CEVA INC
For the period ended Jun 30, 2026. Filed Aug 10, 2026.
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.
Jun 30, 2026 · Filed Aug 10, 2026
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 2026-03-31; filed 2026-05-11.
0001437749-26-016119
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001437749-26-026774
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 93 previous paragraphs and 94 current paragraphs.
51 unchanged; 32 reworded; 11 added; 10 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 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
In the second quarter of 2026, we continued to execute on our strategy, generating revenues of $29.0 million, up 13% year-over-year. Licensing and related revenues were $18.2 million, up 21% year-over-year and representing our strongest quarterly licensing performance in more than three years. Royalty revenues were $10.8 million, up 17% sequentially, reflecting improving smartphone royalties, continued strength in wireless connectivity and the ongoing ramp of automotive AI programs.
Current report
In the second quarter of 2026, we signed 10 IP licensing agreements, including two with first-time customers and two directly with OEMs. The quarter included one of the most strategically significant AI licensing agreements in our history, with a leading global AI and computing platform company selecting our NeuPro-M NPU IP for its next-generation custom AI silicon. This engagement represents a new category of customer for Ceva and enables close collaboration across both the hardware accelerator and AI software stack, allowing the complete AI pipeline to be optimized for the customer’s specific models, applications and use cases.
Current report
The quarter also reflected increased adoption of our diverse portfolio of broader connectivity solutions. A high-volume U.S. semiconductor company adopted, as part of its own product portfolio, a chip based on our Wi-Fi 6 and Bluetooth Low Energy IP that had been developed with another Ceva customer. Separately, an existing customer expanded from licensing a single baseband component to adopting our complete baseband processing subsystem. These engagements illustrate how customers are increasingly leveraging Ceva for integrated solutions that accelerate time-to-market and reduce development risk.
Current report
The remaining licensing agreements were primarily across our connectivity portfolio, with customer wins in Europe, China and across Asia-Pacific, demonstrating the broad-based and global nature of demand for our wireless technologies.
Current report
Following the seasonal weakness experienced in the first quarter, royalty revenues improved sequentially in the second quarter, supported by market share gains in entry-level smartphones, continued expansion at the premium tier and ongoing strength across our wireless connectivity portfolio. While macroeconomic conditions, geopolitical developments and supply chain dynamics continue to create uncertainty across the semiconductor industry, we believe our diversified royalty base positions us well for long-term growth.
Current report
Licensing and related revenues were $18.2 million and $36.0 million for the second quarter and first half of 2026, respectively, representing an increase of 21% and 20% as compared to the corresponding periods in 2025.
Current report
In licensing, two major factors highlight an important shift in the semiconductor industry and explain why Ceva is critically positioned for long-term growth. The first is AI — during the quarter, Ceva signed a landmark AI licensing agreement with a leading global AI and computing platform company, validating our AI IP strategy and expanding our expertise in platform-level AI hardware-software optimization.** **The second trend we see is customers increasingly adopting broader connectivity solutions. A high-volume U.S. semiconductor company chose to adopt a complete chip built on our Wi-Fi 6 and Bluetooth Low Energy IP — originally developed in partnership with another Ceva customer — rather than licensing the underlying IP blocks individually. The decision reflects the same preference for production-proven, complete solutions over developing internally or licensing component IP. Separately, another U.S. customer expanded a relationship that began with a single baseband component by adopting our complete cellular baseband processing subsystem. In addition to the AI and platform wins, we signed multiple follow-on agreements with existing customers alongside our new customer engagements, demonstrating our ability to both expand long-term relationships and consistently win new business. Across connectivity, we secured customer engagements spanning the United States, Europe, China and the broader Asia-Pacific region, reinforcing the global demand for our technologies. While AI is creating exciting new opportunities for Ceva, connectivity remains the foundation of the intelligent edge and continues to be the entry point for many of our customer relationships. Increasingly, those relationships expand over time as customers adopt additional technologies across our portfolio.
Current report
During the quarter, we signed 10 licensing agreements, including two with first-time customers and two directly with OEMs. Together, these wins demonstrate the breadth of demand across our portfolio and reinforce the quality of the customer engagements we are building. More important than the number of agreements is the quality of those engagements. Increasingly, customers are adopting broader platforms and deeper collaborations that strengthen both our near-term licensing business and our long-term royalty opportunity.
Current report
Licensing and related revenues accounted for 63% and 64% of our total revenues for the second quarter and first half of 2026, respectively, as compared to 59% and 60% for the comparable periods of 2025.
