CEVA nine-month revenue hits $85.1M; loss $9.7M
CEVA reported $2.5 million in operating cash flow while holding $29.6 million in cash and $186.0 million in marketable securities.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
CEVA Inc. reported revenue of $85.1 million for the nine months ended September 30, 2026, compared with $78.3 million a year earlier. Licensing and related revenue was $52.4 million, and royalties were $32.7 million. Net loss was $9.7 million, or $0.35 per share, compared with $9.5 million, or $0.40 per share, in 2025.
Net cash provided by operating activities was $2.5 million, compared with $12.1 million used in the prior-year period. At September 30, cash and cash equivalents were $29.6 million and marketable securities were $186.0 million. Management believes these resources, together with cash from operations, will provide sufficient capital to fund operations for at least the next 12 months.
Chief Executive Officer Amir Panush adopted a Rule 10b5-1(c) trading plan to sell, subject to certain conditions, up to 230,000 shares. CEVA repurchased no common shares during the first nine months of 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month revenue rose to $85.1 million from $78.3 million.
- Moderate pointOperating cash flow turned positive at $2.5 million, versus $12.1 million used.
Negative
- None.
Filing Explained
At September 30, CEVA reported 28,526,321 common shares outstanding, versus 27,510,739 at December 31, 2025; the filing reports common and treasury shares issued upon stock-award exercises during the period. The expanded share base reduces existing holders’ percentage ownership, absent offsetting changes.
Key Figures
Key Terms
performance obligation financial
available-for-sale marketable securities financial
foreign currency cash flow hedging program financial
unbilled receivables financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did CEVA Inc. (CEVA) report for the nine months ended September 30, 2026?
What operating cash flow did CEVA Inc. (CEVA) report for the first nine months of 2026?
How many CEVA shares could CEO Amir Panush sell under his trading plan? (CEVA)
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
|
For the quarterly period ended: |
OR
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
|
For the transition period from __________ to _____________ |
Commission file number:
(Exact Name of Registrant as Specified in Its Charter)
|
|
|
|
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
|
|
|
|
(Address of Principal Executive Offices) |
(Zip Code) |
(
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act
|
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
|
|
|
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer |
☐ |
|
☒ |
|
Non-accelerated filer |
☐ |
Smaller reporting company |
|
|
Emerging growth company |
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date:
TABLE OF CONTENTS
|
Page |
||
|
PART I. |
FINANCIAL INFORMATION |
5 |
|
Item 1. |
Interim Condensed Consolidated Balance Sheets at September 30, 2026 (unaudited) and December 31, 2025 |
5 |
|
Interim Condensed Consolidated Statements of Loss (unaudited) for the three and nine months ended September 30, 2026 and 2025 |
6 |
|
|
Interim Condensed Consolidated Statements of Comprehensive Loss (unaudited) for the three and nine months ended September 30, 2026 and 2025 |
7 |
|
|
Interim Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three and nine months ended September 30, 2026 and 2025 |
8 |
|
|
Interim Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2026 and 2025 |
10 |
|
|
Notes to the Interim Condensed Consolidated Financial Statements |
11 |
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
28 |
|
Item 3. |
Quantitative and Qualitative Disclosures about Market Risk |
37 |
|
Item 4. |
Controls and Procedures |
38 |
|
PART II. |
OTHER INFORMATION |
39 |
|
Item 1. |
Legal Proceedings |
39 |
|
Item 1A. |
Risk Factors |
40 |
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
41 |
|
Item 3. |
Defaults Upon Senior Securities |
41 |
|
Item 4. |
Mine Safety Disclosures |
41 |
|
Item 5. |
Other Information |
41 |
|
Item 6. |
Exhibits |
43 |
|
SIGNATURES |
43 |
|
FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements which are based on our management’s beliefs and assumptions and on information currently available to our management. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “goal,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. We discuss these risks, uncertainties and other factors in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2025 in greater detail under the heading “Risk Factors” of such reports. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this filing. You should read this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We hereby qualify our forward-looking statements by these cautionary statements. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the filing date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
U.S. dollars in thousands, except share and per share data
|
September 30, 2026 |
December 31, |
|||||||
|
ASSETS |
||||||||
|
Current assets: |
||||||||
|
Cash and cash equivalents |
$ | $ | ||||||
|
Short-term bank deposits |
||||||||
|
Marketable securities |
||||||||
|
Trade receivables (net of allowance for credit losses of $ |
||||||||
|
Prepaid expenses and other current assets |
||||||||
|
Total current assets |
||||||||
|
Long-term assets: |
||||||||
|
Severance pay fund |
||||||||
|
Deferred tax assets, net |
||||||||
|
Property and equipment, net |
||||||||
|
Operating lease right-of-use assets |
||||||||
|
Goodwill |
||||||||
|
Intangible assets, net |
||||||||
|
Investments in marketable equity securities |
||||||||
|
Other long-term assets |
||||||||
|
Total long-term assets |
||||||||
|
Total assets |
$ | $ | ||||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
|
Current liabilities: |
||||||||
|
Trade payables |
$ | $ | ||||||
|
Deferred revenues |
||||||||
|
Accrued expenses and other payables |
||||||||
|
Accrued payroll and related benefits |
||||||||
|
Operating lease liabilities |
||||||||
|
Total current liabilities |
||||||||
|
Long-term liabilities: |
||||||||
|
Accrued severance pay |
||||||||
|
Operating lease liabilities |
||||||||
|
Other accrued liabilities |
||||||||
|
Total long-term liabilities |
||||||||
|
Stockholders’ equity: |
||||||||
|
Preferred Stock, $ |
||||||||
|
Common Stock, $ |
||||||||
|
Additional paid-in capital |
||||||||
|
Treasury stock at cost ( |
( |
) | ||||||
|
Accumulated other comprehensive income (loss) |
( |
) | ||||||
|
Accumulated deficit |
( |
) | ( |
) | ||||
|
Total stockholders’ equity |
||||||||
|
Total liabilities and stockholders’ equity |
$ | $ | ||||||
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF LOSS (UNAUDITED)
U.S. dollars in thousands, except per share data
|
Nine months ended |
Three months ended |
|||||||||||||||
|
September 30, |
September 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
Revenues: |
||||||||||||||||
|
Licensing and related revenues |
$ | $ | $ | $ | ||||||||||||
|
Royalties |
||||||||||||||||
|
Total revenues |
||||||||||||||||
|
Cost of revenues |
||||||||||||||||
|
Gross profit |
||||||||||||||||
|
Operating expenses: |
||||||||||||||||
|
Research and development, net |
||||||||||||||||
|
Sales and marketing |
||||||||||||||||
|
General and administrative |
||||||||||||||||
|
Amortization of intangible assets |
||||||||||||||||
|
Total operating expenses |
||||||||||||||||
|
Operating loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Financial income, net |
||||||||||||||||
|
Remeasurement of marketable equity securities |
( |
) | ( |
) | ||||||||||||
|
Loss before taxes on income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Income tax expense |
||||||||||||||||
|
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
Basic and diluted net loss per share |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
Weighted-average shares used to compute net loss per share (in thousands): |
||||||||||||||||
|
Basic and diluted |
||||||||||||||||
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
U.S. dollars in thousands
|
Nine months ended |
Three months ended |
|||||||||||||||
|
September 30, |
September 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
Other comprehensive income (loss) before tax: |
||||||||||||||||
|
Available-for-sale securities: |
||||||||||||||||
|
Changes in unrealized gains (losses) |
( |
) | ( |
) | ||||||||||||
|
Reclassification adjustments included in net loss |
( |
) | ( |
) | ( |
) | ||||||||||
|
Net change |
( |
) | ( |
) | ||||||||||||
|
Cash flow hedges: |
||||||||||||||||
|
Changes in unrealized gains (losses) |
( |
) | ||||||||||||||
|
Reclassification adjustments included in net loss |
( |
) | ( |
) | ( |
) | ||||||||||
|
Net change |
( |
) | ( |
) | ( |
) | ||||||||||
|
Other comprehensive income (loss) before tax |
( |
) | ( |
) | ( |
) | ||||||||||
|
Income tax expense (benefit) related to components of other comprehensive income (loss) |
( |
) | ( |
) | ||||||||||||
|
Other comprehensive income (loss), net of taxes |
( |
) | ( |
) | ( |
) | ||||||||||
|
Comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
U.S. dollars in thousands, except share data
|
Common stock |
||||||||||||||||||||||||||||
|
Nine months ended September 30, 2026 |
Number of shares outstanding |
Amount |
Additional |
Treasury stock |
Accumulated other comprehensive income (loss) |
Accumulated |
Total |
|||||||||||||||||||||
|
Balance as of January 1, 2026 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||||||
|
Net loss |
— | ( |
) | ( |
) | |||||||||||||||||||||||
|
Other comprehensive loss, net |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
|
Equity-based compensation |
— | |||||||||||||||||||||||||||
|
Issuance of common stock upon exercise of stock-based awards |
||||||||||||||||||||||||||||
|
Issuance of treasury stock upon exercise of stock-based awards |
(*) | ( |
) | |||||||||||||||||||||||||
|
Balance as of September 30, 2026 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
|
Common stock |
||||||||||||||||||||||||||||
|
Three months ended September 30, 2026 |
Number of shares outstanding |
Amount |
Additional |
Treasury stock |
Accumulated other comprehensive loss |
Accumulated |
Total |
|||||||||||||||||||||
|
Balance as of July 1, 2026 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
|
Net loss |
— | ( |
) | ( |
) | |||||||||||||||||||||||
|
Other comprehensive loss, net |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
|
Equity-based compensation |
— | |||||||||||||||||||||||||||
|
Issuance of common stock upon exercise of stock-based awards |
||||||||||||||||||||||||||||
|
Balance as of September 30, 2026 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
U.S. dollars in thousands, except share data
|
Common stock |
||||||||||||||||||||||||||||
|
Nine months ended September 30, 2025 |
Number of shares outstanding |
Amount |
Additional |
Treasury stock |
Accumulated other comprehensive income (loss) |
Retained |
Total |
|||||||||||||||||||||
|
Balance as of January 1, 2025 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||
|
Net loss |
— | ( |
) | ( |
) | |||||||||||||||||||||||
|
Other comprehensive income, net |
— | — | ||||||||||||||||||||||||||
|
Equity-based compensation |
— | |||||||||||||||||||||||||||
|
Purchase of treasury stock |
( |
) | (*) | ( |
) | ( |
) | |||||||||||||||||||||
|
Issuance of common stock upon exercise of stock-based awards |
(*) | |||||||||||||||||||||||||||
|
Issuance of treasury stock upon exercise of stock-based awards |
(*) | ( |
) | ( |
) | |||||||||||||||||||||||
|
Balance as of September 30, 2025 |
$ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||
|
Common stock |
||||||||||||||||||||||||||||
|
Three months ended September 30, 2025 |
Number of shares outstanding |
Amount |
Additional |
Treasury stock |
Accumulated other comprehensive income (loss) |
Retained |
Total |
|||||||||||||||||||||
|
Balance as of July 1, 2025 |
$ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||
|
Net loss |
— | ( |
) | ( |
) | |||||||||||||||||||||||
|
Other comprehensive loss, net |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
|
Equity-based compensation |
— | |||||||||||||||||||||||||||
|
Purchase of treasury stock |
( |
) | (*) | ( |
) | ( |
) | |||||||||||||||||||||
|
Issuance of treasury stock upon exercise of stock-based awards |
(*) | ( |
) | ( |
) | |||||||||||||||||||||||
|
Balance as of September 30, 2025 |
$ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||
|
(*) |
|
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
U.S. dollars in thousands
|
Nine months ended |
||||||||
|
2026 |
2025 |
|||||||
|
Cash flows from operating activities: |
||||||||
|
Net loss |
$ | ( |
) | $ | ( |
) | ||
|
Adjustments required to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
|
Depreciation |
||||||||
|
Amortization of intangible assets |
||||||||
|
Equity-based compensation |
||||||||
|
Realized gain on sale of available-for-sale marketable securities |
( |
) | ( |
) | ||||
|
Accretion of discount on available-for-sale marketable securities |
( |
) | ( |
) | ||||
|
Unrealized foreign exchange (gain) loss |
( |
) | ||||||
|
Remeasurement of marketable equity securities |
( |
) | ||||||
|
Changes in operating assets and liabilities: |
||||||||
|
Trade receivables, net |
( |
) | ||||||
|
Prepaid expenses and other assets |
( |
) | ( |
) | ||||
|
Operating lease right-of-use assets |
||||||||
|
Accrued interest on bank deposits |
( |
) | ||||||
|
Deferred tax, net |
( |
) | ||||||
|
Trade payables |
( |
) | ||||||
|
Deferred revenues |
( |
) | ( |
) | ||||
|
Accrued expenses and other payables |
( |
) | ( |
) | ||||
|
Accrued payroll and related benefits |
( |
) | ( |
) | ||||
|
Operating lease liability |
( |
) | ||||||
|
Accrued severance pay, net |
||||||||
|
Net cash provided by (used in) operating activities |
( |
) | ||||||
|
Cash flows from investing activities: |
||||||||
|
Purchase of property and equipment |
( |
) | ( |
) | ||||
|
Proceeds from the sale of Intrinsix |
||||||||
|
Investment in bank deposits |
( |
) | ( |
) | ||||
|
Proceeds from bank deposits |
||||||||
|
Investment in available-for-sale marketable securities |
( |
) | ( |
) | ||||
|
Proceeds from maturity of available-for-sale marketable securities |
||||||||
|
Proceeds from sale of available-for-sale marketable securities |
||||||||
|
Net cash provided by (used in) investing activities |
( |
) | ||||||
|
Cash flows from financing activities: |
||||||||
|
Purchase of treasury stock |
( |
) | ||||||
|
Proceeds from exercise of stock-based awards |
||||||||
|
Net cash provided by (used in) financing activities |
( |
) | ||||||
|
Effect of exchange rate changes on cash and cash equivalents |
( |
) | ||||||
|
Decrease in cash and cash equivalents |
( |
) | ( |
) | ||||
|
Cash and cash equivalents at the beginning of the period |
||||||||
|
Cash and cash equivalents at the end of the period |
$ | $ | ||||||
|
Supplemental information of cash flow activities: |
||||||||
|
Cash paid during the period for: |
||||||||
|
Income and withholding taxes |
$ | $ | ||||||
|
Non-cash transactions: |
||||||||
|
Property and equipment purchases incurred but unpaid at period end |
$ | $ | ||||||
|
Right-of-use assets obtained in the exchange for operating lease liabilities |
$ | $ | ||||||
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except share data)
|
NOTE 1: |
BUSINESS |
The financial information in this quarterly report includes the results of Ceva, Inc. and its subsidiaries (the “Company” or “Ceva”).
