CEVA's Q3 Loss Widens Amid Increased R&D Spend

TL;DR

**CEVA is burning cash on R&D for future AI and 5G growth, but short-term losses are widening – a risky bet for patient investors.**

AI Summary

CEVA INC reported a net loss of $2.509 million for the three months ended September 30, 2025, an increase from a net loss of $1.311 million in the same period of 2024. For the nine months ended September 30, 2025, the net loss widened to $9.540 million from $7.050 million in 2024. Total revenues for the three months increased to $28.384 million from $27.207 million year-over-year, driven by licensing and related revenue growing to $16.028 million and royalties increasing to $12.356 million. However, operating expenses rose significantly, with research and development, net, increasing to $19.532 million for the quarter, up from $17.990 million in the prior year. The company's cash and cash equivalents decreased to $17.270 million at September 30, 2025, from $18.498 million at December 31, 2024. Despite increased revenues, higher operating expenses, particularly in R&D, contributed to the expanded net loss. The company continues to invest in Physical AI, 5G, and IoT technologies, expecting these areas to drive long-term royalty growth.

Why It Matters

CEVA's widening net loss, despite revenue growth, signals aggressive investment in R&D for Physical AI and 5G, which could be a long-term play for investors but poses short-term profitability concerns. For employees, continued R&D spending suggests job stability and growth in cutting-edge fields. Customers benefit from CEVA's commitment to developing advanced IP in connectivity, sensing, and inference, potentially leading to more innovative products. In a competitive landscape dominated by major semiconductor IP providers, CEVA's focus on niche yet high-growth areas like Physical AI and IoT is crucial for market relevance and future royalty streams.

Risk Assessment

Risk Level: medium — The company reported a net loss of $9.540 million for the nine months ended September 30, 2025, a significant increase from $7.050 million in the prior year, indicating a deteriorating financial performance. Additionally, cash and cash equivalents decreased to $17.270 million from $18.498 million, and net cash used in operating activities was negative, suggesting ongoing cash burn.

Analyst Insight

Investors should closely monitor CEVA's R&D efficiency and the conversion of its Physical AI and 5G investments into tangible licensing agreements and royalty revenues in upcoming quarters. A wait-and-see approach is advisable until there's clearer evidence of these investments translating into improved profitability and positive cash flow from operations.

Financial Highlights

debt To Equity

N/A

revenue

$78.307M

operating Margin

N/A

total Assets

$306.014M

total Debt

N/A

net Income

-$9.540M

eps

-$0.40

gross Margin

N/A

cash Position

$17.270M

revenue Growth

+0.8%

Revenue Breakdown

Key Numbers

• $9.540M — Net Loss (9 months) (Increased from $7.050M in 2024, indicating widening losses.)
• $28.384M — Total Revenues (3 months) (Up from $27.207M in 2024, showing modest top-line growth.)
• $19.532M — R&D Expenses (3 months) (Increased from $17.990M in 2024, reflecting significant investment.)
• $17.270M — Cash & Cash Equivalents (Decreased from $18.498M, indicating cash burn.)
• 24,017,805 — Common Stock Shares Outstanding (As of November 5, 2025, reflecting current share count.)
• $46.092M — Licensing and Related Revenue (9 months) (Increased from $44.266M in 2024, a key growth driver.)
• $32.215M — Royalties (9 months) (Slightly down from $33.450M in 2024, a concern for recurring revenue.)
• $10.948M — Operating Loss (9 months) (Worsened from $7.619M in 2024, highlighting operational challenges.)
• $0.40 — Basic and Diluted Net Loss Per Share (9 months) (Increased from $0.30 in 2024, reflecting higher per-share losses.)
• $14.098M — Equity-based compensation (9 months) (Increased from $11.679M in 2024, impacting expenses.)

