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CEVA INC (CEVA)·Q3 2025 Earnings Summary

Executive Summary

  • Revenue $28.38M (+11% QoQ, +4% YoY); non-GAAP EPS $0.11; both slightly above Street; GAAP loss per share was $(0.10). Bolded beats: revenue $28.38M vs $28.04M consensus; EPS $0.11 vs $0.105 consensus. Royalty revenue rose 16% QoQ on record wireless IoT shipments [*S&P Global].
  • AI processor licensing contributed ~one-third of licensing revenue in Q2 and Q3, highlighted by a portfolio NeuPro NPU license with Microchip and three AI DSP agreements; connectivity wins in Wi‑Fi 7 and Bluetooth High Data Throughput broadened the pipeline .
  • Q4 guide: revenue $29–$33M; gross margin ~88% GAAP/~89% non‑GAAP; GAAP OpEx $27–$28M; non‑GAAP OpEx $22–$23M; management maintained full-year revenue guidance aligned with Street .
  • Near‑term catalysts: AI licensing momentum (higher royalty potential), record Wi‑Fi 6 and cellular IoT shipments, share gains at a U.S. smartphone OEM with in‑house 5G modem using CEVA IP, and the Microchip partnership validating CEVA’s NPU stack .

What Went Well and What Went Wrong

What Went Well

  • AI portfolio scaling: “We exceeded expectations on both revenue and non‑GAAP diluted income per share… The headline win was a portfolio license for our full NeuPro NPU family with Microchip” .
  • Royalty strength: Royalties up 16% QoQ and 6% YoY on record wireless IoT shipments; Wi‑Fi shipments hit 82M (+73% YoY) and Wi‑Fi 6 shipments +194% YoY .
  • Gross margin expansion: GAAP gross margin 88% (vs 85% LY); non‑GAAP 89% (vs 87% LY) reflecting better mix and licensing execution .

What Went Wrong

  • GAAP profitability: GAAP net loss widened to $(2.51)M vs $(1.31)M last year; GAAP diluted loss per share $(0.10) vs $(0.06) .
  • OpEx at high end: Total GAAP OpEx $27.1M, at the higher end of guidance; non‑GAAP OpEx $22.1M also at the high end due to higher employee benefit provisions .
  • Bluetooth softness: Bluetooth shipments 303M, down 1% YoY; management expects recovery in H2 seasonality but it’s a watch item .

Financial Results

Quarterly Actuals (oldest → newest)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$27.21 $24.25 $25.68 $28.38
GAAP Gross Margin (%)85% 86% 86% 88%
Non-GAAP Gross Margin (%)87% 87% 87% 89%
GAAP Diluted EPS ($)$(0.06) $(0.14) $(0.15) $(0.10)
Non-GAAP Diluted EPS ($)$0.14 $0.06 $0.07 $0.11

Actuals vs. S&P Global Consensus

MetricQ1 2025Q2 2025Q3 2025
Revenue Actual ($M)$24.25 $25.68 $28.38
Revenue Consensus Mean ($M)$26.55*$25.33*$28.04*
EPS (Primary) Actual ($)$0.06 $0.07 $0.11
EPS (Primary) Consensus Mean ($)$0.0704*$0.053*$0.105*
# of Estimates (Revenue / EPS)4 / 5*4 / 5*4 / 5*

Values retrieved from S&P Global.*

Segment Mix (Revenue)

Segment ($USD Millions)Q3 2024Q2 2025Q3 2025
Licensing & Related$15.57 $15.02 $16.03
Royalties$11.63 $10.66 $12.36
Total Revenue$27.21 $25.68 $28.38

KPIs (Q3 2025)

KPIQ3 2025
Total CEVA-powered device shipments579M units (+19% QoQ, +11% YoY)
Mobile handset modems69M units (12% of total)
IoT shipments (Consumer / Industrial)510M total; 500M consumer, 10M industrial
Bluetooth shipments303M units (−1% YoY)
Cellular IoT shipments68M units (+41% YoY, record)
Wi‑Fi shipments82M units (+73% YoY, record); Wi‑Fi 6 shipments +194% YoY

Note: The Q3 call transcript referenced 559M shipments; the 8‑K/press release and filed prepared remarks reference 579M. We anchor to filed figures .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($M)Q3 2025 (prior)$26–$30 Actual: $28.38 Delivered within range
Total Revenue ($M)Q4 2025—$29–$33 New range (sequential up)
GAAP Gross Margin (%)Q4 2025—~88% New
Non‑GAAP Gross Margin (%)Q4 2025—~89% New
GAAP OpEx ($M)Q4 2025—$27–$28 New
Non‑GAAP OpEx ($M)Q4 2025—$22–$23 New
Net Interest Income ($M)Q4 2025—~$1.5 New
Taxes ($M)Q4 2025—~$1.8 New
Share Count (Diluted) (M)Q4 2025—~25.8 New
Full‑Year RevenueFY 2025Lowered to low single‑digit growth (Q1 update) Maintained, aligned with Street Maintained vs Q2 stance

