CEVA (CEVA) 15 Feb 232022 Q4 Earnings call transcript

Good day, and welcome to the CEVA, Inc., Fourth Quarter and Full-Year 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note today's event is being recorded.

I would now like to turn the conference over to Richard Kingston, Vice President of Market Intelligence and Investor Relations. Please go ahead, sir.

Rocco. you, Thank and XXXX everyone, CEVA's quarter fourth Good conference welcome call. full-year earnings and morning, to

Joining are This Arieli, I role Chief earnings me as and call wish Financial Officer, today conference best Officer Amir him Panush, CEO. all of in CEVA CEVA. with is the first Executive Amir’s and Chief his Yaniv

uncertainties, as discussion that that those forward-looking Before assumptions I differ of as just to prove such some risks non-GAAP and incorrect, statements if I’d we like assumptions. from like through statements start, financial you remind contains or and well today’s that CEVA they could expressed materially results by forward-looking and materialize involve to or implied cause take forward-looking the measures. statements to you

and technologies; trends half position, statements opportunity dynamics, drivers, investor regarding expectations and the to royalty and include declines in in market market and an semiconductor benefits plans prospects; demand including belief the Wi-Fi, the respect our long-term licensing in guidance and statements of our year. our projected growth strategy, regarding global technology; and including industry royalties, XXXX to XG growth with our in our and our software; for performance, including guidance for future host financial of XXXX; and the event second demand for long-term Forward-looking

execute global to connected a customers, Securities duration IPs our results, including pandemic in the the consumer our with the devices pandemic, restrictions ability of could please to smarter, achieve difference products and new technologies the on more scope CEVA’s with and impact the Commission. and market global trends; intense license to Intrinsix market of economy XG of industry to extent markets; China; existing the speed the agreements; length and chip to and us; Exchange the of effect consolidation; and For and of associated IoT strong continued growth cause business. ability continue generally; ability new penetrating our information the drivers These demand, that the in be the our & and station the the integrate success on incorporating to maintaining ability extent the for successfully the and for markets base filings include: restrictions IoT our into of factors markets; expansion our our in of in position and market acceptance; our refer the competition

dates. to no information, statements update CEVA speak forward-looking assumes or their which of any respective obligation as

meaningful will provide measures, addition, which section A filings non-GAAP be non-GAAP quarterly core investors.ceva-dsp.com. investors results. of release of this at believe SEC discussing financial and issued a we In in our earnings we operating the we morning included is our and relations in reconciliation the measures certain more website analysis of results financial of comparison

that into With the will Amir Amir? who business. review over our ongoing insight I’d some our for like said, to performance and to provide turn quarter call business the

excited I everyone growth. start us talented how this part to lead to its call you am I today. you, joining and want Richard. of by stage and to Welcome Thank through be this CEVA, next thank of sharing organization for incredibly

the The been work company I six with of and with great now, I passionate the First, a Although highly factors: is weeks their for collaboration of drive. company, team the people. the been little corporate important only culture fostering success a have have three and over impressed about

every a greater the devices devices There and the Second, were that the is of portfolio of over smart billion in CEVA more and record date indicator no sensing XXXX CEVA-powered than world-class IPs. of second year. connectivity to reaching innovative, realize a course than sold of success wireless to X.X XX

The markets the serve, fastest semiconductor greater. market the opportunity and including AI believe some IoT, XG, Wireless Third, the I that CEVA’s industry. in Edge of never we been growing for has are technology

each lines I I with this a second that at with sharing is for product conducting an highest investing look to are year. the growth. of We to details it of the of place, review have place our our potential forward in investor you event, in resources half Once ensure of we planned to the the the in areas are which take

in despite performance three our resilience Wi-Fi our business and solid another and where weak four with XG, quarter. notable continued signed quarter, for agreements, strength strong the fourth agreements to backdrop, licensing] [XXXX the with We agreements. We signed in we quarter, reported in royalties. momentum Turning our with economic [ph] in the licensing X

broad software smartphones, smart automotive We connectivity initiative. and computing, AI deal a key year with the wearables, semiconductors in a remotes for audio, set-top-box for customer for for car the earbuds, global macro/consumer target our elevated strategic also in levels. sensor leader and digital their Other last IP weakness quarter revenue TWS was agreements for signed signed Ultra-wideband inventory reflecting down fusion compared to Royalty more. in-memory

$XXX.X the sequential year XX%, IP increase of demand our growth. we XX% For across delivered strong revenue driven an extensive total an year million, increase of portfolio. year-over-year, from XXXX Revenue the by $XX.X related record NRE, licensing million, full-year, and reached of licensing, of fourth for the throughout

the record XXXX on for belief a agreements, Licensing precursor opportunity is We will new opportunity and royalty I up business revenue further shortly elaborate for and ahead. the year XX I CEVA the that believe signed this continues to from revenue NRE royalty expand. reinforces last licensing what be CEVA’s XX year. royalty drivers for and licensing in our will

