CEVA INC

Previous wording

According to IPnest, we commanded 68% of the wireless connectivity IP market in 2024. Since 2003, more than 20 billion devices have shipped with Ceva IP, including approximately 2.1 billion in 2025. Our technologies power the connectivity, perception and intelligence in today’s most advanced smart edge products across consumer IoT, automotive, industrial and infrastructure, and mobile and PC markets. Based on market research, we believe these sectors will represent a $170 billion total addressable market for Physical AI and Edge AI by 2030.

Current wording

According to IPnest, we commanded 68% of the wireless connectivity IP market in 2025. Since 2003, more than 23 billion devices have shipped with Ceva IP, including approximately 2.1 billion in 2025. Our technologies power the connectivity, perception and intelligence in today’s most advanced smart edge products across consumer IoT, automotive, industrial and infrastructure, and mobile and PC markets. Based on market research, we believe these sectors will represent a $170 billion total addressable market for Physical AI and Edge AI by 2030.

Previous wording

As a result of our focus on silicon and software IP solutions spanning the connectivity, sensing and inference layers of Physical AI, we believe Ceva is well positioned for sustained, long‑term growth in both shipments and royalty revenues. Our diversified royalty streams reflect a broad range of advanced semiconductor packages (ASPs) – from high‑volume Bluetooth and Wi‑Fi connectivity platforms that power billions of consumer devices to higher‑value inference engines and AI DSPs such as NeuPro and SensPro, as well as infrastructure‑class platforms like PentaG-RAN. We believe this mix provides both scale and resilience, enabling us to capture growth across consumer, automotive, industrial and infrastructure markets while reinforcing our role as the enabler of Physical AI.

Current wording

As a result of our focus on silicon and software IP solutions spanning the connectivity, sensing and inference layers of Physical AI, we believe Ceva is well positioned for sustained, long‑term growth in both shipments and royalty revenues. Our diversified royalty streams reflect a broad range of average selling prices (ASPs) – from high‑volume Bluetooth and Wi‑Fi connectivity platforms that power billions of consumer devices to higher‑value inference engines and AI DSPs such as NeuPro and SensPro, as well as infrastructure‑class platforms like PentaG-RAN. We believe this mix provides both scale and resilience, enabling us to capture growth across consumer, automotive, industrial and infrastructure markets while reinforcing our role as the enabler of Physical AI.

Previous wording

Following the seasonal weakness experienced in the first quarter, royalty revenues improved sequentially in the second quarter, supported by market share gains in entry-level smartphones, continued expansion at the premium tier and ongoing strength across our wireless connectivity portfolio. While macroeconomic conditions, geopolitical developments and supply chain dynamics continue to create uncertainty across the semiconductor industry, we believe our diversified royalty base positions us well for long-term growth.

Current wording

Royalty revenues increased 3% year over year and 18% sequentially in the third quarter, led by mobile. Mobile royalty revenues increased 20% year over year, reflecting the continued ramp of internally developed modems at a major U.S. customer. Wi-Fi royalties also increased, driven by a growing contribution from a higher mix of higher-ASP Wi-Fi 6 shipments. While macroeconomic conditions, geopolitical developments and supply chain dynamics continue to create uncertainty across the semiconductor industry, we believe our diversified royalty base positions us well for long-term growth.

Previous wording

In addition, we expect to complement our strong presence in the Asia-Pacific region by further expanding our customer base and revenues in Europe and the U.S. During the quarter, we signed licensing agreements with customers in the U.S., China, and across Asia-Pacific, further reinforcing our global reach. This balance strengthens our resilience and underscores Ceva’s role as a leader in silicon and software IP enabling Physical AI across global markets.

Current wording

In addition, we expect to complement our strong presence in the Asia-Pacific region by further expanding our customer base and revenues in Europe and the U.S. We continue to pursue customer engagements across these regions to broaden our global reach.

Previous wording

However, the global economy continued to be impacted by macroeconomic conditions, including a volatile interest rate environment, foreign currency exchange rate fluctuations, ongoing inflation, memory pricing increases and shortage impacting consumer demand and manufacturing, world conflicts and uncertainty, like the Middle East conflict and higher fuel and oil prices, as well as changes in legislation and regulations, including enacted and proposed tariffs and other trade policies, which introduced additional uncertainty. In periods of perceived or actual unfavorable economic conditions, our customers or potential customers may delay or re-evaluate their decisions to initiate projects, which could result in a delay or cessation of engagements with us and lower licensing revenues. In addition, weaker consumer demand may result in lower royalty revenues as our customers ship fewer units, and supply chain dynamics and component pricing may also impact end-market demand.