Key Players & Entities

• CEVA INC (company) — Registrant
• Nasdaq Global Market (company) — Exchange where CEVA Common Stock is registered
• $2.509 million (dollar_amount) — Net loss for the three months ended September 30, 2025
• $1.311 million (dollar_amount) — Net loss for the three months ended September 30, 2024
• $9.540 million (dollar_amount) — Net loss for the nine months ended September 30, 2025
• $7.050 million (dollar_amount) — Net loss for the nine months ended September 30, 2024
• $28.384 million (dollar_amount) — Total revenues for the three months ended September 30, 2025
• $19.532 million (dollar_amount) — Research and development expenses for the three months ended September 30, 2025
• $17.270 million (dollar_amount) — Cash and cash equivalents at September 30, 2025
• $18.498 million (dollar_amount) — Cash and cash equivalents at December 31, 2024

FAQ

Risk Factors

• Dependence on Key Customers [high — market]: The company's revenue is significantly dependent on a few large customers. A loss of, or reduction in business from, any of these key customers could have a material adverse effect on Ceva's business, financial condition, and results of operations. For example, a substantial portion of licensing and royalty revenue is derived from a limited number of semiconductor and OEM companies.
• Rapid Technological Change [high — operational]: The market for semiconductor IP is characterized by rapid technological change, evolving industry standards, and short product cycles. Ceva must continuously invest in research and development to keep its IP portfolio competitive. Failure to anticipate or respond to these changes could render its products obsolete and negatively impact its competitive position.
• Increasing Operating Expenses [medium — financial]: Operating expenses, particularly research and development (R&D), have increased significantly. R&D expenses for the three months ended September 30, 2025, were $19.532 million, up from $17.990 million in the prior year. This increased investment, while strategic for future growth, contributes to widening net losses.
• Cash Burn and Liquidity [medium — financial]: The company's cash and cash equivalents decreased to $17.270 million at September 30, 2025, from $18.498 million at December 31, 2024. Coupled with widening net losses, this indicates a consistent cash burn that could impact future operational flexibility if not managed effectively.
• Competition in AI and Connectivity [high — market]: Ceva operates in highly competitive markets for AI and connectivity IP. Competitors may offer similar or superior technologies, potentially at lower prices, which could pressure Ceva's market share and profitability. The company's success relies on its ability to maintain a technological edge in areas like Physical AI, 5G, and IoT.
• Equity-Based Compensation Costs [medium — financial]: Equity-based compensation expenses have risen to $14.098 million for the nine months ended September 30, 2025, from $11.679 million in the prior year. While intended to attract and retain talent, these costs represent a significant expense that impacts profitability.

Industry Context

CEVA operates in the highly competitive semiconductor IP market, focusing on enabling 'Physical AI' – the integration of connectivity, sensing, and inference for edge devices. Key growth areas include IoT, automotive, and mobile, driven by increasing demand for AI capabilities at the edge. The industry is characterized by rapid technological advancements and significant R&D investment requirements.

Regulatory Implications

As a technology company, CEVA is subject to standard corporate regulations regarding financial reporting and intellectual property protection. There are no specific, material regulatory risks highlighted in this filing beyond general compliance requirements. The company's focus on global markets may expose it to varying international trade and data privacy regulations.

What Investors Should Do

1. Monitor R&D spending effectiveness
2. Analyze royalty revenue trends
3. Evaluate cash burn rate
4. Assess competitive positioning

Key Dates

• 2025-09-30: End of Q3 2025 — Reported net loss of $2.509 million on revenues of $28.384 million. Cash and cash equivalents stood at $17.270 million.
• 2024-09-30: End of Q3 2024 — Reported net loss of $1.311 million on revenues of $27.207 million. Cash and cash equivalents were higher than in 2025.
• 2025-12-31: End of Fiscal Year 2024 — Company had $18.498 million in cash and cash equivalents, indicating a decrease by Q3 2025.
• 2025-11-05: Date of Report — Common stock shares outstanding reported as 24,017,805.

Glossary

Physical AI

An evolution of Edge AI where AI workloads are run locally on devices, unifying connectivity, sensing, and inference layers to enable intelligent interaction with the physical environment and the cloud. (Ceva's core strategic focus and future growth driver.)

Edge AI

Artificial intelligence workloads that are run locally on a device rather than in a centralized cloud server. (The foundational concept that Ceva's Physical AI builds upon.)

