of certain of our products, the development of which previously included grants from the IIA. The obligation to pay these royalties is contingent on actual sales of these products. Amortization of acquired assets related to the purchase of a license of NB-IoT technologies in the first quarter of 2018 and to certain intangible assets associated with the VisiSonics acquisition in the second quarter of 2023. Our amortization charges were $0.2 million and $0.5 million for 2025 and 2024, respectively.

Previous wording

The net decrease in research and development expenses for 2024 as compared to 2023 principally reflected higher allocation of customization work for our licensees to cost of revenues and lower salaries and employee-related costs. The net increase in research and development expenses for 2023 as compared to 2022 principally reflected lower research grants received, mainly from the IIA, lower customization work for our licensees and higher non-cash equity-based compensation expenses, partially offset by lower salaries and employee-related costs mainly associated with lower employee-related performance costs. The average number of research and development personnel in 2024 was 327, compared to 330 in 2023 and 325 in 2022. The number of research and development personnel was 323 at December 31, 2024 as compared to 322 in 2023 and 328 in 2022.

Current wording

The average number of research and development personnel in 2025 was 321, compared to 327 in 2024. The number of research and development personnel was 311 at December 31, 2025 as compared to 323 in 2024.

Previous wording

Research and development expenses, net of related government grants and French research tax benefits applicable to CIR, were 67.0% of our total revenues for 2024, as compared with 74.6% for 2023 and 58.3% for 2022. We recorded research grants under funding programs of $1,407,000 in 2024, compared with $1,668,000 in 2023 and $4,850,000 in 2022. We recorded UK tax credits and CIR benefits of $2,954,000, $2,641,000 and $2,316,000 for 2024, 2023 and 2022, respectively.

Current wording

Research and development expenses, net of related government grants and French research tax benefits applicable to Crédit Impôt Recherche (CIR), were 68.3% of our total revenues for 2025, as compared with 67.0% for 2024. We recorded research grants under funding programs of $1.4 million in 2025, compared with $1.4 million in 2024. We recorded UK tax credits and CIR benefits of $3.2 million and $3.0 million for 2025 and 2024, respectively.

Previous wording

Research and development expenses consist primarily of salaries and associated costs, facilities expenses associated with research and development activities, project-related expenses connected with the development of our IP which are expensed as incurred, and non-cash equity-based compensation expenses. Non-cash equity-based compensation expenses included in research and development expenses, net for the years 2024, 2023 and 2022 were $9,298,000, $9,133,000 and $8,259,000, respectively. Research and development expenses are net of related government research grants, UK tax credits and research tax benefits applicable to CIR. We view research and development as a principal strategic investment and have continued our commitment to invest heavily in this area, which represents the largest of our ongoing operating expenses. We will need to continue to invest in research and development and such expenses may increase in the future to keep pace with new trends in our industry.

Current wording

Research and development expenses consist primarily of salaries and associated costs, facilities expenses associated with research and development activities, project-related expenses connected with the development of our IP which are expensed as incurred, and non-cash equity-based compensation expenses. Non-cash equity-based compensation expenses included in research and development expenses, net for the years 2025 and 2024 were $10.5 million and $9.3 million, respectively. Research and development expenses are net of related government research grants, UK tax credits and research tax benefits applicable to CIR. We view research and development as a principal strategic investment and have continued our commitment to invest heavily in this area, which represents the largest of our ongoing operating expenses. We will need to continue to invest in research and development and such expenses may increase in the future to keep pace with new trends in our industry.

Previous wording

The increase in sales and marketing expenses for 2024 as compared to 2023 principally reflected higher commission expenses and higher salaries and employee-related costs. The decrease in sales and marketing expenses for 2023 as compared to 2022 principally reflected lower salary and employee related costs, mainly associated with a one-time separation charge recorded in 2022 as a result of the departure of our former executive vice president of worldwide sales.

Current wording

The increase in sales and marketing expenses for 2025 as compared to 2024 principally reflected higher salaries and employee-related costs, and higher non-cash equity-based compensation expenses, partially offset by lower commission expenses.

Previous wording

Sales and marketing expenses as a percentage of our total revenues were 11.8% for 2024, as compared with 11.3% for 2023 and 9.5% for 2022. The total number of sales and marketing personnel was 34 in 2024, as compared with 29 in 2023 and 36 in 2022. Sales and marketing expenses consist primarily of salaries, commissions, travel and other costs associated with sales and marketing activities, as well as advertising, trade show participation, public relations and other marketing costs and non-cash equity-based compensation expenses. Non-cash equity-based compensation expenses included in sales and marketing expenses for the years 2024, 2023 and 2022 were $1,801,000, $1,776,000 and $1,503,000, respectively.