Current wording

The global economy continued to be impacted by macroeconomic conditions, including a volatile interest rate environment, foreign currency exchange rate fluctuations, ongoing inflation, memory pricing increases and shortages impacting consumer demand and manufacturing, world conflicts and uncertainty, like the Middle East conflict and higher fuel and oil prices, as well as changes in legislation and regulations, including enacted and proposed tariffs and other trade policies, which introduced additional uncertainty. In periods of perceived or actual unfavorable economic conditions, our customers or potential customers may delay or re-evaluate their decisions to initiate projects, which could result in a delay or cessation of engagements with us and lower licensing revenues. In addition, weaker consumer demand may result in lower royalty revenues as our customers ship fewer units, and supply chain dynamics and component pricing may also impact end-market demand.

Previous wording

Our operations in Israel remain largely unaffected by the war between Israel and Hamas that began on October 7, 2023 and escalated to conflicts with Lebanon, Hezbollah and Iran. In February 2026, the United States and Israel launched joint combat operations in Iran to which Iran and Hezbollah responded with ballistic missile and drone attacks on Israel as well as other countries and U.S. military bases in the region. Although the United States and Iran have announced ceasefire and de-escalation arrangements from time to time, including a memorandum of understanding entered into on June 17, 2026 that contemplates the termination of military operations on multiple fronts, hostilities have resumed and may continue or escalate. Despite the evolving geopolitical situation, we continue to drive our business and support our customers globally. However, a portion of our employees in Israel have been or are called to active reserve duty, and additional employees may be called in the future, if needed. We have executed our business continuity plan with respect to those employees. It is possible that some of our operations in the region may be disrupted if this continues for a significant period of time or if the situation further deteriorates. The intensity and duration of these conflicts, as well as their economic implications for the Company and Israel’s economy, remain difficult to predict. For more information, please refer to the risk factor titled “Our operations in Israel may be adversely affected by instability in the Middle East region” in Part I—Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

Our operations in Israel remain largely unaffected by the war between Israel and Hamas that began on October 7, 2023 and escalated to conflicts with Lebanon, Hezbollah and Iran. In February 2026, the United States and Israel launched joint combat operations in Iran to which Iran and Hezbollah responded with ballistic missile and drone attacks on Israel as well as other countries and U.S. military bases in the region. Although the United States and Iran have announced ceasefire and de-escalation arrangements from time to time, hostilities have subsequently resumed and may continue or escalate. Despite the evolving geopolitical situation, we continue to drive our business and support our customers globally. However, a portion of our employees in Israel have been or are called to active reserve duty, and additional employees may be called in the future, if needed. We have executed our business continuity plan with respect to those employees. It is possible that some of our operations in the region may be disrupted if this continues for a significant period of time or if the situation further deteriorates. The intensity and duration of these conflicts, as well as their economic implications for the Company and Israel’s economy, remain difficult to predict. For more information, please refer to the risk factor titled “Our operations in Israel may be adversely affected by instability in the Middle East region” in Part I—Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

Total revenues were $29.0 million and $56.1 million for the second quarter and first half of 2026, respectively, representing an increase of 13% and 12%, as compared to the corresponding periods in 2025. The increase in total revenues for both the second quarter and first half of 2026 was due to higher licensing and related revenues, as further described below.

Current wording

Total revenues were $29.1 million and $85.1 million for the third quarter and first nine months of 2026, respectively, representing an increase of 2% and 9%, as compared to the corresponding periods in 2025. The increase in total revenues for both the third quarter and first nine months of 2026 was primarily attributable to higher licensing and related revenues and royalty revenues, as further described below.

Previous wording

Our five largest customers accounted for 55% and 39% of our total revenues for the second quarter and first half of 2026, respectively, as compared to 42% for both of the comparable periods in 2025. Two customers accounted for 21% and 11% of our total revenues for the second quarter of 2026, as compared to two customers that each accounted for 11% of our total revenues for the second quarter of 2025. One customer accounted for 13% of our total revenues for the first half of 2026, as compared to one customer that accounted for 17% of our total revenues for the first half of 2025. Generally, the identity of our customers representing 10% or more of our total revenues varies from period to period, especially with respect to our IP licensing customers as we generate licensing revenues generally from new customers on a quarterly basis. With respect to our royalty revenues, one royalty paying customer represented 10% or more of our total royalty revenues for both the second quarter and first half of 2026 and represented 25% and 18% of our total royalty revenues for the second quarter and first half of 2026, respectively. Two royalty paying customers represented 10% or more of our total royalty revenues for both the second quarter and first half of 2025 and collectively represented 38% and 34% of our total royalty revenues for the second quarter and first half of 2025, respectively. We expect that a significant portion of our future revenues will continue to be generated by a limited number of customers. The concentration of our customers is explainable, in part, by consolidation in the semiconductor industry.

