1. Ceva reported $24.2M revenue, an increase from $22.1M last year. 2. Licensing revenue reached $15.0M, up from $11.4M in 2024. 3. Royalty revenue fell to $9.2M from $10.7M year-on-year. 4. Operating loss decreased to $4.4M compared to $5.0M last year. 5. CEVA's edge AI strategy shows strength despite slow royalty growth.
The increase in licensing revenues and reduced operating loss indicate operational improvement. Historical trends show that strong licensing results often correlate with future revenue growth.
Higher licensing revenue signals positive traction for Ceva's IPs, but royalty decline raises concerns. Market's focus on immediate financial performance makes the impact significant.
Immediate improvements in licensing and management commentary suggest potential price uptick soon. However, the decline in royalty revenue poses risks for longer-term stability.
ROCKVILLE, Md., May 7, 2025 /PRNewswire/ -- Ceva, Inc. (NASDAQ: CEVA), the leading licensor of silicon and software IP that enables Smart Edge devices to connect, sense and infer data more reliably and efficiently, today announced its financial results for the first quarter ended March 31, 2025.
Total revenue for the first quarter of 2025 was $24.2 million, compared to $22.1 million reported for the first quarter of 2024. Licensing and related revenue for the first quarter of 2025 was $15.0 million, compared to $11.4 million reported for the same quarter a year ago. Royalty revenue for the first quarter of 2025 was $9.2 million, compared to $10.7 million reported for the first quarter of 2024.
Amir Panush, Chief Executive Officer of Ceva, commented: "I am pleased with the continued progress we made in our licensing business this quarter, further solidifying our edge AI strategy and reinforcing key customer engagements across our IP portfolio. While royalty revenue was below expectations, we are encouraged by the adoption and successful implementation of our IP in a leading U.S. OEM's in-house 5G modem launched in the quarter. Additionally, the Wi-Fi 7 design win with a long-term wireless connectivity customer and new licensees for our edge AI and spatial audio IPs are incremental drivers for future royalty growth."
During the quarter, eleven IP licensing agreements were concluded, targeting a wide range of end markets and applications, including edge AI NPU for automotive ADAS, Wi-Fi 7 connectivity for AIoT, Bluetooth 6 and Wi-Fi 6 for combo connectivity products, 5G cellular IoT for industrial devices, audio for consumer devices, and spatial audio for PC headsets. Two of the deals signed were with first-time customers.
GAAP gross margin for the first quarter of 2025 was 86%, as compared to 89% in the first quarter of 2024. GAAP operating loss for the first quarter of 2025 was $4.4 million, as compared to a GAAP operating loss of $5.0 million for the same period in 2024. GAAP net loss for the first quarter of 2025 was $3.3 million, as compared to a GAAP net loss of $5.4 million reported for the same period in 2024. GAAP diluted loss per share for the first quarter of 2025 was $0.14, as compared to GAAP diluted loss per share of $0.23 for the same period in 2024.
Non-GAAP gross margin for the first quarter of 2025 was 87%, as compared to 90% for the same period in 2024. Non-GAAP operating income for the first quarter of 2025 was $0.3 million, as compared to non-GAAP operating loss of $0.8 million reported for the first quarter of 2024. Non-GAAP net income and diluted income per share for the first quarter of 2025 were $1.4 million and $0.06, respectively, compared with non-GAAP net loss and diluted loss per share of $1.3 million and $0.05, respectively, reported for the first quarter of 2024.
Yaniv Arieli, Chief Financial Officer of Ceva, stated: "We experienced a shortfall in royalty revenue in the quarter due to a combination of soft low-cost smartphone shipments and an industrial customer who had a slower product ramp-up than in the prior year. We remain focused on operating efficiency and having the agility to navigate challenges arising from market uncertainty."
Ceva management will conduct a conference call on May 7, 2025, at 8:30 a.m. Eastern Time to discuss the operating performance for the quarter. The conference call will be available via the following dial-in numbers:
The conference call will also be available live via webcast at the following link: https://app.webinar.net/GvAklQElMmj. Please go to the website at least fifteen minutes prior to the call to register.
For those who cannot access the live broadcast, a replay will be available by dialing the provided numbers from one hour after the end of the call until 9:00 a.m. (Eastern Time) on May 14, 2025. The replay will also be available at Ceva's website at www.ceva-ip.com.
This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of Ceva to differ materially from those expressed or implied by such forward-looking statements and assumptions. Forward-looking statements include statements regarding drivers for revenue growth, Ceva's ability to navigate challenges from market uncertainty.
The risks, uncertainties, and assumptions that could cause differing Ceva results include: the effect of intense industry competition; the ability of Ceva's technologies and products incorporating Ceva's technologies to achieve market acceptance; Ceva's ability to meet changing needs of end-users and evolving market demands; the cyclical nature of and general economic conditions in the semiconductor industry; Ceva's ability to diversify its royalty streams and license revenues; Ceva's ability to continue to generate significant revenues from the handset baseband market and to penetrate new markets; instability and disruptions related to the ongoing Israel-Gaza conflict; and general market conditions and other risks relating to Ceva's business, including, but not limited to, those that are described from time to time in our SEC filings. Ceva assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
Non-GAAP gross margin for the first quarters of 2025 and 2024 excluded: (a) equity-based compensation expenses of $0.2 million and (b) amortization of acquired intangibles of $0.1 million.
About Ceva, Inc.: At Ceva, we are passionate about bringing new levels of innovation to the smart edge. Our wireless communications, sensing and Edge AI technologies are at the heart of some of today's most advanced smart edge products. This philosophy is in practice today, with Ceva powering more than 19 billion of the world's most innovative smart edge products.
Our headquarters are in Rockville, Maryland, with a global customer base supported by operations worldwide. We are committed to being a responsible and respected global corporate citizen and a more sustainable company.