In impacted X% by a To the emerging large XX% the ramp handset revenues which customer were royalties, decline was a smartphone OEM. lesser with terms baseband by customer for of ours slowdown. handset year-over-year were largest was royalty stronghold our China-based year-over-year, competitor for markets, were extent, chips sales by our XG replaced U.S.-based in who million, full-year a down global the at in due a down $XX.X our a continued annual to primarily royalties, of down

base to revenues year, managed record achieve to demand weak half Bluetooth category, by devices. year-over-year, station royalty unit billion a IoT consumer Moving record our despite shipments year-over-year, while still second grew of RAN royalties PCs, technologies, X consumer X.X affected also XX% shipments. royalties XX% we record of the related global cameras, and the in from customers. billion up the lower station robot Base and a other from royalties grew, our generated cleaners, and many generated vacuum

growth the strength a potential is and positive Overall, diversified our royalty on believe business that that royalty I’m promising with base of by CEVA encouraged markets trajectory ensure customer our and and end prospects. long-term

would CEVA has three important highlight drivers, in Wi-Fi, where excellent licensing opportunity software. future royalties, areas of growth and like terms I XG, to an In and

and at connectivity battery-powered growing The many remain The first Wi-Fi is is for IoT. of to for in years use time. the with the with mind, technology in-demand X throughput most enabling to markets end up IoT cases. one Wi-Fi. working power standard coupled was Wi-Fi for even fastest standards brought devices higher unprecedented low power Wi-Fi robustness lower demand a at This and for increased has and architected

at a to majority units is scarcity, today the dominant to to IoT Wi-Fi possessing TAM and overall XX licensees to CEVA annually XXXX. few X a industry’s IP Wi-Fi grow CAGR Research XXXX, X.X billion with date. exceed ABI Wi-Fi X% is expected of with more for the expertise the of the provider, by companies according continue through is knowhow. than Accordingly,

are one develop through are chips. licensing we lowering of X barriers few for our this to the and the We with Wi-Fi model, expertise entry successfully companies

in up for still Wi-Fi lead X what of Wi-Fi the their have ahead sign started soon expected royalty become and already And cycle. XXXX are licensing, X Wi-Fi customers our is chipsets. will to opportunity market for customers, come X to Moreover, in Many with of Wi-Fi another upgrade XXXX us. we to

The second XG. is area

in While up in markets years, in the XG until has has main case deployed been now been the few last developed smartphones. use

throughput, power is this scalable expertise is low use There lack and end latency markets low of the applicable the and and built much in-house, set cases. technology cellular, at a decades. XG a have CEVA in we means of over broader in of However,

We for The and Access, the DSPs Wireless Fixed licensed growth companies platforms cellular opportunities base to RAN, as IoT. stations, XG Mobility and Open and most have RedCap in highlights recent Ericsson coming already XG-VXX Access many Active the with two macro Wireless IoT Fixed Report our tremendous XG cellular years. XG for Antennas, areas

capitalize CEVA has product of helping capable even brought IP about company a XG. the the In XG rollout next and believe addition, the In the out, years, few to XG network by our mature be much more on world’s wishes of broadly, to coverage the yet market built opportunity I see has soon develop markets. any beginning being to who XG license opportunity in will to XG-advanced we

The third is software.

of number Over order our has the the increasingly software CEVA solutions. in investing differentiate chain past further value to up in move the years, IP, and been of to development

Our includes activity including software and voice highly-sought recognition, detection. noise IMU-based technologies cancelation, today portfolio audio, spatial AI-based after some environmental

is rather presence we software and value CEVA and strong the where for products, true already ODMs This robot business. market strong higher markets our to will can invest royalties fusion with software the than vacuum in to software incremental drive to PC, chipmakers. generate strategy IPs end continue with cleaner the software look We license in to ASPs. to TV, Our their smart directly for strategic OEMs for these of is have and semiconductor opportunities unlock and and growth our sensor the

and launched boAt, at headphones. X Bluetooth in example featuring last IP India premium from worldwide, CES and SoC a work X where by ranked new Number are our Audio this wearables spatial Bluetooth India’s powered excellent An month, audio our of for audio headphones X wearables for wireless is DSP. Number These wearables brand, strategy leading

will licensed Head spatial in that boAt, market annually Systems surpass to also Research will that used solution. part TWS is we the (TSR) segments, mid/high audio which which software addition, mainstream Tracking spatial In MotionEngine by Techno become million pairs of directly audio end according as XXXX. We the XXX our to believe

OEMs with evaluations sound-related our currently audio and to spatial with this in packages market other capabilities headset are running We mind. the of demonstrate many software

great a summary, tough the in in like driven thanks deals and We contribution worldwide our number year would shareholders of XXXX. their team the good for licensing devices. signed against for thank a record in our I revenues, to to and of support. suppliers also and a shipped backdrop. number to demand in CEVA delivered my and our strong year their to macroeconomic products. for a record reached My partners, record by Gideon CEVA predecessor entire confidence So, is We

many As in more to place into ahead drive people, I the in, XXXX, I have the even be have I and the forward we full CEVA believe, for look processes confidence the opportunities that see and ahead company. technology, successful. and

continue will develop that our for. we Our comprehensive outstanding and to portfolio in IP upon is us high demand customers rely products

the in strategy myself our and solidify I to taking what team the Once look this and you year. define forward future will later through be,

the for semiconductor to projected by XXXX. expectations Semiconductor our X% global the XXXX, for As Industry to according industry decline Association, in is

