Ceva Inc ((CEVA)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Ceva Inc’s recent earnings call painted a picture of optimism tempered with caution. The company reported better-than-expected revenue and earnings per share (EPS), driven by strategic wins in artificial intelligence (AI) and wireless connectivity, alongside significant growth in royalty revenue and Internet of Things (IoT) shipments. However, challenges remain with ongoing GAAP operating losses and a decline in GAAP net income, as well as a slight dip in Bluetooth shipments.
Exceeding Revenue and EPS Expectations
Ceva Inc. surpassed financial expectations for the third quarter, reporting revenue of $28.4 million and a non-GAAP EPS of $0.11. This performance highlights the company’s ability to deliver strong financial results despite a challenging economic environment.
Strategic AI Licensing Agreements
The company secured several strategic agreements in the AI segment, most notably with Microchip. This partnership involves Microchip adopting Ceva’s full NPO NPU portfolio for its future roadmap, underscoring the growing importance of AI in Ceva’s business strategy.
Wireless Connectivity Success
Ceva achieved significant wins in Wi-Fi 7 and Bluetooth high data throughput IP, which have cemented multiyear royalty ramps with long-term customers. This success in wireless connectivity is a testament to Ceva’s innovative capabilities and market leadership.
Growth in Royalty Revenue
Royalty revenue saw a 6% year-over-year increase and a 16% sequential rise, driven by consumer IoT, automotive ADAS solutions, and a recovery in mobile markets. This growth reflects Ceva’s strong market position and the increasing demand for its technologies.
Record Shipments in IoT and Wi-Fi
Ceva reported record shipments in both IoT and Wi-Fi sectors. Wi-Fi shipments reached an all-time high of 82 million units, marking a 73% year-over-year increase, while cellular IoT shipments hit a record 69 million units, up 41% from the previous year.
GAAP Operating Loss
Despite the positive revenue and EPS figures, Ceva reported a GAAP operating loss of $2.1 million for the third quarter. This is, however, an improvement from a $2.6 million loss in the same period of the previous year, indicating progress in managing operating expenses.
Decline in GAAP Net Income
The company experienced a GAAP net loss of $2.5 million for the quarter, with a net loss per share of $0.10. This compares to a net loss of $1.3 million in the same period last year, highlighting ongoing financial challenges.
Bluetooth Shipment Decline
Bluetooth shipments saw a slight decline of 1% from the previous year, totaling 303 million units in the quarter. This decline, while minor, indicates potential areas for improvement in Ceva’s product offerings.
Forward-Looking Guidance
Looking ahead, Ceva Inc. anticipates continued momentum, projecting fourth-quarter revenue between $29 million to $33 million. The company expects to maintain a high gross margin and foresees further growth in AI licensing and wireless connectivity, suggesting a positive outlook for the near future.
In summary, Ceva Inc’s earnings call reflects a strong performance with strategic advancements in AI and wireless connectivity. While financial challenges persist, the company’s forward-looking guidance suggests optimism for continued growth and market leadership.