Ceva is the leader in silicon and software IP enabling Physical AI – the artificial intelligence embedded in billions of devices that connect, sense and infer data in the real world. Ceva views Physical AI as the natural evolution of Edge AI. While Edge AI refers to running AI workloads locally on devices rather than in the cloud, Physical AI extends this concept further: it unifies connectivity, sensing and inference layers into a single fabric that allows devices not only to process data at the edge, but also to interact intelligently with their physical environment and the cloud. Ceva believes it is uniquely positioned as the only company with leadership in innovative silicon and software IP solutions across all three layers. Ceva’s technologies power the connectivity, perception and intelligence in today’s most advanced smart edge products across consumer IoT, automotive, industrial and infrastructure, and mobile and PC markets.
Ceva is a trusted partner to many of the leading semiconductor and original equipment manufacturers (“OEM”) and, increasingly, technology platform companies, serving not only Ceva's largest target growth markets but also a wide variety of other applications, including smart home, surveillance, robotics and medical. Ceva’s customers incorporate Ceva’s IP into application-specific integrated circuits and application-specific standard products that they manufacture, market and sell.
Ceva’s portfolio spans the three foundational layers of Physical AI:
|
● |
Connectivity layer (wireless transport): Bluetooth, Wi-Fi, Ultra Wideband (“UWB”), cellular internet-of-things (“IoT”), and 5G Advanced IP platforms that form the backbone of ubiquitous, secure, and high-performance communication |
|
● |
Sensing layer (software and DSPs): Sensor fusion processors, RealSpace spatial audio, MotionEngine software, and general-purpose digital signal processors (“DSPs”) that transform raw sensor data into actionable intelligence |
|
● |
Inference layer (NPUs and AI DSPs): The next-generation NeuPro family of neural processing units (“NPUs”), built on a common architecture and unified software stack that spans Physical AI applications from always-on sensors to AI infrastructure. The portfolio comprises NeuPro-Nano for always-on sensing and entry-level perception in highly constrained devices, NeuPro Prime for mainstream convolutional neural network and transformer workloads, NeuPro Max for advanced edge applications, including robotics, multimodal AI, on-device assistants and Physical AI, and NeuPro Ultra, which extends the family into AI infrastructure for large language model inference in the cloud and data center. Alongside it, the SensPro family of AI DSPs serves high-performance signal and AI workloads |
Ceva licenses its portfolio of wireless communications, sensing and scalable AI IP to its customers, lowering barriers to entry and enabling them to bring new products to market faster, more reliably, efficiently and economically.
|
NOTE 2: |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation
The interim condensed consolidated financial statements and accompanying notes have been prepared according to U.S. Generally Accepted Accounting Principles (“U.S. GAAP”).
In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2025, contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2026, have been applied consistently in these unaudited interim condensed consolidated financial statements.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, bank deposits, marketable securities, foreign exchange contracts and trade receivables. The Company invests its surplus cash in cash deposits and marketable securities in financial institutions and has established guidelines relating to diversification and maturities to maintain safety and liquidity of the investments.
The majority of the Company’s cash and cash equivalents are invested in high grade certificates of deposit with major U.S., European and Israeli banks. Generally, cash and cash equivalents and bank deposits may be redeemed on demand and therefore minimal credit risk exists with respect to them. Nonetheless, deposits with these banks exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits or similar limits in foreign jurisdictions, to the extent such deposits are even insured in such foreign jurisdictions. Generally, these cash equivalents may be redeemed upon demand, and therefore management believes that they bear a lower risk. The short-term bank deposits are held in financial institutions that management believes are institutions with high credit standing and, accordingly, minimal credit risk from geographic or credit concentration. Furthermore, the Company holds an investment portfolio consisting principally of corporate bonds. For available-for-sale debt securities with unrealized loss positions, the Company does not intend to sell these securities and it is more likely than not that the Company will hold these securities until maturity or a recovery of the cost basis. No material credit losses for available-for-sale debt securities were recorded during the periods presented.
The Company’s trade receivables are geographically diverse, mainly in the Asia Pacific region, and also in the United States and Europe. Concentration of credit risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation and account monitoring procedures. The Company performs ongoing credit evaluations of its customers. The Company makes estimates of expected credit losses based upon its assessment of various factors, including historical experience, the age of the trade receivable balances, credit quality of its customers, current economic conditions, and other factors that may affect its ability to collect from customers.
As of September 30, 2026, the allowance for credit losses was immaterial.
The Company has no off-balance-sheet concentration of credit risk.
Recently Adopted Accounting Standards
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). This amendment introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company adopted this guidance on January 1, 2026 on a prospective basis. The Company has elected the practical expedient provided by ASU 2025-05. Under this expedient, the Company assumes that economic conditions as of the balance sheet date remain unchanged for the remaining life of all current accounts receivable and current contract assets arising from transactions under ASC 606. The adoption did not have a material impact on the consolidated financial statements.
Accounting Standards Recently Issued, Not Yet Adopted by the Company
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure of disaggregated information about certain expense captions presented in the Consolidated Statements of Operations as well as disclosure about selling expense. The guidance will be effective for the Company for annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028, with early adoption permitted. It could be applied either prospectively or retrospectively. The Company is currently evaluating the impact on its financial statement disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU simplifies the capitalization guidance by removing all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout ASC 350-40. The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years. Adoption of this ASU can be applied prospectively for reporting periods after its effective date; or follow a modified transition approach. The Company is currently evaluating the impact of this amendment on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The update provides recognition, measurement, presentation, and disclosure requirements for government grants, including guidance for grants related to an asset and grants related to income. The amendments introduced two permitted approaches for asset-related grants: a deferred income approach or a cost accumulation approach. The guidance is effective for the Company beginning January 1, 2029, with early adoption permitted. The Company is currently evaluating the impact on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU was updated to improve the navigability of the required interim disclosures within ASC No. 270 and to clarify when the guidance applies. This ASU is not intended to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. The amendments in this ASU are required to be adopted for interim reporting periods beginning after December 15, 2027, with early adoption permitted, and may be applied either through a prospective or retrospective approach. The Company is currently evaluating the effect of adopting the ASU on its condensed consolidated financial statement disclosures.
Government Grants and Tax Credits
On March 31, 2026, the Israeli Knesset enacted Chapter 10, "Law for the Encouragement and Incentivization of Research and Development, 2026" (the “R&D Law”). The R&D Law introduces a refundable tax credit regime for qualifying research and development expenditures incurred in Israel, effective for tax years beginning January 1, 2026. Subject to certain conditions, eligible companies may apply the credit against Israeli income taxes or Israeli qualified domestic minimum top-up tax or alternatively receive a government grant to the extent the credit is not utilized. Government grants and refundable tax credits, such as those provided under the recently enacted Israeli legislation, are recognized as a reduction to the related expense when there is reasonable assurance that the Company complies with required conditions and the incentive will be received. For the three and nine months ended September 30, 2026, the Company recorded $
Use of Estimates
The preparation of the interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
|
NOTE 3: |
REVENUE RECOGNITION |
Under Accounting Standards Codification (“ASC”) No. 606, “Revenue from Contracts with Customers” (“ASC 606”), the Company recognizes revenue when or as it satisfies a performance obligation by transferring intellectual property (“IP”) licenses or services to the customer, either at a point in time or over time. The Company recognizes most of its revenues at a point in time upon delivery when the customer accepts control of the IP. The Company recognizes revenue over time on license customization and implementation services by using cost inputs to measure progress toward completion of its performance obligations. The Company considers the post-contract support services as a distinct performance obligation that is satisfied over time, and as such, revenue is recognized ratably over the service period.
Revenues that are derived from the sale of a licensee’s products that incorporate the Company’s IP are classified as royalty revenues. Royalty revenues are recognized during the quarter in which the sale of the product incorporating the Company’s IP occurs. Royalties are calculated either as a percentage of the revenues received by the Company’s licensees on sales of products incorporating the Company’s IP or on a per unit basis, as specified in the agreements with the licensees. Royalty revenues are recognized during the quarter in which the Company receives the actual sales data from its customers after the quarter ends and accounts for it as unbilled receivables. When the Company does not receive actual sales data from the customer prior to the finalization of its financial statements, royalty revenues are recognized based on the Company’s estimation of the customer’s sales during the quarter. This estimation process for the royalty revenue accrual is based on inputs and estimations received from the Company’s customers, as well as sales trends and various market factors. Adjustments to royalty revenues are made in subsequent periods to reflect updated estimates as soon as the final royalty reports are sent to the Company.