Current wording

Our five largest customers accounted for 44% and 36% of our total revenues for the third quarter and first nine months of 2026, respectively, as compared to 45% and 39%, respectively, for the comparable periods in 2025. One customer accounted for 11% of our total revenues for the third quarter of 2026, as compared to three customers that each accounted for 11% of our total revenues for the third quarter of 2025. One customer accounted for 10% of our total revenues for the first nine months of 2026, as compared to one customer that accounted for 15% of our total revenues for the first nine months of 2025. Generally, the identity of our customers representing 10% or more of our total revenues varies from period to period, especially with respect to our IP licensing customers, as we generate licensing revenues from new customers on a quarterly basis. With respect to our royalty revenues, two royalty-paying customers represented 10% or more of our total royalty revenues for the third quarter of 2026 and collectively represented 34% of our total royalty revenues for such period, and one royalty-paying customer represented 10% or more of our total royalty revenues for first nine months of 2026 and represented 20% of our total royalty revenues for such period. Two royalty-paying customers represented 10% or more of our total royalty revenues for both the third quarter and first nine months of 2025 and collectively represented 36% and 35% of our total royalty revenues for the third quarter and first nine months of 2025, respectively. We expect that a significant portion of our future revenues will continue to be generated by a limited number of customers. The concentration of our customers is attributable, in part, to consolidation in the semiconductor industry.

Previous wording

The five largest royalty-paying customers accounted for 54% and 51% of our total royalty revenues for the second quarter and first half of 2026, respectively, as compared to 58% and 54% for the comparable periods of 2025.

Current wording

The five largest royalty-paying customers accounted for 56% and 53% of our total royalty revenues for the third quarter and first nine months of 2026, respectively, as compared to 54% for both the comparable periods of 2025.

Previous wording

Cost of revenues was $3.6 million and $7.4 million for the second quarter and first half of 2026, respectively, as compared to $3.5 million and $7.0 million for the comparable periods of 2025. Cost of revenues accounted for 13% of our total revenues for both the second quarter and first half of 2026, as compared to 14% for both of the comparable periods of 2025. The increase for the first half of 2026 primarily reflected higher payments to the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel. Included in cost of revenues for the second quarter and first half of 2026 was a non-cash equity-based compensation expense of $0.2 million and $0.4 million, respectively, as compared to $0.2 million and $0.3 million for the comparable periods of 2025.

Current wording

Cost of revenues was $4.3 million and $11.6 million for the third quarter and first nine months of 2026, respectively, as compared to $3.4 million and $10.4 million for the comparable periods of 2025. Cost of revenues accounted for 15% and 14% of our total revenues for the third quarter and first nine months of 2026, respectively, as compared to 12% and 13% for the comparable periods of 2025. The increase for the third quarter of 2026 primarily reflected higher salaries and employee-related costs, higher service costs and customization work for our customers, and higher payments to the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel (the “IIA”). The increase for the first nine months of 2026 primarily reflected higher salaries and employee-related costs and higher payments to the IIA. Included in cost of revenues for the third quarter and first nine months of 2026 was a non-cash equity-based compensation expense of $0.2 million and $0.5 million, respectively, as compared to $0.2 million and $0.5 million for the comparable periods of 2025. Gross margin was 85% and 86% for the third quarter and first nine months of 2026, respectively, as compared to 88% and 87% for the comparable periods of 2025.

Previous wording

Total operating expenses were $27.5 million and $55.8 million for the second quarter and first half of 2026, respectively, as compared to $26.6 million and $51.8 million for the comparable periods of 2025. The net increase for the second quarter of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS. The net increase for the first half of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS, and higher non-cash equity-based compensation expenses.

Current wording

Total operating expenses were $28.3 million and $84.2 million for the third quarter and first nine months of 2026, respectively, as compared to $27.1 million and $78.8 million for the comparable periods of 2025. The net increase for the third quarter of 2026 was primarily due to deal-related costs associated with a potential transaction that was ultimately not consummated and higher salaries and employee-related costs. The net increase for the first nine months of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS, and higher non-cash equity-based compensation expenses.

Previous wording

Total research and development expenses, net were $19.3 million and $39.2 million for the second quarter and first half of 2026, respectively, as compared to $18.8 million and $36.4 million for the comparable periods of 2025. The increase for both the second quarter and first half of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS. Included in research and development expenses for the second quarter and first half of 2026 were non-cash equity-based compensation expenses of $2.7 million and $5.5 million, respectively, as compared to $2.7 million and $5.1 million for the comparable periods of 2025. Research and development expenses as a percentage of our total revenues were 67% and 70% for the second quarter and first half of 2026, respectively, as compared to 73% for both of the comparable periods of 2025.

