CEVA at JPMorgan Conference: Strategic Moves in Wireless Connectivity

On Wednesday, 14 May 2025, CEVA Inc. (NASDAQ:CEVA) participated in the 53rd Annual JPMorgan Global Technology, Media and Communications Conference. CEO Amir Panouche outlined the company’s strategic focus on IP licensing in wireless connectivity and AI, highlighting both growth opportunities and challenges. CEVA aims to expand its market share, leveraging its robust technology portfolio and high gross margins.

Key Takeaways

• CEVA focuses on IP licensing for wireless connectivity and AI in edge devices.
• The company targets growth in mobile, WiFi, and AI-driven smart devices.
• CEVA maintains gross margins above 85%, aiming for profitability through scale.
• Strategic acquisitions are planned to enhance IP capabilities.
• CEVA expects significant growth in mobile and automotive sectors by 2025-2026.

Financial Results

• Gross Margin: Consistently above 85%, aiming for 85% to 90%.
• Revenue Growth: Focus on organic and inorganic growth, including M&A.
• Profitability: Targeting increased profitability as the business scales.
• Design Services: Divested a lower-margin design services business two years ago.
• Market Share: Aiming to increase mobile market share from 15% to over 20% by next year.
• Revenue Drivers: Anticipates royalty revenue growth from new mobile OEM and automotive sectors in 2025 and 2026.

Operational Updates

• End Markets: Targets PC, mobile, automotive, wireless infrastructure, consumer IoT, and industrial IoT.
• Mobile: Significant growth expected with a new U.S. mobile OEM deploying CEVA’s 5G modem technology.
• Consumer and Industrial IoT: Anticipates market share gains with WiFi and Bluetooth technologies.
• Wireless Infrastructure: Supports two of the four large OEMs, holding over 30% market share.
• Automotive: Growth expected in 2025-2026 with Vision AI DSP technologies in car production.
• Technology and Solutions: Provides complete silicon IP solutions, including Bluetooth, Wi-Fi, cellular IoT, and 5G, with investments in sensor fusion and 3D spatial audio.

Future Outlook

• Growth Drivers: Mobile and WiFi are key growth areas, with AI inference capabilities expected to drive long-term growth from 2026.
• Market Share: Anticipates gaining market share in mobile and wireless connectivity, even if overall market growth is limited.
• Geographic Strategy: Sees localization as a tailwind, serving both Western and Eastern regions.
• Tariffs: Minimal direct impact expected, with potential indirect effects on consumer demand.

Q&A Highlights

• Focus on adding IP capabilities, particularly around Smart Edge, through acquisitions.
• Aims to become a "one-stop shop" for customers’ IP needs.
• Sees increasing complexity in systems-on-chips driving demand for IP providers.

For a deeper understanding, readers are encouraged to refer to the full transcript below.

Full transcript - 53rd Annual JPMorgan Global Technology, Media and Communications Conference:

Anand Agarwal, JPMorgan, JPMorgan: Right. Hi, everyone. I’m Anand Agarwal with JPMorgan. I’m joined here today by Amir Panouche, CEO of CEVA. Thank you for joining us today.

We have thirty minutes together. We’ll leave the last five minutes for for some q and a. But maybe to get things started, Amir, if you want to give the audience here a brief overview on CEVA and for for folks that are hearing about the company for the first time and who who don’t kind of know the evolution in the story, it’d be great to kind of for you to provide them with an overview.

Amir Panouche, CEO, CEVA: Yeah. Definitely, Anand. And thanks for having me today. I’m Er Panoosh, CEO of CEVA. At CEVA, we are an IP licensing company.

The best way to think about it is like ARM. We are licensing our technology, and then we get royalty for every unit sold. But contrary to ARM, we are really enabling three use cases for the Smart Edge, the Connect, Sense and Infer. In terms of Connect, we have broad base of wireless connectivity IP. IPs like Wi Fi, Bluetooth, cellular, IoT, five g technologies.