Current report
Royalty revenues were $10.8 million and $20.0 million for the second quarter and first half of 2026, respectively, representing an increase of 1% as compared to both the corresponding periods in 2025. Royalty revenues accounted for 37% and 36% of our total revenues for the second quarter and first half of 2026, respectively, as compared to 41% and 40% for the comparable periods of 2025. We continue to see encouraging evidence that the investments we have made over recent years are translating into a broader and more diversified royalty base. Royalty revenues increased both sequentially and year over year, supported by continued momentum across wireless connectivity and automotive AI and share gains in smartphones. Wireless connectivity remained particularly strong, with healthy year-over-year growth in both Wi-Fi and Bluetooth shipments, while Cellular IoT shipments reached another quarterly record. In automotive, customer programs continued to ramp, reflecting increasing AI content in next-generation vehicles. Overall, the quarter demonstrates the continued evolution of Ceva's business.
Current report
Our income tax expense was $1.8 million and $3.2 million for the second quarter and first half of 2026, respectively, as compared to $1.1 million and $2.1 million for the comparable periods of 2025. The increase for both the second quarter and first half of 2026 was primarily due to: (1) higher withholding tax expenses; and (2) the prior-year period included a tax benefit from the recognition of deferred tax assets related to net operating loss carryforwards of our French subsidiary. In December 2025, we established a full valuation allowance against these deferred tax assets. As a result, no similar tax benefit was recognized during the second quarter and first half of 2026.
Removed paragraphs (10)
Previous report
In the first quarter of 2026, we continued to execute on our Physical AI strategy, generating revenues of $27.0 million, up 11% year-over-year, including licensing and related revenues of $17.8 million, our strongest licensing quarter in three years, reflecting strong customer engagement and pipeline momentum.
Previous report
In the first quarter of 2026, we signed 14 IP licensing agreements that underscore our momentum across connect, sense and infer. These included multiple multi-technology engagements, reflecting increasing customer adoption of more integrated solutions. In connectivity, we secured our first licensing agreement for a full Bluetooth 7 integrated solution, including modem, software and RF, with a leading U.S.-based analog semiconductor company, marking a key milestone in our strategy to deliver system-level wireless platforms. We also signed Wi-Fi 7 and Wi-Fi 6/Bluetooth combo engagements, along with additional Bluetooth and Wi-Fi agreements across consumer and industrial markets. In cellular, we introduced our PentaG-NTN 5G Advanced modem platform, extending our cellular portfolio into satellite communications, and expanded a customer engagement into a more integrated baseband processing solution, increasing both the scope and long-term value of the relationship. In AI, we signed multiple licensing agreements across automotive and surveillance applications, reflecting growing demand for embedded AI and edge inference solutions.
Previous report
In the first quarter, royalty performance was impacted by typical seasonal softness in mobile, combined with near-term effects from memory availability constraints and channel inventory in lower-tier smartphone segments. We view these dynamics as largely timing-related and expect improvement as the year progresses.
Previous report
Given these evolving dynamics, as well as our lower-than-anticipated revenues for the first quarter of 2025, in May 2025 we adopted a more cautious outlook and lowered our revenue guidance for fiscal year 2025 from high-single-digit growth to low-single-digit growth over 2024 annual revenues. We finished fiscal year 2025 with total revenues of $109.6 million, which was in line with this more cautious approach. Licensing was a relative strength during the year, while royalty revenues were affected by end-market consumer demand dynamics, including the impact of memory pricing and supply constraints on the low-end smartphone market. We anticipate that these factors may continue to impact consumer demand and our royalty revenue growth expectations into 2026. With that said, we’ve increased our overall 2026 revenue growth guidance to be at the higher end of 8%-12% year-over-year.
Previous report
Licensing and related revenues was $17.8 million for the first quarter of 2026, representing an increase of 18% as compared to the corresponding period in 2025. In licensing, our expanding portfolio, combined with our strategy to deliver more integrated, system-level solutions, is enabling us to increase our value per customer. This quarter, we secured our first licensing win for a complete Bluetooth High Data Throughput, or HDT, solution, a foundational capability for the upcoming Bluetooth 7 standard. We licensed this full solution, including modem, software and RF, to a leading U.S.-based analog semiconductor company. We also signed multiple AI‑related licensing agreements, including an NPU deal for surveillance and an AI tools engagement with a global automotive OEM. AI represented more than 20% of our licensing and related revenues in the quarter. Our AI licensing pipeline remains strong, with multiple evaluations and advanced negotiations underway across a broad range of end markets.
