Earnings call transcript: CEVA Q3 2025 revenue rise but EPS misses forecast

CEVA Inc. reported its Q3 2025 earnings, revealing a revenue increase of 4% year-over-year to $28.4 million, versus the forecasted $28.2 million. The company posted a non-GAAP EPS of $0.11, versus the consensus of $0.10. CEVA’s stock saw a 6.19% increase in premarket trading, indicating a positive investor response to other aspects of the earnings call, such as strong licensing revenue and future growth prospects.

Key Takeaways

- CEVA’s Q3 2025 revenue rose by 4% YoY and 11% sequentially.

- Licensing revenue remained robust, contributing 56% of total revenue.

- AI processor licensing accounted for approximately one-third of licensing revenue.

- The company repurchased 340,000 shares for $7.2 million in 2025.

- CEVA’s stock increased by 6.19% in premarket trading despite EPS miss.

Company Performance

CEVA demonstrated solid performance in Q3 2025, marking its sixth consecutive quarter with licensing revenue exceeding $15 million. The company’s strong presence in AI and wireless connectivity markets contributed to its revenue growth. The expansion in AI DSP agreements and a significant partnership with Microchip for its NPU portfolio underscore CEVA’s strategic focus on innovation and long-term growth.

Financial Highlights

- Revenue: $28.4 million (↑4% YoY, ↑11% sequentially)

- Earnings per share: $0.11 (Non-GAAP)

- Gross margin: 88% GAAP, 89% Non-GAAP

- Total operating expenses: $27.1 million

- Net income: $2.7 million (Non-GAAP)

Earnings vs. Forecast

CEVA’s Q3 2025 EPS of $0.11 beat the $0.10 forecast. The revenue of $28.4 million was slightly above the expected $28.2 million.

Market Reaction

Despite missing EPS forecasts, CEVA’s stock surged by 6.19% in premarket trading, reaching $27.78. This movement suggests that investors are optimistic about the company’s future prospects, driven by its strategic initiatives and robust licensing revenue. The stock’s performance is notable given its 52-week range, indicating strong market confidence.

Outlook & Guidance

CEVA maintained its full-year revenue guidance and anticipates Q4 revenue between $29 million and $33 million. The company expects continued growth in Wi-Fi, cellular IoT, and mobile segments, with particular strength in royalties projected for the latter half of the year. CEVA’s strategic focus on AI and wireless connectivity positions it well for future growth.

Executive Commentary

CEO Amir Panush highlighted the significance of AI processor licensing, stating, "AI processor licensing is now a very meaningful and growing part of our business." He expressed excitement about the company’s current momentum and its potential to mirror the historical growth patterns of CPUs and GPUs.

Risks and Challenges

- Supply chain disruptions could impact production and delivery timelines.

- Market saturation in certain segments may limit growth potential.

- Macroeconomic pressures, such as inflation, could affect operating costs.

- Increased competition in AI and wireless connectivity markets.

- Dependence on key partnerships for revenue growth.

Q&A

During the earnings call, analysts inquired about the Microchip NPU deal, which is expected to generate royalties in 18-24 months. Questions also focused on the sustainability of AI processor licensing as a long-term growth opportunity and the company’s commitment to R&D investment while maintaining expense discipline.

Full transcript - CEVA Inc (CEVA) Q3 2025:

Rocco, Conference Moderator: Welcome to the CEVA Third Quarter 2025 Learning Conference Call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad, and to withdraw your question, please press star then two. Please note today’s event is being recorded. I’d now like to turn the conference over to Richard Kingston, Vice President, Market Intelligence and Investor Relations. Please go ahead, sir.

Richard Kingston, Vice President, Market Intelligence and Investor Relations, CEVA: Thank you, Rocco. Good morning, everyone, and welcome to CEVA’s third quarter 2025 earnings conference call. Joining me today on the call are Amir Panush, Chief Executive Officer, and Yaniv Arieli, Chief Financial Officer of CEVA. Before handing over to Amir, I would like to remind everyone that today’s discussion 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. Forward-looking statements include statements regarding our market position and industry trends, including with respect to embedding of AI across customer product lines and customer licensing of NPUs for AI interfacing; statements regarding demand for and benefits of our technologies; expectations regarding revenues, including higher royalty potential for AI agreements; and our financial goals and guidance regarding future performance.