Current wording

Total research and development expenses, net were $18.1 million and $57.3 million for the third quarter and first nine months of 2026, respectively, as compared to $19.5 million and $55.9 million for the comparable periods of 2025. The decrease for the third quarter of 2026 was primarily due to R&D tax credits recognized under the Crédit Impôt Recherche (the “CIR”) and the new Israeli Law for the Encouragement and Incentivization of Research and Development, 2026 (the “R&D Law”), with the latter reducing research and development expenses in 2026 and having no comparable benefit in 2025, as well as lower non-cash equity-based compensation expenses. The increase for the first nine months of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS, partially offset by the tax credits recognized under the R&D Law, which reduced research and development expenses in 2026, with no comparable benefit in 2025. Included in research and development expenses for the third quarter and first nine months of 2026 were non-cash equity-based compensation expenses of $2.1 million and $7.7 million, respectively, as compared to $2.6 million and $7.8 million for the comparable periods of 2025. Research and development expenses as a percentage of our total revenues were 62% and 67% for the third quarter and first nine months of 2026, respectively, as compared to 69% and 71% for the comparable periods of 2025.

Previous wording

The number of research and development personnel was 295 at June 30, 2026, as compared to 323 at June 30, 2025.

Current wording

The number of research and development personnel was 281 at September 30, 2026, as compared to 322 at September 30, 2025.

Previous wording

Our sales and marketing expenses were $3.3 million and $7.0 million for the second quarter and first half of 2026, respectively, as compared to $3.3 million and $6.8 million for the comparable periods of 2025. The increase for the first half of 2026 principally reflected higher non-cash equity-based compensation expenses and the cost of a global sales meeting held during the period (an event that did not take place in the first half of 2025). Included in sales and marketing expenses for the second quarter and first half of 2026 were non-cash equity-based compensation expenses of $0.7 million and $1.4 million, as compared to $0.6 million and $1.2 million for the comparable periods of 2025. Sales and marketing expenses as a percentage of our total revenues were 11% and 13% for the second quarter and first half of 2026, respectively, as compared to 13% and 14% for the comparable periods of 2025.

Current wording

Our sales and marketing expenses were $3.9 million and $11.0 million for the third quarter and first nine months of 2026, respectively, as compared to $3.0 million and $9.8 million for the comparable periods of 2025. The increase for the third quarter of 2026 principally reflected higher salaries and employee-related costs, higher marketing and trade show expenses, and higher non-cash equity-based compensation expenses. The increase for the first nine months of 2026 principally reflected higher commission expenses, higher non-cash equity-based compensation expenses and the cost of a global sales meeting held during the period (an event that did not take place in the first nine months of 2025). Included in sales and marketing expenses for the third quarter and first nine months of 2026 were non-cash equity-based compensation expenses of $0.9 million and $2.3 million, respectively, as compared to $0.6 million and $1.7 million for the comparable periods of 2025. Sales and marketing expenses as a percentage of our total revenues were 14% and 13% for the third quarter and first nine months of 2026, respectively, as compared to 11% and 12% for the comparable periods of 2025.

Previous wording

The total number of sales and marketing personnel was 28 at June 30, 2026, as compared to 34 at June 30, 2025.

Current wording

The total number of sales and marketing personnel was 29 at September 30, 2026, as compared to 32 at September 30, 2025.

Previous wording

Our general and administrative expenses were $4.7 million and $9.4 million for the second quarter and first half of 2026, respectively, as compared to $4.4 million and $8.3 million for the comparable periods of 2025. The increase for both the second quarter and first half of 2026 primarily reflected higher salaries and employee-related costs and higher non-cash equity-based compensation expenses. Included in general and administrative expenses for the second quarter and first half of 2026 were non-cash equity-based compensation expenses of $1.6 million and $3.2 million, as compared to $1.5 million and $2.6 million for the comparable periods of 2025. General and administrative expenses as a percentage of our total revenues were 16% and 17% for the second quarter and first half of 2026, respectively, as compared to 17% for both of the comparable periods of 2025.

Current wording

Our general and administrative expenses were $6.2 million and $15.6 million for the third quarter and first nine months of 2026, respectively, as compared to $4.4 million and $12.7 million for the comparable periods of 2025. The increase for the third quarter of 2026 was primarily due to deal-related costs associated with a potential transaction that was ultimately not consummated and higher non-cash equity-based compensation expenses. The increase for the first nine months of 2026 was primarily due to deal-related costs associated with a potential transaction that was ultimately not consummated, higher salaries and employee-related costs and higher non-cash equity-based compensation expenses. Included in general and administrative expenses for the third quarter and first nine months of 2026 were non-cash equity-based compensation expenses of $1.8 million and $5.0 million, respectively, as compared to $1.5 million and $4.1 million for the comparable periods of 2025. General and administrative expenses as a percentage of our total revenues were 21% and 18% for the third quarter and first nine months of 2026, respectively, as compared to 15% and 16% for the comparable periods of 2025.

