CEVA INC

Company Overview

We are the leader in innovative silicon and software intellectual property (IP) solutions that enable smart edge products to connect, sense, and infer data more reliably and efficiently. Commanding 67% of the wireless connectivity market share based on IP design revenues in 2023, according to IPnest, we believe we have the industry’s broadest portfolio of comprehensive wireless communications and processor IP platforms and embedded software solutions for the deployment of artificial intelligence (AI) algorithms and models directly onto local edge devices (Edge AI). We power the connectivity, sensing, and inference capabilities in today’s most advanced smart edge products across four large, diversified markets with significant opportunity for long-term growth, consumer Internet-of-Things (IoT), automotive, industrial and infrastructure, as well as in the mobile and personal computing (PC) markets where we have well-established customers and presence, which based on our research we believe will represent a $5 billion total addressable market by 2027. Since 2003, more than 19 billion of the world’s most innovative smart edge products from AI-infused smartwatches, IoT devices and wearables to autonomous vehicles, 5G mobile networks and more have been shipped with Ceva IP, with approximately 2 billion shipped in 2024 alone.

For more than three decades, we have been a trusted partner to hundreds of leading semiconductor and original equipment manufacturer (OEM) companies servicing not just our largest target growth and incumbent markets, but also a wide variety of other end markets and applications, including smart-home, surveillance, robotics and medical. Our transformative semiconductor IP and embedded software offerings are incorporated by customers into application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs) to enable power-efficient, intelligent, secure and connected devices that connect, sense, and infer - the three critical pillars of the rapidly evolving era of AI-enabled smart edge.

We have established leadership positions in key technology areas, including reliable and secure wireless connectivity for use in both infrastructure and end points across multiple end markets, low-power and highly efficient audio and video/vision sensing and interface solutions and scalable neural-network-based AI processing.

We are a sustainability and environmentally conscious company. We have adopted both a Code of Business Conduct and Ethics and a Sustainability Policy, in which we emphasize and focus on environmental preservation, recycling, the welfare of our employees and privacy – which we promote on a corporate level. At Ceva, we are committed to social responsibility, values of preservation and consciousness towards these purposes.

Our revenue mix primarily comprises IP licensing fees and related revenues and royalties generated from our customers’ shipments of smart edge products deploying our IP. Related revenues include revenues from post contract support, training and sale of development systems and chips.

We were initially incorporated in Delaware on November 22, 1999 under the name DSP Cores, Inc. Our current company was created through the combination of the DSP IP licensing division of DSP Group, Inc. and Parthus Technologies plc (Parthus) in November 2002.

With a global team of more than 400 development, support and sales professionals, we are headquartered in Rockville, Maryland, with research and development facilities in France, Greece, Ireland, Israel, Serbia, the United Kingdom and the United States and sales and support offices throughout Asia Pacific (APAC), Sweden, France, Israel, United Kingdom and the United States. We are committed to our customers’ success and intend to continue to drive innovation in smart connected systems in the AI era.

Industry Background

Short Range Wireless IP

Wi-Fi, Bluetooth and ultra-wideband (UWB) are key enabling technologies for any company looking to address the consumer IoT, automative, industrial, mobile, and PC end markets with Edge AI and IoT use cases. Moreover, many companies wish to integrate these connectivity technologies into System-on-Chip (SoC) designs rather than provide connectivity through an additional chip in the system. Yet, Wi-Fi and Bluetooth standards are constantly evolving, and the many new end applications are looking to benefit from these enhancements, which put further time-to-market pressure on systems and chip companies. In many cases, companies need to support multiple wireless standards in a device, which further increases the complexity. The advent of Artificial Intelligence of Things (AIoT) and the push to add embedded AI capabilities to almost every device has resulted in significant demand for connectivity IP that address this growing market, which includes smart True Wireless Stereo (TWS) earbuds, wearables, health monitoring, smart speakers, smart home appliances, white goods, and many other consumer and IoT devices. By licensing from us rather than developing these technologies in-house, our customers aim to access the latest standards, profiles and state-of-the-art radio frequences (RF) and to improve their time-to-market without undertaking the expensive research and development costs required to develop these technologies internally.