Previous report
During the quarter, 14 IP licensing agreements were signed, including two with OEMs. We secured a Wi-Fi 7 design targeting consumer IoT, a Wi-Fi 6 / Bluetooth combo engagement with a leading edge-AI SoC platform company, and multiple additional Bluetooth and Wi-Fi wins across our connectivity portfolio, as well as securing a new customer win with a major U.S.-based MCU provider licensing our next-generation UWB platform.
Previous report
Across these wins, a clear pattern is emerging. The Bluetooth, NTN and UWB engagements we highlighted this quarter are all with existing customers who have expanded their use of Ceva IP over the past two years. More broadly, customers are increasingly adopting more integrated, system-level solutions from Ceva, expanding our value per design, while strengthening long-term royalty and margin potential.
Previous report
Licensing and related revenues accounted for 66% of our total revenues for the first quarter of 2026, as compared to 62% for the comparable period of 2025.
Previous report
Royalty revenues were $9.2 million for the first quarter of both 2026 and 2025. Royalty revenues accounted for 34% of our total revenues for the first quarter of 2026, as compared to 38% for the comparable period of 2025. We continue to see encouraging momentum across our diversified smart edge markets, with growth in IoT, industrial and AI-driven applications. Wi-Fi shipments reached an all-time high in the quarter at 91 million units, up 158% year-over-year, driven by record Wi-Fi 6 volumes, highlighting the continued expansion of this market as customers ramp deployments across a broad range of devices. We are seeing a similar dynamic in Bluetooth, with ongoing adoption of Bluetooth 6 across multiple end markets. Cellular IoT was also strong, coming in at 66 million units, up 38% year-over-year, reflecting broad-based demand across connected devices. More broadly, Wi-Fi and Bluetooth continue to be durable, multi-year growth drivers. AI-driven royalties also continued to grow, highlighted by our first mass-volume automotive AI deployment at Toyota and a ramping AI SoC for surveillance, representing early signs of the long-term contribution we expect from edge AI across multiple end markets. Against these tailwinds, first quarter royalties were impacted by typical seasonal softness in mobile, combined with near-term effects from memory availability constraints and channel inventory in the lower-tier segments. We view these mobile dynamics as largely timing-related and expect improvement as the year progresses, supported by inventory normalization and typical seasonality, along with stronger high-end smartphone demand in the second half.
Previous report
Our income tax expenses was $1.3 million for the first quarter of 2026, as compared to $1.0 million for the comparable period of 2025. The increase for the first quarter of 2026 primarily reflected higher withholding tax expenses.
Reworded paragraphs (32)
Previous wording
Together, these layers make Ceva, with our unified AI fabric, an essential enabler of Physical AI that breaks down barriers to entry and accelerates time‑to‑market for our customers. We are increasingly delivering more integrated, system-level solutions, enabling higher value per design, deeper customer engagement and greater long-term royalty potential.
Current wording
Together, these layers make Ceva, with our unified AI fabric, an essential enabler of Physical AI that breaks down barriers to entry and accelerates time‑to‑market for our customers. We are increasingly delivering more integrated, system-level solutions, rather than individual IP blocks. This approach enables customers to accelerate development, reduce engineering risk and focus internal resources on system-level differentiation, while increasing Ceva’s content per platform, deepening customer relationships and strengthening long-term royalty potential.
Previous wording
We license our portfolio of wireless communications and scalable Edge AI IP to our customers, breaking down barriers to entry and enabling them to bring new cutting-edge products to market faster, more reliably, efficiently and economically.
Current wording
We license our portfolio of wireless communications, sensing and scalable Edge AI IP to our customers, breaking down barriers to entry and enabling them to bring new cutting-edge products to market faster, more reliably, efficiently and economically.
Previous wording
Our customers are increasingly adopting our roadmap as they seek to integrate connectivity, sensing and intelligence into their devices. The first quarter of 2026 provided further evidence of this trend, with 14 licensing agreements, including multiple multi-technology engagements across connectivity and AI, reinforcing demand for our connect, sense and infer portfolio.
Current wording
Our customers are increasingly adopting our roadmap as they seek to integrate connectivity, sensing and intelligence into their devices. The second quarter of 2026 provided further evidence of this trend, with 10 licensing agreements, including two first-time customers and two OEMs. The quarter was highlighted by one of the most strategically significant AI licensing agreements in our history with a leading global AI and computing platform company, together with continued customer adoption of broader hardware and software platform solutions across our connectivity portfolio, reinforcing demand for our connect, sense and infer portfolio.
Previous wording
On royalties, we continue to see encouraging momentum across our diversified smart edge markets, with growth in consumer IoT, industrial and AI-driven applications. In the first quarter of 2026, Ceva-powered device shipments reached 458 million units, up 9% year-over-year. Wi-Fi shipments reached a record level, driven by strong adoption of Wi-Fi 6 across a broad range of devices, while cellular IoT shipments grew 38% year-over-year, reflecting continued expansion across connected applications.