Previous wording

The number of general and administrative personnel was 51 at June 30, 2026, as compared to 47 at June 30, 2025.

Current wording

The number of general and administrative personnel was 50 at September 30, 2026, as compared to 49 at September 30, 2025.

Previous wording

Our amortization charges were $0.1 million and $0.2 million for the second quarter and first half of 2026, respectively, as compared to $0.2 million and $0.3 million for the comparable periods of 2025. The amortization charges for both the second quarter and first half of 2026 and 2025 were incurred in connection with the amortization of intangible assets associated with the acquisitions of the Hillcrest Labs and VisiSonics business.

Current wording

Our amortization charges were $0.1 million and $0.3 million for the third quarter and first nine months of 2026, respectively, as compared to $0.1 million and $0.4 million for the comparable periods of 2025. The amortization charges for both the third quarter and first nine months of 2026 and 2025 were incurred in connection with the amortization of intangible assets associated with the acquisitions of the Hillcrest Labs and VisiSonics businesses.

Previous wording

The increase in interest income and gains and losses from marketable securities, net, during both the second quarter and first half of 2026 principally reflected higher combined bank deposits and marketable securities balances held (mainly resulting from the follow‑on offering completed in the fourth quarter of 2025), partially offset by lower yields.

Current wording

The increase in interest income and gains and losses from marketable securities, net, during both the third quarter and first nine months of 2026 principally reflected higher combined bank deposits and marketable securities balances held, mainly resulting from the follow‑on offering completed in the fourth quarter of 2025.

Previous wording

We review our monthly expected major non-U.S. dollar denominated expenditures and look to hold equivalent non-U.S. dollar cash balances to mitigate currency fluctuations. However, our Euro cash balances have increased significantly on a quarterly basis beyond our Euro liabilities, mainly from applicable French research tax credits, which are generally refunded every three years. Separately, our NIS liabilities are significantly higher than our NIS‑denominated assets, mainly because of operating lease obligations. This has resulted in a foreign exchange loss of $1.0 million and $1.2 million for the second quarter and first half of 2026, respectively, as compared to a foreign exchange gain of $0.6 million and $1.2 million for the comparable periods of 2025.

Current wording

We review our monthly expected major non-U.S. dollar denominated expenditures and look to hold equivalent non-U.S. dollar cash balances to mitigate currency fluctuations. However, our Euro cash balances have increased significantly on a quarterly basis beyond our Euro liabilities, mainly from applicable French research tax credits, which are generally refunded every three years. Separately, our NIS liabilities are significantly higher than our NIS‑denominated assets, mainly because of operating lease obligations. We try to mitigate certain foreign currency exposures through the use of foreign exchange forward contracts. As a result of these currency exposures, net of our hedging activities, we recorded a foreign exchange gain of $0.1 million and a foreign exchange loss of $1.1 million for the third quarter and first nine months of 2026, respectively, as compared to a foreign exchange loss of $0.3 million and a foreign exchange gain of $0.9 million for the comparable periods of 2025.

Previous wording

We recorded a gain of $0.0 million and $0.1 million for the second quarter and first half of 2026, respectively, as compared to a loss of $0.2 million and $0.3 million for the comparable periods of 2025, related to remeasurement of marketable equity securities, which we hold at fair value. Over time, other income (expense), net, may be affected by market dynamics and other factors. Equity values generally change daily for marketable equity securities and upon the occurrence of observable price changes or upon impairment of marketable equity securities. In addition, volatility in the global economic climate and financial markets could result in a significant change in the value of our investments.

Current wording

We recorded a loss of less than $0.1 million and a gain of $0.1 million for the third quarter and first nine months of 2026, respectively, as compared to a gain of less than $0.1 million and a loss of $0.3 million for the comparable periods of 2025, related to remeasurement of marketable equity securities, which we hold at fair value. Over time, remeasurement of marketable equity securities may be affected by market dynamics and other factors. Equity values generally change daily for marketable equity securities and upon the occurrence of observable price changes or upon impairment of marketable equity securities. In addition, volatility in the global economic climate and financial markets could result in a significant change in the value of our investments.