For sensing, we have lots of DSP capabilities and audio and other sensor capabilities. And then for infer, it’s all the things related to NPU, AI accelerators that goes into the edge devices. We have been very fortunate to enable more than 20,000,000,000 devices so far, about 2,000,000,000 devices every year, with a strong leadership in all the different wireless connectivity. And overall, we see great momentum in growth engine for us. If you want to think about Silva, Silva has been around for more than twenty years.

The first phase of the company was all about mobile communication. The second was about the IoT and wireless connectivity all around us. And now deferred is really the Smart Edge with Inference AI smart devices enabling the future growth for the company.

Anand Agarwal, JPMorgan, JPMorgan: That’s great. You mentioned Smart Edge and Edge AI. Could you spend a few minutes maybe talking a little bit about your the company’s specific offerings around that space?

Amir Panouche, CEO, CEVA: Yeah, definitely, Anand. So first, for us, Smart Edge is really the combination of those three use cases that we are enabling. The connect, sense and infer. Every device needs to be wirelessly connected to the cloud to provide the communication. Every device needs to be able to be aware of the surrounding with the sensing capabilities.

And, course, the ability to infer that and to have the smartness inside the device. Specifically, for our technology on the inference, the NPU, all the technology that people are talking about, the AI, AI is well known to be a technology deployed in the data center, super hyperscalers for training and now for inference. We are truly enabling that into the edge devices with the combination of technology that’s extremely low power from our heritage in mobile low power devices, and very scalable, going from basically the use cases, the simple use cases for audio, predictive maintenance, medical device and those type of things, all the way to the high end NPO AI inference that goes into smartphone, tablets, AIDA system, autonomous driving, and so on.

Anand Agarwal, JPMorgan, JPMorgan: When it comes to all of these solutions that kind of cater to AI, how do you differentiate from your competitors, and why do you win?

Amir Panouche, CEO, CEVA: Yes. Very good questions. There are really three factors related to that. One, we always have a very, very strong combination of the performance and the low power. And again, that comes from the DNA of CEVA for more than twenty years, enabling extremely low power devices on the edge.

And with AI performance and ability to wind the network efficiently with low latency is super critical. The second is the scalability of this technology. If we work with MCU partners, if we work with SOC partners, what they are looking for AI is the ability to serve all their product line from the lower scale devices to the very high end devices. We basically have one architect that has the scalability to go multi engines, multi core, different type of configuration, but the baseline is the same. So we can serve them in all the different configuration that they need.

So scale is super critical for AI at Edge. And the last piece is really the integration of the hardware and the software. In every device and every technology that we go and enable with our partners, we provide both the silicon IP as well as the software IP from the graph compiler to all the software development tools and so on, and the integration of these two things together. If I can give an example, we just won a major design wins with next year, a Korean automotive Tier 1s that supplies to Hyundai. And if you when we asked them at the end of the why they picked our technology, what they told us is that they were looking basically to have one solution that has the accelerator of AI, so called running the neural networks, but also doing all the pre and post processing.

So you need to get the sensor information, be able to decode it, and this is a DSP functionality. And we provide all the DSP functionality plus the accelerator, so called the NPU, the neural processing unit, integrated with one software that runs all things together and scheduling that, all in a very power efficient manner.

Anand Agarwal, JPMorgan, JPMorgan: Got it. Got it. Given like the breadth of end markets, and I know you kind of segment your end markets as Smart Edge and mobile potentially, could you maybe provide a little bit of an overview around some of the end markets that you serve and then essentially your outlook on some of those end markets maybe for this year and then essentially next year as well?

Amir Panouche, CEO, CEVA: Yes, definitely. So we serve and target six end markets related to the Smart Edge. It’s a PC, mobile, automotive, wireless infrastructure, consumer IoT and industrial IoT. Specifically, let’s start with mobile. Actually, mobile, see a tremendous opportunity for us this year and going into ’twenty six and ’twenty seven of accelerating and improving our market share.