Current wording
On royalties, we continue to see encouraging momentum across our diversified smart edge markets, with growth in wireless connectivity, automotive AI and improving smartphone royalties. In the second quarter of 2026, Ceva-powered device shipments reached 567 million units, up 16% year-over-year. Bluetooth shipments increased 16% year-over-year to 295 million units, Wi-Fi shipments grew 28% year-over-year to 80 million units and cellular IoT shipments reached a new record of 68 million units, up 3% year-over-year.
Previous wording
We are also seeing early contributions from AI-driven royalties, highlighted by our first mass-volume automotive AI deployment and a ramping AI SoC for surveillance, marking the initial phase of what we expect to become a meaningful long-term growth driver.
Current wording
We are also seeing continued contributions from AI-driven royalties, highlighted by the ongoing ramp of automotive AI programs and a ramping AI SoC for surveillance, marking the initial phase of what we expect to become a meaningful long-term growth driver.
Previous wording
In addition, we expect to complement our strong presence in the Asia-Pacific region by further expanding our customer base and revenues in Europe and the U.S., as reflected in our increasingly diversified geographic revenue mix in recent years. This balance strengthens our resilience and underscores Ceva’s role as a leader in silicon and software IP enabling Physical AI across global markets.
Current wording
In addition, we expect to complement our strong presence in the Asia-Pacific region by further expanding our customer base and revenues in Europe and the U.S. During the quarter, we signed licensing agreements with customers in the U.S., China, and across Asia-Pacific, further reinforcing our global reach. This balance strengthens our resilience and underscores Ceva’s role as a leader in silicon and software IP enabling Physical AI across global markets.
Previous wording
However, the global economy continued to be impacted by macroeconomic conditions, including a volatile interest rate environment, foreign currency exchange rate fluctuations, ongoing inflation, world conflicts and uncertainty, like the Middle East conflict and higher fuel and oil prices, as well as changes in legislation and regulations, including enacted and proposed tariffs and other trade policies, which introduced additional uncertainty. In periods of perceived or actual unfavorable economic conditions, our customers or potential customers may delay or re-evaluate their decisions to initiate projects, which could result in a delay or cessation of engagements with us and lower licensing revenues. In addition, weaker consumer demand may result in lower royalty revenues as our customers ship fewer units, and supply chain dynamics and component pricing may also impact end-market demand.
Current wording
However, the global economy continued to be impacted by macroeconomic conditions, including a volatile interest rate environment, foreign currency exchange rate fluctuations, ongoing inflation, memory pricing increases and shortage impacting consumer demand and manufacturing, world conflicts and uncertainty, like the Middle East conflict and higher fuel and oil prices, as well as changes in legislation and regulations, including enacted and proposed tariffs and other trade policies, which introduced additional uncertainty. In periods of perceived or actual unfavorable economic conditions, our customers or potential customers may delay or re-evaluate their decisions to initiate projects, which could result in a delay or cessation of engagements with us and lower licensing revenues. In addition, weaker consumer demand may result in lower royalty revenues as our customers ship fewer units, and supply chain dynamics and component pricing may also impact end-market demand.
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, Hezbollah and Iran. Most recently, in February 2026, the United States and Israel launched joint combat operations in Iran to which Iran and Hezbollah responded with ballistic missile and drone attacks on Israel as well as other countries and U.S. military bases in the region. While temporary ceasefires between the United States, Israel and Iran, and between Israel and Hezbollah, were reached in April 2026 and remain in effect as of the date hereof, there can be no assurance that the temporary ceasefire agreements will be upheld or that permanent ceasefires will be reached, and the situation in Israel and the region remains highly volatile. 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. 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” in our Annual Report on Form 10-K for the year ended December 31, 2025.
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. In February 2026, the United States and Israel launched joint combat operations in Iran to which Iran and Hezbollah responded with ballistic missile and drone attacks on Israel as well as other countries and U.S. military bases in the region. Although the United States and Iran have announced ceasefire and de-escalation arrangements from time to time, including a memorandum of understanding entered into on June 17, 2026 that contemplates the termination of military operations on multiple fronts, hostilities have resumed and may continue or escalate. 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. 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” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Previous wording
Total revenues were $27.0 million for the first quarter of 2026, representing an increase of 11% as compared to the corresponding period in 2025. The increase in total revenues for the first quarter of 2026 was due to higher licensing and related revenues, as further described below.
