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What changed in CEVA INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CEVA INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+394 added−389 removedSource: 10-K (2025-02-27) vs 10-K (2024-03-07)

Top changes in CEVA INC's 2024 10-K

394 paragraphs added · 389 removed · 297 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

63 edited+20 added−14 removed24 unchanged
Biggest changeTo capitalize on this industry shift, we intend to: ● develop and enhance our range of DSP/AI processing platforms and NPUs with additional features, performance and capabilities; ● develop and expand our short range wireless IPs and customer base, providing the newest standards and the most complete offerings to streamline our customers’ deployments; ● continue to develop new generation of high performance platforms incorporating DSPs and AI accelerators to pursue opportunities and grow our footprint in the 5G addressable markets including infrastructure, automotive, mobile broadband and cellular IoT; ● go up the “value chain” by adding and charging for software for our wireless, AI, voice, spatial audio and IMU (Inertial Measurement Units) products; ● expand our presence in NPU for smart edge SoC by capitalizing on our AI accelerators and CDNN graph compiler software technologies; ● continue to prudently invest in strategic technologies that enable us to strengthen our presence in existing market or enter new addressable markets; ● capitalize on our relationships and leadership within our worldwide community of semiconductor and OEM licensees who are developing Ceva-based solutions; ● capitalize on our technology leadership in the development of advanced processor technologies, connectivity IPs and sensor fusion software to create and develop new, strategic relationships with OEMs and semiconductor companies to replace their internal solutions with Ceva-based solutions; and ● capitalize on our IP licensing and royalty business model which we believe is the best vehicle for a pervasive adoption of our technology and allows us to focus our resources on research and development of new licensable technologies and applications.
Biggest changeTo capitalize on this industry shift, we intend to: ● develop and enhance our NPU product lines for Edge AI to meet our customers’ evolving requirements ● develop and enhance our DSP platforms with additional features, performance and capabilities; ● develop and expand our short-range wireless IP and customer base, providing the newest standards, new IP blocks like RF and multi-protocol solutions to streamline our customers’ deployments; ● continue to develop new generations of high-performance platforms incorporating processors NPUs, wireless connectivity standards and embedded application software to pursue opportunities and grow our footprint in the smart edge markets. ● go up the “value chain” by adding and charging for software for our wireless, AI, voice, spatial audio and Inertial Measurement Unit (IMU) products; ● continue to prudentially invest in strategic technologies that enable us to strengthen our presence in existing market or enter new addressable markets; ● capitalize on our relationships and leadership position within our worldwide community of semiconductor and OEM licensees who are developing Ceva-based solutions; ● capitalize on our technology leadership in the development of advanced processor technologies, connectivity IP and sensor fusion software to create and develop new, strategic relationships with OEMs and semiconductor companies to replace their internal solutions with Ceva-based solutions; and ● capitalize on our IP licensing and royalty business model which we believe is the best vehicle for a pervasive adoption of our technology and allows us to focus our resources on research and development of new licensable technologies and applications.
Our engineers possess significant experience in developing AI DSP cores, NPUs and tools for 5G, computer vision, AI , connectivity products (Wi-Fi, UWB and Bluetooth), NB-IoT, and sensor processing and sensor fusion software.
Our engineers possess significant experience in developing AI and sensor fusion DSP cores, NPUs and tools for 5G, computer vision, AI, connectivity products (Wi-Fi, UWB and Bluetooth), NB-IoT, and sensor processing and sensor fusion software.
The following industry players and factors may have a significant impact on our competitiveness: ● we compete directly in the signal processing cores space with Verisilicon, Cadence and Synopsys; ● we compete with CPU IP or configurable CPU IP (offering DSP configured CPU and/or DSP acceleration and/or connectivity capabilities to their IP) providers, such as ARM, Synopsys and Cadence and the RISC-V open source; ● we compete with custom ASIC providers and internal engineering teams at companies such as Marvell, Broadcom, ST and NXP that may design programmable DSP core products and signal processing cores in-house and therefore not license our technologies; ● we compete in the short-range wireless markets with Mindtree, Synopsys and internal engineering teams at companies such as Infineon, Silicon Labs and NXP; ● we compete in embedded imaging and vision market with Cadence, Synopsys, Videantis, Arm and Verisilicon; ● we compete in AI processor market with AI processor and accelerator providers, including Arm, Cadence, Synopsys, Cambricon, Digital Media Professionals (DMP), Expedera, Imagination Technologies, Nvidia open source NVDLA and Verisilicon; ● we compete in the audio and voice applications market with ARM, Cadence, Synopsys and Verisilicon; and ● we compete in the embedded 3D Audio and Motion Sensing software market with Waves, Dolby and CyweeMotion.