CEVA assumes no obligation to update any forward-looking statements or information which speak as of their respective dates. We will also be discussing certain non-GAAP financial measures, which we believe provide a more meaningful analysis of our core operating results and comparison of quarterly results. A reconciliation of non-GAAP financial measures is included in the earnings release we issued this morning and in the SEC filings section of our Investor Relations website at investors.ceva-ip.com. With that said, I’d like to turn the call over to Amir, who will review our business performance for the quarter and provide some insight into our ongoing business. Amir?

Amir Panush, Chief Executive Officer, CEVA: Thank you, Richard, and good morning, everyone. We are pleased to report a third quarter that exceeded our expectations on both revenue and non-GAAP EPS. We have revenue of $28.4 million and non-GAAP EPS of $0.11. In licensing, we secured several strategic agreements that reinforce our market-leading position in wireless connectivity and accelerate our expansion in AI. This quarter was marked by strong execution across our core pillars, connect, send, and infer, and highlights the breadth and strength of our IP solution portfolio. The most significant win this quarter was in AI, where Microchip, one of the world’s leading microcontroller and connectivity providers, and whose products power billions of devices across industrial, consumer, automotive, and other end markets, adopted our full NPU portfolio for its future roadmap. This win is a strong proof point of a broader industry trend.

Major MCUs and semiconductor vendors are embedding AI capabilities across their product lines, bringing more on-device intelligence for performance, user experience, privacy, and cost. Selecting CEVA gives Microchip a complete portfolio of edge AI inference solutions, from ultra-low-power inference for MCUs to high-performance AI in advanced systems, all under a unified software stack. This flexibility allows them to standardize AI deployments across industrial, automotive, consumer, communications, and compute markets without compromising on power or cost. Let me take a moment to talk about the role of NPUs in the broader AI ecosystem. At the end of the day, an NPU is an optimized compute engine for AI inference, just as CPUs orchestrate system control and GPUs accelerate graphics. Companies rarely reinvent CPUs or GPUs. They license proven processor IP and focus on system integration and software differentiation. We believe NPUs will follow the same path.

Licensing a proven and scalable NPU architecture delivers the performance and scalability customers need while freeing resources to focus on software, optimized models, and application-specific experiences. CEVA is uniquely positioned to lead this transition with a full-range NPU portfolio, a unified software framework and tools, and a strong partner ecosystem. This enables customers to focus on differentiated models and experiences while we provide the scalable, proven technology foundation. Our recent NPU engagement with a leading MCU vendor is a powerful validation of this approach. Beyond the NPU portfolio win, we signed three AI DSP agreements that broaden our reach across consumer electronics and automotive. First, a leading global electronics brand is integrating our AI DSP into its next-generation edge SoC family for home appliances, enabling vision, voice, and contextual awareness in connected devices.

Second, a high-profile automotive customer expanded its use of CEVA AI DSPs and accelerators for centralized compute platforms, now entering production. A new engagement with an innovative ADAS chipless architecture company is strengthening our position in automotive. AI processor licensing is now a very meaningful and growing part of our business, contributing roughly one-third of the licensing revenue in both the second and third quarters. The first time AI has had such a significant impact on our licensing mix. In addition, these AI agreements typically carry a higher royalty potential than our traditional licensing business, further enhancing long-term value. Moving now on to wireless connectivity, which represents a core pillar of our growth strategy and a powerful cross-sell engine into AI. We had another impactful quarter. We deliver wins in both established standards like Wi-Fi 6 and Bluetooth 5 and next-generation standards.