Silicon and Software IP

Intellectual Property (IP) that includes designs for semiconductor chips (silicon) and the software that runs on them. (Ceva's primary product offering, licensed to customers.)

NPU

Neural Processing Unit, a specialized microprocessor designed to accelerate machine learning tasks. (Part of Ceva's Inference portfolio (NeuPro family).)

DSPs

Digital Signal Processors, microprocessors optimized for processing digital signals, often used in areas like audio, video, and communications. (Ceva utilizes DSPs for sensing and AI workloads (SensPro family).)

Deferred Revenues

Revenue that has been received by a company but not yet earned, typically because the goods or services have not yet been delivered or rendered. (Represents future revenue obligations; a decrease from $3.599M to $3.052M suggests fewer upfront payments or faster revenue recognition.)

Accumulated other comprehensive gain (loss)

Includes unrealized gains and losses on certain investments and foreign currency translation adjustments that have not been included in net income. (A shift from a loss of $1.330M to a gain of $201M indicates positive changes in these specific accounting items.)

Year-Over-Year Comparison

Compared to the prior year, CEVA INC has seen modest revenue growth, with total revenues increasing to $28.384 million for the three months ended September 30, 2025, from $27.207 million in the same period of 2024. However, this top-line improvement has been overshadowed by significantly higher operating expenses, particularly in R&D, leading to a widened net loss of $2.509 million compared to $1.311 million year-over-year. Cash reserves have also declined, indicating increased cash burn. New risks related to the competitive landscape and the effectiveness of R&D investments are becoming more prominent.

Key Financial Figures

• $0.001 — cable date: 24,017,805 of common stock, $0.001 par value, as of November 5, 2025. 2
• $170 billion — and that these sectors will represent a $170 billion total addressable market for Physical A
• $58 billion — nd conversational AI devices will reach $58 billion and $110 billion, respectively, by 2032
• $110 b — l AI devices will reach $58 billion and $110 billion, respectively, by 2032, underscor
• $1 — 60 $ 265,770 (*) Amount less than $1. The accompanying notes are an integr

Filing Documents

• ceva20250930_10q.htm (10-Q) — 1799KB
• ex_884329.htm (EX-31.1) — 12KB
• ex_884330.htm (EX-31.2) — 12KB
• ex_884331.htm (EX-32) — 6KB
• 0001437749-25-034103.txt ( ) — 9151KB
• ceva-20250930.xsd (EX-101.SCH) — 78KB
• ceva-20250930_def.xml (EX-101.DEF) — 503KB
• ceva-20250930_lab.xml (EX-101.LAB) — 428KB
• ceva-20250930_pre.xml (EX-101.PRE) — 543KB
• ceva-20250930_cal.xml (EX-101.CAL) — 52KB
• ceva20250930_10q_htm.xml (XML) — 1879KB

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 36 Item 4.

Controls and Procedures

Controls and Procedures 37 PART II. OTHER INFORMATION 37 Item 1.

Legal Proceedings

Legal Proceedings 37 Item 1A.

Risk Factors

Risk Factors 38 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39 Item 3 Defaults Upon Senior Securities 39 Item 4 Mine Safety Disclosures 39 Item 5 Other Information 39 Item 6 Exhibits 40

SIGNATURES

SIGNATURES 40 3 Table of Contents

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA This Quarterly Report contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of Ceva to differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Forward-looking statements are generally written in the future tense and/or are preceded by words such as "will," "may," "should," "could," "expect," "suggest," "believe," "anticipate," "intend," "plan," or other similar words. Forward-looking statements include the following: Our belief that we are the leader in silicon and software IP enabling Physical AI, and our view that Physical AI represents the natural evolution of Edge AI, unifying connectivity, sensing and inference to enable intelligent interaction between devices, the physical environment and the cloud, and that we are uniquely positioned as the only company with leadership in innovative silicon and software IP solutions across all three layers; Our belief that our technologies power the connectivity, perception, and intelligence in today's most advanced smart edge products across large, diversified markets covering the consumer Internet-of-Things (IoT), automotive, industrial and infrastructure, and mobile and personal computing (PC) markets, and that these sectors will represent a $170 billion total addressable market for Physical AI and Edge AI by 2030 based on our market research; Our belief that our portfolio of technologies comprised of connectivity, sensing and inference positions us at the center of the most important megatrends shaping the semiconductor industry, including 5G expansion, generative and embedded AI, industrial automation and vehicle electrification, and our belief that demand across these areas continues to drive stron