Current wording

Sales and marketing expenses as a percentage of our total revenues were 12.1% for 2025, as compared with 11.8% for 2024. The total number of sales and marketing personnel was 30 in 2025, as compared with 34 in 2024. Sales and marketing expenses consist primarily of salaries, commissions, travel and other costs associated with sales and marketing activities, as well as advertising, trade show participation, public relations and other marketing costs and non-cash equity-based compensation expenses. Non-cash equity-based compensation expenses included in sales and marketing expenses for the years 2025 and 2024 were $2.4 million and $1.8 million, respectively.

Previous wording

The increase in general and administrative expenses for 2024 as compared to 2023 principally reflected higher allowance for credit losses. The increase in general and administrative expenses for 2023 as compared to 2022 principally reflected higher professional services cost and higher non-cash equity-based compensation expenses, partially offset with lower salaries and related costs.

Current wording

The increase in general and administrative expenses for 2025 as compared to 2024 principally reflected higher non-cash equity-based compensation expenses and higher salaries and employee-related costs, partially offset by allowance for credit losses recorded in 2024.

Previous wording

General and administrative expenses as a percentage of our total revenues were 15.8% for 2024, as compared with 15.3% for 2023 and 11.8% for 2022. The total number of general and administrative personnel was 45 in 2024, as compared with 45 in 2023 and 46 in 2022. General and administrative expenses consist primarily of fees for directors, salaries for management and administrative employees, accounting and legal fees, expenses related to investor relations and facilities expenses associated with general and administrative activities, allowance for credit losses and non-cash equity-based compensation expenses. Non-cash equity-based compensation expenses included in general and administrative expenses for the years 2024, 2023 and 2022 were $3,763,000, $3,795,000 and $2,888,000, respectively.

Current wording

General and administrative expenses as a percentage of our total revenues were 16.5% for 2025, as compared with 15.8% for 2024. The total number of general and administrative personnel was 51 in 2025, as compared with 45 in 2024. General and administrative expenses consist primarily of fees for directors, salaries for management and administrative employees, accounting and legal fees, expenses related to investor relations and facilities expenses associated with general and administrative activities, allowance for credit losses and non-cash equity-based compensation expenses. Non-cash equity-based compensation expenses included in general and administrative expenses for the years 2025 and 2024 were $6.2 million and $3.8 million, respectively.

Previous wording

Our amortization charges were $0.6 million, $0.6 million and $2.0 million for 2024, 2023 and 2022 respectively. The amortization charges in both 2024 and 2023 were incurred in connection with the amortization of intangible assets associated with the acquisition of the Hillcrest Labs and VisiSonics business. The amortization charges in 2022 were incurred in connection with the amortization of intangible assets associated with the acquisition of the Hillcrest Labs and the strategic investment in Immervision. As of December 31, 2024, the net amount of intangible assets associated with the acquisitions was $1.1 million.

Current wording

Our amortization charges were $0.6 million in each of the years 2025 and 2024. The amortization charges were incurred in connection with the amortization of intangible assets associated with the acquisition of the Hillcrest Labs and VisiSonics business. As of December 31, 2025, the net amount of intangible assets associated with the acquisitions was $0.5 million.

Previous wording

The increase in interest income and gains and losses from marketable securities, net, for 2024 as compared to 2023 principally reflected higher combined cash, bank deposits and marketable securities balances held (mainly because of cash received from the sale of Intrinsix in October 2023) and higher yields. The increase in interest income and gains and losses from marketable securities, net, for 2023 as compared to 2022 reflected higher yields, offset with lower combined cash, bank deposits and marketable securities balances held.

Current wording

The increase in interest income and gains and losses from marketable securities, net, for 2025 as compared to 2024 principally reflected higher combined cash, bank deposits and marketable securities balances held (mainly resulting from the follow‑on offering completed in the fourth quarter of 2025) and higher yields.