The following industry players and factors may have a significant impact on our competitiveness: ● we compete directly in the signal processing cores space with Verisilicon, Cadence and Synopsys; ● we compete with CPU IP or configurable CPU IP (offering DSP configured CPU and/or DSP acceleration and/or connectivity capabilities to their IP) providers, such as Arm, Synopsys and Cadence and the RISC-V open source; ● we compete with custom ASIC providers and internal engineering teams at companies such as Marvell, Broadcom, ST and NXP that may design programmable DSP core products and signal processing cores in-house and therefore not license our technologies; ● we compete in the short-range wireless markets with Mindtree and internal engineering teams at companies such as Infineon, Silicon Labs and NXP; ● we compete in embedded imaging and vision market with Cadence, Synopsys, Videantis, Arm and Verisilicon; ● we compete in AI processor market with AI processor and accelerator providers, including Arm, Cadence, Synopsys, Cambricon, Digital Media Professionals (DMP), Expedera, Imagination Technologies, Nvidia open source NVDLA and Verisilicon; ● we compete in the audio and voice applications market with Arm, Cadence, Synopsys and Verisilicon; and ● we compete in the embedded 3D spatial audio and Motion Sensing software market with Waves, Dolby and CyweeMotion.
Accordingly, there are no assurances that any patent application filed by us will result in a patent being issued, or that our issued patents, and any patents that may be issued in the future, will afford us adequate protection against competitors with similar technology; nor can we be assured that patents issued to us will not be infringed or that others will not design around our technology.
Accordingly, there are no assurances that any patent application filed by us will result in a patent being issued, or that our issued patents, and any patents that may be issued in the future, will afford us adequate protection against competitors with similar technology; nor can we be assured that patents issued to us will not be infringed or invalidated, or that others will not design around our technology.
Products We are the leading licensor of silicon and software IP that enables smart edge devices to connect, sense and infer data more reliably and efficiently. Our wireless communications, sensing and Edge AI technologies are at the heart of some of today’s most advanced smart edge products.
Products We are the leading licensor of wireless interface silicon and software IP that enables smart edge devices to connect, sense and infer data more reliably and efficiently. Our wireless communications, sensing and Edge AI technologies are at the heart of some of today’s most advanced smart edge products.
Our technical support services include: ● assistance with implementation, responding to customer-specific inquiries, training and, when and if they become available, distributing updates and upgrades of our products; ● application support, consisting of providing general hardware and software design examples, ready-to-use software modules and guidelines to our licensees to assist them in using our technology; and ● design services, consisting of creating customer-specific implementations of our signal processing IPs and application platforms.
Our technical support services include: ● assistance with implementation, responding to customer-specific inquiries, training and, when and if they become available, distributing updates and upgrades of our products; ● application support, consisting of providing general hardware and software design examples, ready-to-use software modules and guidelines to our licensees to assist them in using our technology; and ● design services, consisting of creating customer-specific implementations of our signal processing IP and application platforms.
The advent of wireless connectivity technologies like 5G-Advanced, Wi-Fi 7 and Bluetooth 5 and the diverse sensor related workloads required to make a device smart, such as advanced image enhancement, computer vision, AI inferencing, voice and audio pre- and post- processing, spatial audio and motion sensor fusion have further increased these pressures.
The advent of wireless connectivity technologies like 5G-Advanced, Wi-Fi 7 and Bluetooth 6/7 and the diverse sensor related workloads required to make a device smart, such as advanced image enhancement, computer vision, AI inferencing, voice and audio pre- and post- processing, spatial audio and motion sensor fusion have further increased these pressures.
Ceva’s SensPro sensor fusion AI DSPs offer a combination of high performance single and half precision floating-point math for powertrain and Radar applications along with a large amount of 8- and 16-bit parallel processing capacity required for deep neural network (DNN) inference processing.