We have a new large U. S. Mobile OEM that decided to deploy with their five gs modem our technology. So that’s a great tailwind for us as we go towards the rest of the year and then ’twenty six, ’twenty seven. The other piece, overall, if we look at the consumer IoT and the industrial IoT with the different wireless technologies that we have delivering those IPs like WiFi and Bluetooth, we see significant market share that we are going to gain.

Already, we are shipping today more than 1,000,000,000 devices of Bluetooth annually, more than 200,000,000 devices of WiFi, around 200,000,000 devices of cellular IoT, and all of them are expanding within this year and even more growth in ’twenty six. Just one more piece in wireless infrastructure. We’re already basically supporting two of the four large OEMs out there, and we have more than 30% market share.

Anand Agarwal, JPMorgan, JPMorgan: From a mobile perspective, is do I recall correctly that you have more than 60% market share? Is that right?

Amir Panouche, CEO, CEVA: Yes. So today, we are around, let’s say, around 15 plus percent market share, and we expect to grow more than 20% and above as we go through next year.

Anand Agarwal, JPMorgan, JPMorgan: Got it. Could you maybe talk about like what does your competitive environment kind of comprise of? Because there aren’t a lot of companies that are essentially catering your end markets from an embedded IP perspective. Essentially, is the basis for competition in this space? Is it is it price?

Is it time to market? Would love to get your thoughts on that.

Amir Panouche, CEO, CEVA: Yeah. So overall for our technology, I would say the first things to keep in mind that our competition many times is so called the make versus buy, is our customers need to decide whether they want to do this technologies in house by themselves or to basically license from outside supplier like CEVA. In terms of wireless communication, whether it’s WiFi, Bluetooth, cellular IT and so on, we really don’t have that much competition anymore as an IP supplier. We are pretty much so called the leader in that space. And then the competition is, to the most part, the mix versus buy with the NIH potentially of our customers.

Having said that, what we see more and more, and the best way to put that is if we look twenty years back, right, in the semiconductor industry, companies, they have their own fabs. And then over time, they mostly almost completely move to a fabless model. So they go to TSMC and other fabs, right? Building a CPU, companies did by themselves. Today, ARM pretty much dominating that space, right?

We are looking to basically be the leader of wireless communication around those CPUs to be really de facto the standard to help companies drive their success in the marketplace, and we are as an IP provider. Now in order to do that well, back to your questions, what are really so called the metrics or the KPIs, the things that our customers look at, definitely time to market. We need to make sure that we can really help accelerate. And we believe that as we make that progress in the marketplace for market share and capabilities, we really see how we accelerate our customers versus their own internal developments in terms of getting product out to the market. The second is really the cost of ownership or the price of the cost of developing that.

We have the economy of scale. Basically, that’s the beauty with IP. And once we develop that, to the most part, we can replicate it, and then we can make it much more economic economical to our customers instead of each of them developing on their own. And with that, I really view that wireless communication will become basically an IP supply to all different those companies, and they will innovate in how they integrate all the different components together. And if we look a little bit at the rest of the product portfolio that we have, whether it’s NPUs or DSPs or more the processing capabilities, definitely, there is the mix versus buy.

But there, there’s also some competition that we see sometimes here and there, synopsis or cadence, depends where.

Anand Agarwal, JPMorgan, JPMorgan: That was a great analogy, by the way, the whole transition from fabs in house to from an IDM model to essentially like a fabless model. I think that’s definitely true and relevant today. Could you talk a little bit more about maybe what is like besides that, besides the transition of people outsourcing more and more of like the IP, what do you see as some of the short term and longer term growth drivers for the business?

Amir Panouche, CEO, CEVA: Yes. So first, short term, if we think about 2025, while, of course, tariffs and all that can create some jittering in the marketplace, but fundamentally, we see a significant growth opportunity for us in mobile. We see significant growth opportunity for us in terms of WiFi. From a licensing perspective, we see large number of customers, tens of customers that already licensed from us Bluetooth or other technologies coming and licensing the next generation, so called from Bluetooth six point zero to seven point zero and from WiFi six to WiFi seven, plus the integration of this technology. So we have lots of customers that have licensed Bluetooth, and now we license both Bluetooth and WiFi and other cellular communication technologies.