Earnings Call Themes & Trends

TopicQ1 2025 (May)Q2 2025 (Aug)Q3 2025 (Nov)Trend
AI/NPU strategyNeuPro‑M win in ADAS; building scalable NPU and SDK stack Four NPU agreements; expanding into infrastructure/data center; higher royalty potential Microchip portfolio license; AI ~1/3 of licensing in Q2/Q3; higher long‑term royalties Accelerating adoption and strategic wins
Wireless connectivityWi‑Fi 7 design win; Wi‑Fi 6 ASP uplift Record Wi‑Fi 6 shipments; robust pipeline Wins in Wi‑Fi 7 & BT High Data Throughput; Wi‑Fi shipments record high Ramping shipments and mix shift to higher ASP
Smartphone macroLow‑cost smartphone softness; expect sequential ramp Q4 historically strongest; H2 royalty uptick; U.S. OEM share gains Sequential momentum expected in Q4; second model at U.S. OEM Improving sequentially; mix tailwinds at U.S. OEM
AutomotiveVision DSPs/AI accel ramp; Nextchip ADAS win V2X via Autotalks/Qualcomm; L2/L3 SoCs entering production Two large semi customers ramp ADAS; RedCap auto IoT platform with United Micro Royalty ramp building; new platform partnerships
Tariffs/macroLimited direct tariff impact; cautious outlook Seasonality tailwinds; maintain overall revenue guidance Maintain FY guidance aligned with Street; watch seasonality Stable guidance with caution on macro

Management Commentary

  • “We exceeded expectations on both revenue and non‑GAAP diluted income per share… portfolio license for our full NeuPro NPU family with Microchip” — Amir Panush, CEO .
  • “AI processor licensing contributed approximately one-third of licensing revenue… wins are multi-year… record wireless IoT shipments… focused on disciplined expense management” — Yaniv Arieli, CFO .
  • “AI agreements typically carry a higher royalty potential than our traditional licensing business” — Prepared remarks .
  • Microchip partnership validation: “By providing scalable NPU technology together with NeuPro Studio, we enable Microchip to extend its leadership and deliver AI‑driven innovation” — CEO .
  • Connectivity evolution: “Long‑term customer licensed our latest Wi‑Fi 7 and Bluetooth High Data Throughput IP… essential for advanced audio, wearables, robotics and Physical‑AI use cases” — CEO .

Q&A Highlights

  • Royalty drivers: Growth across mobile (share gains at a U.S. OEM), Wi‑Fi 6/7, cellular IoT, automotive ADAS; sequential momentum expected into Q4 .
  • Microchip NPU timing: Typical 18–24 months from design to royalty; multi‑year deal with potential for renewals and upsell as AI evolves .
  • NPU + connectivity synergy: Customers likely to license both; integrated solutions improve time‑to‑market and power/cost efficiency .
  • Competitive landscape: Licensing proven scalable NPU IP plus unified SDK cited as key advantage; pipeline supports sustained AI licensing contribution .
  • OpEx outlook: No big changes in Q4; 2026 investments to be evaluated against NeuPro ROI; maintain expense discipline .

Estimates Context

  • Q3 2025 results slightly topped consensus: revenue $28.38M vs $28.04M estimate; EPS $0.11 vs $0.105 estimate. Q2 also beat; Q1 missed on both revenue and EPS as smartphone low‑end softness weighed. Q4 revenue guide $29–$33M brackets Street at ~$31.16M, suggesting potential modest upside if licensing/royalties sustain H2 seasonality [*S&P Global].
  • With AI licensing at ~1/3 of mix and record IoT shipments, Street models may need to adjust royalty ASP assumptions higher (Wi‑Fi 6/7 mix) and carry-through to Q4 seasonality .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Mix tailwinds: Shift to higher‑ASP Wi‑Fi 6/7 and cellular IoT plus U.S. OEM share gains should support royalty growth into Q4; watch shipment trajectories and ASPs .
  • AI monetization: Multi‑year NeuPro NPU deals (e.g., Microchip) lift licensing now and royalties later; expect first royalty streams ~18–24 months post‑design .
  • Margins resilient: Gross margin expanded to 88% GAAP/89% non‑GAAP; non‑GAAP operating margin improved to ~11% with licensing strength .
  • Guidance implies sequential growth: Q4 revenue $29–$33M with stable margins; full‑year guidance maintained vs Street, reducing downside risk near term .
  • Watch list: GAAP losses and OpEx at high end; monitor Bluetooth unit recovery and any macro demand softening; management remains expense‑disciplined .
  • Strategic pipeline: Connectivity (Wi‑Fi 7/BT HDT), automotive (ADAS/V2X), and edge/cloud AI inference engagements broaden end‑market exposure .
  • Capital returns: Continued buybacks ($1M in Q3; $7.2M YTD) provide support; subsequent November offerings could impact capital structure—monitor usage of proceeds .

Additional Relevant Press Releases (Q3 Context)

  • Long‑term Microchip partnership: broad NeuPro NPU portfolio license; integration of NeuPro Studio SDK .
  • Wi‑Fi 7 1x1 client IP general availability; adopted by multiple customers for AI‑enabled IoT .
  • 5G RedCap automotive IoT platform with United Micro leveraging PentaG Lite .

Disclosures and Notes

  • Non‑GAAP adjustments include equity‑based comp, amortization of intangibles, and acquisition‑related costs; reconciliations provided in filings .
  • Shipments discrepancy: Filed prepared remarks/press release show 579M; the live transcript referenced 559M. We rely on filed figures .