CEVA, Inc. is the leader in innovative silicon and software IP solutions that enable smart edge products to connect, sense, and infer data more reliably and efficiently. The company's wireless communications, sensing, and edge AI technologies are at the heart of some of today's most advanced smart edge products, powering over 17 billion devices globally.
Financials
Q1 2024 Results
In the first quarter of 2024, CEVA delivered solid results that reflected strong royalty trends with 33% year-over-year growth, while licensing was lower than anticipated as a few deals were delayed to later quarters. The company reported total revenues of $22.1 million, with licensing and related revenue at $11.4 million and royalties at $10.7 million.
For the full year 2023, CEVA reported annual revenues of $97.4 million and a net loss of $11.9 million. The company generated annual operating cash flow of -$6.3 million and free cash flow of -$9.2 million.
In the first quarter of 2024, CEVA saw shipment volumes increase 25% year-over-year, with growth across all end markets it serves. Bluetooth shipments were $202 million, up 6% year-over-year, while cellular IoT shipments were 36 million units, up 24% year-over-year, and Wi-Fi shipments were 31 million units, up 50% year-over-year.
Business Overview
Robust Demand for CEVA's Connectivity and Edge AI IP
CEVA continues to experience strong interest across its IP portfolio, driven by key industry megatrends including 5G, generative AI, industrial automation, and vehicle electrification. In the first quarter, the company concluded 11 licensing deals across its target markets of consumer, automotive, industrial, and infrastructure.
Notably, CEVA signed strategic deals for its next-generation Bluetooth 6 and Wi-Fi 7 IPs, reinforcing its market-leading position. The company believes its Wi-Fi 7 IP commands higher license fees and royalty rates than previous generations, as it provides significant performance and time-to-market advantages to customers. ABI Research forecasts Wi-Fi 7 shipments will exceed 1.7 billion units annually by 2028, presenting a substantial growth opportunity for CEVA.
In Bluetooth, CEVA added a new Bluetooth 6 customer, a world leader in wireless audio, who is leveraging CEVA's IP to accelerate product development for the next generation of Bluetooth audio. The company's Bluetooth IP has powered billions of devices to date and is widely deployed across consumer, automotive, industrial, and IoT applications.
CEVA's Sensor Fusion and Edge AI Offerings Gain Traction
Beyond connectivity, CEVA is also experiencing strong demand for its sensor fusion and edge AI solutions. The company's SensPro2 sensor hub AI DSP family is designed to address the growing need for efficient, high-performance signal processing in sensor-based applications across various industries, including smartphones, automotive ADAS, drones, robotics, and more.
CEVA's newest generation of AI neural processing units (NPUs) present a highly efficient and high-performance architecture to enable generative and classic AI on a wide range of edge devices. Research from Yole Group indicates that 2.5 billion Edge AI devices will ship annually by 2026, highlighting the significant market opportunity.
The company's sensor fusion and spatial audio application software also allows it to address important technology used in personal computers, robotics, TWS earbuds, smart TVs, and other smart sensing products. CEVA's MotionEngine software has already shipped in over 300 million devices, demonstrating its market traction and excellence.
Strengthening Ecosystem and Partnerships
CEVA continues to invest in strengthening its ecosystem and partnerships to expand its reach and capabilities. In the first quarter, the company announced a new partnership with Arm targeting 5G advanced infrastructure and non-terrestrial networks (NTN), aimed at lowering the barriers to entry for developing products in these large and innovative markets.
CEVA also announced a new UWB wireless IP for consumer devices, building on its success in UWB solutions for the automotive market. ABI Research forecasts the global market of UWB-enabled device shipments will grow at a CAGR of 14% over the next 5 years, from 435 million units in 2023 to nearly 1.3 billion units by 2028.
Outlook
For the second quarter of 2024, CEVA expects sequential revenue growth of 6% to 16%, primarily driven by licensing. The company maintains its full-year 2024 guidance of 4% to 8% revenue growth, with the second half of the year expected to be stronger than the first half.
CEVA believes its ubiquitous technology and collaborative business model present a significant and secular growth prospect as the continuing digital transformation drives industries to become connected and intelligent. The company is focused on enabling the three main use cases associated with smart edge devices - connect, sense, and infer - across its target markets of consumer, automotive, industrial, and infrastructure.
With its broad portfolio of wireless connectivity, sensor fusion, and edge AI IP, CEVA is well-positioned to capitalize on the growing demand for smart edge solutions. The company's strategy to extract higher value for its technology, leveraging its unrivaled technical leadership and the ROI gains it can provide to customers, is expected to drive increased shareholder value through higher revenues, margins, and profits over time.
Conclusion
CEVA's diversified business model, with a balanced mix of licensing and royalty revenues, has enabled the company to deliver solid results in the first quarter of 2024. The strong demand for its connectivity and edge AI solutions, coupled with its strategic partnerships and ecosystem, positions CEVA for long-term growth as the smart edge market continues to evolve. With a robust pipeline of new customer engagements and a focus on extracting higher value from its technology, CEVA is well on its way to achieving its financial targets and driving increased shareholder value.