Our SensPro sensor fusion AI DSPs offer a combination of high performance single and half precision floating-point math for powertrain and Radar applications along with a large amount of 8- and 16-bit parallel processing capacity required for deep neural network (DNN) inference processing.
In particular, our Sustainability Policy reflects our commitment to diversity and equal opportunity, a harassment-free workplace, training, development and employee engagement, and human rights, health and safety, and other matters relevant to employee well-being and the Ceva culture.
Our Sustainability Policy reflects our commitment to diversity and equal opportunity, a harassment-free workplace, training, development and employee engagement, and human rights, health and safety, and other matters relevant to employee well-being and the Ceva culture.
Our inability to compete effectively on these bases could have a material adverse effect on our business, results of operations and financial condition. With respect to certain large potential customers, we also compete with internal engineering teams, which may design programmable signal processing IP core products in-house.
Our inability to compete effectively on these bases could have a material adverse effect on our business, results of operations and financial condition. With respect to certain large potential customers, we also compete with internal engineering teams, which may design wireless connectivity or programmable signal processing IP core products in-house.
We cannot assure you that we would be able to prevail in any such litigation or be able to devote the financial resources required to bring such litigation to a successful conclusion. In any potential dispute involving our patents or other intellectual property, our licensees also could become the targets of litigation.
We cannot assure you that we would be able to prevail in any such litigation or be able to devote the financial resources required to bring such litigation to a successful conclusion. In any potential dispute involving our patents or other IP, our licensees also could become the targets of litigation.
In addition, as our intellectual property is widely licensed and deployed, system OEM companies can obtain Ceva-based chipsets from a wide range of suppliers, thus reducing dependence on any one supplier and fostering price competition, both of which help to contain the cost of Ceva-based products. We operate a licensing and royalty business model.
In addition, as our IP is widely licensed and deployed, system OEM companies can obtain Ceva-based chipsets from a wide range of suppliers, thus reducing dependence on any one supplier and fostering price competition, both of which help contain the cost of Ceva-based products. We operate a licensing and royalty business model.
From time to time, we develop new signal processors, platforms, software solutions or connectivity products in close alignment with a number of tier-one industry players which signifies to the market that we are focused on viable applications that meet broad industry needs or try to get similar inputs and insight for our new developments from our marketing team.
From time to time, we develop new signal processors, platforms, software solutions or connectivity products in close alignment with several tier-one industry players, which signifies to the market that we are focused on viable applications that meet broad industry needs or try to get similar inputs and insight for our new developments from our marketing team.
We typically charge a license fee for access to our hardware technology and a royalty fee for each unit of silicon which incorporates our hardware or software technology. License and related fees are invoiced in accordance with agreed-upon contractual terms.
We typically charge a license fee for access to our hardware technology and a royalty fee for each unit of silicon which incorporates our hardware or software technology. 6 Table of Contents License and related fees are invoiced in accordance with agreed-upon contractual terms.
They are subject to rapid change and are significantly affected by new product introductions. We compete with other suppliers of licensed signal processing IPs.
They are subject to rapid change and are significantly affected by new product introductions. We compete with other suppliers of licensed signal processing IP.
Royalties are reported and invoiced quarterly and generally based on a fixed unit rate or a percentage of the sale price for the Ceva-based silicon product. Strategy We believe there is a growing demand for IPs that enable smart edge devices to connect, sense and infer data more reliably and efficiently.
Royalties are reported and invoiced quarterly and generally based on a fixed unit rate or a percentage of the sale price for the Ceva-based silicon product. Strategy We believe there is a growing demand for IP that enables smart edge devices to connect, sense and infer data more reliably and efficiently.
The software required to process the sensor data and fuse the data from multiple sensors is complex and requires unique specialization. By licensing rather than developing this sensor processing software in-house, companies can focus their efforts developing the applications that utilize the processed sensor data to create differentiated, contextually aware devices.
The software required to process the sensor data and fuse the data from multiple sensors is complex and requires unique specialization. By licensing our IP rather than developing this sensor processing software in-house, our customers can focus their efforts developing the applications that utilize the processed sensor data to create differentiated, contextually aware devices.