Cellular IoT IP

Cellular IoT, and specifically Narrowband IoT (NB-IoT), LTE Cat-1 and 5G RedCap standards, have become key technologies for companies wishing to connect low power IoT devices over long distances using cellular networks. By its nature, cellular is a very complex technology, with most of the industry knowledge held by a few large companies. By providing low power cellular digital signal processing (DSP) cores and platforms, we help our customers overcome the entry barriers to the cellular IoT market without undertaking the complex and expensive research and development process to develop these technologies internally.

5G/5G Advanced User Equipment and Infrastructure IP

As 5G and the upcoming 5G-Advanced standards continue to be deployed globally, new use cases and applications that leverage the standard’s enormous bandwidth and ultra-low latency are emerging, including fixed wireless access, private networks, Low Earth Orbit (LEO) satellite networks and vehicle-to-everything (V2X) communications. Our latest generation Ceva-XC20 family of DSPs and PentaG2 platform IP effectively lower the high entry barriers for network equipment manufacturers, IoT companies, satellite OEMs and newcomers who wish to address these market opportunities by providing comprehensive IP on which to build their 5G/5G Advanced SoC and ASICs, while helping reduce the time-to-market, risk, effort and associated cost.

Sensor Fusion

Inertial and environmental sensors based on micro-electromechanical systems (MEMS) are used in an increasing number of devices, including smartphones, laptops, robots, TWS earbuds, spatial audio headsets, smart TVs, remote controls, AR and VR headsets, drones and many other consumer and industrial devices. The software required to process the sensor data and fuse the data from multiple sensors is complex and requires unique specialization. By licensing our IP rather than developing this sensor processing software in-house, our customers can focus their efforts developing the applications that utilize the processed sensor data to create differentiated, contextually aware devices. In addition, the processors required to combine the data from these sensors and run the applications are performance intensive and increasingly require specialized architectures that can handle a combination of traditional DSP processing and AI processing. Our SensPro sensor fusion AI DSPs offer a combination of high performance single and half precision floating-point math for powertrain and Radar applications along with a large amount of 8- and 16-bit parallel processing capacity required for deep neural network (DNN) inference processing.

NPUs

Neural processing units (NPUs) are specialized processors designed to accelerate neural network computations, such as machine learning (ML) and AI. NPUs are optimized for performing complex mathematical operations required by neural networks, such as matrix multiplications and convolutions, much more efficiently than traditional processors like central processing units (CPUs) or graphics processing units (GPUs). Our family of NeuPro NPUs are tailored to meet the full scale of AI applications, from tinyML and embedded AI through to Small Language Models, Large Language Models and Time Test Compute. These NPUs are specifically architected to provide the AI performance combined with optimal DSP for filtering data from sensor inputs, all running in real-time, on device with minimal power consumption. This makes the NeuPro NPU family ideal for a wide range of smart edge devices, including smartphones, automotive advanced driver-assistance systems (“ADAS”), next generation AI PC, intelligent microcontroller units (MCUs) for consumer and industrial markets, wireless audio SoCs, smart cameras and other AIoT devices.

Design Gap

The demand for smart edge devices in the consumer IoT, automotive, industrial, infrastructure, mobile and PC markets continues to grow. These devices require faster and lower power connectivity, with richer user experience that is aware and predictive. Semiconductor manufacturers face ever growing pressures to make smaller, feature-rich integrated circuits that are more reliable, less expensive and have greater performance. These two trends are occurring concurrently in the face of decreasing product lifecycles and constrained battery power. The advent of wireless connectivity technologies like 5G-Advanced, Wi-Fi 7 and Bluetooth 6/7 and the diverse sensor related workloads required to make a device smart, such as advanced image enhancement, computer vision, AI inferencing, voice and audio pre- and post- processing, spatial audio and motion sensor fusion have further increased these pressures. While semiconductor manufacturing processes have advanced significantly to allow a substantial increase in the number of circuits placed on a single chip, resources for design capabilities have not kept pace with the advances in manufacturing processes and the increasingly rapid design cycle expectations, resulting in a growing “design gap” between the increasing manufacturing potential and the constrained design capabilities.