This quarter, a long-term customer licensed our latest Wi-Fi 7 and Bluetooth high data throughput IP for upcoming roadmaps. These standards offer higher throughput, lower latency, and improved power efficiency, which are essential for advanced audio, wearables, robotics, and broader physical AI use cases. These transitions are not one-off wins. They cement multi-year royalty ramps as customers build on prior generations and continue forward with CEVA technologies as core enablers of connectivity and AI. By consistently delivering end-to-end multi-standard connectivity solutions together with advanced sensing and AI IP, we provide a unified foundation for intelligent connected devices. This positions us as the de facto partner for next-generation connectivity and strengthens our leadership as AI and sensing adoption expands across markets. Now turning to royalties, we delivered solid growth across most of our markets, with royalties up 6% year over year and 16% sequentially.

Consumer IoT was a key driver, posting 9% year over year growth supported by record shipments in cellular IoT and Wi-Fi. Our 5G WAN infrastructure customers also had a strong quarter, with revenues up 91% compared to last year. In automotive, two large semiconductor customers continued to ramp up volume shipments for ADAS solutions based on our AI DSP, contributing to overall royalty growth in the quarter and beyond. Mobile royalties grew 4% year over year and 7% sequentially, driven by recovering low-end smartphone segments. At the high end, our US OEM customers launched a second smartphone model featuring its in-house 5G modem with CEVA technology. As this model expands into more markets in the fourth quarter, we expect further royalty growth. In summary, this quarter’s AI-led licensing momentum and continued progress in wireless connectivity highlights the breadth and scalability of our IP across send, connect, and infer.

These wins strengthen our pipeline, increase visibility into future revenue streams, and reinforce CEVA’s role as a foundational technology provider for intelligent, connected, and increasingly physical AI devices. Now I’ll hand the call over to Yaniv for the financials.

Yaniv Arieli, Chief Financial Officer, CEVA: Good morning. Thank you, Amir. I’ll now start by reviewing the results of our operations for the third quarter of 2025. Revenue for the third quarter was $28.4 million, up 4% compared to $27.2 million for the same quarter last year, and up 11% sequentially. The revenue breakdown is as follows. Licensing and related revenue totaled $16 million, representing 56% of our total revenue for the quarter. This reflects a 3% year-over-year increase and a 7% sequential increase. Licensing revenue for the first three quarters of 2025 reached $46.1 million, a 4% increase compared to $44.3 million for the same period of 2024. As Amir noted, this growth preliminarily represents strong traction in AI, following multiple significant design wins for NPUs and AI DSPs. AI processor licensing contributed roughly a third of the licensing revenue in both the second and third quarters, demonstrating solid momentum and strategic progress.

These wins encore the importance of our NeuPro NPU portfolio and AI DSP offerings as key growth drivers going forward. Royalty revenue for the third quarter was $12.4 million, reflecting 44% of total revenue, a 16% sequential increase, and a 6% increase year over year. Consumer IoT was a key driver, posting 9% year-over-year growth, supported by record shipments in cellular IoT and Wi-Fi. Gross margin came slightly better than our guidance, at 88% of GAAP basis and 89% of non-GAAP basis, compared to 85% and 87%, respectively, a year ago. Total operating expenses for the third quarter were $27.1 million at the higher end of our guidance.

Our total non-GAAP operating expenses for the third quarter excluding equity-based compensation expenses, amortization of intangibles and related acquisition costs were $22.1 million at the higher end of our guidance as well, mainly due to higher employee benefit provisions associated with better financial results. Non-GAAP operating margins and net income improved significantly over the first and second quarters of 2025, reaching 11% of revenue and $3.1 million, also higher than 8% and $2.1 million recorded in the third quarter of last year. GAAP operating loss for the third quarter was $2.1 million as compared to GAAP operating loss of $2.6 million for the same period in 2024. GAAP and non-GAAP taxes were $1.7 million, just below our guidance. GAAP net loss for the third quarter of 2025 was $2.5 million.

The diluted loss per share was $0.10 as compared to a net loss of $1.3 million and diluted loss per share of $0.06 for the same period last year. Our net GAAP income, non-GAAP net income, and diluted income per share for the third quarter of 2025 was $2.7 million and 11%, respectively, representing $0.01 over street estimates. For the same period last year, net income was $3.4 million, and diluted income per share was $0.14. With respect to other related data, shipped units by CEVA’s licensees during the third quarter of 2025 were 559 million units, up 19% sequentially and 11% up year over year. Of these, 69 million units, or 12%, were mobile handset modems. A record 510 million units were for IoT, up 13% year over year, with consumer IoT reaching 500 million units and industrial IoT totaling 10 million units.