Current wording
Total revenues were $29.0 million and $56.1 million for the second quarter and first half of 2026, respectively, representing an increase of 13% and 12%, as compared to the corresponding periods in 2025. The increase in total revenues for both the second quarter and first half of 2026 was due to higher licensing and related revenues, as further described below.
Previous wording
Our five largest customers accounted for 44% of our total revenues for the first quarter of 2026, as compared to 56% for the comparable period in 2025. Two customers accounted for 24% of our total revenues for the first quarter of 2026, as compared to one customer that accounted for 24% of our total revenues for the first quarter of 2025. 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 2026 and collectively represented 22% of our total royalty revenues for the first quarter of 2026. 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. 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 55% and 39% of our total revenues for the second quarter and first half of 2026, respectively, as compared to 42% for both of the comparable periods in 2025. Two customers accounted for 21% and 11% of our total revenues for the second quarter of 2026, as compared to two customers that each accounted for 11% of our total revenues for the second quarter of 2025. One customer accounted for 13% of our total revenues for the first half of 2026, as compared to one customer that accounted for 17% of our total revenues for the first half of 2025. 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, one royalty paying customer represented 10% or more of our total royalty revenues for both the second quarter and first half of 2026 and represented 25% and 18% of our total royalty revenues for the second quarter and first half of 2026, respectively. Two royalty paying customers represented 10% or more of our total royalty revenues for both the second quarter and first half of 2025 and collectively represented 38% and 34% of our total royalty revenues for the second quarter and first half of 2025, 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.
Previous wording
The five largest royalty-paying customers accounted for 47% of our total royalty revenues for the first quarter of 2026, as compared to 50% for the comparable period of 2025.
Current wording
The five largest royalty-paying customers accounted for 54% and 51% of our total royalty revenues for the second quarter and first half of 2026, respectively, as compared to 58% and 54% for the comparable periods of 2025.
Previous wording
Cost of revenues was $3.7 million for the first quarter of 2026, as compared to $3.5 million for the comparable period of 2025. Cost of revenues accounted for 14% of our total revenues in the first quarter of both 2026 and 2025. The slight increase for the first quarter of 2026 primarily reflected higher payments to the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel. Included in cost of revenues for the first quarter of both 2026 and 2025 was a non-cash equity-based compensation expense of $0.2 million.
Current wording
Cost of revenues was $3.6 million and $7.4 million for the second quarter and first half of 2026, respectively, as compared to $3.5 million and $7.0 million for the comparable periods of 2025. Cost of revenues accounted for 13% of our total revenues for both the second quarter and first half of 2026, as compared to 14% for both of the comparable periods of 2025. The increase for the first half of 2026 primarily reflected higher payments to the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel. Included in cost of revenues for the second quarter and first half of 2026 was a non-cash equity-based compensation expense of $0.2 million and $0.4 million, respectively, as compared to $0.2 million and $0.3 million for the comparable periods of 2025.
Previous wording
Gross margin for the first quarter of 2026 was 86%, unchanged from 86% for the comparable period of 2025. The increase in gross margin in absolute dollars for the first quarter of 2026 mainly reflected higher licensing and related revenues, as set forth above.
Current wording
Gross margin for both the second quarter and first half of 2026 was 87%, as compared to 86% for both of the comparable periods of 2025. The increase in gross margin in percentage and absolute dollars for both the second quarter and first half of 2026 mainly reflected higher licensing and related revenues, as set forth above.
Previous wording
Total operating expenses were $28.4 million for the first quarter of 2026, as compared to $25.1 million for the comparable period of 2025. The net increase for the first quarter of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS, and higher non-cash equity-based compensation expenses.
Current wording
Total operating expenses were $27.5 million and $55.8 million for the second quarter and first half of 2026, respectively, as compared to $26.6 million and $51.8 million for the comparable periods of 2025. The net increase for the second quarter of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS. The net increase for the first half of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS, and higher non-cash equity-based compensation expenses.
Previous wording
Total research and development expenses, net were $19.8 million for the first quarter of 2026, as compared to $17.6 million for the comparable period of 2025. The increase for the first quarter of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS, higher facilities expenses associated with research and development activities and higher non-cash equity-based compensation expenses. Included in research and development expenses for the first quarter of 2026 were non-cash equity-based compensation expenses of $2.9 million, as compared to $2.5 million for the comparable period of 2025. Research and development expenses as a percentage of our total revenues were 73% for the first quarter of both 2026 and 2025.