Also, with many weeks XXXX, the on public companies view muted the a half the last semiconductor to in year. first have of reported two earnings that taken particularly regards

also that things trends, my to for CEVA’s want continue the potential long-term all growth long-term semiconductors. drive these of continued belief reinforce We demand see but as I to electric will strong, digitalization remains

XXXX. to many wish year. roadshows sincerely non-deal you I of families your joyful and a and the Finally, I meeting conferences look to you forward at throughout successful want and

call to the will I over turn Now, Yaniv the for financials.

board. on Amir. Welcome you, Thank

quarter I’ll to the $XX.X to the XXXX. have the glad by slightly of quarter of fourth million, you down as for fourth reviewing compared was good Revenue luck. last X% quarter for $XX.X We’re million to for and the here operations same year. start the results

revenue million, as is fourth the million up follows: total of reflecting XXXX. breakdown revenue reflecting third XX% for Royalty $XX.X quarter last revenues, of X% Licensing, from million $XX.X and was quarter for of a revenue The total same revenues, million, down $XX.X NRE XX.X related XX% from the was year.

acquired to an non-GAAP quarterly XX% GAAP guidance GAAP on expenses Quarterly on million. a Non-GAAP and gross basis, was better and expected gross $X.X on equity-based XX% intangibles Gross respectively. compensation margin a them and than basis margin XX% approximately basis. and million, in both $X.X of of of compared on non-GAAP came excluded amortization margins XX%

closing of of our the total allocation operating $X.X due expenses of GAAP cost impairment $XX.X with of above associated Intrinsix’s and million cost quarter million expenses associated at Our retirement to of office, and NRE high-end the the for was $X.X revenue, from lastly compensation-related an million guidance executives, an higher into R&D costs with expenses. of fourth lower

fourth quarter, Difficulty] the operating for excluding expenses Our non-GAAP [Technical

proceed sir. please reconnected line. [Operator Yaniv’s Instructions] We’ve Yaniv,

Thanks. know we guys. pick you Do up where were let Anyways, me here. Sorry disconnected?

at to XX% and than better non-GAAP margins, XX% at in compared expected. XX% On XX%, guidance, our and came the margins GAAP

cost total million. at GAAP three the higher due for One in our Our came came This retirement million in an of non-GAAP higher of $X.X executives, of fourth from expenses associated associated office, cost to NRE is as compensation-related million Intrinsix’s is, allocation revenue expenses. of and and $X.X the expenses million lower as well operating an impairment of expenses $XX quarter the aspects. with at closing into $XX.X line, with R&D costs the

tax million on GAAP the of XXX rule of non-GAAP pre-tax $X.X expense of reform adjustment at result was came the mainly for with benefit tax Our the the XX% representing non-GAAP quarter of income. the and implementation tax of associated $X.X million, a U.S.

$X.XX the $X.X and quarter million EPS income net for quarter the for of and fourth diluted XXXX. [XX%] $X.X was for the quarter to compared EPS income net [ph] GAAP was fourth diluted U.S. XXXX, of million

With respect the XX%, CEVA’s were Shipped other XX% XXX devices, million during data. million baseband units quarter from XXX XX fourth the quarter related licensees handset reported, to by shipments. were Of reported down chips. units XXXX or million the fourth

up and shipments Our were station XXX year-over-year. X% XX% product sequentially, but down million units, base IoT

the shipments XX Wi-Fi total million up Bluetooth [ph] sequentially, quarter, XX% up XX% units. units. were shipments a of X% also units for to million] were were and to sequentially, sequentially, cellular XX million IoT [$XXX up

half year-over-year year, to an high. X.X% socket devices. were increased the modem for OEM The by handsets the XX% customer the attributable shipments X.X billion for year. loss our million was record down second to of key weak a As who overall XG of is by Qualcomm shipments smartphone demand at and XXX a year-over-year devices, in to all-time replaced chipsets, globally decline Annual total the

revenue $XX.X million reached continued IoT royalty of XXXX. new grow record XXXX million, and a in from base up Our station and million product and level XX.X in to $XX

IoT product were units, up year-over-year In X% of and to base billion terms almost X.X station unit shipments devices.

increased the turmoil, XXXX non-GAAP our million XXXX. Despite events XX% and macro reported to from million $XX.X $XX.X economic income for net from

were cash at for end items, bank As sheet the the our million. year deposits approximately balances, securities and of equivalent marketable the balance $XXX cash,

than quarter, shares continue In XXXX, fourth million the for we for during generated amortization at to from around XXX from be have we was was have we engineers. XXX,XXX activities. cash days. approximately the and we operating norm shares $X XXX,XXX $X.X repurchased of fourth were DSOs approximately $X.X available And On-going end of XX quarter and of the and repurchase. depreciation purchase still people for lower $X.X fourth million, million whom assets fixed million. XXX At onboard, the quarter, the

outlook. our to turning Now,

the Amir Also, earlier, to is As sector inventories. discussed markets soft elevated and and continue consumer demand expense re-alignments. smartphone undergoing electronics suffer technology the adjustments project from and

up and be while anticipate pace of picking the softness second the the revenues this year. sequentially, of XXXX royalty our licensing and expect will We to continue the half half that lower first into both in

from reduced this outlook we annual time. industry, Due visibility will the XXXX to refrain for across guidance revenue at giving and uncertain this economic

improves. more when will our and We topic this best revisit provide do information to visibility