Our****Business

We address the requirements of the consumer, industrial, infrastructure, automotive, mobile and PC markets by designing and licensing a broad range of robust processors, platforms, software and solutions which streamline the design of products for developing a wide variety of application specific solutions that address the connect, sense and infer use cases of smart edge devices.

Given the “design gap,” as well as the increasing complexity and the unique skill set required to develop a smart edge SoC, many semiconductor design and manufacturing companies increasingly choose to license proven IP, such as processor cores (e.g., DSP, CPU, GPU and NPU), connectivity platforms (e.g., Bluetooth, Wi-Fi, UWB, 5G) and embedded software algorithms (e.g., sensor fusion, sound, spatial audio) and memory and physical IP from silicon IP companies like Ceva to complement their in-house development or to replace their internal development efforts for these technologies. With increasingly complex designs and shorter time-to-market demands, it is becoming progressively more challenging and less cost-efficient for most semiconductor companies to develop the full range of wireless standards in-house alongside maintaining DSP and NPU platforms for their sensing and AI needs. As a result, companies increasingly seek to license this IP from a third-party developer, such as Ceva.

Our Business Model

Our mission is to be the partner of choice for transformative IP solutions for the smart edge. Our platforms for connect, sense and infer use cases in smart edge devices enables us to address the high-volume markets of consumer IoT, automotive, industrial, infrastructure, mobile and PC. We license our technologies on a worldwide basis to semiconductor and OEM companies that design and manufacture products that combine Ceva-based solutions with their own proprietary technology.

We believe our business model offers us some key advantages. By not focusing on manufacturing or selling silicon products, we are free to widely license our technology and focus most of our resources on research and development. By choosing to license our IP, manufacturers have the advantage of being able to solely focus on creating their own differentiated solutions and developing their own unique product roadmaps. Through our licensing efforts, we have established a worldwide community developing Ceva-based solutions, and therefore we can leverage their strengths, customer relationships, proprietary technology advantages, and existing sales and marketing infrastructure. In addition, as our IP is widely licensed and deployed, system OEM companies can obtain Ceva-based chipsets from a wide range of suppliers, thus reducing dependence on any one supplier and fostering price competition, both of which help contain the cost of Ceva-based products.

We operate a licensing and royalty business model. We typically charge a license fee for access to our hardware technology and a royalty fee for each unit of silicon which incorporates our hardware or software technology.

License and related fees are invoiced in accordance with agreed-upon contractual terms. Royalties are reported and invoiced quarterly and generally based on a fixed unit rate or a percentage of the sale price for the Ceva-based silicon product.

Strategy

We believe there is a growing demand for IP that enables smart edge devices to connect, sense and infer data more reliably and efficiently. These devices are becoming more complex, integrating multiple technologies and standards into a single SoC. We also recognize chip design skills and expertise are scarce nowadays and more systems companies and OEMs are deciding to develop chips in-house, creating an even greater demand for IP.

We have strategically aligned our IP portfolio to allow us to exploit the most lucrative “design gaps” in the demand for smart edge devices, which, based on our research, we expect will grow at an 8% compound annual growth rate from 2022 to 2027. We offer expertise developing complete solutions in a number of key growth end markets, including consumer IoT, automotive, industrial, infrastructure, mobile and PC. For these markets, we offer IP solutions that include various types of specialized platforms for 5G-Advanced, satellite communications, multi-standard wireless connectivity (incorporating Wi-Fi, Bluetooth, UWB, 802.15.4), wireless RF, cellular IoT, sensor fusion and spatial audio. To capitalize on this industry shift, we intend to:

Products

We are the leading licensor of wireless interface silicon and software IP that enables smart edge devices to connect, sense and infer data more reliably and efficiently. Our wireless communications, sensing and Edge AI technologies are at the heart of some of today’s most advanced smart edge products. From Bluetooth connectivity, Wi-Fi, UWB and 5G platform IP for ubiquitous, robust communications, to scalable Edge AI NPU IP, sensor fusion processors and embedded application software that make devices smarter, we believe we have the broadest portfolio of IP to connect, sense and infer data more reliably and efficiently.