Bluetooth shipments were 303 million units in the quarter, down 1% from 306 million in the third quarter of 2024. Cellular IoT shipments were at all-time record high, with 69 million units, up 41% year over year. Wi-Fi shipments also reached an all-time high of 82 million units, up 73% from 47 million units a year ago. Wi-Fi 6 shipments also set a new record, up 194% year over year as customers continue to ramp up the clock. Our wireless IP portfolio, which includes Bluetooth, Wi-Fi, UWB, and cellular IoT, achieved its strongest royalty revenue quarter on record. These shipments and royalty trends reinforced the adoption of next-generation connectivity standards, which served as the foundation for AI embedded devices and positioned CEVA for multi-year royalty growth.

As for the balance sheet items, as of September 30, 2025, CEVA’s cash, cash equivalent balances, marketable securities, and bank deposits were approximately $152 million. In the third quarter, we purchased about 40,000 shares for approximately $1 million. In all of 2025, we purchased approximately 340,000 shares for approximately $7.2 million. As of today, around 684,000 shares are available for repurchase under the repurchase program, which was extended in November of last year. Our DFOs for the third quarter of this year were 47 days, a bit higher than the last quarter, but in line to our norms in prior quarters. During the third quarter, we used $5.9 million in cash from operation activities. Ongoing depreciation and amortization was $1.2 million, and the purchase of fixed assets was $0.4 million. At the end of the third quarter, our headcount was 434 people, of whom 353 are engineers.

Now for the guidance. Our licensing business remains strong, supported by robust pipeline and deal flow across our three core pillars: connect, send, and infer. We delivered six consecutive quarters with licensing revenue above $15 million, underscoring consistent execution. Royalty revenues typically strengthen in any given second half, and third quarter reflects this trend with 16% sequential growth and 6% year-over-year growth. Looking ahead, we expect continued seasonal momentum in the fourth quarter, driven by share gains at a US OEM smartphone customer using our technology and its in-house 5G modem, and by strong ramps in Wi-Fi and cellular IoT. We are maintaining our full-year revenue guidance, as previously discussed, and aligned with street estimates for the year. As for the fourth quarter, total revenue is expected to be in the range of $29-$33 million.

Gross margin is expected to remain high and at the same level of Q3, approximately 88% of GAAP basis and 89% of non-GAAP basis, excluding aggregate of $0.2 million for equity-based compensation expenses and $0.1 million of amortization of acquired intangibles. GAAP OpEx is expected to be higher than the third quarter, in the range of $27-$28 million. Of our anticipated total operating expenses for the third quarter, $4.7 million is expected to be attributable to equity-based compensation expenses, $0.2 million for amortization of acquired intangibles, and $0.1 million for expenses related to a business acquisition. Non-GAAP OpEx is also expected to be higher than the third quarter, in the range of $22-$23 million. Net interest income is expected to be approximately $1.5 million.

Taxes for the third quarter are expected to be approximately $1.8 million, and the share count for the third quarter is expected to be approximately 25.8 million shares. Rocko, we can now open the Q&A session, please.

Rocco, Conference Moderator: Yes, sir. As a reminder, if you’d like to ask a question, please press star then one on your telephone keypad. If your question has already been addressed and you’d like to remove yourself from queue, please press star then two. Once again, that’s star then one if you have a question. Today’s first question comes from Chris Reimer with Barclays. Please go ahead.

Chris Reimer, Analyst, Barclays: Hi. Thanks for taking my questions and congratulations on the strong quarter. Looking at shipments, you mentioned the strong momentum with the smartphone customer that was driving the royalties. I was wondering if you could describe any of the other segments and how they’re doing, if there might be any other ramp-ups coming to market in the near term.