XXXX, In primarily to will general, licensing, category traction continue in related good grow continues our business customers our of across the IoT generate diversified & and to strength believe portfolio. see base revenues In in NRE station royalties, our this we the customer

decline in in of Handset the half further anticipated base year. station and partially baseband the royalties. are royalties to offsetting our growth IoT back XXXX,

those monitor expense measures cost On measures side, we we may control the extend implemented the and market. as

to this this growth Overall further year. plan $X.X also planned our for will to our cost and $X.X million. we XXXX GAAP million, non-GAAP increase on to investor by expense and $X.X drivers our goods of later event invest expenses in to and by million topic, we for expect upcoming update to continue However, in $X.X million increase COGS

is OpEx expected OpEx $X expected by GAAP $X for million. to by only is for million XXXX XXXX and to non-GAAP million $X decrease to to $X increase million

subsidiary. to is tax just be of for taxes over to Our non-GAAP our XXXX utilization in XX%, Israeli rate withholding expected limitation due

we And of is in-line macro expectations XXXX, the trends. quarter the the with expected based weakness on first for of the the seeing for the first first across soft continue Specifically consumer year. our are quarter, industry, in what half industry are

our we monitor licensing market so closely, to continue We can our pipeline to business royalty the changing and respond dynamics.

aggregate Gross acquired similar on for X.X XX% margin and to X.X approximately non-GAAP of million is a an basis, GAAP basis, XX% of to be of the excluding quarter on intangibles. amortization compensation equity-based and expected fourth million last year, of a expenses

quarter lower $X.X OpEx to compensation, acquired of million. quarter in amount XXXX, same be $XX.X than amortization to million Including of expenses, fourth the expected equity-based $XX.X million the for million to and expected holdback the the first related the is of an $X.X for and Intrinsix range of intangibles.

is year the than count the OpEx $XX.X And the expected for on of non-GAAP expected Our basis. XX% for $X.X be slightly million interest share to Taxes is to higher at Net million. shares. range income of to quarter, be $XX.X a quarter approximately fourth first million just quarter XX.X first non-GAAP million. last

session. the Rocco, now open could you Q&A

Matt go first Thank comes you, with Cowen. Today's Please ahead. sir. [Operator from Instructions] question Ramsay

Thank and to much. afternoon morning you good very everybody. Good

Amir, congratulations and all, welcome. of First

question traditional picture a later the thoughts. Just license all of and you impressions forward. I on look there? the with be, any your to in remarks strategy few you've mentioned year, you over impressions of and broader I then I update of the strategic sort big have guess forward follow-up for in working Thanks. you a of just you have picture one us intrinsic prepared CEO, a model. giving And taken would sort of a thoughts versus royalty of you'd share think might the as I going but that the wonder is, first as of I sort if focus, first areas business big

sure, Yes, Matt.

the you my great that have with since And within talking nice to the for the company diversified company, as thanks it's for and first, for observation I the generally overall. we very see joined really First, say speaking would last technology X portfolio wishes. and I weeks the

really in our market the the key that semiconductors. think trend technologies I are addressing

all really in that, Wi-Fi, of specifically, company. software the for is investing in mentioned those XG, potential at very looking Wi-Fi I'm are of at with the course, the you things how activities if at remarks long-term And adding more are good R&D look And terms really as the look order growth our you if a that, then our if on, foster you company. growth look I contributing for potential long-term for the really we to capabilities in

Got little think trends auto industry industry time it. in times industry it's think in questions are the out I industrial wise wanted that clicking double model on ask the your and and script for trends follow different broadly, for you of the right any realizing bit revenue now half consumer spending the year than just I you mean, market the there, of worth that to what of will are. we and Yaniv, facing that. but sort you it's markets. first and on the Thank of I giving of company volatile view trends a guys, maybe semi's the a mentioned that the few follow and

China. there's that – certain in some potential then reopening have in corrections the happened inventory some disruption for There's places and certainly

bluntly. ask to right don't the now. that trends normal guess I what question know I So, are

of helpful. us year first So, thinking the more kind how of give thoughts guys. little of would if on you're really that half Thanks be about you the could a

that helped that Excellent address Yes, no as sure. you well. me partially question doubt and

