Ceva, the chip-design and software licensing company reporting from Rockville, Maryland, said November 9 that third-quarter revenue rose 2% to $29.1 million as royalties recovered from the previous quarter and AI licensing reached a company record. The business still posted a loss under standard accounting rules, showing that stronger demand has not yet translated into an operating profit.
In its quarterly results, Ceva reported $16.3 million in licensing and related revenue, up 2% from a year earlier, and $12.7 million in royalties, up 3% year over year. Royalties rose 18% from the second quarter. The distinction matters: the larger growth figure measures a sequential recovery, not growth from the same period last year.
Ceva licenses technology that other companies incorporate into chips and devices, rather than reporting these royalties as sales of its own finished consumer products. Its customers shipped 623 million Ceva-powered devices during the quarter, matching the company’s previous quarterly record. That count is customer device volume, not Ceva’s own chip shipments or a measure of revenue per device.
AI accounted for more than 35% of licensing and related revenue, which Ceva called a record for its AI licensing business. That percentage does not describe all company revenue. Ceva signed 10 intellectual-property licensing agreements in the quarter, including six for AI technologies and three agreements with first-time customers.
The company said three of its highest-volume connectivity customers extended agreements for multiple years and added more Ceva technology. One added Wi-Fi 6 and Wi-Fi 7 to existing Bluetooth and digital-signal-processing deployments. These arrangements can expand the base for future royalty income, but the announcement did not quantify the revenue each agreement will produce or say when all resulting devices will reach customers.
Chief Executive Amir Panush and Chief Financial Officer Yaniv Arieli pointed to the rollout of internally developed modems at a major U.S. customer as a multiyear smartphone royalty opportunity. Ceva did not name that customer. Arieli also said a significant connectivity agreement expected in the third quarter was signed early in the fourth quarter, underscoring how the timing of individual deals can shift licensing revenue between reporting periods.
Under generally accepted accounting principles, Ceva’s third-quarter net loss was $2.3 million, or 8 cents a share, compared with a $2.5 million loss, or 10 cents a share, a year earlier. Its operating loss widened to $3.5 million from $2.1 million, while gross margin fell to 85% from 88%. A narrower net loss therefore should not be read as an improvement in every measure of operating performance.
On the company’s adjusted, non-GAAP basis, net income was $3.8 million, or 13 cents a diluted share, compared with $2.7 million, or 11 cents, a year earlier. Those figures exclude items including stock-based compensation, amortization and deal-related costs. They supplement rather than replace the reported GAAP loss. Management expects a stronger fourth quarter, but that remains an outlook rather than a completed result.
For investors, the question is whether the royalty recovery and new AI licenses can produce sustained growth while covering costs. The size and timing of future modem royalties, initial neural-processing-unit royalties and revenue from the newly signed agreements remain uncertain. Monday’s release establishes the quarter’s results and management’s expectations, not a guaranteed return from the next product cycle.
JBizNews Desk | Technology
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