Amir Panush, Chief Executive Officer, CEVA: Yeah, Chris, this is Amir. Thanks for the question. Definitely, we see growth momentum in terms of our royalty, both in terms of seasonality and overall, coming from basically multiple different opportunities. One, of course, is the mobile that we mentioned with the largest OEM. The other thing from a seasonality point of view in mobile, the low-tier customers that we have in mobile, we expect them to continue, basically, the sequential growth as we go through the year. The other things that we mentioned, and now we see more and more that’s happening, is basically the Wi-Fi shipment volume growth and the transition from Wi-Fi 4.5 to the more latest standard Wi-Fi 6, which on its own also basically goes with higher ASP per unit, and with that will drive higher royalty overall.

In addition to that, we see the cellular IoT keeps growing very nicely, and we had another record high this quarter, like the Wi-Fi shipments. The last piece that we mentioned is things related to automotive aid system. We have now two customers that started to ramp in volume production, and we expect that to continue to grow in Q4 and through the next few years as well. Additionally, in V2X, we had a customer that got acquired by Qualcomm, and this is also growing and ramping right now, and we expect that to continue to drive additional royalty growth. All in all, from significant Wi-Fi growth, cellular IoT, gaining more market share in mobile, and doing better in automotive, all these will drive royalty growth as we move forward.

Chris Reimer, Analyst, Barclays: Thanks. Yeah, that’s great color. Just touching on the Microchip partnership, and in addition with the other NPU deals that you’re making, is there any change in the timeline to development and getting products into the market? Is there any change in the types of products? Just wondering about any color there.

Amir Panush, Chief Executive Officer, CEVA: Sure. Thanks, Chris. First, we are super excited about this opportunity where Microchip decided to license our complete portfolio of NPUs, all the way from the lower power performance type of MCU needs all the way to more high-end type of inference needs in infrastructure and data centers. This is a really great opportunity to collaborate with a great company like Microchip. In terms of the time to market, it’s similar to, for the most part, other technologies we see, which is typically between 18 and 24 months from the time that we started design until our customers basically go to production and start the ramp-up. Overall, I would say this is not different that much from any of the other design wins that we have had.

Chris Reimer, Analyst, Barclays: Got it. Got it. Thanks for that. That’s it for me. I’ll jump back.

Yaniv Arieli, Chief Financial Officer, CEVA: Thank you, Chris.

Rocco, Conference Moderator: Thank you. As a reminder to ask a question, please press star then one. Our next question comes from Madison DePaulo with William Blair. Please go ahead.

Madison DePaulo, Analyst, William Blair: Hi. This is Madison calling on behalf of Kevin Cassidy. I was just wondering, when can we expect to see the Microchip NPU shipments hit CEVA’s royalty revenue, and what is the timeframe of the license?

Yaniv Arieli, Chief Financial Officer, CEVA: Yeah. A typical license agreement is a few years, and then usually a customer comes and licenses the next generation or different enhancements or new features that will come up and develop over the years. That is our normal life cycle of a licensing deal. One thing I think Amir mentioned is that we do not see in the NPU or AI business line any differences or significant differences versus the other IoT and the connected devices. Usually, the design cycle of a chip runs anywhere between one to two years, and then productization and ramp-up. Anywhere between two years to three years, you usually find and see the royalty stream, especially for a big and successful company. That is the norm that we have seen in recent years. We do not think AI is any different than the other IPs that we license.

Amir Panush, Chief Executive Officer, CEVA: Maybe one more comment I will add. This is Amir. First, in terms of the deal itself, this is a multi-year deal. This is really to provide direct access to our technology, to Microchip, to enable that across all the product lines. We are very excited with that. Also, definitely, AI is a market where technology, in terms of new innovation and new needs, is coming very quickly. We do expect, especially in the AI domain, that the cycle of innovation and speed towards innovation will drive renewal of those deals with additional capabilities to come on a good regular basis of every year or two. Definitely, there is more opportunity to keep upsell the technology as we drive more of that development.

Chris Reimer, Analyst, Barclays: Okay. Thank you.

Yaniv Arieli, Chief Financial Officer, CEVA: Sure. Thank you.