We compete on the basis of signal processing IP performance, first-to-market availability for latest generation wireless standards, overall chip cost, power consumption, flexibility, reliability, communication and multimedia software availability, design cycle time, tool chain, customer support, name recognition, reputation and financial strength.
We compete based on signal processing IP performance, first-to-market availability for latest generation wireless standards, overall chip cost, power consumption, flexibility, reliability, communication and multimedia software availability, design cycle time, tool chain, customer support, name recognition, reputation and financial strength.
Research and Development Our research and development team is focused on improving and enhancing our existing products, as well as developing new products to broaden our offerings and market opportunities. These efforts are largely driven by current and anticipated customer and market needs.
Research and Development Our research and development team focuses on improving and enhancing our existing products, as well as developing new products to broaden our offerings and market opportunities. These efforts are largely driven by current and anticipated customer and market needs.
Litigation may in the future be necessary to enforce our patents and other intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others, or to defend against claims of infringement or invalidity.
Litigation may in the future be necessary to enforce our patents and other IP rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others, or to defend against claims of infringement or invalidity.
We also seek to limit disclosure of our intellectual property and trade secrets by requiring employees and consultants with access to our proprietary information to execute confidentiality agreements with us and by restricting access to our source code and other intellectual property.
We also seek to limit disclosure of our IP and trade secrets by requiring employees and consultants with access to our proprietary information to execute confidentiality agreements with us and by restricting access to our source code and other IP.
Due to rapid technological change, we believe that factors such as the technological and creative skills of our personnel, new product developments and enhancements to existing products are more important than specific legal protections of our technology in establishing and maintaining a technology leadership position. We have an active program to protect our proprietary technology through the filing of patents.
Due to rapid technological change, we believe that factors such as the technological and creative skills of our personnel, new product developments and enhancements to existing products are more important than obtaining statutory protections for our technology in establishing and maintaining a technology leadership position. We have an active program to protect our proprietary technology through the filing of patents.
In addition, the laws of certain countries in which our products are or may be developed, manufactured or sold may not protect our products and intellectual property rights to the same extent as the laws of the United States.
In addition, the laws of certain countries in which our products are or may be developed, manufactured or sold may not protect our products and IP rights to the same extent as the laws of the United States.
We are generally bound to indemnify licensees under the terms of our license agreements. Although our indemnification obligations are generally subject to a maximum amount, these obligations could nevertheless result in substantial expenses.
We are generally obligated to indemnify our licensees under the terms of our license agreements. Although our indemnification obligations are typically subject to a maximum amount, these obligations could nevertheless result in substantial expenses.
Our marketing group runs competitive benchmark analyses to help us maintain our competitive position. Technical Support We offer technical support services through our offices in Israel, APAC region, France and the United States. As of December 31, 2023, we had 28 employees in technical support.
Our marketing group runs competitive benchmark analyses to help us maintain our competitive position. Technical Support We offer technical support services through our offices in Israel, APAC region, France and the United States. As of December 31, 2024, we had 26 employees in technical support.
We have registered trademark in the United States for our name Ceva and the related Ceva logo, and currently market our signal processing cores and other technology offerings under this trademark. 12 Table of Contents Human Capital Resources The table below presents the number of employees of Ceva as of December 31, 2023 by function and geographic location.
We have registered trademarks in the United States for our name Ceva and the related Ceva logo, and currently market our signal processing cores and other technology offerings under this trademark. 12 Table of Contents Human Capital Resources The table below presents the numbers of our employees as of December 31, 2024 by function and geographic location.
The semiconductor industry is characterized by frequent litigation regarding patent and other intellectual property rights. Questions of infringement in the semiconductor field involve highly technical and subjective analyses.
The semiconductor industry is characterized by frequent litigation regarding patent and other IP rights. Questions of infringement in the semiconductor field involve highly technical and subjective analyses.
Because such patent holding companies do not provide services or use technology, the assertion of our own patents by way of counter-claim may be ineffective.
Because such patent holding companies do not provide services or use technology, the assertion of our own patents by way of counterclaim may be ineffective.
In order to reduce the cost, complexity, and risk in bringing products to market, Ceva has developed a suite of system platforms and solutions. These platforms and solutions combine the hardware and software elements that are essential for designers deploying Ceva’s state-of-the-art platforms, AI DSP cores and NPUs.