Previous wording

Our income tax expense was $1.8 million and $3.2 million for the second quarter and first half of 2026, respectively, as compared to $1.1 million and $2.1 million for the comparable periods of 2025. The increase for both the second quarter and first half of 2026 was primarily due to: (1) higher withholding tax expenses; and (2) the prior-year period included a tax benefit from the recognition of deferred tax assets related to net operating loss carryforwards of our French subsidiary. In December 2025, we established a full valuation allowance against these deferred tax assets. As a result, no similar tax benefit was recognized during the second quarter and first half of 2026.

Current wording

Our income tax expense was $1.1 million and $4.2 million for the third quarter and first nine months of 2026, respectively, as compared to $1.7 million and $3.8 million for the comparable periods of 2025. The decrease in the third quarter of 2026 was primarily attributable to lower withholding tax expense, while the increase for the first nine months of 2026 was primarily attributable to higher withholding tax expense. In addition, the corresponding periods of 2025 reflected the impact of changes in deferred tax assets related to net operating loss carryforwards of our French subsidiary. In December 2025, we established a full valuation allowance against these deferred tax assets. As a result, no similar tax impact was recognized during the third quarter and first nine months of 2026.

Previous wording

Our French subsidiary is entitled to a tax benefit of 10% applied to specific revenues under the French IP Box regime. The French IP Box regime applies to net income derived from the licensing, sublicensing or sale of several IP rights, such as patents and copyrighted software, including royalty revenues. This elective regime requires a direct link between the income benefiting from the preferential treatment and the research and development expenditures incurred and contributing to that income. Qualifying income may be taxed at a favorable 10% CIT rate (plus social surtax, hence 10.3% in total). Income not eligible for a tax benefit under the French IP Box regime is taxed at a regular rate of 25%.

Current wording

Our French subsidiary is entitled to a tax benefit of 10% applied to specific revenues under the French IP Box regime. The French IP Box regime applies to net income derived from the licensing, sublicensing or sale of several IP rights, such as patents and copyrighted software, including royalty revenues. This elective regime requires a direct link between the income benefiting from the preferential treatment and the research and development expenditures incurred and contributing to that income. Qualifying income may be taxed at a favorable 10% corporate income tax rate (plus social surtax, hence 10.3% in total). Income not eligible for a tax benefit under the French IP Box regime is taxed at a regular rate of 25%.

Previous wording

As of June 30, 2026, we had approximately $44.3 million in cash and cash equivalents, $5.1 million in bank deposits, and $171.3 million in marketable securities, totaling $220.7 million, as compared to $222.0 million at December 31, 2025. The decrease for the first six months of 2026 principally reflected investments in leasehold and equipment for our new offices in Ra’anana, Israel, partially offset by cash proceeds from exercise of stock-based awards.

Current wording

As of September 30, 2026, we had approximately $29.6 million in cash and cash equivalents, $5.1 million in bank deposits, and $186.0 million in marketable securities, totaling $220.7 million, as compared to $222.0 million at December 31, 2025. The decrease for the first nine months of 2026 principally reflected investments in leasehold and equipment for our new offices in Ra’anana, Israel, partially offset by cash proceeds from exercise of stock-based awards.

Previous wording

Out of total cash, cash equivalents, bank deposits and marketable securities of $220.7 million, $122.7 million was held by our foreign subsidiaries. Our intent is to reinvest earnings of our foreign subsidiaries, and our current operating plans do not demonstrate a need to repatriate foreign earnings to fund our U.S. operations. If additional funds are required in the United States for strategic transactions or other corporate purposes, we would first seek to access such capital through alternative means, including tax-efficient transfers of funds that qualify for applicable exemptions, debt financing arrangements, or capital markets transactions, including potential follow-on equity offerings, similar to our follow-on public offering completed in November 2025. However, if these alternatives are not available or are not sufficient, we may need to accrue and pay taxes to repatriate these funds. The determination of the amount of additional taxes related to the repatriation of these earnings is not practicable, as it may vary based on various factors such as the location of the cash and the effect of regulation in the various jurisdictions from which the cash would be repatriated.

Current wording

Out of total cash, cash equivalents, bank deposits and marketable securities of $220.7 million, $87.2 million was held by our foreign subsidiaries. Our intent is to reinvest earnings of our foreign subsidiaries, and our current operating plans do not demonstrate a need to repatriate foreign earnings to fund our U.S. operations. If additional funds are required in the United States for strategic transactions or other corporate purposes, we would first seek to access such capital through alternative means, including tax-efficient transfers of funds that qualify for applicable exemptions, debt financing arrangements, or capital markets transactions, including potential follow-on equity offerings, similar to our follow-on public offering completed in November 2025. However, if these alternatives are not available or are not sufficient, we may need to accrue and pay taxes to repatriate these funds. The determination of the amount of additional taxes related to the repatriation of these earnings is not practicable, as it may vary based on various factors such as the location of the cash and the effect of regulation in the various jurisdictions from which the cash would be repatriated.