Rocco, Conference Moderator: Once again, to ask a question, please press star then one. Our next question comes from Martin Yang at Oppenheimer. Please go ahead.

Martin Yang, Analyst, Oppenheimer: Hi. Thank you for taking my question. Can you maybe go into more details on which Microchip product family or verticals will be prioritized initially? Is it industrial, automotive, any other data centers? How do you think about the attractiveness of those end markets, respectively, based on when or which goes to market first?

Amir Panush, Chief Executive Officer, CEVA: Yeah. Martin, thanks. Great question. Again, just to clarify, in terms of the deal itself, this is to provide full access for all the different ranges of needs of NPUs to all the different markets that Microchip have business at. In terms of which will come first, we can’t really go into the details of what our customers are planning to do, but it will definitely be on so-called the full spectrum of that range. We do expect to have multiple programs where some of them are more, I would call it, the embedded MCU product line, and some of them are more towards the infrastructure and the data centers type of solutions.

Rocco, Conference Moderator: Thank you, Amir. One more question. How do you think about the prospect of getting NeuPro integrated with your connectivity IPs? Is there a strong interest by customers for both of those? If so, how far along with productization and mass production?

Amir Panush, Chief Executive Officer, CEVA: Yeah. That’s a great question. First, with this specific customer, for example, yeah, we have in the past licensed connectivity and are very likely to continue licensing additional connectivity technology as we move forward. We definitely see a good synergy of the ability to license both connectivity technology and NPU technology. Definitely, as you go towards more of the embedded system, that’s where the integration of the two technologies makes lots of sense and provides additional time-to-market advantage, cost, and power efficiency of the solution. Those are the things that we typically really master very well and can enable our customers to compete very successfully in the marketplace. That combination will play to our strengths as we keep moving forward. In the previous quarter, we talked about several deals of NPU coming together with connectivity, and that trend will continue.

We are very, very encouraged with what we have seen so far, really building on the wireless connectivity leadership. Then on top of that, really now driving very good success in terms of design wins and access in the markets with our AI solution.

Martin Yang, Analyst, Oppenheimer: Thank you, Amir. That’s it for me.

Yaniv Arieli, Chief Financial Officer, CEVA: Thanks, Martin.

Rocco, Conference Moderator: Our next question comes from David O’Connor at BNP Paribas. Please go ahead.

Yaniv Arieli, Chief Financial Officer, CEVA: Yeah. Great. Good morning. Thanks so much for letting me ask a question. Maybe, Amir, just firstly, again, sorry to go back to the Microchip deal, but if you could give us just a bit more color around what the competitive landscape looks like for you to kind of secure that win. Was it mainly internal IP that you were competing against? Was there a lot of kind of anything you can share around what that led to that, and why exactly now? I mean, NeuPro itself, you guys have been developing for some time. Why exactly now did Microchip license NeuPro? Also, maybe as a follow-on, can you talk as well around the sustainability of that kind of AI looking forward? When you look in the pipeline, how does that look? Is there other potential big Microchip?

Any kind of color you can share around that would be helpful. Thank you.

Amir Panush, Chief Executive Officer, CEVA: Yeah. Thanks a lot, David. Really three different questions. I’ll try to address each of them. First, from a competitive landscape, this is also what I mentioned in the prepared remarks related specifically to NPU. NPU, we believe, like other processors, whether it’s a CPU or a DSP or GPU, we believe that the majority of the companies out there are not going to build on their own or make on their own, and they will go and license the technology. We believe there is a great opening and opportunity ahead of us to license NPU technology. The same, again, they apply to the customer, which we competed with other potential IP vendors rather than the mix versus buy. We believe, again, that’s a great opportunity for us.

The reason that we have won in this account and why now we’re seeing the momentum, which is, honestly, it’s not just now, it’s for the last two quarters in bigger numbers, and for the last four quarters, we’re really starting gaining the momentum. It’s because we are delivering three major ingredients that each of them is quite unique to us, and all of them is extremely unique of what we can offer. One is now a complete portfolio of NPUs, starting again from the low end to the higher end of the spectrum for inference use cases. Portfolio play. Second is a combined software stack that can support all the different hardware configurations underneath, and one that can quite easily get integrated by our customers into their own software stack. Very advanced software stack that supports all our combined portfolio.