To reduce the cost, complexity, and risk in bringing products to market, we have developed a suite of system platforms and solutions. These platforms and solutions combine the hardware and software elements that are essential for designers deploying Ceva’s state-of-the-art platforms, AI DSP cores and NPUs.
These companies also may choose to license their proprietary signal processing IP cores to third parties and, as a result, become direct competitors. 11 Table of Contents Proprietary Rights Our success and ability to compete are dependent on our ability to develop and maintain the proprietary aspects of our intellectual property and to operate without infringing the proprietary rights of others.
These companies also may choose to license their wireless connectivity or proprietary signal processing IP cores to third parties and, as a result, become direct competitors. 11 Table of Contents Proprietary Rights Our success and ability to compete are dependent on our ability to develop and maintain the proprietary aspects of our technology and to operate without infringing the proprietary rights of others.
NPUs Neural processing units (NPUs) are specialized processors designed to accelerate neural network computations, such as machine learning and artificial intelligence. NPUs are optimized for performing complex mathematical operations required by neural networks, such as matrix multiplications and convolutions, much more efficiently than traditional processors like CPUs or GPUs.
NPUs Neural processing units (NPUs) are specialized processors designed to accelerate neural network computations, such as machine learning (ML) and AI. NPUs are optimized for performing complex mathematical operations required by neural networks, such as matrix multiplications and convolutions, much more efficiently than traditional processors like central processing units (CPUs) or graphics processing units (GPUs).
International Sales and Operations Customers based in Europe and Middle East (EME) and Asia Pacific (APAC) accounted for 90% of our total revenues for 2023, 88% of our total revenues for 2022 and 84% for 2021, with customers in China accounting for 59%, 63% and 59% of total revenues for 2023, 2022 and 2021, respectively.
International Sales and Operations Customers based in Europe and Middle East (EME) and Asia Pacific (APAC) accounted for 81% of our total revenues for 2024, 90% of our total revenues for 2023 and 88% of our total revenues for 2022, with customers in China accounting for 49%, 59% and 63% of total revenues for 2024, 2023 and 2022, respectively.
As of December 31, 2023, we had 29 employees in sales and marketing. We have sales offices and representation in APAC region, Sweden, France and the United States. Maintaining close relationships with our customers and strengthening these relationships are central to our strategy.
As of December 31, 2024, we had 34 employees in sales and marketing. We have sales offices and representation in APAC region, Sweden, France, Israel, United Kingdom and the United States. Maintaining close relationships with our customers and strengthening these relationships are central to our strategy.
Our research and development team consists of 322 engineers as of December 31, 2023, working in seven development centers located in Israel, France, the United States, Ireland, the United Kingdom and Serbia, and from 2024 also in Greece.
Our research and development team consists of 323 engineers as of December 31, 2024, working in seven development centers located in France, Greece, Ireland, Israel, Serbia, the United Kingdom and the United States.
Customers We have licensed our platforms, AI DSPs, NPUs and wireless connectivity IPs to leading semiconductor and OEM companies throughout the world. These companies incorporate our IP into application-specific chipsets or custom-designed chipsets that they manufacture, market and sell to consumer electronics companies. We also license our technologies to OEMs directly.
Customers We have licensed our platforms, AI DSPs, NPUs and wireless connectivity IP to leading semiconductor and OEM companies throughout the world, including seven of the world’s top 10 MCU players. These customers incorporate our IP into application-specific chipsets or custom-designed chipsets that they manufacture, market and sell to consumer electronics companies. We also license our technologies to OEMs directly.
Companies such as Marvell, Samsung, and STMicroelectronics license our designs for some applications and use their own proprietary cores for other applications.
Companies such as NXP, Renesas and STMicroelectronics license our designs for some applications and use their own proprietary cores for other applications.
We deliver our platforms, AI DSPs and NPUs in the form of a hardware description language definition (known as a soft core or a synthesizable core). All Ceva hardware IPs can be manufactured on any process using any physical library, and all are accompanied by a complete set of tools and an integrated development environment.
We deliver our platforms, AI and sensor fusion DSPs and NPUs in the form of a hardware description language definition (known as a soft core or a synthesizable core). All our hardware IP can be manufactured on any process using any physical library and comes with a complete set of tools and an integrated development environment.