The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The estimated revenues do not include amounts of royalties or unexercised contract renewals:
|
Remainder of 2026 |
2027 |
2028 and thereafter |
||||||||||
|
Licensing and related revenues |
$ | $ | $ | |||||||||
Disaggregation of revenue:
The following table provides information about disaggregated revenue by primary geographical, use cases for the Company's technology portfolio, and timing of revenue recognition:
|
Nine months ended September 30, 2026 (unaudited) |
Three months ended September 30, 2026 (unaudited) |
|||||||||||||||||||||||
|
Licensing and related revenues |
Royalties |
Total |
Licensing and related revenues |
Royalties |
Total |
|||||||||||||||||||
|
Geography |
||||||||||||||||||||||||
|
United States |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Europe and Middle East |
||||||||||||||||||||||||
|
Asia Pacific |
||||||||||||||||||||||||
|
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Use cases for the Company’s technology portfolio |
||||||||||||||||||||||||
|
Connect (baseband for handset and other devices, Bluetooth, Wi-Fi and NB-IoT) |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Infer (Imaging, vision and AI) |
||||||||||||||||||||||||
|
Sense (sensor fusion and audio) |
||||||||||||||||||||||||
|
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Timing of revenue recognition |
||||||||||||||||||||||||
|
Products transferred at a point in time |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Products and services transferred over time |
— | — | ||||||||||||||||||||||
|
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Nine months ended September 30, 2025 (unaudited) |
Three months ended September 30, 2025 (unaudited) |
|||||||||||||||||||||||
|
Licensing and related revenues |
Royalties |
Total |
Licensing and related revenues |
Royalties |
Total |
|||||||||||||||||||
|
Geography |
||||||||||||||||||||||||
|
United States |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Europe and Middle East |
||||||||||||||||||||||||
|
Asia Pacific |
||||||||||||||||||||||||
|
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Use cases for the Company’s technology portfolio |
||||||||||||||||||||||||
|
Connect (baseband for handset and other devices, Bluetooth, Wi-Fi and NB-IoT) |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Infer (Imaging, vision and AI) |
||||||||||||||||||||||||
|
Sense (sensor fusion and audio) |
||||||||||||||||||||||||
|
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Timing of revenue recognition |
||||||||||||||||||||||||
|
Products transferred at a point in time |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Products and services transferred over time |
— | — | ||||||||||||||||||||||
|
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Contract balances:
The following table provides information about trade receivables, unbilled receivables and contract liabilities from contracts with customers:
|
September 30, 2026 |
December 31, 2025 |
|||||||
|
Current assets (classified under “Trade receivables”): |
||||||||
|
Trade receivables |
$ | $ | ||||||
|
Unbilled receivables (associated with licensing and related revenues) |
||||||||
|
Unbilled receivables (associated with royalties) |
||||||||
|
Total current assets |
||||||||
|
Long-term assets (classified under “Other long-term assets”): |
||||||||
|
Unbilled receivables (associated with licensing and related revenues) |
||||||||
|
Deferred revenues (short-term contract liabilities) |
||||||||
The Company receives payments from customers based upon contractual payment schedules; trade receivables are recorded when the right to consideration becomes unconditional, and an invoice is issued to the customer. Unbilled receivables associated with licensing and other include amounts related to the Company’s contractual right to consideration for completed performance obligations not yet invoiced. Unbilled receivables associated with royalties are recorded as the Company recognizes revenues from royalties earned during the quarter, but not yet invoiced, either by actual sales data received from customers, or, when applicable, by the Company’s estimation. Contract liabilities (deferred revenue) include payments received in advance of performance under the contract and are realized with the associated revenue recognized under the contract.
During the three and nine months ended September 30, 2026, the Company recognized $
Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days.
Costs to obtain a contract:
As of September 30, 2026 and December 31, 2025, the Company had a remaining contract cost asset of $
|
NOTE 4: |
MARKETABLE SECURITIES |
The following is a summary of available-for-sale marketable securities:
|
September 30, 2026 (Unaudited) |
||||||||||||||||
|
Amortized |
Gross |
Gross |
Fair |
|||||||||||||
|
Available-for-sale - matures within one year: |
||||||||||||||||
|
Corporate bonds |
$ | $ | $ | ( |
) | $ | ||||||||||
|
Available-for-sale - matures after one year through four years: |
||||||||||||||||
|
Corporate bonds |
( |
) | ||||||||||||||
|
Total |
||||||||||||||||
| $ | $ | $ | ( |
) | $ | |||||||||||
|
December 31, 2025 |
||||||||||||||||
| Amortized cost |
Gross unrealized gains |
Gross unrealized losses |
Fair value |
|||||||||||||
|
Available-for-sale - matures within one year: |
||||||||||||||||
|
Corporate bonds |
$ | $ | $ | ( |
) | $ | ||||||||||
|
Available-for-sale - matures after one year through three years: |
||||||||||||||||
|
Corporate bonds |
( |
) | ||||||||||||||
|
Total |
$ | $ | $ | ( |
) | $ | ||||||||||
The following table presents gross unrealized losses and fair values for those investments that were in an unrealized loss position as of September 30, 2026 and December 31, 2025 and the length of time that those investments have been in a continuous loss position:
|
Less than 12 months |
12 months or greater |
|||||||||||||||
|
Fair value |
Gross unrealized loss |
Fair value |
Gross unrealized loss |
|||||||||||||
|
As of September 30, 2026 (unaudited) |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
|
As of December 31, 2025 |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
As of September 30, 2026, the allowance for credit losses was not material.
The following table presents gross realized gains and losses from sale of available-for-sale marketable securities:
|
Nine months ended |
Three months ended |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|||||||||||||
|
Gross realized gains from sale of available-for-sale marketable securities |
$ | $ | $ | $ | ||||||||||||
|
Gross realized losses from sale of available-for-sale marketable securities |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
|
NOTE 5: |
FAIR VALUE MEASUREMENT |
FASB ASC No. 820, “Fair Value Measurements and Disclosures” defines fair value and establishes a framework for measuring fair value. Fair value is an exit price, representing the amount that would be received for selling an asset or paid for the transfer of a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:
|
Level I |
Unadjusted quoted prices in active markets that are accessible on the measurement date for identical, unrestricted assets or liabilities; |
|
Level II |
Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and |
|
Level III |
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
The Company measures its marketable securities, investments in marketable equity securities and foreign currency derivative contracts at fair value. The carrying amount of cash, cash equivalents, short-term bank deposits, trade receivables, other accounts receivable, trade payables and other accounts payables approximate fair value due to the short-term maturity of these instruments. Investments in marketable equity securities are classified within Level I as the securities are traded in an active market. Marketable securities and foreign currency derivative contracts are classified within Level II as the valuation inputs are based on quoted prices and market observable data of similar instruments.
The table below sets forth the Company’s assets and liabilities measured at fair value by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
|
Description |
September 30, 2026 (unaudited) |
Level I (unaudited) |
Level II (unaudited) |
Level III (unaudited) |
||||||||||||
|
Assets: |
||||||||||||||||
|
Marketable securities: |
||||||||||||||||
|
Corporate bonds |
$ | $ | $ | $ | ||||||||||||
|
Foreign exchange contracts |
$ | $ | $ | $ | ||||||||||||
|
Investments in marketable equity securities |
$ | $ | $ | $ | ||||||||||||
|
Liabilities: |
||||||||||||||||
|
Foreign exchange contracts |
$ | $ | $ | $ | ||||||||||||
|
Description |
December 31, 2025 |
Level I |
Level II |
Level III |
||||||||||||
|
Assets: |
||||||||||||||||
|
Marketable securities: |
||||||||||||||||
|
Corporate bonds |
$ | $ | $ | $ | ||||||||||||
|
Foreign exchange contracts |
$ | $ | $ | $ | ||||||||||||
|
Investments in marketable equity securities |
$ | $ | $ | $ | ||||||||||||
|
NOTE 6: |
GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER DATA |
The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the Company’s chief operating decision maker (“CODM”), which is the Company’s chief executive officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates the Company’s financial information and resources and assesses the performance of these resources on a consolidated basis. There is no expense or asset information that is supplemental to those disclosed in these interim condensed consolidated financial statements that are regularly provided to the CODM. The allocation of resources and assessment of performance of the operating segment is based on consolidated net income as shown in our interim condensed consolidated statements of loss. The CODM considers net income in the annual forecasting process and reviews actual results when making decisions about allocating resources. Since the Company operates as one operating segment, financial segment information, including profit or loss and asset information, can be found in these interim condensed consolidated financial statements.
|
a. |
Summary information about geographic areas: |
The following is a summary of revenues and long-lived assets (including ROU assets) within geographic areas:
|
Nine months ended |
Three months ended |
|||||||||||||||
|
2026 (unaudited) |
2025 (unaudited) |
2026 (unaudited) |
2025 (unaudited) |
|||||||||||||
|
Revenues based on customer location: |
||||||||||||||||
|
United States |
$ | $ | $ | $ | ||||||||||||
|
Europe and Middle East |
||||||||||||||||
|
Asia Pacific (1) |
||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
|
(1) China |
$ | $ | $ | $ | ||||||||||||
|
September 30, 2026 (unaudited) |
December 31, 2025 |
|||||||
|
Long-lived assets by geographic region: |
||||||||
|
Israel |
$ | $ | ||||||
|
France |
||||||||
|
United States |
||||||||
|
Greece |
||||||||
|
Other |
||||||||
| $ | $ | |||||||
|
b. |
Major customer data as a percentage of total revenues: |
The following table sets forth the customers that represented 10% or more of the Company’s total revenues in each of the periods set forth below:
|
Nine months ended |
Three months ended |
|||||||||||||||
|
2026 (unaudited) |
2025 (unaudited) |
2026 (unaudited) |
2025 (unaudited) |
|||||||||||||
|
Customer A |
* | ) | % | * | ) | % | ||||||||||
|
Customer B |
* | ) | * | ) | * | ) | % | |||||||||
|
Customer C |
* | ) | * | ) | * | ) | % | |||||||||
|
Customer D |
% | * | ) | * | ) | * | ) | |||||||||
|
Customer E |
* | ) | * | ) | % | * | ) | |||||||||
|
*) Less than 10% |
|
c. |
Major customer data as a percentage of total trade receivable: |
The following table sets forth the customers that represented 10% or more of the Company’s total trade receivable in each of the periods set forth below:
|
September 30, 2026 (unaudited) |
December 31, 2025 |
|||||||
|
Customer A |
% | * | ) | |||||
|
Customer B |
% | % | ||||||
*) Less than 10%
|
NOTE 7: |
FINANCIAL INCOME, NET |
|
Nine months ended |
Three months ended |
|||||||||||||||
|
2026 (unaudited) |
2025 (unaudited) |
2026 (unaudited) |
2025 (unaudited) |
|||||||||||||
|
Interest income |
$ | $ | $ | $ | ||||||||||||
|
Gain on available-for-sale marketable securities, net |
||||||||||||||||
|
Amortization of discount (premium) on available-for-sale marketable securities, net |
||||||||||||||||
|
Foreign exchange gain (loss), net |
( |
) | ( |
) | ||||||||||||
|
Total |
$ | $ | $ | $ | ||||||||||||
|
NOTE 8: |
NET LOSS PER SHARE OF COMMON STOCK |
Basic net income (loss) per share is computed based on the weighted average number of shares of common stock outstanding during each period. Diluted net income (loss) per share is computed based on the weighted average number of shares of common stock outstanding during each period, plus dilutive potential shares of common stock considered outstanding during the period, in accordance with FASB ASC No. 260, “Earnings Per Share.”
|
Nine months ended |
Three months ended |
|||||||||||||||
|
2026 (unaudited) |
2025 (unaudited) |
2026 (unaudited) |
2025 (unaudited) |
|||||||||||||
|
Numerator: |
||||||||||||||||
|
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
Denominator (in thousands): |
||||||||||||||||
|
Basic and diluted weighted average common stock outstanding |
||||||||||||||||
|
Basic and diluted net loss per share |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
The total number of shares related to outstanding equity-based awards was
|
NOTE 9: |
COMMON STOCK AND STOCK-BASED COMPENSATION PLANS |
The Company grants stock options and restricted stock units (“RSUs”) to employees and non‑employee directors of the Company and its subsidiaries under the Company’s equity plans and provides the right to purchase common stock pursuant to the Company’s 2002 employee stock purchase plan (the “ESPP”) to employees of the Company and its subsidiaries.