The last piece is that within each of those different configurations, we believe that we have one of the best, if not the best, optimization in terms of the architecture and technology that we can offer of the trade-off between power, cost, size, and performance. Extremely competitive offering on each ingredient on its own, on top of that, the portfolio, and then the software stack that comes on top of that. We believe all those three ingredients coming together provide us very good competitive advantage in the marketplace. The last piece about sustainability of the business, at the end, when we look at the pipeline ahead of us, it aligns quite nicely with the momentum that we have generated in the last two quarters.

A significant portion of the pipeline comes from AI or NPU product lines that, as you mentioned, we have invested in for the last few years, and now we really see that materializing nicely. I cannot say that on a quarterly basis, that’s exactly going to be the revenue recognition. Things can vary on a quarterly basis, but as a long-term trajectory, our pipeline definitely supports this level of revenue and potentially even above it.

Rocco, Conference Moderator: Very helpful. Thanks, Amir. That’s great color. Maybe just following on from that one for Yaniv on the optics side of things, given the kind of interest and acceleration you’re seeing on the NeuPro AI side of things, can you just speak to the optics? Is that in the base, or can we expect maybe a step up in optics required there to support that growth that you’re seeing? Anything around the optics related to NeuPro? Thanks, guys.

Amir Panush, Chief Executive Officer, CEVA: Yeah. Sure, David. Two things on that. One, definitely, as you have seen for the last few years, we definitely manage very carefully expenses, and we would like to drive continued momentum on the bottom line. Having said that, definitely, we see a significant opportunity ahead of us, both actually on keep expanding our wireless connectivity leadership as well as on the AI that now we really have the proof points and the success in the marketplace. When I take these two points into consideration, definitely, we look at how we can keep investing and adding the capabilities to drive revenue growth, all while at the end of the day, stay quite disciplined of how we invest our money.

Yaniv Arieli, Chief Financial Officer, CEVA: For Q4, we gave the specific guidance. You won’t see big changes in the optics and in R&D investments. Going forward, we need to do our planning and discussions, and probably we’ll do it later early next year about 2026 investments and how we see the opportunities and the potential ROI in this specific, very, very exciting market that seems that we have managed to penetrate into and in some sense signed some very, very interesting and lucrative deals.

Amir Panush, Chief Executive Officer, CEVA: Yeah. Overall on that, David, I would just conclude we’re really excited about the momentum that we are seeing right now and the competitiveness of our technology, again, both on AI and overall the wireless connectivity leadership with the volume keeps going up quarter over quarter.

Rocco, Conference Moderator: Great color. Thanks so much, guys.

Thank you. That concludes our question and answer session. I’d like to turn the conference back over to Amir Panush for any closing remarks.

Yaniv Arieli, Chief Financial Officer, CEVA: Hello?

Rocco, Conference Moderator: Hello, Amir?

Hello. I’d like to turn the call over to Amir Panush. Please go ahead.

Martin Yang, Analyst, Oppenheimer: That’s fine. I’ll take it here. Thanks very much, Rocco. On behalf of the CEVA team, thank you for joining us today. With AI now contributing over a third of licensing revenue and connectivity shipments hitting record highs, we are well positioned for sustainable growth and expanding our role as a foundational technology provider for intelligent connected devices. We look forward to meeting many of you during the third quarter at investor conferences. As a reminder, the prepared remarks for this conference call are filed as an exhibit to the current report on Form 8K and accessible through the investor section of our website. With regards to upcoming conferences, we will be participating in the following conferences: the 14th Annual Roth Technology Conference, November 19th in New York, the UBS Global Technology and AI Conference, December 2nd in Scottsdale, Arizona, and the Northland Growth Conference, December 16th, being held virtually.

Further information on these events and all events we will be participating in can be found on the investor section of our website. Thank you and goodbye.

Rocco, Conference Moderator: Thank you. That concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.

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