Ceva, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues were $29.1 million, a 2% increase year-over-year (YoY) compared to Q3 2025.
• Licensing and related revenues were $16.3 million, up 2% YoY.
• Royalty revenues were $12.7 million, up 3% YoY and 18% sequentially.
• GAAP gross margin was 85%, down from 88% in Q3 2025.
• Non-GAAP gross margin was 86%, down from 89% in Q3 2025.
• GAAP operating loss was $3.5 million, compared to a $2.1 million loss in Q3 2025.
• Non-GAAP operating income was $2.5 million, compared to $3.1 million in Q3 2025.
• GAAP net loss was $2.3 million, compared to a $2.5 million loss in Q3 2025.
• Non-GAAP net income was $3.8 million, compared to $2.7 million in Q3 2025.
• GAAP diluted loss per share was $0.08, compared to $0.10 in Q3 2025.
• Non-GAAP diluted earnings per share were $0.13, compared to $0.11 in Q3 2025.
• Cash and cash equivalents were $29.6 million as of September 30, 2026, down from $40.6 million at December 31, 2025.
• Deferred revenues were $3.4 million as of September 30, 2026, compared to $3.5 million at December 31, 2025.

Guidance and Future Outlook:

• Management expects a strong fourth quarter on both top and bottom lines.
• A significant multi-year connectivity agreement expected in Q3 was signed early in Q4.
• The ramp of internally developed modems at a major U.S. customer is creating a multi-year smartphone royalty growth opportunity through 2027 and beyond.
• The company is extending its AI business into infrastructure applications and moving closer to initial NPU royalties.

Business Segments and Product Lines:

• AI licensing revenues reached a record level, accounting for more than 35% of total licensing and related revenues.
• Ceva signed 10 IP licensing agreements during the quarter, including three with first-time customers.
• Six of the new agreements were for AI technologies, including one with a new customer targeting AI infrastructure and Edge AI agreements for consumer, automotive, and industrial markets.
• Three of Ceva's highest-volume connectivity customers extended agreements for multiple years and added more IP, including one adding Wi-Fi 6 and Wi-Fi 7 to existing Bluetooth and DSP deployments.
• Ceva expanded its presence in smart TVs with a customer targeting advanced motion-based interaction.
• 623 million Ceva-powered devices were shipped by customers, matching an all-time quarterly record, including record cellular IoT and Wi-Fi 6 shipments.

Market and Competitive Landscape:

• Royalty revenues were partially offset by memory-related softness in compute-intensive consumer devices.
• The company continues to build a broader base of potential future royalty-generating products through expanded relationships with high-volume connectivity customers.

Risks and Challenges:

• Intense industry competition.
• Ability of technologies to achieve market acceptance.
• Lengthy sales cycle for IP and related solutions.
• Geopolitical risks, including tariffs, trade measures, and disruptions related to conflicts in the Middle East.
• General market conditions and evolving market demands.

Management Commentary and Tone:

• CEO Amir Panush stated the company continued to grow, highlighting 18% sequential royalty revenue growth and record device shipments.
• CFO Yaniv Arieli noted that royalty growth was led by the modem ramp and IoT/connectivity strength, despite consumer device softness.
• Management expressed confidence in the long-term growth potential of the Connect, Sense, and Infer portfolio.

Other Key Points:

• The company announced a conference call for November 9, 2026, at 8:30 a.m. Eastern Time to discuss results.
• A replay of the conference call will be available until 9:00 a.m. Eastern Time on November 16, 2026.
• Ceva has more than 23 billion devices shipped and is trusted by over 400 customers worldwide.
• The company's portfolio includes 5G, cellular IoT, Bluetooth, Wi-Fi, UWB, Edge AI NPUs, AI DSPs, and sensor fusion processors.