From a royalty perspective, we just talked about the two other tailwinds in the engine for the business in 2025. But then beyond that, if we look at twenty twenty seven twenty twenty six, twenty twenty seven and beyond, it’s really this revolution of devices are becoming smart with AI inference capabilities. We literally see now the transition from cloud based, for the most part, to hybrid with edge devices capable to run from small models all the way to LLM, so called the large language models, and that will drive significant growth opportunity for us.

Anand Agarwal, JPMorgan, JPMorgan: It’s almost like a land and expand model.

Amir Panouche, CEO, CEVA: Yes. From

Anand Agarwal, JPMorgan, JPMorgan: an end markets perspective, where do you see the growth coming from in 2025 and 2026? There’s a lot that’s been said around how some of the end markets, specifically consumer, etcetera, are going to see fairly muted growth in 2025. In your view, where is a lot of this growth going to come from?

Amir Panouche, CEO, CEVA: So we are overall in a very good position that even if at the end of the day, the market itself doesn’t grow significantly in ’twenty five, whether it’s mobile, whether it’s the industrial IoT, whether it’s a different wireless connectivity that we have for the different consumer IoT devices,

Anand Agarwal, JPMorgan, JPMorgan: we

Amir Panouche, CEO, CEVA: are still in a gaining market share position, very strongly in mobile, very strongly with wireless connectivity, all of them, actually. We are still gaining market share. What we have built in the last few years is a large number of customers that license our technology and ramping. So we will keep seeing that ramp coming in the next two, three years. The last piece I will mention is the automotive, where with our Vision AI DSP technologies, those technologies we licensed now almost four years ago, and now it’s really starting to ramp into car that are going on the road.

Anand Agarwal, JPMorgan, JPMorgan: Because of the cycles essentially?

Amir Panouche, CEO, CEVA: Because the cycle in automotive, and especially the more complicated Vision AI, the DSP, SoCs. And now it’s it’s in production, in car production, and we will see in ’25 and ’26 nice growth in the automotive space as well for us.

Anand Agarwal, JPMorgan, JPMorgan: Yeah. So so maybe and and and correct me if I’m wrong here. Maybe a good way to think about this is like you’ve done the investment that they’ve embedded your IP within the vehicles irrespective of how fast or if the auto market continues to decline through the end of the year, you’re still going to win because your IP will start shipping this year, essentially. That’s kind of the way to think about it.

Amir Panouche, CEO, CEVA: Yeah, exactly. Our technology will start shipping as well as those cars are becoming they have more and more of those so called ADAS different ADAS system enabling

Anand Agarwal, JPMorgan, JPMorgan: More content. Exactly. Yeah, yeah, that makes sense. So over the last several years, you’ve been investing in your software portfolio. Could you maybe give the folks here an overview of what that portfolio one comprises of?

Two, essentially, what are your areas of focus for the future within like software? And have you seen those investments that you’ve made in the past kind of pan out?

Amir Panouche, CEO, CEVA: Yeah. So first, even before I go to the specific investment, would say that our approach, and it goes back to what I mentioned earlier, is that for any silicon IP that we offer, any product, we are really going all the way from the physical layer up to the upper level of the software stack. And we provide as a complete solution because what we have found out that our customers in order to really be able to get the first time to market and having a good solution that works well in the field with interoperability and all the other capabilities, They require basically the complete stack, including the software. So we have invested quite a bit. And whether it’s a Bluetooth, Wi Fi, cellular IoT, five gs and so on, we provide a complete functionality.

The same for AI as we do today, as I mentioned, graph compiler, all the software tools. That’s why, again, Next Chip and other customers really like our technology and start basically adapting that. Then on top of that, what we have invested very specifically is adding so called embedded software application capabilities for sensor fusion, for contextual awareness, for three d special audio to provide more immersive type of user experiences that differentiate overall our silicon IP offering. And with this type of technology, we go directly many times to the OEM, not necessarily to the semiconductor provider because they really drive so called the user experience. They value that.

