CEVA, Inc.

What they do

CEVA licenses its IP platforms, processors, and software to semiconductor and OEM customers, who integrate them into ASICs, ASSPs, and SoCs. The company holds leadership in all three foundational layers of Physical AI: connect (wireless connectivity), sense (sensing), and infer (AI processing). With over 400 R&D and sales professionals globally, CEVA's IP has shipped in over 20 billion devices since 2003.

Revenue drivers

• Licensing and related revenues — Includes licensing fees for IP and related software; Q2 2026 revenue was $18.2 million, up 21% year-over-year, the highest in three years.
• Royalty revenues — Ongoing royalties on shipments of customer products incorporating CEVA IP; Q2 2026 revenue was $10.8 million, up 1% year-over-year and 17% sequentially, supported by wireless connectivity and automotive AI programs.
• Technology differentiation across markets — Revenue spans consumer IoT, automotive, industrial/infrastructure, and mobile/PC markets, with each contributing to licensing and royalty streams.

Recent performance

Q2 2026 total revenue was $29.0 million, up 13% year-over-year. GAAP net loss narrowed to $2.9 million ($0.10 diluted EPS) from $3.7 million ($0.15) in the prior year. Non-GAAP operating income rose to $3.1 million (11% margin) from $0.8 million (3%). Trailing-twelve-month licensing and related revenues increased 13% to $69.6 million. Full-year 2025 revenue was $109.6 million with a net loss of $10.6 million.

Strategy

CEVA is capitalizing on the shift to Physical AI by expanding its AI customer base, exemplified by a new agreement with a leading global AI and computing platform company for its NeuPro-M NPU IP. The company is also broadening connectivity solutions, including Wi-Fi 6 and Bluetooth Low Energy IP, and extending its spatial audio technology into PC gaming. Management emphasizes deepening customer engagements through combined hardware IP, software, and system-level expertise to increase content per design and support longer-term relationships.

Risks

• Competition and pricing pressure — The market for IP solutions is highly competitive, which could lead to lower prices and reduced revenues.
• Customer dependence on end-product adoption — If customers' products incorporating CEVA IP fail to achieve market acceptance, CEVA may not generate adequate sales.
• Market cyclicality — Operating results are affected by the highly cyclical semiconductor industry and potential supply chain disruptions.
• Quarterly volatility and long sales cycles — Lengthy sales cycles and fluctuating quarterly results may not be indicative of future performance.

Outlook

Management highlights sustained momentum in licensing and improving royalty trends, with Q2 2026 non-GAAP operating margin expanding to 11% from 3% a year ago. They expect continued demand for AI and connectivity IP as customers accelerate complex designs. However, no specific forward guidance was provided in the earnings release.