Bullish indicating open at $55-$60, IPO prices at $37
Introduction & Market Context
CEVA Inc. (NASDAQ:CEVA) released its second quarter 2025 earnings presentation on August 11, 2025, revealing a mixed performance with year-over-year revenue declines but sequential improvement from the previous quarter. The semiconductor IP company, which specializes in wireless connectivity, AI processors, and sensor hub technologies, reported total revenue of $25.7 million, down 9.5% from $28.4 million in the same period last year.
The presentation comes after a challenging first quarter that saw the company’s stock drop nearly 15% following an earnings miss. CEVA’s current stock price of $21.72 represents a 2.55% increase from its previous close, suggesting some stabilization despite ongoing headwinds.
Quarterly Performance Highlights
CEVA’s Q2 2025 results showed continued pressure on both major revenue streams. Licensing and related revenue fell to $15 million, a 13% year-over-year decline from $17.3 million in Q2 2024. Royalty revenue decreased 5% year-over-year to $10.7 million, though this represents a sequential improvement from $9.2 million in Q1 2025.
CEO Amir Panush emphasized the growth of the company’s AI business and new NPU (Neural Processing Unit) agreements, suggesting the company is pivoting toward higher-growth segments despite overall revenue challenges.
The company reported a GAAP loss per share of 15 cents, slightly worse than the 14-cent loss in the same quarter last year. Non-GAAP earnings per share came in at 7 cents, a significant decline from 17 cents in Q2 2024 and a sequential drop from the 6 cents reported in Q1 2025.
CEVA’s shipment data revealed some bright spots amid the challenges. The company reported total unit shipments of 488 million, with smart edge devices (excluding smartphones) accounting for 433 million units. Notably, cellular IoT shipments reached a record high of 66 million units, highlighting strength in this growing segment.
Detailed Financial Analysis
The five-quarter revenue trend shows a consistent pattern of pressure on CEVA’s licensing business, which has declined from $17.3 million in Q2 2024 to $15 million in Q2 2025. The royalty business has shown more volatility, peaking at $13.5 million in Q4 2024 before declining to $9.2 million in Q1 2025 and partially recovering to $10.7 million in the current quarter.
CEVA maintained its strong balance sheet position with $157 million in cash, cash equivalents, marketable securities, and bank deposits at the end of Q2, with no debt. This financial stability provides the company with flexibility to navigate current challenges and invest in growth initiatives.
The company continued its shareholder return program, repurchasing 300,000 shares for $6.2 million during the quarter. An additional 725,000 shares remain available for repurchase under the existing plan, demonstrating management’s confidence in the company’s long-term prospects despite near-term headwinds.
Strategic Initiatives
CEVA’s presentation highlighted its focus on high-growth technology segments, including AI, 4D Radar and V2X (vehicle-to-everything), Edge AI NPUs, Bluetooth 6, and Spatial Audio. This strategic positioning aligns with industry trends toward more intelligent and connected devices at the edge of networks.
The company signed 13 deals during the quarter, maintaining its business development momentum. CEVA’s global workforce stands at 435 employees, including 354 engineers, underscoring its R&D-intensive business model.
The record shipments in cellular IoT devices suggest CEVA is gaining traction in this growing market segment, potentially offsetting some weakness in more mature categories. Wi-Fi and Bluetooth shipments remained substantial at 254 million and 62 million units respectively, though the presentation did not provide year-over-year comparisons for these segments.
Forward-Looking Statements
While the Q2 presentation did not include explicit forward guidance, the emphasis on AI business growth and new NPU agreements suggests CEVA is positioning itself for future growth in these high-value segments. This aligns with the company’s previous statements from Q1 about the long-term nature of the IP licensing business.
The sequential improvement in royalty revenue from Q1 to Q2 (from $9.2 million to $10.7 million) indicates some stabilization and potential recovery in this revenue stream, though it remains below year-ago levels.
CEVA’s continued investment in R&D and focus on emerging technologies like Edge AI, advanced connectivity standards, and automotive applications reflects a strategy of positioning for long-term growth despite near-term revenue challenges. The company’s "Powering the Smart Edge" tagline encapsulates its focus on enabling intelligence in connected devices across multiple markets.
Given the company’s previous guidance for "low single digits" revenue growth in 2025 and the current year-over-year revenue decline of 9.5% in Q2, CEVA will need to demonstrate stronger performance in the second half of the year to meet even these modest growth expectations. The company’s strong cash position provides a buffer as it navigates these challenges while continuing to invest in future growth opportunities.
Full presentation:
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