QX. for up back Let's

were sequentially you trends we look up royalty at units. the some in in QX, Bluetooth If of

cellular Wi-Fi, We’re up up IoT. up market We XG has in of sequentially own handsets most were in dynamics. in and our which than then core sequentially were other their

have that for because automotive we earnings, companies addressed any the that and the markets royalties the for for and don't the meaning half at all. by public now was of and at of at and some you markets look we industrial If least those year exclude commentary first are the

but automotive, one no on, in royalty wins In Industrial, this is but market of a again, yet. drivers. we're design working life royalties have not our We it's that existing

that It and handset be is we the beginning for It consumer. year. vacuum from are of the markets like. first cleaners have are down at the part and of be the are be headwinds – something the In market the Most – the it our handset. that or the soft. least could of with These course, are could some themselves of consumer devices is It of and laptops center now the fusion. could coming down. of Handset still year

Across the industry.

era. also that in hear focused could which in ones XG, the You big on low are and mid-term much the play, but in from players, multiple we more this

– – that we in consumer into of did are probably types so type type taking again really more well revenues, in single the high a of softness because and market many [ph] consumer high segments all which in [prolong] have at of sequential very cameras from will more level we probably lower QX we device. So, in QX, see account, digits we're these looking different as

royalties. with prudent/industry, Approach The robust, So, I the with and seeing companies that focused. a inflation the licensing are – with R&D on, in the the a downsizing for downsizing macro, the we interest, efforts. but but still lot we're is taking all now more refocusing going more things think concerns of

teams, don't quicker there in also that of of outsource, to services come slowdown, market. beginning bootstrap if encountered want mode, out being IP or the cut aware R&D an So the IPs bit out or help of And you that a from whether there in year. be know or if I get help that's that company as could we and companies get of, is combination soon we QX intrinsic from align CEVA out or it's or if the to and to but option even something to you recession groups the as an cautious and

more of of trends want the bit to is in in way where like and optimistic quite half the the domain a year. looks And most guidance coming you industry second be our the the So, think a that's from. I careful everybody are these in

of color Again, it. you've really Lots Thanks. there. appreciate

Just from quick important on been it. that’s queue. infrastructure the [indiscernible] Visibility the to growth then while, for I'll XG jump some basis market also for a the me one one space? is any company to on and back that know really but on last a that and in acceleration I the volatility quarterly has a

your So, very a but those back of it. I space you Appreciate reacceleration. make comments trends about driven, guys. any half different Thanks the assume than that's wireless mostly the infrastructure are much consumer in that?

trends The highest no trends seasonality on operators Sure. the years real had, when implement the year, station. one XXXX are It's spending different the release XG than in The different. nice are a experience, higher networks. of and XG. we our had new base from was to We and decisions of there's XXXX

Indian is discussing the at that that Nokia look wins some could and the talking of sharing exciting they're sockets opportunities and and commentary back about an be year. it you design If market other gaining to some maybe

when see should wins. the be aside royalties design for in in Unfortunately, because trends of the our kick timing we exactly know and those past, don't positive but and the from experience XXXX that's those we'll

to two And I said, believe Yes. lead our I would what customers. add Yaniv

there. share market some gain to one-hand, year, as no them seasonality expect to on overall market this but Yaniv do this and there's well said, We

hard that we're rollout generally at exactly the it's like, to will optimistically. hand, looking other speaking, look how but predict the On

today Please our And ahead. question from Cassidy go next Securities. comes Thank of Kevin you. Rosenblatt

licenses? welcome slowdown on for or a question, thanks would question be And Yes, Amir. my Matt's Was just include that to single follow-up on does it. down taking just also? you're licensing high to saying that there digits clarify royalties that Is and

investments We're I due see taking yet consumer some of been the us. the is conservative slowdown R&D respect, weakness know more seeing from outcome. loaning the around and royalties don't that a their it in can we're right approach of that now that And out or have handset off readjusting everything we companies to the

how know new of be don't back in We quick they'll business design a start.

of that seen haven't We many too examples yet.

news the and the We of projects. are reading layoffs of bigger and readjustments the companies different the

with right now think single-digit all I at altogether we are looking and So, is numbers still licensing we're the that looking that's the of how strong. at

it yet in QX happen in didn't We QX. that saw and

those Although trends bit already started a have while little and may played a back.

that don't some So, bump but see around them, into the we we we hope this. macro that's of

And more on maybe that. little licensing. say colors been add is the it I fundamentally as on business strong bit would that as the a I'll has

the really, see don't the and of we terms realignment I – that drives outcome that we our changes fundamental licensing It's and that to drive basically through. abilities different see our anything across market. So, of investments called just so just in with kind in many are project don't semiconductors customers don't going the of

There terms are projects that hand. can change in of timing one on

now opportunities. work internally there on so potentially have done to with coming those out, could may are called been hand, projects the other that On us

that we bag, there as way that's looking called mixed that a And move through off just So, we things are so go is that why the it can quarter. at

What's going Are it those just just base Okay. you like you end a interesting market you're customer Thanks for that. licenses new a how into address I sales go there? software force products. do guess strategy the is new new the or customers? of the and what's for looks And hiring maybe that to

far market diversify of us so those in and offering as see type and so-called say previous base and offer we but models, the go I we two royalty drive acquisition opportunity it have as longer product of to are go those products and got in more capable a we our again as putting also this things of activities as drive for us. business stronger how to for a drive dedicated growth meaningful [indiscernible] we called to addition, that to people done, a would team first we