The options granted under the Company’s stock incentive plans have been granted at the fair market value of the Company’s common stock on the grant date. Options granted to employees under stock incentive plans generally vest at a rate of
|
Number of |
Weighted exercise |
Weighted remaining term |
Aggregate value |
|||||||||||||
|
Outstanding as of December 31, 2025 |
$ | $ | ||||||||||||||
|
Granted |
||||||||||||||||
|
Exercised |
( |
) | ||||||||||||||
|
Forfeited or expired |
||||||||||||||||
|
Outstanding as of September 30, 2026 (unaudited) |
$ | $ | ||||||||||||||
|
Exercisable as of September 30, 2026 (unaudited) |
$ | $ | ||||||||||||||
As of September 30, 2026, there was $
An RSU award is an agreement to issue shares of the Company’s common stock at the time the award or a portion thereof vests. RSUs granted to employees generally vest in three equal annual installments starting on the first anniversary of the grant date. RSUs granted to non-employee directors are awarded following a director’s election or re-election to the Board at the Company’s annual meeting, and fully vest on the first-year anniversary of the grant date.
On February 11, 2026, the Compensation Committee of the Board (the “Committee”) granted
Subject to achievement of the above performance goals for 2026, the PSUs vest
The grant‑date fair value of the TSR‑based PSUs was estimated using a Monte Carlo simulation model, which incorporates assumptions regarding stock price volatility, risk‑free interest rates, and expected dividends. The grant‑date fair value of the financial‑metric PSUs was based on the Company’s stock price on the grant date.
A summary of the Company’s RSU and PSU activities and related information for the nine months ended September 30, 2026, are as follows:
|
Number of PSUs |
Weighted Average Grant- Date |
|||||||
|
Unvested as of December 31, 2025 |
$ | |||||||
|
Granted |
||||||||
|
Vested |
( |
) |
||||||
|
Forfeited or expired |
( |
) |
||||||
|
Unvested as of September 30, 2026 (unaudited) |
$ | |||||||
As of September 30, 2026, there was $
The following table shows the total equity-based compensation expense included in the interim condensed consolidated statements of loss:
|
Nine months ended |
Three months ended |
|||||||||||||||
|
2026 (unaudited) |
2025 (unaudited) |
2026 (unaudited) |
2025 (unaudited) |
|||||||||||||
|
Cost of revenue |
$ | $ | $ | $ | ||||||||||||
|
Research and development, net |
||||||||||||||||
|
Sales and marketing |
||||||||||||||||
|
General and administrative |
||||||||||||||||
|
Total equity-based compensation expense |
$ | $ | $ | $ | ||||||||||||
The fair value for rights to purchase shares of common stock under the Company’s employee stock purchase plan was estimated on the date of grant using the following assumptions:
| Nine months ended September 30, |
Three months ended |
||||||||||||||||||||
|
2026 (unaudited) |
2025 (unaudited) |
2026 (unaudited) |
2025 (unaudited) |
||||||||||||||||||
|
Expected dividend yield |
|||||||||||||||||||||
|
Expected volatility |
- | - | - | ||||||||||||||||||
|
Risk-free interest rate |
- | - | - | ||||||||||||||||||
|
Contractual term of up to (months) |
- | - | - | - | |||||||||||||||||
During the third quarter of 2026, the Company's employees purchased
|
NOTE 10: |
DERIVATIVES AND HEDGING ACTIVITIES |
The Company follows the requirements of FASB ASC No. 815, “Derivatives and Hedging” which requires companies to recognize all of their derivative instruments as either assets or liabilities in the statement of financial position at fair value. The accounting for changes in fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging transaction and further, on the type of hedging transaction. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation. Due to the Company’s global operations, it is exposed to foreign currency exchange rate fluctuations in the normal course of its business. The Company’s treasury policy allows it to offset the risks associated with the effects of certain foreign currency exposures through the purchase of foreign exchange forward or option contracts (“Hedging Contracts”). The policy, however, prohibits the Company from speculating on such Hedging Contracts for profit. To protect against the increase in value of forecasted foreign currency cash flow resulting mainly from salaries paid in currencies other than the U.S. dollar during the year, the Company instituted a foreign currency cash flow hedging program. The Company hedges portions of the anticipated payroll of its non-U.S. employees denominated in the currencies other than the U.S. dollar for a period of one to twelve months with Hedging Contracts. Accordingly, when the dollar strengthens against the foreign currencies, the decline in present value of future foreign currency expenses is offset by losses in the fair value of the Hedging Contracts. Conversely, when the dollar weakens, the increase in the present value of future foreign currency expenses is offset by gains in the fair value of the Hedging Contracts. These Hedging Contracts are designated as cash flow hedges.
For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. As of September 30, 2026 and December 31, 2025, the notional principal amount of the Hedging Contracts to sell U.S. dollars held by the Company was $
Other derivative instruments that are not designated as hedging instruments consist of forward contracts that the Company uses to hedge monetary assets denominated in currencies other than the U.S. dollar. Gains and losses on these contracts as well as related costs are included in financial income, net, along with the gains and losses of the related hedged item. There were no other open derivative instruments as of September 30, 2026 and December 31, 2025.
The fair value of the Company’s outstanding derivative instruments is as follows:
|
September 30, 2026 (unaudited) |
December 31, 2025 |
|||||||
|
Derivative assets: |
||||||||
|
Derivatives designated as cash flow hedging instruments: |
||||||||
|
Foreign exchange forward contracts |
$ | $ | ||||||
|
Total |
$ | $ | ||||||
|
Derivative liabilities: |
||||||||
|
Derivatives designated as cash flow hedging instruments: |
||||||||
|
Foreign exchange forward contracts |
$ | $ | ||||||
|
Total |
$ | $ | ||||||
The increase (decrease) in unrealized gains (losses) recognized in “accumulated other comprehensive income (loss)” on derivatives, before tax effect, is as follows:
|
Nine months ended |
Three months ended |
|||||||||||||||
|
2026 (unaudited) |
2025 (unaudited) |
2026 (unaudited) |
2025 (unaudited) |
|||||||||||||
|
Derivatives designated as cash flow hedging instruments: |
||||||||||||||||
|
Foreign exchange option contracts |
$ | $ | $ | $ | ||||||||||||
|
Foreign exchange forward contracts |
( |
) | ||||||||||||||
| $ | $ | $ | ( |
) | $ | |||||||||||
The net gains reclassified from “accumulated other comprehensive income (loss)” into income are as follows:
|
Nine months ended |
Three months ended |
|||||||||||||||
|
2026 (unaudited) |
2025 (unaudited) |
2026 (unaudited) |
2025 (unaudited) |
|||||||||||||
|
Derivatives designated as cash flow hedging instruments: |
||||||||||||||||
|
Foreign exchange option contracts |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
|
Foreign exchange forward contracts |
( |
) | ( |
) | ( |
) | ||||||||||
| $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | |||||||
The Company recorded in cost of revenues and operating expenses a net loss of $
|
NOTE 11: |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
The following table summarizes the changes in accumulated balances of other comprehensive income (loss), net of taxes:
|
Nine months ended September 30, 2026 (unaudited) |
Three months ended September 30, 2026 (unaudited) |
|||||||||||||||||||||||
|
Unrealized gains (losses) on available- for-sale marketable securities |
Unrealized gains (losses) on cash flow hedges |
Total |
Unrealized gains (losses) on available- for-sale marketable securities |
Unrealized gains (losses) on cash flow hedges |
Total |
|||||||||||||||||||
|
Beginning balance |
$ | $ | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||
|
Other comprehensive income (loss) before reclassifications |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
|
Amounts reclassified from accumulated other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
Net current period other comprehensive loss |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
|
Ending balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
|
Nine months ended September 30, 2025 (unaudited) |
Three months ended September 30, 2025 (unaudited) |
|||||||||||||||||||||||
|
Unrealized gains (losses) on available- for-sale marketable securities |
Unrealized gains (losses) on cash flow hedges |
Total |
Unrealized gains (losses) on available- for-sale marketable securities |
Unrealized gains (losses) on cash flow hedges |
Total |
|||||||||||||||||||
|
Beginning balance |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||
|
Other comprehensive income before reclassifications |
||||||||||||||||||||||||
|
Amounts reclassified from accumulated other comprehensive loss |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
|
Net current period other comprehensive income (loss) |
( |
) | ( |
) | ||||||||||||||||||||
|
Ending balance |
$ | ( |
) | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||
The following table provides details about reclassifications out of accumulated other comprehensive income (loss):
|
Details about Accumulated Other Comprehensive Income (Loss) Components |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) |
Affected Line Item in the Statements of Loss |
|||||||||||||||
|
Nine months ended September 30, |
Three months ended September 30, |
||||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
||||||||||||||
|
Unrealized gains on cash flow hedges |
$ | $ | $ | ( |
) | $ |
Cost of revenues |
||||||||||
| ( |
) |
Research and development |
|||||||||||||||
| ( |
) |
Sales and marketing |
|||||||||||||||
| ( |
) |
General and administrative |
|||||||||||||||
| ( |
) |
Total, before income taxes |
|||||||||||||||
|
Income tax expense |
|||||||||||||||||
| ( |
) |
Total, net of income taxes |
|||||||||||||||
|
Unrealized gains on available-for-sale marketable securities |
Financial income, net |
||||||||||||||||
| ( |
) | ( |
) |
Income tax expense |
|||||||||||||
|
Total, net of income taxes |
|||||||||||||||||
| $ | $ | $ | ( |
) | $ |
Total, net of income taxes |
|||||||||||
|
NOTE 12: |
SHARE REPURCHASE PROGRAM |
The Company did not repurchase any shares of common stock during both the three and nine months ended September 30, 2026. During the three months ended September 30, 2025, the Company repurchased
The repurchases of common stock are accounted for as treasury stock, and result in a reduction of stockholders’ equity. When treasury shares are reissued, the Company accounts for the reissuance in accordance with FASB ASC No. 505-30, “Treasury Stock” and charges the excess of the repurchase cost over issuance price using the weighted average method to retained earnings. The purchase cost is calculated based on the specific identification method. In the case where the repurchase cost over issuance price using the weighted average method is lower than the issuance price, the Company credits the difference to additional paid-in capital.
|
Item 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
You should read the following discussion together with the unaudited financial statements and related notes appearing elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties. Any or all of our forward-looking statements in this Quarterly Report may turn out to be wrong. These forward-looking statements can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Factors which could cause actual results to differ materially include those set forth in Part II—Item 1A—“Risk Factors” in this Quarterly Report and Part I—Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 as well as those discussed elsewhere in this Quarterly Report. See “Forward-Looking Statements.”
The financial information presented in this Quarterly Report includes the results of Ceva, Inc. and its subsidiaries.
BUSINESS OVERVIEW
We enable Physical AI, the artificial intelligence embedded in billions of devices that connect, sense and infer data in the real world. We view Physical AI as the natural evolution of Edge AI. While Edge AI refers to running AI workloads locally on devices rather than in the cloud, Physical AI extends this concept further: it unifies connectivity, sensing and inference layers into a single fabric that allows devices not only to process data at the edge, but also to interact intelligently with their physical environment and the cloud. We believe Ceva is uniquely positioned as the only company with leadership in innovative silicon and software IP solutions across all three layers – connect, sense and infer.
In the third quarter of 2026, we continued to execute our strategy, generating revenues of $29.1 million, up 2% year over year. Licensing and related revenues were $16.3 million, up 2% year over year and down 10% sequentially. AI licensing revenues reached a quarterly record and represented more than 35% of total licensing and related revenues. Royalty revenues were $12.7 million, up 3% year over year and 18% sequentially, supported by the continued ramp of internally developed modems at a major U.S. customer and growth in Wi-Fi royalties. Customers shipped 623 million Ceva-powered devices during the quarter, up 8% year over year.
According to IPnest, we commanded 68% of the wireless connectivity IP market in 2025. Since 2003, more than 23 billion devices have shipped with Ceva IP, including approximately 2.1 billion in 2025. Our technologies power the connectivity, perception and intelligence in today’s most advanced smart edge products across consumer IoT, automotive, industrial and infrastructure, and mobile and PC markets. Based on market research, we believe these sectors will represent a $170 billion total addressable market for Physical AI and Edge AI by 2030.