Previous wording

During the first six months of 2026, we invested $52.0 million of cash in bank deposits and marketable securities with maturities up to 47 months from the balance sheet date. In addition, during the same period, bank deposits and marketable securities were redeemed for cash amounting to $56.2 million. All our marketable securities are classified as available-for-sale. The purchase and sale or redemption of available-for-sale marketable securities are considered part of investing cash flow. Available-for-sale marketable securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of stockholders’ equity, net of taxes. Realized gains and losses on sales of investments, as determined on a specific identification basis, are included in the interim condensed consolidated statements of loss. The amount of credit losses recorded for the first six months of 2026 was immaterial. For more information about our marketable securities, see Note 4 to the interim condensed consolidated financial statements for the three and six months ended June 30, 2026.

Current wording

During the first nine months of 2026, we invested $124.8 million of cash in bank deposits and marketable securities with maturities up to 44 months from the balance sheet date. In addition, during the same period, bank deposits and marketable securities were redeemed for cash amounting to $112.4 million. All our marketable securities are classified as available-for-sale. The purchase and sale or redemption of available-for-sale marketable securities are considered part of investing cash flow. Available-for-sale marketable securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of stockholders’ equity, net of taxes. Realized gains and losses on sales of investments, as determined on a specific identification basis, are included in the interim condensed consolidated statements of loss. The amount of credit losses recorded for the first nine months of 2026 was immaterial. For more information about our marketable securities, see Note 4 to the interim condensed consolidated financial statements for the three and nine months ended September 30, 2026.

Previous wording

Net cash provided by operating activities for the first six months of 2026 was $0.9 million and consisted of net loss of $7.4 million, adjustments for non-cash items of $13.8 million, and changes in operating assets and liabilities of $5.5 million. Adjustments for non-cash items primarily consisted of $1.7 million of depreciation and amortization of intangible assets, $10.5 million of equity-based compensation expenses, and $1.9 million of unrealized foreign exchange loss. The decrease in operating assets and liabilities primarily consisted of an increase in prepaid expenses and other assets of $6.8 million (mainly as a result of payment of a yearly design tool subscription, an increase in French research tax benefits applicable to the CIR, advance tax payments, and a $2.4 million increase in unbilled receivables classified as “other long-term assets” in the interim condensed consolidated balance sheets), as well as a decrease in trade payables of $0.9 million, a decrease in deferred revenues of $0.8 million, and a decrease in accrued expenses and other payables of $0.8 million, partially offset by a decrease in trade receivables, net, of $2.4 million, a decrease in operating lease right-of-use assets of $0.4 million, an increase in accrued payroll and related benefits of $0.6 million, and an increase in operating lease liabilities of $0.5 million.

Current wording

Net cash provided by operating activities for the first nine months of 2026 was $2.5 million and consisted of net loss of $9.7 million, adjustments for non-cash items of $19.1 million, and changes in operating assets and liabilities of $6.9 million. Adjustments for non-cash items primarily consisted of $2.5 million of depreciation and amortization of intangible assets, $15.5 million of equity-based compensation expenses, and $1.3 million of unrealized foreign exchange loss. The decrease in operating assets and liabilities primarily consisted of an increase in prepaid expenses and other assets of $6.7 million (mainly as a result of payment of a yearly design tool subscription, an increase in French research tax benefits applicable to the CIR, advance tax payments, and a $2.6 million increase in unbilled receivables classified as “other long-term assets” in the interim condensed consolidated balance sheets), as well as a decrease in trade payables of $1.2 million and a decrease in accrued payroll and related benefits of $2.4 million (mainly as a result of yearly bonus payments), partially offset by a decrease in trade receivables, net, of $2.7 million and a decrease in operating lease right-of-use assets of $0.8 million.

Previous wording

Net cash used in operating activities for the first six months of 2025 was $6.2 million and consisted of net loss of $7.0 million, adjustments for non-cash items of $9.3 million, and changes in operating assets and liabilities of $8.5 million. Adjustments for non-cash items primarily consisted of $2.0 million of depreciation and amortization of intangible assets and $9.2 million of equity-based compensation expenses, partially offset by $1.7 million of unrealized foreign exchange gain. The decrease in operating assets and liabilities primarily consisted of an increase in prepaid expenses and other assets of $2.9 million (mainly as a result of payment of a yearly design tool subscription and an increase in French research tax benefits applicable to the CIR which is generally refunded every three years), a decrease in accrued expenses and other payables of $1.4 million, and a decrease in accrued payroll and related benefits of $4.6 million (mainly as a result of yearly bonus payments), partially offset by a decrease in trade receivables of $0.9 million.