Our categories of products include the following:

We deliver our platforms, AI and sensor fusion DSPs and NPUs in the form of a hardware description language definition (known as a soft core or a synthesizable core). All our hardware IP can be manufactured on any process using any physical library and comes with a complete set of tools and an integrated development environment. An extensive third-party network supports Ceva platforms, AI DSPs and NPUs with a wide range of complementing software and platforms. In addition, we provide development platforms, software development kits and software debug tools, which facilitate system design, debug and software development.

To reduce the cost, complexity, and risk in bringing products to market, we have developed a suite of system platforms and solutions. These platforms and solutions combine the hardware and software elements that are essential for designers deploying Ceva’s state-of-the-art platforms, AI DSP cores and NPUs. Our family of platforms are targeted for baseband processing within mobile, cellular IoT devices and base station RAN, satellite communications, advanced imaging, computer vision, radar application and deep neural networks, and audio, voice and sensing and Internet-of-Things related applications.

Customers

We have licensed our platforms, AI DSPs, NPUs and wireless connectivity IP to leading semiconductor and OEM companies throughout the world, including seven of the world’s top 10 MCU players. These customers incorporate our IP into application-specific chipsets or custom-designed chipsets that they manufacture, market and sell to consumer electronics companies. We also license our technologies to OEMs directly. Included among our licensees are the following customers: Actions, Ambiq, AIC Semi, Alif, ASPEED, ASR Micro, Atmosic, Autotalks, Beken, Bestechnic, boAt, Broadcom, Ceragon, Cirrus Logic, Espressif, ESWIN, FujiFilm, Goodix, iCatch, ICOM, InPlay, Intel, iRobot, Itron, LG Electronics, LifeSignals, Mediatek, Microchip, MorningCore, Nations, Nextchip, Nokia, Nordic Semi, Novatek, NXP, onsemi, Synaptics, Oticon, Panasonic, Renesas, Rockchip, Rohm, Samsung, SatixFy, Sharp, SiFlower, SigmaStar, Socionext, Sony, Sonova, STMicroelectronics, THX, Toshiba, Unisoc, Vatics, Winner Micro and Yamaha.

International Sales and Operations

Customers based in Europe and Middle East (EME) and Asia Pacific (APAC) accounted for 81% of our total revenues for 2024, 90% of our total revenues for 2023 and 88% of our total revenues for 2022, with customers in China accounting for 49%, 59% and 63% of total revenues for 2024, 2023 and 2022, respectively. Additional information on the geographic breakdown of our revenues and location of our long-lived assets is contained in Note 12 to our consolidated financial statements, which appear elsewhere in this annual report.

Sales and Marketing

We license our technology through a direct sales force. As of December 31, 2024, we had 34 employees in sales and marketing. We have sales offices and representation in APAC region, Sweden, France, Israel, United Kingdom and the United States.

Maintaining close relationships with our customers and strengthening these relationships are central to our strategy. From time to time, we develop new signal processors, platforms, software solutions or connectivity products in close alignment with several tier-one industry players, which signifies to the market that we are focused on viable applications that meet broad industry needs or try to get similar inputs and insight for our new developments from our marketing team. Generally, these industry leaders become licensees for these products which allows us to create a roadmap for the future development of existing cores and application platforms and connectivity products and helps us to anticipate the next potential applications for the market. We seek to use our customer relationships to deliver new products in a faster time to market.

We use a variety of marketing initiatives to stimulate demand and brand awareness in our target markets. These marketing efforts include contacts with industry analysts, presenting at key industry trade shows and conferences, and a comprehensive digital marketing program aimed at developing and nurturing relationships with potential customers. Our marketing group runs competitive benchmark analyses to help us maintain our competitive position.

