CEVA Inc. 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Ceva Inc. reported second quarter 2026 revenue of $29 million, a 13% year-over-year increase and 7% sequential growth, driven by a 21% rise in licensing and related revenue to $18.2 million, the highest in three years.
- Royalty revenue was $10.8 million, up 17% sequentially and slightly above the prior year period, supported by wireless connectivity, automotive AI deployment, and smartphone market share gains.
- Gross margin was 87% GAAP and 88% non-GAAP, with GAAP operating loss improving to $2.1 million from $4.5 million a year ago, and non-GAAP operating income rising to $3.1 million from $0.8 million.
- Non-GAAP net income increased 28% year over year to $2.3 million, with diluted earnings per share rising to $0.08 from $0.07, doubling sequentially.
- Customers shipped 567 million Ceva-powered devices in the quarter, a 16% increase year over year, including 61 million mobile handset modem units and 487 million consumer IoT units.
- Bluetooth shipments decreased 16% year over year to 295 million units, cellular IoT shipments reached a record 68 million units, and Wi-Fi shipments increased 28% to 80 million units.
- The company ended the quarter with approximately $221 million in cash and equivalents, generated $5.8 million in operating cash flow, and employed 406 people, including 327 engineers.
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Transcript
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Good day, and welcome to the CEVA, Inc. second quarter 2026 earnings conference call. All participants will be in listen-only mode. Should 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, Investor and Public Relations. Please go ahead, sir. Thank you, Rocco.
Good morning, everyone, and welcome to CEVA's second quarter 2026 earnings conference call. Joining me today are Amir Panush, Chief Executive Officer, and Yaniv Arieli, Chief Financial Officer. Before handing the call over to Amir, I'd 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 our results to differ materially from those expressed or implied by such statements. We will also discuss certain non-GAAP financial measures, which we believe provide investors with additional insight into our core operating performance. Reconciliations between our GAAP and non-GAAP results are included in the earnings release issued this morning and available on the investor relations section of our website. With that, I'll turn the call over to Amir.
Amir? Thank you, Richard, and good morning, everyone.
We delivered another strong quarter, with revenue increasing 13% year-over-year to $29 million, fueled by licensing and related revenue growing 21% to hit highest level in three years. The quarter also benefited from a sequential recovery in royalty revenue, driven by continuing momentum across wireless connectivity, ramping automotive AI programs, and market share gains in smartphone. During the quarter, we signed 10 licensing agreements, including two with first-time customers and two directly with OEMs. More important than the number of agreements is the quality of those agreements. Increasingly, customers are adopting broader platforms and deeper collaborations that strengthens both our near-term licensing business and our long-term royalty opportunity. I would like to focus today on two themes that we believe highlight an important shift in the semiconductor industry and explain why CEVA and our technologies are increasingly well-positioned for long-term growth.
The first is the continuing migration of intelligence from the cloud to the smart edge. This is a trend we have discussed for several years and one that is increasingly driving demand for our higher performance, connectivity, sensing, and AI technologies. During the quarter, we announced that we believe is one of the most strategically significant AI licensing agreements in CEVA's history. A leading global AI and computing platform company selected our NeuPro-M NPU IP for its next generation custom AI silicon. This agreement is significant for several reasons. First, it represents a new category of AI customers for CEVA. Historically, our AI licensing activity has primarily been with semiconductor companies and device OEMs.
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