Current wording
Total research and development expenses, net were $19.3 million and $39.2 million for the second quarter and first half of 2026, respectively, as compared to $18.8 million and $36.4 million for the comparable periods of 2025. The increase for both the second quarter and first half of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS. Included in research and development expenses for the second quarter and first half of 2026 were non-cash equity-based compensation expenses of $2.7 million and $5.5 million, respectively, as compared to $2.7 million and $5.1 million for the comparable periods of 2025. Research and development expenses as a percentage of our total revenues were 67% and 70% for the second quarter and first half of 2026, respectively, as compared to 73% for both of the comparable periods of 2025.
Previous wording
The number of research and development personnel was 318 at March 31, 2026, as compared to 325 at March 31, 2025.
Current wording
The number of research and development personnel was 295 at June 30, 2026, as compared to 323 at June 30, 2025.
Previous wording
Our sales and marketing expenses were $3.8 million for the first quarter of 2026, as compared to $3.4 million for the comparable period of 2025. The increase for the first quarter of 2026 principally reflected higher commission expenses and the cost of a global sales meeting held during the period (an event that did not take place in the first quarter of 2025), partially offset by lower employee-related costs. Included in sales and marketing expenses for the first quarter of 2026 were non-cash equity-based compensation expenses of $0.7 million, as compared to $0.6 million for the comparable period of 2025. Sales and marketing expenses as a percentage of our total revenues were 14% for the first quarter of both 2026 and 2025.
Current wording
Our sales and marketing expenses were $3.3 million and $7.0 million for the second quarter and first half of 2026, respectively, as compared to $3.3 million and $6.8 million for the comparable periods of 2025. The increase for the first half of 2026 principally reflected higher non-cash equity-based compensation expenses and the cost of a global sales meeting held during the period (an event that did not take place in the first half of 2025). Included in sales and marketing expenses for the second quarter and first half of 2026 were non-cash equity-based compensation expenses of $0.7 million and $1.4 million, as compared to $0.6 million and $1.2 million for the comparable periods of 2025. Sales and marketing expenses as a percentage of our total revenues were 11% and 13% for the second quarter and first half of 2026, respectively, as compared to 13% and 14% for the comparable periods of 2025.
Previous wording
The total number of sales and marketing personnel was 30 at March 31, 2026, as compared to 34 at March 31, 2025.
Current wording
The total number of sales and marketing personnel was 28 at June 30, 2026, as compared to 34 at June 30, 2025.
Previous wording
Our general and administrative expenses were $4.7 million for the first quarter of 2026, as compared to $3.9 million for the comparable period of 2025. The increase for the first quarter of 2026 primarily reflected higher salaries and employee-related costs and higher non-cash equity-based compensation expenses. Included in general and administrative expenses for the first quarter of 2026 were non-cash equity-based compensation expenses of $1.6 million, as compared to $1.1 million for the comparable period of 2025. General and administrative expenses as a percentage of our total revenues were 17% for the first quarter of 2026, as compared to 16% for the comparable period of 2025.
Current wording
Our general and administrative expenses were $4.7 million and $9.4 million for the second quarter and first half of 2026, respectively, as compared to $4.4 million and $8.3 million for the comparable periods of 2025. The increase for both the second quarter and first half of 2026 primarily reflected higher salaries and employee-related costs and higher non-cash equity-based compensation expenses. Included in general and administrative expenses for the second quarter and first half of 2026 were non-cash equity-based compensation expenses of $1.6 million and $3.2 million, as compared to $1.5 million and $2.6 million for the comparable periods of 2025. General and administrative expenses as a percentage of our total revenues were 16% and 17% for the second quarter and first half of 2026, respectively, as compared to 17% for both of the comparable periods of 2025.
Previous wording
The number of general and administrative personnel was 52 at March 31, 2026, as compared to 47 at March 31, 2025.
Current wording
The number of general and administrative personnel was 51 at June 30, 2026, as compared to 47 at June 30, 2025.
Previous wording
Our amortization charges were $0.1 million for the first quarter of both 2026 and 2025. The amortization charges for both periods 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 and $0.2 million for the second quarter and first half of 2026, respectively, as compared to $0.2 million and $0.3 million for the comparable periods of 2025. The amortization charges for both the second quarter and first half of 2026 and 2025 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 the first quarter of 2026 principally reflected higher combined bank deposits and marketable securities balances held (mainly resulting from the follow‑on offering completed in the fourth quarter of 2025).
Current wording
The increase in interest income and gains and losses from marketable securities, net, during both the second quarter and first half of 2026 principally reflected higher combined bank deposits and marketable securities balances held (mainly resulting from the follow‑on offering completed in the fourth quarter of 2025), partially offset by lower 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 have increased significantly on a quarterly basis beyond our Euro liabilities, mainly from applicable French research tax credits, which are generally refunded every three years. Separately, our NIS liabilities are significantly higher than our NIS‑denominated assets, mainly because of operating lease obligations. This has resulted in a foreign exchange loss of $0.2 million for the first quarter of 2026, as compared to a foreign exchange gain of $0.6 million for the comparable period of 2025.
