Ceva, Inc. (NASDAQ:CEVA), a preeminent licensor of wireless connectivity and smart sensing technologies for the Internet of Things (IoT), has delivered outstanding financial results for the second quarter of 2024. The company surpassed market expectations, demonstrating strong gains in both licensing execution and royalty revenue across various sectors. At the heart of today’s most sophisticated smart-edge products, Ceva’s technologies are fostering a smarter, safer, and more interconnected world.
A Legacy of Innovation and Market Leadership
With over three decades of pioneering industry experience, Ceva has established itself as a beacon of innovation in providing vertically integrated silicon and software IP solutions. These solutions enable customers to create intelligent, connected devices that excel in performance, power efficiency, and adaptability.
Ceva’s contributions can be found in more than 17 billion of the world’s most advanced smart-edge products across diverse markets, including consumer IoT, mobile, automotive, industrial, and PC infrastructure. Annually, the company ships over 1 billion devices utilizing its IoT connectivity IPs, solidifying its leading role in the ongoing IoT revolution.
Financial Milestones and Performance
In the fiscal second quarter of 2024, Ceva reported notable financial achievements. The company’s total revenue soared to $28.4 million, marking a 24% increase from $22.9 million in the second quarter of 2023. Licensing and related revenue experienced a substantial rise to $17.3 million, up by 28% year-over-year and 51% sequentially. Royalty revenue grew to $11.2 million, reflecting a 19% year-over-year increase and a 5% quarter-over-quarter uptick.
Ceva’s gross margins also saw significant improvement, climbing to 90% on a GAAP basis and 91% on a non-GAAP basis, compared to 85% and 86%, respectively, in the same quarter of the previous year. The company’s non-GAAP operating margin stood at 15%, a remarkable turnaround from the negative margins reported in Q1 2024 and Q2 2023.
Non-GAAP net income for Q2 2024 surged to $4.2 million, or $0.17 per diluted share, a significant recovery from a net loss of $0.5 million, or $0.02 per diluted share, in Q2 2023.
Diverse Technology Portfolio and Expanding Market Reach
Ceva’s impressive IP portfolio addresses pivotal technology trends across multiple sectors:
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5G Mobile & Infrastructure: Ceva’s PentaG2 baseband platform and Ceva-XC vector DSPs are foundational components for global 5G networks, facilitating smartphones, fixed wireless access, and cellular V2X applications.
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Wireless IoT: As the preeminent licensor of connectivity solutions for IoT, Ceva delivers advanced Bluetooth, Wi-Fi, UWB, and cellular IoT solutions for a range of devices, from smart hearables to wireless biosensors.
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Edge AI Sensing: Ceva supports the increasing demand for power-efficient Edge AI deployment with its NeuPro-M NPUs and SensPro2 DSPs, catering to neural network-based designs.
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Sensing & Audio Software: The company’s sophisticated software solutions, such as RealSpace for spatial audio and ClearVox for voice clarity, are integral to superior user experiences in various consumer devices.
In Q2 2024, Ceva forged 11 licensing deals, targeting AI solutions for industrial and consumer edge AI devices, next-gen wireless infrastructure, 5G satellite, 5G RedCap, and Bluetooth connectivity for wearables and hearables. Noteworthy is a strategic Bluetooth portfolio agreement with a top 3 U.S. semiconductor analog company, expanding into connectivity and AI.
Pioneering Product Launches and AI Integration
Ceva continues to advance its product offerings with two significant IP introductions in Q2 2024:
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NeuPro-Nano: This new Neural Processor Unit (NPU) is tailored for TinyML applications, making it ideal for AIoT devices, including hearables, wearables, smart home products, and industrial IoT solutions. The NeuPro-Nano delivers exceptional performance with ultra-low power consumption, efficiently managing TinyML workloads. It features a fully programmable architecture that supports advanced machine learning data types and operators, crucial for contemporary AI tasks.
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Ceva-Waves Links: The Ceva-Waves Links family represents a breakthrough multi-protocol wireless platform designed to expedite the development of connected Smart Edge SoCs. This platform accommodates a variety of wireless protocols, including Wi-Fi, Bluetooth, IEEE 802.15.4, and UWB, making it versatile for various IoT and smart home applications. The modular architecture allows bespoke solutions for specific application requirements, and the first member of this family, the Links100, optimizes low-power communication for IoT applications.
Strategic Financial Outlook and Continuing Growth
Looking ahead to Q3 2024, Ceva projects total revenue between $26.0 million and $28.0 million, maintaining gross margins in line with Q2 2024. The company aims to achieve the higher end of its forecasted 4%-8% annual revenue growth.
As Ceva relentlessly innovates and broadens its IP solutions across the Connect, Sense, and Infer sectors, it remains at the vanguard of meeting the escalating demand for intelligent, connected devices. With a comprehensive portfolio addressing key trends in 5G, IoT, and Edge AI, Ceva stands well-poised to drive the next wave of technological evolution towards a more interconnected world.