Okay, great. Thank you.

comes Thank Desilva Suji our question you. with from Roth go Please today ahead. next Capital. And

Yaniv, luck of Richard Hi, and Amir. Best new role. in the

and of So, volatility, on if the In rate, question look a last perhaps. back, follow-up think aside you on question the recent, if licensing and maybe there sort past, from to the longer-term run we licensing the licensing rate what adding revenue your of similar what licensing term? growing, of multiple kind kind longer a have be to – rate software run that run would about effect with or kind software, of

you want at Yes. move least this look It's and has say. year this precursor a there At the for in. off is obviously planning. along, we in at are a That's licensing that different from when markets and at royalties mark too internal business, consensus great question beginning the we're one annual not which relevant we that think we didn't it nice guidance normally CEVA, for I but that give like a would do. years there we thing look many demonstrated don't to far the you're that technology have We that changed. is and our out I the as of for year the we play

of million don't the year, year we and We outs one macro don't that pick XXXX, that going be $X of wasn't stronger, less, environment. investing is less a which in OpEx licensing throughout We're wasn't million to have a bit is exactly remember is and it QX, of this fine R&D, only some but easier, that different which $X non-GAAP refocusing, to maybe perspective, seen guided – licensing was including companies from tuning. I maybe know still a increasing We've the will when increase. royalties strong. ins for them up, a

different geographies the expense that but line, trends said, relevant still different licensing are remarks about talked also we the with the prepared and in looking that all space. to different on the really conservatively and the that Amir we're very, all segments the the very markets in different So, said

Was you're referring in revenue to you're referring consensus? what your calendar remark? Yaniv, that XXXX to

overall Yes, for us. Yes.

your my Actually, long-term Bluetooth lower I'm whether others keep around dominate is that, that ASP the uplift wondering station and If question the do royalty Great. to lower know calendar I in another follow-up of if math ASP to longer-term or be base question. I Bluetooth to units, sounds and the that there is is ASP. it IoT, it $X.XX XXXX opportunity bend for units – would about ASP if seems and are $X.XX. higher. kind continue

we calls. – try to avoid price is with what on come to So, list our earnings coming up

the to But chips think therefore and not are magnitude us type one, the probably expensive markets. to is of the Wi-Fi end anywhere the between something that needs be two price more the Xx ASP Xx industry in sometimes than typical. chip then it's say I maybe we in for would depends on the that Bluetooth complexity, from three and

big So a potential. that's

same very Wi-Fi think run a we've devices get be in with years, should two, rate I three Bluetooth about talked billion in last hopefully higher there period of year. a reaching time, the ASPs. we should short or

of opportunity the are the and and solutions combo So, both us Wi-Fi. in IoT space lot today Bluetooth in out for a coming solution,

well. part in offering be very that with necessarily has of growth a we it, of IoT. interesting to that's magnitude the not as changed, but not base That the as to – well very those So want applicable could the put numbers today a our station [cent] don't are [ph]

that. will tend add to to Yes. I

Bluetooth its hardware also to optimistic from XG AI few moving on through we in there moving own as then we so-called see there look, our DSP the that ASP coming can again and increase really as to device and additional of accelerators than to this forward how technologies more years. you the long-term to and so per royalty go from Wi-Fi from with on. an And comprehensive see perspective so-called terms and base I'm very, our you software, about and the of core If move then overall, we very

everybody. it. Appreciate Okay. Thanks

question our Please you. Barclays. Reimer comes go Chris Thank next ahead. today And with from

for you taking my questions. Thank Hi.

decline effecting fact guidance stronger. to that you the that think second question give. previously My there that makes mentioned in your of the the and and conservatively you are something the you the taking is, will looking customers is consumer used that year be at away You half demand to

last – that you or it's you've is very potentially concrete Just if there's something the right second that your that? second get that the changed? currently from you will something customer I'm this quarter to anything Is but that in behavior seen from mentioned telling this customers wondering half Or weak that stronger? back just just I maybe half to to quarter think now, us are there be in

it's industry from coming in It's sure. many many, CEVA, really not sure, Yes, the different coming customers. from

or even customers Skyworks, – managed Silicon have or If at like you Logic a CEVA’s Semi [indiscernible], players together. lot whether of Cirrus Labs, some look peers or our ON that it's of NXP we

without higher It been and out in clear second clear in half then first than half the that X year. also for about the we're cycle where first gain the much half to consumer months whether the everybody it's good believe second did second And a half that maybe months not talking X off give coming at of from. royalties that we're softness, the position to has the last guidance and the royalty, them a whether macroeconomics that's will necessarily, not just inventory build-outs, will it's

Nothing so the we saw are the numbers realize specific seeing for again, QX. customers our told just that that you us now, numbers

that from coming in said, is trends where the point, but strong are We markets the with a are. this

down we're levels would looking for expect and China I semiconductor those well the would to terms volume expectation that all inventory in as And move Yes. other that help of go year. forward tell as and the And that us as shipments, industry in through regions. we we and

of several open consumer things demand the stronger and challenging. after that in So-called come quarters will up terms yes. more in And that's that, were will

this that's Got are it. M&A radar? How your And more. on something one you looking just at in Is it environment?