They can integrate it into their own devices. And with that, we get higher royalty per unit than typically you would see with silicon IP.

Anand Agarwal, JPMorgan, JPMorgan: Got it. Is there a percentage attach rate of software that I know you don’t publicly disclose this, but is there a directional sense around what is it a vast majority of customers that are kind of adopting these software solutions along with the silicon IP? Or is this still something that’s kind of gaining traction in the market today?

Amir Panouche, CEO, CEVA: Yes. So overall, as I mentioned, first, most of our silicon AP one delivery, deliver with software. But more the software application goes on top of that. Yeah. We are not really talking about percentage of market share, but definitely, we have enabled more than 300,000,000 devices already with this type of technologies.

Anand Agarwal, JPMorgan, JPMorgan: Yeah.

Amir Panouche, CEO, CEVA: And we still and we see that still going very nicely for us.

Anand Agarwal, JPMorgan, JPMorgan: Got it. A lot of conversations that we’ve had over the course of this week and and the last several weeks, actually, companies are are increasingly selecting geographies to sell into, whether it’s, you know, if they’re specifically The US based semis companies, they either wanna sell into the Western Hemisphere or they wanna sell into Asia. Right? And by Asia, we’re kind of you can almost segment China into its own little bucket, right? What is your one view on that?

And two, do you feel like you need to kind of bias your strategy for the future to to align with with that sort of sales motion, Asia versus The US or the Western Hemisphere?

Amir Panouche, CEO, CEVA: Yeah. So, you know, first, I would say as a tech veteran, I would say that overall, free access to technology and ability to collaborate, it’s something that, generally speaking, we prefer, right? Having said that, with so called more the localization right now fabrication of needs of technology, actually, it’s a tailwind for us as an IP company. We don’t develop the final products. We don’t ship the final products, so we don’t have that so called limitation or impacts related to tariffs and so on.

Actually, as an IP provider, because of the localization, we see in China and in other regions, basically, each regions want to make sure that they have access to the best technology out there and to maintain that access. And with that, as an IP supplier, this is actually a great tailwind that can help us to keep driving the business. We serve both regions of the Westerns and East sides of the world very, very successfully. I would say that what we do see is acceleration basically of the need to go and get access to the IP. And also, I would say, to some degree, even drives more innovation, surprisingly, right?

Like the deep sea and other models that came along and all that, they came from the needs, harder to some degree, harder access to the innovation that comes worldwide, and then everyone tried to innovate on its own. Again, that’s where Propel more IP needs.

Anand Agarwal, JPMorgan, JPMorgan: Do feel that despite all the noise with tariffs, do you feel like just given that response, it feels like you are not going to be impacted by tariffs as much as maybe some of the physical silicon companies.

Amir Panouche, CEO, CEVA: Yes. So in terms of direct impacts, we really have today literally no direct impacts. Again, we are basically not chipping any goods. From indirect impacts, what we the way that we look at that is really whether it will impact the end demand by the consumer. So at the end of the day, if tariffs will create negative sentiments of consumer in terms of consumer demand that will eventually translate for consumer people buying less goods and less products and technology, that propel and create indirect impact to our shipments or royalty revenue.

And overall, to some degree, potentially, the level of innovation at least for a short period of time. In the long run, it will also correct itself. The innovation, the need to get new IP and access to the new technology, it just will get accelerated. It’s not going to slow down.

Anand Agarwal, JPMorgan, JPMorgan: Yeah. That makes sense. As a business, you’ve done extremely well at maintaining your gross margins above 85% fairly consistently. How do you see this trending forward given the discussion around tariffs, given the discussion around end market demand, all of those factors?