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 have increased significantly on a quarterly basis beyond our Euro liabilities, mainly from applicable French research tax credits, which are generally refunded every three years. Separately, our NIS liabilities are significantly higher than our NIS‑denominated assets, mainly because of operating lease obligations. This has resulted in a foreign exchange loss of $1.0 million and $1.2 million for the second quarter and first half of 2026, respectively, as compared to a foreign exchange gain of $0.6 million and $1.2 million for the comparable periods of 2025.
Previous wording
We recorded a gain of $0.1 million for the first quarter of 2026, as compared to a loss of $0.1 million for the comparable period of 2025, 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.
Current wording
We recorded a gain of $0.0 million and $0.1 million for the second quarter and first half of 2026, respectively, as compared to a loss of $0.2 million and $0.3 million for the comparable periods of 2025, 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
As of March 31, 2026, we had approximately $21.4 million in cash and cash equivalents, $5.1 million in bank deposits, and $189.2 million in marketable securities, totaling $215.7 million, as compared to $222.0 million at December 31, 2025. The decrease for the first three months of 2026 principally reflected cash used in operating activities and investments in leasehold and equipment for our new offices in Ra’anana, Israel, partially offset by cash proceeds from exercise of stock-based awards.
Current wording
As of June 30, 2026, we had approximately $44.3 million in cash and cash equivalents, $5.1 million in bank deposits, and $171.3 million in marketable securities, totaling $220.7 million, as compared to $222.0 million at December 31, 2025. The decrease for the first six months of 2026 principally reflected investments in leasehold and equipment for our new offices in Ra’anana, Israel, partially offset by cash proceeds from exercise of stock-based awards.
Previous wording
Out of total cash, cash equivalents, bank deposits and marketable securities of $215.7 million, $114.4 million was held by our foreign subsidiaries. Our intent is to 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 we require additional funds for strategic transactions in the United States, we may need 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 $220.7 million, $122.7 million was held by our foreign subsidiaries. Our intent is to 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. If additional funds are required in the United States for strategic transactions or other corporate purposes, we would first seek to access such capital through alternative means, including tax-efficient transfers of funds that qualify for applicable exemptions, debt financing arrangements, or capital markets transactions, including potential follow-on equity offerings, similar to our follow-on public offering completed in November 2025. However, if these alternatives are not available or are not sufficient, we may need 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 three months of 2026, we invested $27.6 million of cash in bank deposits and marketable securities with maturities up to 50 months from the balance sheet date. In addition, during the same period, marketable securities were redeemed for cash amounting to $14.1 million. All 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 2026 was immaterial. For more information about our marketable securities, see Note 4 to the interim condensed consolidated financial statements for the three months ended March 31, 2026.
Current wording
During the first six months of 2026, we invested $52.0 million of cash in bank deposits and marketable securities with maturities up to 47 months from the balance sheet date. In addition, during the same period, bank deposits and marketable securities were redeemed for cash amounting to $56.2 million. All 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 six months of 2026 was immaterial. For more information about our marketable securities, see Note 4 to the interim condensed consolidated financial statements for the three and six months ended June 30, 2026.
Previous wording
Net cash used in operating activities for the first three months of 2026 was $4.9 million and consisted of net loss of $4.5 million, adjustments for non-cash items of $6.6 million, and changes in operating assets and liabilities of $7.0 million. Adjustments for non-cash items primarily consisted of $0.9 million of depreciation and amortization of intangible assets, $5.4 million of equity-based compensation expenses, and $0.5 million of unrealized foreign exchange loss. The decrease in operating assets and liabilities primarily consisted of an increase in prepaid expenses and other assets of $5.8 million (mainly as a result of payments of a yearly design tool subscription and $1.4 million of unbilled receivables classified as “other long-term assets” in the interim condensed consolidated balance sheets), as well as a decrease in accrued expenses and other payables of $0.9 million and 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 operating lease liabilities of $0.7 million.