Technical Support

We offer technical support services through our offices in Israel, APAC region, France and the United States. As of December 31, 2024, we had 26 employees in technical support. Our technical support services include:

We believe that our technical support services are a means to assist our licensees to embed our cores and platforms in their designs and products. Our technology is highly complex, combining sophisticated signal processing IP core architectures, integrated circuit designs and development tools. Effective customer support in helping our customers to implement our solutions enables them to shorten the time to market for their applications. Our support organization is made up of experienced engineers and professional support personnel. We conduct technical training for our licensees and their customers and meet with them from time to time to track the implementation of our technology.

Research and Development

Our research and development team focuses on improving and enhancing our existing products, as well as developing new products to broaden our offerings and market opportunities. These efforts are largely driven by current and anticipated customer and market needs.

Our research and development team consists of 323 engineers as of December 31, 2024, working in seven development centers located in France, Greece, Ireland, Israel, Serbia, the United Kingdom and the United States. Our engineers possess significant experience in developing AI and sensor fusion DSP cores, NPUs and tools for 5G, computer vision, AI, connectivity products (Wi-Fi, UWB and Bluetooth), NB-IoT, and sensor processing and sensor fusion software. In addition, we engage third party contractors with specialized skills as required to support our research and development efforts.

We encourage our research and development personnel to maintain active roles in various international organizations that develop and maintain standards in electronics and related industries. This involvement allows us to influence the development of new standards, keeps us informed as to important new developments regarding standards and allows us to demonstrate our expertise to existing and potential customers who also participate in these standards-setting bodies.

Competition

The markets in which we operate are intensely competitive. They are subject to rapid change and are significantly affected by new product introductions. We compete with other suppliers of licensed signal processing IP. We believe that the principal competitive elements in our field are signal processing IP and NPU performance, overall chip cost, power consumption, flexibility, reliability, communication and multimedia software and algorithms availability, design cycle time, tool chain, customer support, financial strength, name recognition and reputation. We believe that we compete effectively in each of these areas but can offer no assurance that we will have the financial resources, technical expertise, and marketing or support capabilities to compete successfully in the future.

The markets in which we compete are dominated by large, highly competent semiconductor companies that have significant brand recognition, a large installed base and a large network of support and field application engineers. The following industry players and factors may have a significant impact on our competitiveness:

In addition, we may face increased competition from smaller, niche semiconductor design companies in the future. Some of our customers also may decide to satisfy their needs through in-house design. We compete based on signal processing IP performance, first-to-market availability for latest generation wireless standards, overall chip cost, power consumption, flexibility, reliability, communication and multimedia software availability, design cycle time, tool chain, customer support, name recognition, reputation and financial strength. Our inability to compete effectively on these bases could have a material adverse effect on our business, results of operations and financial condition.

With respect to certain large potential customers, we also compete with internal engineering teams, which may design wireless connectivity or programmable signal processing IP core products in-house. Companies such as NXP, Renesas and STMicroelectronics license our designs for some applications and use their own proprietary cores for other applications. These companies also may choose to license their wireless connectivity or proprietary signal processing IP cores to third parties and, as a result, become direct competitors.

Proprietary Rights

Our success and ability to compete are dependent on our ability to develop and maintain the proprietary aspects of our technology and to operate without infringing the proprietary rights of others. We rely on a combination of patent, trademark, trade secret and copyright laws and contractual restrictions to protect the proprietary aspects of our technology. These legal protections afford only limited protection of our technology. We also seek to limit disclosure of our IP and trade secrets by requiring employees and consultants with access to our proprietary information to execute confidentiality agreements with us and by restricting access to our source code and other IP. Due to rapid technological change, we believe that factors such as the technological and creative skills of our personnel, new product developments and enhancements to existing products are more important than obtaining statutory protections for our technology in establishing and maintaining a technology leadership position.