Our portfolio spans:
|
● |
Connectivity layer (wireless transport): Bluetooth, Wi‑Fi, Ultra‑Wideband (UWB), cellular internet-of-things (IoT), and 5G‑Advanced IP platforms that form the backbone of ubiquitous, secure, and high‑performance communication. |
|
● |
Sensing layer (software and DSPs): Sensor fusion processors, RealSpace spatial audio, MotionEngine software, and general‑purpose digital signal processors (DSPs) that transform raw sensor data into actionable intelligence. |
|
● |
Inference layer (NPUs and AI DSPs): The next-generation NeuPro family of neural processing units (“NPUs”), built on a common architecture and unified software stack that spans Physical AI applications from always-on sensors to AI infrastructure. The portfolio comprises NeuPro-Nano for always-on sensing and entry-level perception in highly constrained devices, NeuPro Prime for mainstream convolutional neural network and transformer workloads, NeuPro Max for advanced edge applications, including robotics, multimodal AI, on-device assistants and Physical AI, and NeuPro Ultra, which extends the family into AI infrastructure for large language model inference in the cloud and data center. Alongside it, the SensPro family of AI DSPs serves high-performance signal and AI workloads. |
Together, these layers make Ceva, with our unified AI fabric, an essential enabler of Physical AI that breaks down barriers to entry and accelerates time‑to‑market for our customers. We are increasingly delivering more integrated, system-level solutions, rather than individual IP blocks. This approach enables customers to accelerate development, reduce engineering risk and focus internal resources on system-level differentiation, while increasing Ceva’s content per platform, deepening customer relationships and strengthening long-term royalty potential.
For more than three decades, we have been a trusted partner to hundreds of leading semiconductor and original equipment manufacturer (OEM) companies, serving not only our largest target growth markets but also a wide variety of other applications, including smart home, surveillance, robotics and medical. Our transformative semiconductor IP and embedded software offerings are incorporated by customers into application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs) to enable power‑efficient, intelligent, secure and connected devices that connect, sense and infer – the three critical pillars of the rapidly evolving era of AI‑enabled smart edge technology.
We license our portfolio of wireless communications, sensing and scalable Edge AI IP to our customers, breaking down barriers to entry and enabling them to bring new cutting-edge products to market faster, more reliably, efficiently and economically.
We believe our portfolio of technologies comprised of connectivity, sensing and inference – the three foundational layers of Physical AI – positions Ceva at the center of the most important megatrends shaping the semiconductor industry, including 5G expansion, generative and embedded AI, industrial automation and vehicle electrification. Demand across these areas continues to drive strong interest in our IP portfolio, both in established markets and in new, emerging use cases.
In the third quarter of 2026, we signed 10 IP licensing agreements, including three with first-time customers. AI accounted for six agreements, and AI licensing revenues reached their highest quarterly level on record. These agreements included NeuPro-M for an AI infrastructure application, NeuPro-Nano and NeuPro-Max for consumer IoT applications, and two AI DSP reuse agreements extending our technologies into additional customer products.
During the quarter, three of our highest-volume connectivity customers extended their long-standing agreements with Ceva for multiple years and added more Ceva IP. One licensed our Wi-Fi 6 and Wi-Fi 7 technologies, complementing the Bluetooth and DSP IP it already ships in high volume. These engagements expand our technology footprint within customer portfolios and our opportunity for future royalty growth.
In sensing, we secured a MotionEngine Hex agreement to enable motion-based interaction with smart TVs. The customer is targeting one of the world's largest television brands. This agreement builds on our agreement last year with a leading smart TV platform provider to integrate MotionEngine into its operating system.
AI-related licensing represented more than 35% of total licensing and related revenues in the third quarter, highlighting the growing commercial adoption of our AI technologies. Subsequent to quarter-end, on October 28, 2026, we announced our next-generation NeuPro portfolio, comprising NeuPro-Nano, NeuPro Prime, NeuPro Max and NeuPro Ultra. The new portfolio extends our addressable applications from embedded and advanced edge AI into AI infrastructure, building on a common architecture and unified software stack. The next-generation architecture is available to select early-access customers, with general availability planned for the second quarter of 2027.
We believe the following key elements represent significant growth drivers for Ceva as the leader in silicon and software IP enabling Physical AI, spanning the three foundational layers of connectivity, sensing and inference:
|
● |
Connectivity layer – Foundation for billions of devices: Our broad Bluetooth, Wi‑Fi, UWB, and cellular IoT IP platforms address the high‑volume IoT, industrial, consumer, and smart home markets. ABI Research projects more than 16.5 billion devices annually by 2029. With leadership in Wi‑Fi 6 and Wi‑Fi 7 IP, and record Wi‑Fi 6 shipments in 2025, we believe we are positioned to capture higher royalty revenues as customers transition to newer standards. |
|
● |
Connectivity layer – 5G everywhere: Our PentaG2 platform and DSPs for 5G mobile broadband, 5G RedCap and 5G Advanced, including our PentaG-NTN solution for satellite communications, provide one of the industry’s most comprehensive baseband IP solutions, enabling fixed wireless access, satellite communications, robotics, automotive and industrial applications. |
|
● |
Connectivity layer – Infrastructure intelligence: Our PentaG RAN platform, including the Ceva‑XC22 multi‑thread DSP, extends our leadership into 5G RAN and 5G Advanced for data centers and infrastructure, enabling scalable, customizable solutions for next‑generation networks. |
|
● |
Sensing layer – Consumer audio and spatial intelligence: High‑volume consumer audio markets such as TWS earbuds, AR/VR headsets, and wearables represent incremental growth opportunities for our Bluetooth, Audio AI DSPs, NPUs and RealSpace Spatial Audio & Head Tracking software. Recent design wins with Nothing and other consumer brands highlight growing adoption. |
|
● |
Sensing layer – Software intelligence at scale: Our MotionEngine software, already shipped in more than 500 million devices, enhances MEMS‑based inertial and environmental sensors across robotics, smartphones, laptops, TWS earbuds, and more. Combined with our SensPro DSPs and NeuPro NPUs, we believe this positions Ceva as a one‑stop shop for sensor processing and AI‑driven user experiences. |
|
● |
Inference layer – Generative and classic AI at the edge: Our NeuPro portfolio addresses generative and classic AI applications across edge devices and, with the next-generation portfolio announced subsequent to quarter-end, AI infrastructure. Existing engagements include Microchip's portfolio license for our NeuPro-M and NeuPro-Nano NPUs and an earlier agreement with a leading global AI and computing platform company developing next-generation custom AI silicon. The third quarter included a NeuPro-M agreement for an AI infrastructure application. These engagements broaden our opportunities across semiconductor, OEM and platform customers. |
|
● |
Inference layer – Embedded AI and TinyML: Our NeuPro‑Nano NPUs bring cost‑ and power‑efficient AI to microcontrollers and systems-on-chips (SoCs), enabling artificial IoT (AIoT) devices for sound, vision, vibration, and health monitoring. ABI Research projects that by 2030, over 50% of TinyML shipments will be powered by dedicated embedded AI hardware such as NeuPro‑Nano. |
|
● |
Inference layer – AI DSPs for perception and sensor intelligence: Our SensPro2 AI DSP family addresses demand for efficient, high‑performance AI signal processing across sensor‑rich applications, from smartphones and drones to automotive ADAS and industrial IoT. |
As a result of our focus on silicon and software IP solutions spanning the connectivity, sensing and inference layers of Physical AI, we believe Ceva is well positioned for sustained, long‑term growth in both shipments and royalty revenues. Our diversified royalty streams reflect a broad range of average selling prices (ASPs) – from high‑volume Bluetooth and Wi‑Fi connectivity platforms that power billions of consumer devices to higher‑value inference engines and AI DSPs such as NeuPro and SensPro, as well as infrastructure‑class platforms like PentaG-RAN. We believe this mix provides both scale and resilience, enabling us to capture growth across consumer, automotive, industrial and infrastructure markets while reinforcing our role as the enabler of Physical AI.
CURRENT TRENDS
We believe the long-term trend of digital transformation is evolving into a new era defined by Physical AI – the next phase of Edge AI – where intelligence is embedded directly into the devices that connect, sense and interact with the real world. Our ubiquitous IP portfolio and collaborative licensing model position us to capture secular growth across consumer IoT, automotive, industrial and infrastructure, and mobile and PC markets.
Our customers are increasingly adopting our technologies as they seek to integrate connectivity, sensing and intelligence into their devices. In the third quarter of 2026, we signed 10 licensing agreements, including three with first-time customers and six involving AI. AI licensing revenues reached a quarterly record and represented more than 35% of total licensing and related revenues. Customer adoption of additional connectivity technologies and AI DSP reuse agreements also expanded our pipeline of future royalty-generating designs.
In the third quarter of 2026, customers shipped 623 million Ceva-powered devices, up 8% year over year. Bluetooth shipments increased 9% year over year to 329 million units, while cellular IoT shipments reached a new quarterly record of 69 million units, up 2% year over year. Wi-Fi shipments were 78 million units, down 6% year over year. Of the 78 million units, higher-value Wi-Fi 6 represented 57% of Wi-Fi unit shipments, up from 24% a year ago.
We also continued to make progress toward NPU royalty generation, with several NeuPro customers completing chip tape-outs during the third quarter. Subsequent to quarter-end, our November 2, 2026 announcement highlighted Mobilint's REGULUS AI SoC, which incorporates both our NeuPro-Nano NPU and SensPro DSP technologies in the same SoC. This illustrates how adoption of multiple Ceva technologies can expand our royalty opportunity per device. We expect initial NeuPro royalties around the end of 2026 or early 2027.
Royalty revenues increased 3% year over year and 18% sequentially in the third quarter, led by mobile. Mobile royalty revenues increased 20% year over year, reflecting the continued ramp of internally developed modems at a major U.S. customer. Wi-Fi royalties also increased, driven by a growing contribution from a higher mix of higher-ASP Wi-Fi 6 shipments. While macroeconomic conditions, geopolitical developments and supply chain dynamics continue to create uncertainty across the semiconductor industry, we believe our diversified royalty base positions us well for long-term growth.
In addition, we expect to complement our strong presence in the Asia-Pacific region by further expanding our customer base and revenues in Europe and the U.S. We continue to pursue customer engagements across these regions to broaden our global reach.
The global economy continued to be impacted by macroeconomic conditions, including a volatile interest rate environment, foreign currency exchange rate fluctuations, ongoing inflation, memory pricing increases and shortages impacting consumer demand and manufacturing, world conflicts and uncertainty, like the Middle East conflict and higher fuel and oil prices, as well as changes in legislation and regulations, including enacted and proposed tariffs and other trade policies, which introduced additional uncertainty. In periods of perceived or actual unfavorable economic conditions, our customers or potential customers may delay or re-evaluate their decisions to initiate projects, which could result in a delay or cessation of engagements with us and lower licensing revenues. In addition, weaker consumer demand may result in lower royalty revenues as our customers ship fewer units, and supply chain dynamics and component pricing may also impact end-market demand.
Instability in the Middle East
Our operations in Israel remain largely unaffected by the war between Israel and Hamas that began on October 7, 2023 and escalated to conflicts with Lebanon, Hezbollah and Iran. In February 2026, the United States and Israel launched joint combat operations in Iran to which Iran and Hezbollah responded with ballistic missile and drone attacks on Israel as well as other countries and U.S. military bases in the region. Although the United States and Iran have announced ceasefire and de-escalation arrangements from time to time, hostilities have subsequently resumed and may continue or escalate. Despite the evolving geopolitical situation, we continue to drive our business and support our customers globally. However, a portion of our employees in Israel have been or are called to active reserve duty, and additional employees may be called in the future, if needed. We have executed our business continuity plan with respect to those employees. It is possible that some of our operations in the region may be disrupted if this continues for a significant period of time or if the situation further deteriorates. The intensity and duration of these conflicts, as well as their economic implications for the Company and Israel’s economy, remain difficult to predict. For more information, please refer to the risk factor titled “Our operations in Israel may be adversely affected by instability in the Middle East region” in Part I—Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
RESULTS OF OPERATIONS
Total Revenues
Total revenues were $29.1 million and $85.1 million for the third quarter and first nine months of 2026, respectively, representing an increase of 2% and 9%, as compared to the corresponding periods in 2025. The increase in total revenues for both the third quarter and first nine months of 2026 was primarily attributable to higher licensing and related revenues and royalty revenues, as further described below.