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

Item 1. FINANCIAL STATEMENTS INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) U.S. dollars in thousands, except share and per share data September 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 17,270 $ 18,498 Short-term bank deposits 2,807 2,029 Marketable securities 131,981 143,117 Trade receivables (net of allowance for credit losses of $ 2,626 at both September 30, 2025 and December 31, 2024) 49,699 37,209 Prepaid expenses and other current assets 12,649 15,488 Total current assets 214,406 216,341 Long-term assets: Severance pay fund 8,021 7,161 Deferred tax assets, net 1,402 1,456 Property and equipment, net 6,008 6,877 Operating lease right-of-use assets 3,962 5,811 Goodwill 58,308 58,308 Intangible assets, net 1,252 1,877 Investments in marketable equity securities 51 312 Other long-term assets 12,604 10,805 Total long-term assets 91,608 92,607 Total assets $ 306,014 $ 308,948 LIABILITIES AND STOCKHOLDERS ' EQUITY Current liabilities: Trade payables $ 1,782 $ 1,125 Deferred revenues 3,052 3,599 Accrued expenses and other payables 5,239 6,243 Accrued payroll and related benefits 13,400 16,964 Operating lease liabilities 1,235 2,598 Total current liabilities 24,708 30,529 Long-term liabilities: Accrued severance pay 8,318 7,365 Operating lease liabilities 2,543 2,963 Other accrued liabilities 1,726 1,535 Total long-term liabilities 12,587 11,863 Stockholders' equity: Preferred Stock: $ 0.001 par value: 5,000,000 shares authorized; none issued and outstanding — — Common Stock: $ 0.001 par value: 45,000,000 shares authorized; 24,133,325 and 23,756,255 shares issued at September 30, 2025 and December 31, 2024, respectively. 24,016,853 and 23,626,865 shares outstanding at September 30, 2025 and December 31, 2024, respectively 24 24 Additional paid in-capital 2

BUSINESS

BUSINESS The financial information in this quarterly report includes the results of Ceva, Inc. and its subsidiaries (the "Company" or "Ceva"). Ceva is the leader in silicon and software IP enabling Physical AI – the artificial intelligence embedded in billions of devices that connect, sense and infer data in the real world. Ceva views Physical AI as the natural evolution of Edge AI. While Edge AI refers to running AI workloads locally on devices rather than in the cloud, Physical AI extends this concept further: it unifies connectivity, sensing and inference layers into a single fabric that allows devices not only to process data at the edge, but also to interact intelligently with their physical environment and the cloud. Ceva is uniquely positioned as the only company with leadership in innovative silicon and software IP solutions across all three layers. Ceva's technologies power the connectivity, perception and intelligence in today's most advanced smart edge products across consumer IoT, automotive, industrial and infrastructure, and mobile and PC markets. Ceva is a trusted partner to many of the leading semiconductor and original equipment manufacturer ("OEM") companies servicing not only Ceva's largest target growth markets but also a wide variety of other applications, including smart-home, surveillance, robotics and medical. Ceva's customers incorporate Ceva's IP into application-specific integrated circuits and application-specific standard products that they manufacture, market and sell. Ceva's portfolio includes: Connectivity: Bluetooth, WiFi, UltraWideband, cellular IoT, and 5GAdvanced IP platforms that form the backbone of secure, highperformance communication. Sensing: Sensor fusion processors, RealSpace spatial audio, MotionEngine software, and generalpurpose digital signal processors ("DSPs") that transform raw sensor data into actionable intelligence. Inference: The NeuPro family of NPUs – from NeuPro-Nano for embedded AI to NeuPro-M for g

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