Yes.

focus work me, area our on look So for we definitely how and drive board to as definitely a strategy. came I speaking, there’s generally just

of as forward, looking] things the that [ph] part is M&A Moving other important at. to [I'm

the that go for into drive strategic that's and something our are in to our looking we of And activities. at ability our as our definitely We year. strongly strategy I'm cash terms positioned

very me. it Great, much. great. Thank you for That's

you, Thank Chris.

And ahead. Yang Thank from go you. Oppenheimer. question next Please comes at our Martin today

you Thank regarding XXXX And any licensing activities China's concentration your the into effects licensing. you maybe My reopening Hi. last whether activities? for licensing geographic there Can positive on comment on year? taking my tailwind question question. is from for any see is first you

Good question.

Let's look worldwide in us, whether of that royalties from for of at licensing XX% Bluetooth, whether of XG, my that China whether a some royalty order overall it's of both coming basis, it's royalties it's is big the and licensing means China. on but because Wi-Fi to get top about in don't our are payers China percentage head revenues, handsets, recall

deals been activity out it robust the well know there means years, world, around from COVID, many, but and work for from we minus or home how licensing and China saw That shutdown, we that quarters, all many the remote. months many plus works has to that including even also closed in those companies

has changed the I'm that not has that. case. So, been And anything sure around

a year. U.S. sales licensing. have on one more the European to the something market is We the new focus for so opportunities in team give bigger this we'll probably that is And Europe, focus of in us This

new I and It models. and added we think ago last with mostly sensor also three doing the have team the in acquired two opportunities added and where and fusion enhanced new been with XXX that that is people the we've we we so intrinsic, business for something the years. was U.S. Hillcrest markets years started technology R&D today about

but trying no any help are other a not changes has happening Amir? guys, nothing more lot right steps but call their than see Amir with overall concern we think a the things everywhere. the environment, try specific do make I companies So, to macro don't it's them just it, bit and doubt that that. are next big real layoffs China. maybe there's We'll that's sharing you We little And efficient and now, it's make just are to insight. of

Yes. for licensing would [indiscernible] But I again. say

and and would the Pacific as year, we Asia very this I technology half. nice the more investments economy I see go we at of into as multiple, the some comment U.S. the that opportunity of across specifically say, into coming that again, on China, will licensing, type again, first as look enhance belief For that will half I second the share open up Europe, on more

So, good licensing overall globe. quite place and the overall, again believe it's is we diversified fundamentally, that in a across

sound, question in changing licensing of expect larger and share you Bluetooth at let's the agreements AI, deals Got I Wi-Fi say, more have of the signed, you’ve among some vision, within When particularly of on your ultra-wideband it. connectivity, shifts components licensing. the look do next, versus it within and to deals two one share the the years? mix three years those the

and lines could processor, you days while. indeed, on these vision find a start offering. that for been in different one, is of generic lot and processors could have with AI, is in edge a self-contained not which a it of Indeed, all you AI could something the AI station find easier we've unique part it's AI. really device product of a about but talking with a CEVA camera I'll just base that that's based as and technology lots it XG we're the and or our

of aspect So, that's one it.

audio The World – the in When demo Will talk solution. us visit nice whoever probably CES. we – market. at the high-end about has combination. will Congress join Mobile it other It that the out we some is to showed coming of a was us are and both same there. the solutions It and have

[ph]. audio, [head the have Bluetooth connectivity, sensors] spatial, have spatial the have could you could you could You

So, we combining. technologies different have

once down is is further part the that we the add of a Some ASPs trend. more into and CEVA some them semiconductor And while in The customers offerings royalties of both of services you them part if based, co-creation, our call space. add licensing higher on with what that's the or is we our software help the the processor and could every NRE, based. of today could on

it. Thank Got much. very you

Thank you.

Our of next question O’Connor Paribas. Please go David from today BNP comes ahead.

of the, welcome you to I That's my and of potential of review the first question. kind remarks, areas Great. mean, [previous] and about [ph]? this is portfolio Amir. in the portfolio just outcome questions you may Thanks a think start, for review? my non-core talked Maybe what's there your business more opening taking that's

Thank there second for half. Ultra-Wideband pipeline the Is are what like? Second what new can you. that in licensing question, deal designs question Ultra-Wideband any is in? in give second big help geography on market looks And the the that And the half? that us on the a that in was uptick uptick you any indication final strategic there, can to coming

Yes.

potential to the with would be that terms portfolio with see model and with business our investments. where the potential potential into technology. I'm at basically competitive we of the it to the And is growth looking of efficient what most the of can and most terms in we sure make the the So, areas team market in basically I our with most working like make

portfolio us, are we that for analysis So, what putting like would mostly that's the I sure potential that, was… with I'm of we areas the as investments with differentiate and where there And growth in can make the that team. has to again, course, as doing well

the… UWB

Yes.