Current wording
Net cash provided by operating activities for the first six months of 2026 was $0.9 million and consisted of net loss of $7.4 million, adjustments for non-cash items of $13.8 million, and changes in operating assets and liabilities of $5.5 million. Adjustments for non-cash items primarily consisted of $1.7 million of depreciation and amortization of intangible assets, $10.5 million of equity-based compensation expenses, and $1.9 million of unrealized foreign exchange loss. The decrease in operating assets and liabilities primarily consisted of an increase in prepaid expenses and other assets of $6.8 million (mainly as a result of payment of a yearly design tool subscription, an increase in French research tax benefits applicable to the CIR, advance tax payments, and a $2.4 million increase in unbilled receivables classified as “other long-term assets” in the interim condensed consolidated balance sheets), as well as a decrease in trade payables of $0.9 million, a decrease in deferred revenues of $0.8 million, and a decrease in accrued expenses and other payables of $0.8 million, partially offset by a decrease in trade receivables, net, of $2.4 million, a decrease in operating lease right-of-use assets of $0.4 million, an increase in accrued payroll and related benefits of $0.6 million, and an increase in operating lease liabilities of $0.5 million.
Previous wording
Net 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, and 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.
Current wording
Net cash used in operating activities for the first six months of 2025 was $6.2 million and consisted of net loss of $7.0 million, adjustments for non-cash items of $9.3 million, and changes in operating assets and liabilities of $8.5 million. Adjustments for non-cash items primarily consisted of $2.0 million of depreciation and amortization of intangible assets and $9.2 million of equity-based compensation expenses, partially offset by $1.7 million of unrealized foreign exchange gain. The decrease in operating assets and liabilities primarily consisted of an increase in prepaid expenses and other assets of $2.9 million (mainly as a result of payment of a yearly design tool subscription and an increase in French research tax benefits applicable to the CIR which is generally refunded every three years), a decrease in accrued expenses and other payables of $1.4 million, and a decrease in accrued payroll and related benefits of $4.6 million (mainly as a result of yearly bonus payments), partially offset by a decrease in trade receivables of $0.9 million.
Previous wording
Net cash used in investing activities for the first three months of 2026 was $15.8 million, compared to $6.2 million of net cash provided by investing activities for the comparable period of 2025. We had a cash outflow of $24.6 million and a cash inflow of $14.1 million with respect to investments in marketable securities during the first three months of 2026, as compared to 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. For the first three months of 2026, we had an investment of $3.0 million in bank deposits. We had a cash outflow of $2.3 million and $0.3 million during the first three months of 2026 and 2025, respectively, from purchase of property and equipment (the 2026 outflow partially reflects investments in leasehold improvements and equipment for our new offices in Ra’anana, Israel).
Current wording
Net cash provided by investing activities for the first six months of 2026 was $1.3 million, compared to $20.8 million of net cash provided by investing activities for the comparable period of 2025. We had a cash outflow of $48.1 million and a cash inflow of $55.4 million with respect to investments in marketable securities during the first six months of 2026, as compared to a cash outflow of $30.8 million and a cash inflow of $49.8 million with respect to investments in marketable securities during the first six months of 2025. For the first six months of 2026, we had a net investment of $3.0 million in bank deposits, as compared to an investment of $0.7 million in bank deposits for the comparable period of 2025. We had a cash outflow of $2.9 million and $1.0 million during the first six months of 2026 and 2025, respectively, from purchase of property and equipment (the 2026 outflow partially reflects investments in leasehold improvements and equipment for our new offices in Ra’anana, Israel). For the first six months of 2025, we had a cash inflow of $3.5 million in connection with the release of escrowed funds associated with the sale of Intrinsix.
Previous wording
Net cash provided by financing activities for the first three months of 2026 was $1.6 million, as compared to net cash provided by financing activities in the amount of $1.4 million for the comparable period of 2025. All of the cash inflows in both periods resulted from the exercise of stock‑based awards.
Current wording
Net cash provided by financing activities for the first six months of 2026 was $1.6 million, as compared to net cash used in financing activities in the amount of $4.5 million for the comparable period of 2025. During the first six months of 2026, we received $1.6 million from the exercise of stock-based awards, as compared to $1.6 million received for the comparable period of 2025. For the first six months of 2025, we had a cash outflow of $6.2 million from the purchase of treasury stock.
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, which was extended collectively by an additional 7,800,000 shares in 2010, 2013, 2014, 2018, 2020, 2023 and 2024. No shares of common stock were repurchased during the first quarter of either 2026 or 2025. As of March 31, 2026, we had 684,486 shares available for repurchase.
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, which was extended collectively by an additional 7,800,000 shares in 2010, 2013, 2014, 2018, 2020, 2023 and 2024. No shares of common stock were repurchased during the first six months of 2026. During the first six months ended June 30, 2025, we repurchased 300,000 shares of common stock at an average purchase price of $20.54 per share for an aggregate purchase price of $6.2 million. As of June 30, 2026, we had 684,486 shares available for repurchase.