CEVA INC Q4 FY2024 earnings call

• 2024 was a transformative year with double-digit revenue growth, increased profitability, and expanded market leadership. • Key strategic licensing deals in Q4 included a top-tier global MCU company for Wi-Fi platform, a leading U.S. OEM for 5G modem, and agreements for AI DSPs and NeuPro-Nano NPUs. • In 2024, CEVA shipped a record 2 billion units, with strong growth in Wi-Fi, Bluetooth, cellular IoT, and audio AI shipments. • Solidified leadership in connectivity, including 5G cellular and short-range connectivity with new deals for Bluetooth 6/7 and Wi-Fi 7 platforms. • Made progress in sensing with Spatial Audio software and automotive ADAS, and in inference with NeuPro-Nano NPU.

For the fourth quarter of 2024, revenue increased 21% to $29.2 million. Licensing and related revenue was $15.7 million (33% growth), making up 54% of total revenues. Royalty revenue was $13.5 million (9% growth), accounting for 46% of total revenues. For the full year 2024, total revenue was $106.9 million, with licensing and related revenue at $60 million (4% growth) and royalty revenue showing strong growth. Royalty shipments in 2024 reached 2 billion units, with end market contributions: consumer IoT 53% of annual royalties, mobile 32%, and industrial IoT 16%. Fourth quarter royalty shipments were 623 million units, with Wi-Fi shipments at 66 million units (up 110% YOY), Bluetooth at 343 million units (record high), and cellular IoT at 46 million units (up 37% YOY).

• 2025 total revenue expected to grow 7%-11% over 2024, with lower growth in first half and higher in second half. • Expenses to increase at a lower rate than top-line growth, range $99M-$103M. • First quarter 2025 revenue forecast $25.5M-$27.5M, gross margin slightly lower than Q4 due to seasonality and strategic customer design activities.

• Forward-looking statements involve risks and uncertainties, including impacts of market changes, delays in customer ramp-ups, and currency fluctuations affecting asset values. • Divestment of Intrinsix business transitioned to discontinued operation, and non-GAAP measures used which may not be comparable to others.

Q: Kevin Cassidy asked about MCUs and AI integration with license agreements.

A: Amir Panush stated there's opportunity for wireless and MPU integration into OEM MCUs as MCU players add AI capabilities.

Q: Kevin Cassidy inquired about U.S. mobile OEM 5G modem royalty revenues.

A: Yaniv Arieli said it's up to the customer to set timing and ramp-up, excited about the opportunity but no specific details on run rate.

Q: Suji Desilva asked about DeepSeek model and China's infer activity.

A: Amir Panush said new models optimize for smaller footprint, accelerating edge opportunity.

Q: Suji Desilva asked about Wi-Fi growth in 2025.

A: Amir Panush said transition from Wi-Fi 4/5 to 6 is accelerating, with 2025 seeing further growth.

Q: Gus Richard asked about cell phone modem vs Wi-Fi growth rates.

A: Yaniv Arieli said hard to predict exact rates, but 2025 has strong moving pieces with first half slower than second.

Q: Gus Richard asked about AI model bifurcation.

A: Amir Panush said CEVA's portfolio supports all tiers from low to high end edge AI requirements.

Q: Chris Reimer asked about customization in licensing deals and gross margin.

A: Yaniv Arieli said no new customization, leftovers from prior deals affecting Q1 gross margin due to seasonality.