many a that for really terms In actually off. been to technology very exciting UWB, many, able take this haven't years is of the

and penetration the into and see complement used things power the into some very with car we that will and keys and Wi-Fi to to secured that domains, [indiscernible] related smartphone now Bluetooth. multiple inter-positioning, automotive OEMs, Now all of propagating security also also across IoT low type nicely cases we're very the of to connectivity

technology partners and go to to So, of market quickly with very are very to we strong type our portfolio of technology. IP this enable

of our that very to takes partners big potential technology be support the now of see how that really on bullish I the supporting very to the and that I will that technology, but seen, off. really a is but fundamentals time is be overall, take ecosystem and this considering off. this to technology tell course, believe values still I'm market we Of will have as strong

automotive By APAC on And region the this of was an type M&A. deal, question way, the one. the

The first David? question, what was that,

there may third was that but help uptick that half? markets wins second are second new half in ones just There may I big that the any understand ramping, that just a Thank design is the the coming there on other the Yes. HX, swing you. just accelerate part, any back, uptick.

one show as that come that volume, our of in the India's new that wearables some XG potential a Wi-Fi design few production, up. it's very a in ramp-ups I the say soon would can could picks customers as OEM go nice We whether customers that been whether headsets with that nice in design it's want. the CES that have designing, brands Yes, wins and X those into of top

there of XX hands obviously and production. So, only deals full are Wi-Fi quite a we north have few, in

get could So, in. lots of potentially customers

talked year but or this lineup] about those [all we [ph]. year, think I are next either

half summarize, that we second of is I supporting look potential] year volume see think XG, the the of would what and talk [ph] the really I we into growth coming stronger of combination in domain go the Wi-Fi, potential stronger right? as customers that and at and [down as to base we what the to software, many very well about really good or you things, the as half. second see the the as non-handset stations, All those already more we have licensed many that's strong And many, we've pipe. we the with

Okay. Thank – And today yes, you. comes our from question sir. next

Gus Our next with Northland. ahead. question Richard from comes go Please

Yes, you. thanks so much for for all well Hope goes taking the Amir. aboard. Welcome question,

trends is know licensing quick or growth the us but you those a faster of licensing growing business a question that two out, a you of on little is different those sense I Just give NRE? could don't segments of split NRE.

well. from we're of I would could NRE as sometimes wins. say on later technical view. it up think part that year, the the also varies interesting We're was the on point the year margins high probably it some in you And are QX lining very I starting a the gross just margins. see relatively design deals that the of there side.

contributor would that top to then slip would those margins but a So, non-GAAP XX% probably bit, be the revenues. service line the

nine IP and that to services. of and the nice picks to laid for that get could opportunities product the or from six in So, is instead which now get we R&D today it's when but months whether cocreation, a combination, These out companies are headcount. obviously help to want opportunity the focused business off from invest the still outsourcing. into staff, months the that's combination a time to connectivity, internal now, that a and get also up, want very use market service They but still the is the think we're of especially

we that second business we good be just as up is think think that XXXX. I on across quarter specifically driven very this that of we have and a picking in from So, It's a And business. deals don't interest for the should onwards, based that seasonality sign, there the well. side anywhere but

Got on [ph], [ARMX] go the it. version ability is And of lifting on just then any royalty sign curious, or have has with and either sort your up any contracts I'm of their rates latest you pricing there royalty to when these just pressure ARM modify royalty do increasing content? rates side, and pricing been you

it's devices the royalty of There end-markets. things and are with lower higher-end what or versus or Either that cost combination offer rates. devices IPs two more help we us

that more for high consumer aid targeting are you are TV obviously device any Those true advanced more the a is versus for in pricing. Bluetooth a hearing differs true device, If device for quality. which any consumer much or

of the say I We is the end-markets X. that also Number only would customers – X want is partners will because processor type way – are to So, our offerings, software Number we could succeed. or customers. we them succeed that's

they newer them from and the talk us. rates, rates, try technologies, offer different royalty enhancements. We time-to-time, So, to to

licensing to gets So, that's to and in one is to be newer to fees product get to customer And start other sell move an one ongoing product process, higher a the we one products. and the situation and the able royalties. the get then right successful from – higher win-win we're the also technology

piece] [ace are the for the So, [ph] determine those really think that aspects I three us.

Thank Okay. I'll you Got so much. there. stop it.

the question-and-answer And over to this back Richard ladies concludes you. I'd Thank turn and closing conference remarks. session. for like gentlemen, Kingston our to

today you interest Great. your us Thank in joining and CEVA. continued for for

as for on our conference website the report current investors.ceva-dsp.com. the prepared the an this remarks investor at reminder, accessible to and exhibit through of call a As section are X-K filed Form

events, With can World in section our XX-XX, upcoming will on goodbye. you events found Thank Further Conference, in in be March regards information and be of to events we participating participating Congress, to XXth all Mobile XXth on following Roth be Annual we Barcelona, Xnd Spain; February March the will these conferences: the website. in, and California investors

you concludes presentation. attending today's This for sir. call. you thank today's Thank We conference all

a day. have wonderful disconnect and now lines may your You