Our five largest customers accounted for 44% and 36% of our total revenues for the third quarter and first nine months of 2026, respectively, as compared to 45% and 39%, respectively, for the comparable periods in 2025. One customer accounted for 11% of our total revenues for the third quarter of 2026, as compared to three customers that each accounted for 11% of our total revenues for the third quarter of 2025. One customer accounted for 10% of our total revenues for the first nine months of 2026, as compared to one customer that accounted for 15% of our total revenues for the first nine months of 2025. Generally, the identity of our customers representing 10% or more of our total revenues varies from period to period, especially with respect to our IP licensing customers, as we generate licensing revenues from new customers on a quarterly basis. With respect to our royalty revenues, two royalty-paying customers represented 10% or more of our total royalty revenues for the third quarter of 2026 and collectively represented 34% of our total royalty revenues for such period, and one royalty-paying customer represented 10% or more of our total royalty revenues for first nine months of 2026 and represented 20% of our total royalty revenues for such period. Two royalty-paying customers represented 10% or more of our total royalty revenues for both the third quarter and first nine months of 2025 and collectively represented 36% and 35% of our total royalty revenues for the third quarter and first nine months of 2025, respectively. We expect that a significant portion of our future revenues will continue to be generated by a limited number of customers. The concentration of our customers is attributable, in part, to consolidation in the semiconductor industry.
The following table sets forth use cases for the Ceva technology portfolio as percentages of our total revenues for each of the periods set forth below:
|
First Nine Months |
First Nine Months |
Third Quarter |
Third Quarter |
|||||||||||||
|
Connect (baseband for handset and other devices, Bluetooth, Wi-Fi and NB-IoT) |
73 | % | 71 | % | 68 | % | 67 | % | ||||||||
|
Infer (Imaging, vision and AI) |
17 | % | 16 | % | 22 | % | 20 | % | ||||||||
|
Sense (sensor fusion and audio) |
10 | % | 13 | % | 10 | % | 13 | % | ||||||||
Licensing and Related Revenues
Licensing and related revenues were $16.3 million and $52.4 million for the third quarter and first nine months of 2026, respectively, representing an increase of 2% and 14% as compared to the corresponding periods in 2025.
In licensing, a new customer selected NeuPro-M for an AI infrastructure application focused on improving the efficiency of data center inference systems. Other agreements included NeuPro-Nano and NeuPro-Max for consumer IoT applications. Furthermore, we continued to expand our AI DSP business, signing two reuse agreements that extend our technology into additional customer products and expand our pipeline of future royalty-generating designs. Our wireless connectivity business continues to benefit from the growing need for multiple connectivity technologies in increasingly intelligent devices. During the quarter, one of our highest-volume customers expanded its long-standing relationship with Ceva and licensed our Wi-Fi 6 and Wi-Fi 7 technologies, alongside our Bluetooth and DSPs that it already deploys at scale. This is an important part of our connectivity strategy. We also signed two multi-use Bluetooth agreements, further expanding the reach of our connectivity IP across customer product portfolios. Our leadership in this market was recently reaffirmed by IPnest, which ranked Ceva number one in wireless interface IP for the third successive year, with approximately 68% market share by revenue for the third successive year. In sensing, we secured a new agreement for our MotionEngine Hex technology to enable advanced motion-based interaction for smart TVs. Our customer is targeting one of the world's largest television brands. This agreement builds on our agreement last year with a leading smart TV platform provider to integrate MotionEngine into its operating system. Together, these engagements expand our presence across the smart TV ecosystem, enabling more intuitive and precise user experiences as televisions evolve into increasingly interactive entertainment and gaming platforms. Overall, we continued to make progress across our business during the third quarter. Record AI licensing revenue reflects the growing commercial adoption of our AI portfolio.
We signed 10 agreements during the quarter, including three with first-time customers. AI was particularly strong, accounting for six of these agreements. Our record quarterly AI licensing revenue demonstrates that our investment in AI technologies is translating into meaningful business today, while expanding our opportunity for long-term royalty growth.
Licensing and related revenues accounted for 56% and 62% of our total revenues for the third quarter and first nine months of 2026, respectively, as compared to 56% and 59% for the comparable periods of 2025.
Royalty Revenues
Royalty revenues were $12.7 million and $32.7 million for the third quarter and first nine months of 2026, respectively, representing an increase of 3% and 2% as compared to the corresponding periods in 2025. Royalty revenues accounted for 44% and 38% of our total revenues for the third quarter and first nine months of 2026, respectively, as compared to 44% and 41% for the comparable periods of 2025. We reported shipments of 623 million Ceva-powered devices in the third quarter of 2026, matching our all-time quarterly record. Our IoT unit volumes reflect the scale and penetration of our connectivity business, with strong Bluetooth volumes, record cellular IoT shipments and record Wi-Fi 6 unit shipments, which carry higher royalty value. This strength was partly offset by weakness in the broader compute-intensive consumer markets, including smartphones, PCs and TVs, where memory market headwinds weighed on demand.
A key development was the continued ramp of internally developed modems at a major U.S. customer, contributing to growth in mobile royalties. This is the first time our customer has moved its internally developed modems into high-volume production across its mainstream flagship smartphone models, an important step for Ceva in this market. We expect this volume ramp to accelerate significantly in the fourth quarter, supported by a full quarter of device shipments across multiple models, and to continue into 2027 and beyond. We believe this, together with continued share gains in broad-based IoT, positions us well for future royalty growth.
The five largest royalty-paying customers accounted for 56% and 53% of our total royalty revenues for the third quarter and first nine months of 2026, respectively, as compared to 54% for both the comparable periods of 2025.
Geographic Revenue Analysis
|
Nine Months |
Nine Months |
Third Quarter |
Third Quarter |
|||||||||||||||||||||||||||||
|
(in millions, except percentages) |
||||||||||||||||||||||||||||||||
|
United States |
$ | 23.3 | 27 | % | $ | 15.9 | 20 | % | $ | 5.0 | 17 | % | $ | 6.8 | 24 | % | ||||||||||||||||
|
Europe and Middle East |
$ | 3.2 | 4 | % | $ | 5.0 | 7 | % | $ | 1.3 | 4 | % | $ | 1.5 | 5 | % | ||||||||||||||||
|
Asia Pacific (1) |
$ | 58.6 | 69 | % | $ | 57.3 | 73 | % | $ | 22.8 | 79 | % | $ | 20.1 | 71 | % | ||||||||||||||||
|
(1) China |
$ | 48.6 | 57 | % | $ | 44.6 | 57 | % | $ | 19.5 | 67 | % | $ | 14.7 | 52 | % | ||||||||||||||||
Due to the nature of our license agreements and the associated potential large individual contract amounts, the geographic split of revenues, both in absolute dollars and percentage terms, generally varies from quarter to quarter.
Cost of Revenues
Cost of revenues was $4.3 million and $11.6 million for the third quarter and first nine months of 2026, respectively, as compared to $3.4 million and $10.4 million for the comparable periods of 2025. Cost of revenues accounted for 15% and 14% of our total revenues for the third quarter and first nine months of 2026, respectively, as compared to 12% and 13% for the comparable periods of 2025. The increase for the third quarter of 2026 primarily reflected higher salaries and employee-related costs, higher service costs and customization work for our customers, and higher payments to the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel (the “IIA”). The increase for the first nine months of 2026 primarily reflected higher salaries and employee-related costs and higher payments to the IIA. Included in cost of revenues for the third quarter and first nine months of 2026 was a non-cash equity-based compensation expense of $0.2 million and $0.5 million, respectively, as compared to $0.2 million and $0.5 million for the comparable periods of 2025. Gross margin was 85% and 86% for the third quarter and first nine months of 2026, respectively, as compared to 88% and 87% for the comparable periods of 2025.
The number of technical support personnel was 34 at September 30, 2026, as compared to 31 at September 30, 2025.
Operating Expenses
Total operating expenses were $28.3 million and $84.2 million for the third quarter and first nine months of 2026, respectively, as compared to $27.1 million and $78.8 million for the comparable periods of 2025. The net increase for the third quarter of 2026 was primarily due to deal-related costs associated with a potential transaction that was ultimately not consummated and higher salaries and employee-related costs. The net increase for the first nine months of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS, and higher non-cash equity-based compensation expenses.
Research and Development Expenses, Net
Total research and development expenses, net were $18.1 million and $57.3 million for the third quarter and first nine months of 2026, respectively, as compared to $19.5 million and $55.9 million for the comparable periods of 2025. The decrease for the third quarter of 2026 was primarily due to R&D tax credits recognized under the Crédit Impôt Recherche (the “CIR”) and the new Israeli Law for the Encouragement and Incentivization of Research and Development, 2026 (the “R&D Law”), with the latter reducing research and development expenses in 2026 and having no comparable benefit in 2025, as well as lower non-cash equity-based compensation expenses. The increase for the first nine months of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS, partially offset by the tax credits recognized under the R&D Law, which reduced research and development expenses in 2026, with no comparable benefit in 2025. Included in research and development expenses for the third quarter and first nine months of 2026 were non-cash equity-based compensation expenses of $2.1 million and $7.7 million, respectively, as compared to $2.6 million and $7.8 million for the comparable periods of 2025. Research and development expenses as a percentage of our total revenues were 62% and 67% for the third quarter and first nine months of 2026, respectively, as compared to 69% and 71% for the comparable periods of 2025.
The number of research and development personnel was 281 at September 30, 2026, as compared to 322 at September 30, 2025.
Sales and Marketing Expenses
Our sales and marketing expenses were $3.9 million and $11.0 million for the third quarter and first nine months of 2026, respectively, as compared to $3.0 million and $9.8 million for the comparable periods of 2025. The increase for the third quarter of 2026 principally reflected higher salaries and employee-related costs, higher marketing and trade show expenses, and higher non-cash equity-based compensation expenses. The increase for the first nine months of 2026 principally reflected higher commission expenses, higher non-cash equity-based compensation expenses and the cost of a global sales meeting held during the period (an event that did not take place in the first nine months of 2025). Included in sales and marketing expenses for the third quarter and first nine months of 2026 were non-cash equity-based compensation expenses of $0.9 million and $2.3 million, respectively, as compared to $0.6 million and $1.7 million for the comparable periods of 2025. Sales and marketing expenses as a percentage of our total revenues were 14% and 13% for the third quarter and first nine months of 2026, respectively, as compared to 11% and 12% for the comparable periods of 2025.
The total number of sales and marketing personnel was 29 at September 30, 2026, as compared to 32 at September 30, 2025.
General and Administrative Expenses
Our general and administrative expenses were $6.2 million and $15.6 million for the third quarter and first nine months of 2026, respectively, as compared to $4.4 million and $12.7 million for the comparable periods of 2025. The increase for the third quarter of 2026 was primarily due to deal-related costs associated with a potential transaction that was ultimately not consummated and higher non-cash equity-based compensation expenses. The increase for the first nine months of 2026 was primarily due to deal-related costs associated with a potential transaction that was ultimately not consummated, higher salaries and employee-related costs and higher non-cash equity-based compensation expenses. Included in general and administrative expenses for the third quarter and first nine months of 2026 were non-cash equity-based compensation expenses of $1.8 million and $5.0 million, respectively, as compared to $1.5 million and $4.1 million for the comparable periods of 2025. General and administrative expenses as a percentage of our total revenues were 21% and 18% for the third quarter and first nine months of 2026, respectively, as compared to 15% and 16% for the comparable periods of 2025.
The number of general and administrative personnel was 50 at September 30, 2026, as compared to 49 at September 30, 2025.
Amortization of Intangible Assets
Our amortization charges were $0.1 million and $0.3 million for the third quarter and first nine months of 2026, respectively, as compared to $0.1 million and $0.4 million for the comparable periods of 2025. The amortization charges for both the third quarter and first nine months of 2026 and 2025 were incurred in connection with the amortization of intangible assets associated with the acquisitions of the Hillcrest Labs and VisiSonics businesses.