Amir Panouche, CEO, CEVA: Yes. So we are really an IP company. And within being an IP company and how we manage the company, definitely our goal, and we see that continuing that we will be so called above the 85% gross margin and an average between 8590% gross margin. And what we what we do see is here and there, big projects where we basically provide the off the shelf IP that we have to really drive the 90% gross margin. But on top of that, because we are going after really the top players in the different markets and we and they need some help with some developments of the technology, we’re also enabling some customization that we work with them.

And with that, the gross margin can go single point up and down. But overall, we are going to sustain and maintain about 85% gross margin. Two years ago, we had a business of design services. It was a lower gross margin. We divested that.

And I’m a strong believer in the IP business model, and that will drive it drives great gross margin. And then from there, it can drive great profitability as the scale goes up.

Anand Agarwal, JPMorgan, JPMorgan: Got it. And you talked about scale going up and driving profitability as you kind of increase scale. If you think about like the growth required to attain a certain scale, let’s say $1,000,000,000 right, what are some of the compromises you’re willing to make in terms of margin for that? And how do you think about that general growth versus margin paradigm?

Amir Panouche, CEO, CEVA: Yes. So first, we are definitely a growth company, right? And we would like to be a growth company, and that’s our goal. With that in the IP business model for us to grow, we are doing all the things organically. We talked about the several tailwinds, the mobile, the WiFi, the AI that is coming more and more.

But on top of that is also inorganic growth and definitely M and A opportunity that we are looking at. But that’s all within the domain of IP. So within that growth, we will still maintain so called 85% plus gross margin. With the one thing that I mentioned that when we see the opportunity to really drive new innovation to the marketplace with the leaders out there to create a technology that we can own and even scale up, we will do that additional customization on top of the off the shelf type of an IP, which can impact a little bit the gross margin, a single point. But we are still basically the focus, like with that, is really a growth minded company.

Anand Agarwal, JPMorgan, JPMorgan: Got it. Got it. And I think you kind of you answered the next question I had, which was around, historically, you’ve done a phenomenal job of managing organic and inorganic growth at organizations that you’ve been at in the past. The focus here is going to be on acquisitions or inorganic opportunities related to IP. They’re going to be basically you’re not going to venture into the device space.

Is that would that be fair to assume?

Amir Panouche, CEO, CEVA: That’s definitely our focus first. We have done very well. If you think about CEVA, what is the strength of CEVA? Definitely, strong in heritage of more than twenty years being as an IP company, serving large number of customers in all the different edge markets. And this is a great platform as an IP company to go and expand more and add to that portfolio.

We already have done multiple acquisitions, very successful one, as you mentioned. Our Bluetooth and then Wi Fi technology came from acquisition that we grew up extremely, extremely well over the years. We have done acquisition on software, and that’s how we added more of the software application capabilities that drives for us really great royalty into and revenue overall. And the last piece recently, we acquired also a company to develop our IP. So now we can combine it all together with really, as I mentioned, to be even more content and better economics of the deal to our customers.

So we have done multiple steps of through the journey. And definitely, I see in the coming years that we will add more IP capabilities, more technologies in the portfolio, to the most part, around Smart Edge, becoming even more relevant and more content to our customers. And what we see is that, as I mentioned, the whole history of semiconductor, right, we can see those systems, the so called SoCs, are becoming more and more complex with more and more ingredients. It’s a very challenging task for all our customers to do it at scale up and down through the different tiers of the product line that they need to support. The more we, as an IT provider, as an IT provider, can provide them the large portfolio of technology they can embed in, and then they can basically go and put it all together, the more value we create and more synergies.

Anand Agarwal, JPMorgan, JPMorgan: One stop shop?

Amir Panouche, CEO, CEVA: Yeah. Exactly. That’s a nice way to put it. All right.

Anand Agarwal, JPMorgan, JPMorgan: We we have a couple of minutes left and wanted to see if anybody in the audience had any questions. If not, Amir, I will thank you for your time. Appreciate you, going through, this fireside chat with us, and thanks so much.

Amir Panouche, CEO, CEVA: Thank you very much, Anit. Was my pleasure. Great.

Anand Agarwal, JPMorgan, JPMorgan: Thanks so much.

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