Current wording

Net cash used in operating activities for the first nine months of 2025 was $12.1 million and consisted of net loss of $9.5 million, adjustments for non-cash items of $15.7 million, and changes in operating assets and liabilities of $18.3 million. Adjustments for non-cash items primarily consisted of $3.1 million of depreciation and amortization of intangible assets and $14.1 million of equity-based compensation expenses, partially offset by $1.1 million of unrealized foreign exchange gain. The decrease in operating assets and liabilities primarily consisted of an increase in trade receivables of $12.2 million, a decrease in accrued expenses and other payables of $0.9 million, a decrease in accrued payroll and related benefits of $4.2 million (mainly as a result of yearly bonus payments), and a decrease in deferred revenues of $0.5 million.

Previous wording

Net cash provided by investing activities for the first six months of 2026 was $1.3 million, compared to $20.8 million of net cash provided by investing activities for the comparable period of 2025. We had a cash outflow of $48.1 million and a cash inflow of $55.4 million with respect to investments in marketable securities during the first six months of 2026, as compared to a cash outflow of $30.8 million and a cash inflow of $49.8 million with respect to investments in marketable securities during the first six months of 2025. For the first six months of 2026, we had a net investment of $3.0 million in bank deposits, as compared to an investment of $0.7 million in bank deposits for the comparable period of 2025. We had a cash outflow of $2.9 million and $1.0 million during the first six months of 2026 and 2025, respectively, from purchase of property and equipment (the 2026 outflow partially reflects investments in leasehold improvements and equipment for our new offices in Ra’anana, Israel). For the first six months of 2025, we had a cash inflow of $3.5 million in connection with the release of escrowed funds associated with the sale of Intrinsix.

Current wording

Net cash used in investing activities for the first nine months of 2026 was $16.5 million, compared to $14.6 million of net cash provided by investing activities for the comparable period of 2025. We had a cash outflow of $119.0 million and a cash inflow of $109.5 million with respect to investments in marketable securities during the first nine months of 2026, as compared to a cash outflow of $49.8 million and a cash inflow of $63.1 million with respect to investments in marketable securities during the first nine months of 2025. For the first nine months of 2026, we had a net investment of $3.0 million in bank deposits, as compared to a net investment of $0.7 million in bank deposits for the comparable period of 2025. We had a cash outflow of $4.0 million and $1.4 million during the first nine months of 2026 and 2025, respectively, from purchase of property and equipment (the 2026 outflow partially reflects investments in leasehold improvements and equipment for our new offices in Ra’anana, Israel). For the first nine months of 2025, we had a cash inflow of $3.5 million in connection with the release of escrowed funds associated with the sale of Intrinsix.

Previous wording

Net cash provided by financing activities for the first six months of 2026 was $1.6 million, as compared to net cash used in financing activities in the amount of $4.5 million for the comparable period of 2025. During the first six months of 2026, we received $1.6 million from the exercise of stock-based awards, as compared to $1.6 million received for the comparable period of 2025. For the first six months of 2025, we had a cash outflow of $6.2 million from the purchase of treasury stock.

Current wording

Net cash provided by financing activities for the first nine months of 2026 was $3.0 million, as compared to net cash used in financing activities in the amount of $3.9 million for the comparable period of 2025. During the first nine months of 2026, we received $3.0 million from the exercise of stock-based awards, as compared to $3.2 million received for the comparable period of 2025. For the first nine months of 2025, we had a cash outflow of $7.2 million from the purchase of treasury stock.

Previous wording

In August 2008, we announced that our board of directors approved a share repurchase program for up to one million shares of common stock, which was extended collectively by an additional 7,800,000 shares in 2010, 2013, 2014, 2018, 2020, 2023 and 2024. No shares of common stock were repurchased during the first six months of 2026. During the first six months ended June 30, 2025, we repurchased 300,000 shares of common stock at an average purchase price of $20.54 per share for an aggregate purchase price of $6.2 million. As of June 30, 2026, we had 684,486 shares available for repurchase.

Current wording

In August 2008, we announced that our board of directors approved a share repurchase program for up to one million shares of common stock, which was extended collectively by an additional 7,800,000 shares in 2010, 2013, 2014, 2018, 2020, 2023 and 2024. No shares of common stock were repurchased during the first nine months of 2026. During the nine months ended September 30, 2025, we repurchased 340,295 shares of common stock at an average purchase price of $21.01 per share for an aggregate purchase price of $7.2 million. As of September 30, 2026, we had 684,486 shares available for repurchase.