Financial Income, Net (in millions)
|
Nine Months |
Nine Months |
Third Quarter |
Third Quarter |
|||||||||||||
|
Financial income, net |
$ | 5.2 | $ | 5.5 | $ | 2.3 | $ | 1.2 | ||||||||
|
of which: |
||||||||||||||||
|
Interest income and gains and losses from marketable securities, net |
$ | 6.3 | $ | 4.6 | $ | 2.2 | $ | 1.5 | ||||||||
|
Foreign exchange gain (loss) |
$ | (1.1 | ) | $ | 0.9 | $ | 0.1 | $ | (0.3 | ) | ||||||
Financial income, net, consists of interest earned on investments, gains and losses from sale of marketable securities, accretion (amortization) of discounts (premiums) on marketable securities and foreign exchange movements.
The increase in interest income and gains and losses from marketable securities, net, during both the third quarter and first nine months of 2026 principally reflected higher combined bank deposits and marketable securities balances held, mainly resulting from the follow‑on offering completed in the fourth quarter of 2025.
We review our monthly expected major non-U.S. dollar denominated expenditures and look to hold equivalent non-U.S. dollar cash balances to mitigate currency fluctuations. However, our Euro cash balances have increased significantly on a quarterly basis beyond our Euro liabilities, mainly from applicable French research tax credits, which are generally refunded every three years. Separately, our NIS liabilities are significantly higher than our NIS‑denominated assets, mainly because of operating lease obligations. We try to mitigate certain foreign currency exposures through the use of foreign exchange forward contracts. As a result of these currency exposures, net of our hedging activities, we recorded a foreign exchange gain of $0.1 million and a foreign exchange loss of $1.1 million for the third quarter and first nine months of 2026, respectively, as compared to a foreign exchange loss of $0.3 million and a foreign exchange gain of $0.9 million for the comparable periods of 2025.
Remeasurement of Marketable Equity Securities
We recorded a loss of less than $0.1 million and a gain of $0.1 million for the third quarter and first nine months of 2026, respectively, as compared to a gain of less than $0.1 million and a loss of $0.3 million for the comparable periods of 2025, related to remeasurement of marketable equity securities, which we hold at fair value. Over time, remeasurement of marketable equity securities may be affected by market dynamics and other factors. Equity values generally change daily for marketable equity securities and upon the occurrence of observable price changes or upon impairment of marketable equity securities. In addition, volatility in the global economic climate and financial markets could result in a significant change in the value of our investments.
Income Tax Expense
Our income tax expense was $1.1 million and $4.2 million for the third quarter and first nine months of 2026, respectively, as compared to $1.7 million and $3.8 million for the comparable periods of 2025. The decrease in the third quarter of 2026 was primarily attributable to lower withholding tax expense, while the increase for the first nine months of 2026 was primarily attributable to higher withholding tax expense. In addition, the corresponding periods of 2025 reflected the impact of changes in deferred tax assets related to net operating loss carryforwards of our French subsidiary. In December 2025, we established a full valuation allowance against these deferred tax assets. As a result, no similar tax impact was recognized during the third quarter and first nine months of 2026.
We are subject to income and other taxes in the United States and in numerous foreign jurisdictions. Our domestic and foreign tax liabilities are dependent on the jurisdictions in which profits are determined to be earned and taxed. Additionally, the amount of taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we operate. A number of factors influence our effective tax rate, including changes in tax laws and treaties as well as the interpretation of existing laws and rules. Federal, state, and local governments and administrative bodies within the United States, and other foreign jurisdictions have implemented, or are considering, a variety of broad tax, trade, and other regulatory reforms that may impact us. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. Key corporate tax provisions of OBBBA include the restoration of 100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to Section 163(j) interest limitations, modification of several international tax provisions, and expanded Section 162(m) aggregation requirements. In accordance with ASC 740, we have recognized the effects of the new tax law in the period of enactment. The OBBBA did not have a material impact on our financial position.
We have significant operations in Israel and France, and a substantial portion of our taxable income is generated in these jurisdictions, as well as potentially in the U.S. due to Global Intangible Low-Taxed Income and the requirement to capitalize research and development expenditures under IRC Section 174 over 15 years if sourced internationally. Although certain of our non-U.S. subsidiaries are taxed at rates substantially lower than U.S. tax rates, our overall tax rate could nevertheless result in a substantial increase as a result of withholding tax expenses with respect to which we are unable to obtain a refund from the relevant tax authorities.
Our Irish subsidiary qualified for a 12.5% tax rate on its trade. Interest income generated by our Irish subsidiary is taxed at a rate of 25%.
Our French subsidiary is entitled to a tax benefit of 10% applied to specific revenues under the French IP Box regime. The French IP Box regime applies to net income derived from the licensing, sublicensing or sale of several IP rights, such as patents and copyrighted software, including royalty revenues. This elective regime requires a direct link between the income benefiting from the preferential treatment and the research and development expenditures incurred and contributing to that income. Qualifying income may be taxed at a favorable 10% corporate income tax rate (plus social surtax, hence 10.3% in total). Income not eligible for a tax benefit under the French IP Box regime is taxed at a regular rate of 25%.
Our Israeli subsidiary has previously benefited from various Israeli tax incentives, including reduced corporate tax rates and, in some instances, exemptions on undistributed profits. These tax-exempt profits are permanently reinvested as management has determined that the Israeli subsidiary does not currently intend to distribute dividends. Therefore, deferred taxes have not been provided for such tax-exempt income. We intend to continue to reinvest these profits and do not currently foresee a need to distribute dividends out of such tax-exempt income.
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.
We believe that the assumptions and estimates associated with revenue recognition, equity-based compensation and credit losses have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.
See our Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of additional critical accounting policies and estimates. There have been no changes in our critical accounting policies as compared to those previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2025.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2026, we had approximately $29.6 million in cash and cash equivalents, $5.1 million in bank deposits, and $186.0 million in marketable securities, totaling $220.7 million, as compared to $222.0 million at December 31, 2025. The decrease for the first nine months of 2026 principally reflected investments in leasehold and equipment for our new offices in Ra’anana, Israel, partially offset by cash proceeds from exercise of stock-based awards.
Out of total cash, cash equivalents, bank deposits and marketable securities of $220.7 million, $87.2 million was held by our foreign subsidiaries. Our intent is to reinvest earnings of our foreign subsidiaries, and our current operating plans do not demonstrate a need to repatriate foreign earnings to fund our U.S. operations. If additional funds are required in the United States for strategic transactions or other corporate purposes, we would first seek to access such capital through alternative means, including tax-efficient transfers of funds that qualify for applicable exemptions, debt financing arrangements, or capital markets transactions, including potential follow-on equity offerings, similar to our follow-on public offering completed in November 2025. However, if these alternatives are not available or are not sufficient, we may need to accrue and pay taxes to repatriate these funds. The determination of the amount of additional taxes related to the repatriation of these earnings is not practicable, as it may vary based on various factors such as the location of the cash and the effect of regulation in the various jurisdictions from which the cash would be repatriated.
During the first nine months of 2026, we invested $124.8 million of cash in bank deposits and marketable securities with maturities up to 44 months from the balance sheet date. In addition, during the same period, bank deposits and marketable securities were redeemed for cash amounting to $112.4 million. All our marketable securities are classified as available-for-sale. The purchase and sale or redemption of available-for-sale marketable securities are considered part of investing cash flow. Available-for-sale marketable securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of stockholders’ equity, net of taxes. Realized gains and losses on sales of investments, as determined on a specific identification basis, are included in the interim condensed consolidated statements of loss. The amount of credit losses recorded for the first nine months of 2026 was immaterial. For more information about our marketable securities, see Note 4 to the interim condensed consolidated financial statements for the three and nine months ended September 30, 2026.
Bank deposits are classified as short-term bank deposits and long-term bank deposits. Short-term bank deposits are deposits with maturities of more than three months but no longer than one year from the balance sheet date, whereas long-term bank deposits are deposits with maturities of more than one year as of the balance sheet date. Bank deposits are presented at their cost, including accrued interest, and purchases and sales are considered part of cash flows from investing activities.
Operating Activities
Net cash provided by operating activities for the first nine months of 2026 was $2.5 million and consisted of net loss of $9.7 million, adjustments for non-cash items of $19.1 million, and changes in operating assets and liabilities of $6.9 million. Adjustments for non-cash items primarily consisted of $2.5 million of depreciation and amortization of intangible assets, $15.5 million of equity-based compensation expenses, and $1.3 million of unrealized foreign exchange loss. The decrease in operating assets and liabilities primarily consisted of an increase in prepaid expenses and other assets of $6.7 million (mainly as a result of payment of a yearly design tool subscription, an increase in French research tax benefits applicable to the CIR, advance tax payments, and a $2.6 million increase in unbilled receivables classified as “other long-term assets” in the interim condensed consolidated balance sheets), as well as a decrease in trade payables of $1.2 million and a decrease in accrued payroll and related benefits of $2.4 million (mainly as a result of yearly bonus payments), partially offset by a decrease in trade receivables, net, of $2.7 million and a decrease in operating lease right-of-use assets of $0.8 million.
Net cash used in operating activities for the first nine months of 2025 was $12.1 million and consisted of net loss of $9.5 million, adjustments for non-cash items of $15.7 million, and changes in operating assets and liabilities of $18.3 million. Adjustments for non-cash items primarily consisted of $3.1 million of depreciation and amortization of intangible assets and $14.1 million of equity-based compensation expenses, partially offset by $1.1 million of unrealized foreign exchange gain. The decrease in operating assets and liabilities primarily consisted of an increase in trade receivables of $12.2 million, a decrease in accrued expenses and other payables of $0.9 million, a decrease in accrued payroll and related benefits of $4.2 million (mainly as a result of yearly bonus payments), and a decrease in deferred revenues of $0.5 million.
Cash flows from operating activities may vary significantly from quarter to quarter depending on the timing of our receipts and payments. Our ongoing cash outflows from operating activities principally relate to payroll-related costs and obligations under our property leases and design tool licenses. Our primary sources of cash inflows are receipts from our accounts receivable, to some extent, funding from research and development government grants and French research tax credits, and interest earned from our cash, deposits and marketable securities. The timing of receipts of accounts receivable from customers is based upon the completion of agreed milestones or agreed dates as set out in the contracts.
Investing Activities
Net cash used in investing activities for the first nine months of 2026 was $16.5 million, compared to $14.6 million of net cash provided by investing activities for the comparable period of 2025. We had a cash outflow of $119.0 million and a cash inflow of $109.5 million with respect to investments in marketable securities during the first nine months of 2026, as compared to a cash outflow of $49.8 million and a cash inflow of $63.1 million with respect to investments in marketable securities during the first nine months of 2025. For the first nine months of 2026, we had a net investment of $3.0 million in bank deposits, as compared to a net investment of $0.7 million in bank deposits for the comparable period of 2025. We had a cash outflow of $4.0 million and $1.4 million during the first nine months of 2026 and 2025, respectively, from purchase of property and equipment (the 2026 outflow partially reflects investments in leasehold improvements and equipment for our new offices in Ra’anana, Israel). For the first nine months of 2025, we had a cash inflow of $3.5 million in connection with the release of escrowed funds associated with the sale of Intrinsix.
Financing Activities
Net cash provided by financing activities for the first nine months of 2026 was $3.0 million, as compared to net cash used in financing activities in the amount of $3.9 million for the comparable period of 2025. During the first nine months of 2026, we received $3.0 million from the exercise of stock-based awards, as compared to $3.2 million received for the comparable period of 2025. For the first nine months of 2025, we had a cash outflow of $7.2 million from the purchase of treasury stock.
In August 2008, we announced that our board of directors approved a share repurchase program for up to one million shares of common stock, which was extended collectively by an additional 7,800,000 shares in 2010, 2013, 2014, 2018, 2020, 2023 and 2024. No shares of common stock were repurchased during the first nine months of 2026. During the nine months ended September 30, 2025, we repurchased 340,295 shares of common stock at an average purchase price of $21.01 per share for an aggregate purchase price of $7.2 million. As of September 30, 2026, we had 684,486 shares available for repurchase.