Previous wording

We review our monthly expected major non-U.S. dollar denominated expenditures and look to hold equivalent non-U.S. dollar cash balances to mitigate currency fluctuations. However, our Euro cash balances increase significantly on a quarterly basis beyond our Euro liabilities, mainly from the French research tax benefits applicable to CIR, which is generally refunded every three years. This has resulted in a foreign exchange loss of $1.01 million (due to the devaluation of our Euro cash balances as the U.S. dollar strengthened significantly during this period as compared to the Euro), a foreign exchange gain of $0.69 million and a foreign exchange gain of $0.07 million for 2024, 2023 and 2022, respectively.

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 the French research tax benefits applicable to CIR, which is generally refunded every three years. This has resulted in a foreign exchange gain of $0.61 million and a foreign exchange loss of $1.01 million (due to the devaluation of our Euro cash balances as the U.S. dollar strengthened significantly during this period as compared to the Euro) for 2025 and 2024, respectively.

Previous wording

We recorded a loss of $0.1 million, a loss of $0.0 million, and a loss of $2.5 million in 2024, 2023 and 2022, respectively, related to remeasurement of marketable equity securities. 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 $0.3 million and $0.1 million in 2025 and 2024, respectively, related to remeasurement of marketable equity securities. 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

During the years 2024, 2023 and 2022, we recorded tax expenses of $6.0 million, $10.2 million and $18.1 million, respectively.

Current wording

During the years 2025 and 2024, we recorded tax expenses of $5.9 million and $6.0 million, respectively.

Previous wording

In 2022, based on the weight of available positive and negative evidence, we recorded a valuation allowance for certain deferred tax assets (including withholding tax assets) of our Israeli subsidiary due to uncertainty regarding its future taxable income. In assessing the realizability of deferred tax assets, the key assumptions used to determine positive and negative evidence included the Company’s cumulative taxable loss for the past three years, current trends related to actual taxable earnings or losses, and expected future reversals of existing taxable temporary differences, as well as projections for future annual results. Accordingly, we recorded a charge of $15.6 million in 2022 as a reserve against our deferred tax assets.

Current wording

In 2025, based on the weight of available positive and negative evidence, we recorded a valuation allowance for certain deferred tax assets of our French subsidiary due to uncertainty regarding its future taxable income. In assessing the realizability of deferred tax assets, the key assumptions used to determine positive and negative evidence included the Company’s current trends related to actual taxable earnings or losses, and expected future reversals of existing taxable temporary differences, as well as projections for future annual results. Accordingly, we recorded a charge of $1.0 million in 2025 as a reserve against our deferred tax assets.

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 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. On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (“OBBBA”) into law, which is considered the enactment date under U.S. GAAP. Key corporate tax provisions of OBBBA include the restoration of 100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to Section 163(j) interest limitations, modification of several international tax provisions, and expanded Section 162(m) aggregation requirements. In accordance with ASC 740, we have recognized the effects of the new tax law in the period of enactment. The impact of OBBBA for the year ended December 31, 2025 did not have a material impact on our financial position for the period. We continue to evaluate the impact of OBBBA on our consolidated financial statements and will update its estimates as additional guidance becomes available.

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 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.

Current wording

We have significant operations in Israel and France, and a substantial portion of our taxable income is generated in these jurisdictions, 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 15 years if sourced internationally. Although certain of our non-U.S. subsidiaries are taxed at rates substantially lower than U.S. tax rates, our overall tax rate 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

For more information about our provision for income taxes, see Note 14 to the attached Notes to Consolidated Financial Statement for the year ended December 31, 2024.

Current wording

For more information about our provision for income taxes, see Note 14 to the Consolidated Financial Statement for the year ended December 31, 2025.

Previous wording

As of December 31, 2024, we had approximately $18.5 million in cash and cash equivalents, $2.0 million in short term bank deposits and $143.1 million in marketable securities, totaling $163.6 million, as compared to $166.5 million at December 31, 2023. The decrease in 2024 as compared to 2023 principally reflected funds used to repurchase 375,219 shares of common stock for an aggregate consideration of approximately $8.5 million, partially offset by cash used in operating activities and unrealized investment gain on marketable securities of approximately $2.2 million.

Current wording

As of December 31, 2025, we had approximately $40.6 million in cash and cash equivalents, $2.1 million in short term bank deposits and $179.3 million in marketable securities, totaling $222.0 million, as compared to $163.6 million at December 31, 2024. The increase in 2025 as compared to 2024 principally reflected net proceeds of $63.3 million from a follow-on offering, in which 3,450,000 ordinary shares were issued and sold to the public during the fourth quarter of 2025.