We have an active program to protect our proprietary technology through the filing of patents. Our patents relate to our signal processing IP cores and application-specific platform technologies. As of December 31, 2024, we held 50 patents in the United States, eight patents in Canada, 90 patents in the Europe and Middle East (EME) region and 10 patents in the Asia Pacific (APAC) region, totaling 158 patents, with expiration dates between 2025 and 2041. In addition, as of December 31, 2024, we had six patent applications pending in the United States, nine pending patent applications in the EME region, three pending global Patent Corporation Treaty (PCT) patent applications and eight pending patent applications in the APAC region, totaling 26 pending patent applications.

We actively pursue foreign patent protection in countries where we feel it is prudent to do so. Our policy is to apply for patents or for other appropriate statutory protection when we develop valuable new or improved technology that is eligible for protection. The patent prosecution process involves complex legal and factual questions, and the breadth of claims allowed is uncertain. Accordingly, there are no assurances that any patent application filed by us will result in a patent being issued, or that our issued patents, and any patents that may be issued in the future, will afford us adequate protection against competitors with similar technology; nor can we be assured that patents issued to us will not be infringed or invalidated, or that others will not design around our technology. In addition, the laws of certain countries in which our products are or may be developed, manufactured or sold may not protect our products and IP rights to the same extent as the laws of the United States. We can provide no assurance that our pending patent applications or any future applications will be approved or will not be challenged by third parties, that any issued patents will effectively protect our technology, or that patents held by third parties will not have an adverse effect on our ability to do business.

The semiconductor industry is characterized by frequent litigation regarding patent and other IP rights. Questions of infringement in the semiconductor field involve highly technical and subjective analyses. In addition, patent infringement claims are increasingly being asserted by patent holding companies (so-called patent “trolls”), which do not use technology and whose sole business is to enforce patents against companies, such as us, for monetary gain. Because such patent holding companies do not provide services or use technology, the assertion of our own patents by way of counterclaim may be ineffective. Litigation may in the future be necessary to enforce our patents and other IP rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others, or to defend against claims of infringement or invalidity. We cannot assure you that we would be able to prevail in any such litigation or be able to devote the financial resources required to bring such litigation to a successful conclusion.

In any potential dispute involving our patents or other IP, our licensees also could become the targets of litigation. We are generally obligated to indemnify our licensees under the terms of our license agreements. Although our indemnification obligations are typically subject to a maximum amount, these obligations could nevertheless result in substantial expenses. In addition to the time and expense required for us to indemnify our licensees, a licensee’s development, marketing and sale of products embodying our solutions could be severely disrupted or shut down as a result of litigation, and we could be liable to such licensees for additional amounts.

We also rely on trademark, copyright and trade secret laws to protect our IP. We have registered trademarks in the United States for our name Ceva and the related Ceva logo, and currently market our signal processing cores and other technology offerings under this trademark.

Human Capital Resources

The table below presents the numbers of our employees as of December 31, 2024 by function and geographic location.

We believe we are a respected employer in the countries where we have operations, and, with the help of our employees, we strive to be a responsible global corporate citizen and a more sustainable company. Our Code of Business Conduct and Ethics sets the standards of conduct of our directors, officers and employees. In addition, in 2020, we adopted a Sustainability Policy that addresses matters related to our employees as well as data privacy and security, resource conservation and recycling, and other environmental matters. Our Sustainability Policy reflects our commitment to diversity and equal opportunity, a harassment-free workplace, training, development and employee engagement, and human rights, health and safety, and other matters relevant to employee well-being and the Ceva culture. The code is reviewed and updated periodically by our Board or Directors, and both the code and our Sustainability Policy are available on our website at www.ceva-ip.com.

Our employees are not represented by any collective bargaining agreements, however, certain provisions of Israeli law and the collective bargaining agreements between the Histadrut (General Federation of Labor in Israel) and the Coordination Bureau of Economic Organizations (the Israeli federation of employers’ organizations) apply to our Israeli employees. We have never experienced a work stoppage. We believe our employee relations are good, as is their general well-being, which is one of management’s top priorities.

Available Information

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available, free of charge, on our website at www.ceva-ip.com, as soon as reasonably practicable after such reports are electronically filed with the Securities and Exchange Commission and are also available on the SEC’s website at www.sec.gov.

Our website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.