We believe that our cash and cash equivalents, short-term bank deposits and marketable securities, along with cash from operations, will provide sufficient capital to fund our operations for at least the next 12 months. We cannot provide assurances, however, that the underlying assumed levels of revenues and expenses will prove to be accurate.
In addition, as part of our business strategy, we occasionally evaluate potential acquisitions of businesses, products and technologies and minority equity investments. Accordingly, a portion of our available cash may be used at any time for the acquisition of complementary products or businesses or minority equity investments. Such potential transactions may require substantial capital resources, which may require us to seek additional debt or equity financing. We cannot assure you that we will be able to successfully identify suitable acquisition or investment candidates, complete acquisitions or investments, integrate acquired businesses into our current operations, or expand into new markets. Furthermore, we cannot provide assurances that additional financing will be available to us in any required time frame and on commercially reasonable terms, if at all.
Contractual Obligations and Commitments
We believe that our contractual obligations and commitments have not changed materially from those included in our Annual Report on Form 10-K for the year ended December 31, 2025.
|
Item 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
A majority of our revenues and a portion of our expenses are transacted in U.S. dollars and our assets and liabilities together with our cash holdings are predominantly denominated in U.S. dollars. However, the majority of our expenses are denominated in currencies other than the U.S. dollar, principally the NIS and the Euro. Increases in volatility of the exchange rates of currencies other than the U.S. dollar versus the U.S. dollar could have an adverse effect on the expenses and liabilities that we incur when remeasured into U.S. dollars. We review our monthly expected non-U.S. dollar denominated expenditures and look to hold equivalent non-U.S. dollar cash balances to mitigate currency fluctuations. However, our Euro cash balances increase significantly on a quarterly basis beyond our Euro liabilities, mainly from French research tax benefits applicable to the CIR, which is generally refunded every three years. Separately, our NIS liabilities are significantly higher than our NIS‑denominated assets, mainly because of operating lease obligations. We try to mitigate certain foreign currency exposures through the use of foreign exchange forward contracts. As a result of these currency exposures, net of our hedging activities, we recorded a foreign exchange gain of $0.1 million and a foreign exchange loss of $1.1 million for the third quarter and first nine months of 2026, respectively, as compared to a foreign exchange loss of $0.3 million and a foreign exchange gain of $0.9 million for the comparable periods of 2025.
As a result of currency fluctuations and the remeasurement of non-U.S. dollar denominated expenditures to U.S. dollars for financial reporting purposes, we may experience fluctuations in our operating results on an annual and quarterly basis. To protect against the increase in value of forecasted foreign currency cash flow resulting from salaries paid in currencies other than the U.S. dollar during the year, we follow a foreign currency cash flow hedging program. We hedge portions of the anticipated payroll for our non-U.S. employees denominated in currencies other than the U.S. dollar for a period of one to twelve months with forward and option contracts. During both the third quarter and first nine months of 2026, we recorded accumulated other comprehensive loss of $0.1 million from our forward contracts, net of taxes, with respect to anticipated payroll expenses for our non-U.S. employees. During the third quarter and first nine months of 2025, we recorded accumulated other comprehensive loss of $0.6 million and accumulated other comprehensive gain of $0.2 million, respectively, from our forward and option contracts, net of taxes, with respect to anticipated payroll expenses for our non-U.S. employees. As of September 30, 2026, the amount of other comprehensive loss from our forward contracts, net of taxes, was less than $0.1 million, which will be recorded in the consolidated statements of income (loss) during the following three months. We recognized a net loss of $0.1 million and a net gain of $0.6 million for the third quarter and first nine months of 2026, respectively, related to forward contracts, and a net gain of $0.6 million and $1.0 million for the comparable periods of 2025, related to forward and option contracts. We note that hedging transactions may not successfully mitigate losses caused by currency fluctuations. We expect to continue to experience the effect of exchange rate and currency fluctuations on an annual and quarterly basis.
A hypothetical 10% weakening of the U.S. dollar against the NIS and the Euro would have resulted in an increase to our salary and employee related expenses, which are a large portion of our operating costs, of approximately $1.5 million and $4.8 million for the third quarter and first nine months of 2026, respectively. A hypothetical 10% strengthening of the U.S. dollar against the NIS and the Euro would have resulted in a decrease to our salary and employee related expenses of approximately $1.2 million and $3.9 million for the third quarter and first nine months of 2026, respectively.
The majority of our cash and cash equivalents are invested in high-grade certificates of deposit with major U.S., European and Israeli banks. Generally, cash and cash equivalents and bank deposits may be redeemed and therefore minimal credit risk exists with respect to them. Nonetheless, deposits with these banks exceed the Federal Deposit Insurance Corporation (FDIC) insurance limits or similar limits in foreign jurisdictions, to the extent such deposits are even insured in such foreign jurisdictions. While we monitor on a systematic basis the cash and cash equivalent balances in the operating accounts and adjust the balances as appropriate, these balances could be impacted if one or more of the financial institutions with which we deposit our funds fails or is subject to other adverse conditions in the financial or credit markets. To date, we have experienced no loss of principal or lack of access to our invested cash or cash equivalents; however, we can provide no assurance that access to our invested cash and cash equivalents will not be affected if the financial institutions that we hold our cash and cash equivalents fail.
We hold an investment portfolio consisting principally of corporate bonds. We have the ability to hold such investments until recovery of temporary declines in market value or maturity. As of September 30, 2026, the unrealized losses associated with our investments were $2.9 million. As we tend to hold such bonds with unrealized losses to recovery, the allowance for credit losses was not material during the third quarter and first nine months of 2026. However, we can provide no assurance that we will recover present declines in the market value of our investments.
Interest income and gains and losses from marketable securities, net, were $2.2 million and $6.2 million for the third quarter and first nine months of 2026, respectively, as compared to $1.5 million and $4.6 million for the comparable periods of 2025. The increase in interest income and gains and losses from marketable securities, net, during both the third quarter and first nine months of 2026 principally reflected higher combined bank deposits and marketable securities balances held, mainly resulting from the follow‑on offering completed in the fourth quarter of 2025.
We are exposed primarily to fluctuations in the level of U.S. interest rates. To the extent that interest rates rise, fixed interest investments may be adversely impacted, whereas a decline in interest rates may decrease the anticipated interest income for variable rate investments. We typically do not attempt to reduce or eliminate our market exposures on our investment securities because the majority of our investments are short term. We currently do not have any interest rate derivative instruments but may put them in place in the future. Fluctuations in interest rates within our investment portfolio have not had, and we do not currently anticipate such fluctuations will have, a material effect on our financial position on an annual or quarterly basis.
|
Item 4. |
CONTROLS AND PROCEDURES |
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2026.
There has been no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.
PART II OTHER INFORMATION
|
Item 1. |
LEGAL PROCEEDINGS |
As of September 30, 2026, our interim condensed consolidated balance sheet includes a provision of approximately $0.2 million for one legal proceeding arising in the ordinary course of business, which was fully concluded during the third quarter. We are not a party to any litigation or legal proceedings that we believe could reasonably be expected to have a material effect on our business, results of operations and financial condition.
|
Item 1A. |
RISK FACTORS |
We have not identified any material changes to the Risk Factors previously disclosed in Part I—Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of those factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and stock price. You should carefully consider the risks and uncertainties described in our Annual Report filed on Form 10-K for the year ended December 31, 2025, together with all of the other information in this Quarterly Report on Form 10-Q, including in Part I—Item 2—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the condensed consolidated financial statements and related notes.
|
Item 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
There were no repurchases of our common stock during the three months ended September 30, 2026.
|
Item 3. |
DEFAULTS UPON SENIOR SECURITIES |
Not applicable.
|
Item 4. |
MINE SAFETY DISCLOSURES |
Not applicable.
|
Item 5. |
OTHER INFORMATION |
Rule 105b-1 Trading Plans
On
Amendments to Bylaws
On November 9, 2026, the Board of Directors of the Company (the “Board”) approved and adopted amendments to the existing Bylaws of the Company (as so amended, the “Bylaws”). Among other things, the amendments:
|
● |
change the voting standard for stockholder matters (other than the election of directors) from a majority of the shares present in person or represented by proxy and entitled to vote on the matter to a majority in voting power of the votes cast (excluding abstentions and broker non-votes); |
|
● |
clarify and enhance procedural mechanics and disclosure requirements in connection with stockholder director nominations and business proposals at stockholder meetings, including, without limitation, to: |
|
o |
revise the advance notice deadline for annual meetings (other than proposals submitted pursuant to Rule 14a-8 under the Exchange Act, which remain governed by that rule) to require that notice be delivered not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting (subject to adjustment if the annual meeting is more than 30 days before or more than 60 days after such anniversary), such that, for the 2027 annual meeting, notice should be delivered between February 2, 2027 and March 4, 2027; |
|
o |
require that a stockholder submitting a nomination or proposal be a stockholder of record at the time of giving notice and at the time of the meeting and be present in person (including by remote communication) or through a qualified representative at the meeting; |
|
o |
update the information that proposing and nominating stockholders, certain related persons and director nominees are required to provide, including with respect to synthetic equity positions, the acquisition dates, investment intent and pledges of shares, material relationships and litigation involving the Company; |
|
o |
update the information, representations and agreements that proposed nominees are required to provide, including nominee voting commitments and intent to serve a full term, and limit the number of nominees a stockholder may nominate to the number of directors to be elected at the meeting; |
|
o |
clarify the timing and scope of the obligation of proposing and nominating stockholders and proposed nominees to update and supplement notices, including that updates may not be used to change nominees or add business; |
|
o |
require that notices and other documents be delivered to the Company in writing by hand or by certified or registered mail; |
|
o |
revise the universal proxy provisions to clarify that a nomination, and any related proxies and votes, will be disregarded if the nominating stockholder does not comply with Rule 14a-19 under the Exchange Act, including applicable notice and solicitation requirements, and provide evidence of compliance at least seven business days before the meeting; |
|
● |
provide that any stockholder soliciting proxies from other stockholders must use a proxy card color other than white; |
|
● |
provide that the Board may adopt rules and regulations for the conduct of stockholder meetings, that the person presiding over a stockholder meeting may prescribe rules, regulations and procedures for the meeting and may adjourn the meeting, including in the absence of a quorum, and that the presiding person, or the Board or a committee before the meeting, may determine that business or a nomination was not properly brought before the meeting; |
|
● |
provide that the Board may fix the exact number of directors by resolution within a range of five to nine directors; |
|
● |
permit special meetings of the Board to be called by the Chairman of the Board, the Chief Executive Officer, the Secretary or a majority of the directors, shorten the notice period for special meetings of the Board, and update the parties who may call a special meeting of a committee; |
|
● |
update the exclusive forum provision to permit the Company to consent to an alternative forum; |
|
● |
conform to recent amendments to the General Corporation Law of the State of Delaware, including with respect to virtual meetings, the stockholder list, electronic notice and the definition of officer for purposes of indemnification; and |
|
● |
make certain other technical, conforming, modernizing and clarifying changes. |
The complete text of the Bylaws is filed as Exhibit 3.1 hereto and incorporated herein by reference. The foregoing description of the Bylaws does not purport to be complete and is qualified in its entirety by reference to the Bylaws as filed hereto.
|
Item 6. |
EXHIBITS |
|
Exhibit |
Description |
|
3.1 |
Amended and Restated Bylaws. |
|
31.1 |
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. |
|
31.2 |
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. |
|
32 |
Section 1350 Certification of Chief Executive Officer and Chief Financial Officer. |
|
|
|
|
101.INS |
The following materials from Ceva, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Loss, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Cash Flows, (iv) Condensed Consolidated Statements of Comprehensive Loss, (v) Condensed Consolidated Statements of Changes in Stockholders’ Equity, and (vi) Notes to Condensed Consolidated Financial Statements. |
|
101.SCH |
Inline XBRL Taxonomy Extension Schema Document. |
|
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
|
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document. |
|
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document. |
|
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
|
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
Ceva, Inc. |
|
|
Date: November 9, 2026 |
By: /s/ AMIR PANUSH |
|
Amir Panush |
|
|
Date: November 9, 2026 |
By: /s/ YANIV ARIELI |
|
Yaniv Arieli |