Included among our licensees are the following customers: Actions, Ambiq, AIC Semi, Artosyn, ASPEED, ASR Micro, Atmosic, Autotalks, Beken, Bestechnic, Broadcom, Celeno, Ceragon, Cirrus Logic, Espressif, FujiFilm, GCT Semi, Goodix, iCatch, ICOM, InPlay, Intel, iRobot, Itron, Leadcore, LG Electronics, LifeSignals, Mediatek, Microchip, MorningCore, Nations, Nextchip, Nokia, Nordic Semi, Novatek, Nurlink, NXP, ON Semi, Sanechip, Synaptics, Optek, Oticon, Panasonic, Picocom, Renesas, Rockchip, Rohm, Samsung, Sanechips, Sharp, SiFive, SiFlower, SigmaStar, Socionext, Sony, Sonova, STMicroelectronics, Toshiba, Unisoc, Vatics, Winner Micro and Yamaha.
Included among our licensees are the following customers: Actions, Ambiq, AIC Semi, Alif, ASPEED, ASR Micro, Atmosic, Autotalks, Beken, Bestechnic, boAt, Broadcom, Ceragon, Cirrus Logic, Espressif, ESWIN, FujiFilm, Goodix, iCatch, ICOM, InPlay, Intel, iRobot, Itron, LG Electronics, LifeSignals, Mediatek, Microchip, MorningCore, Nations, Nextchip, Nokia, Nordic Semi, Novatek, NXP, onsemi, Synaptics, Oticon, Panasonic, Renesas, Rockchip, Rohm, Samsung, SatixFy, Sharp, SiFlower, SigmaStar, Socionext, Sony, Sonova, STMicroelectronics, THX, Toshiba, Unisoc, Vatics, Winner Micro and Yamaha.
Ceva’s latest generation Ceva-XC20 DSP and PentaG2 platform IP effectively lower the high entry barriers for network equipment manufacturers, IoT companies and newcomers who wish to address these huge market opportunities by providing comprehensive IPs on which to build their 5G/5G Advanced SoC and ASICs, while reducing the time-to-market, risk, effort and associated cost.
Our latest generation Ceva-XC20 family of DSPs and PentaG2 platform IP effectively lower the high entry barriers for network equipment manufacturers, IoT companies, satellite OEMs and newcomers who wish to address these market opportunities by providing comprehensive IP on which to build their 5G/5G Advanced SoC and ASICs, while helping reduce the time-to-market, risk, effort and associated cost.
Our patents relate to our signal processing IP cores and application-specific platform technologies. As of December 31, 2023, we hold 46 patents in the United States, eight patents in Canada, 90 patents in the EME (Europe and Middle East) region and 13 patents in Asia Pacific (APAC) region, totaling 157 patents, with expiration dates between 2024 and 2039.
Our patents relate to our signal processing IP cores and application-specific platform technologies. As of December 31, 2024, we held 50 patents in the United States, eight patents in Canada, 90 patents in the Europe and Middle East (EME) region and 10 patents in the Asia Pacific (APAC) region, totaling 158 patents, with expiration dates between 2025 and 2041.
ITEM 1. BUSINESS Company Overview Headquartered in Rockville, Maryland, Ceva is the leader in innovative silicon and software IP solutions that enable smart edge products to connect, sense, and infer data more reliably and efficiently.
ITEM 1. BUSINESS Company Overview We are the leader in innovative silicon and software intellectual property (IP) solutions that enable smart edge products to connect, sense, and infer data more reliably and efficiently.
By providing low power cellular digital signal processor (DSP) cores and platforms, we help companies overcome the entry barriers to the cellular IoT market without undertaking the complex and expensive R&D to develop these technologies internally. 5G/5G Advanced User Equipment and Infrastructure IPs As 5G networks continue to be deployed globally, new use cases and applications that leverage the standard’s enormous bandwidth and ultra-low latency are emerging, including fixed wireless access, private networks and vehicle-to-everything (V2X) communications, to name but a few.
By providing low power cellular digital signal processing (DSP) cores and platforms, we help our customers overcome the entry barriers to the cellular IoT market without undertaking the complex and expensive research and development process to develop these technologies internally. 5G/5G Advanced User Equipment and Infrastructure IP As 5G and the upcoming 5G-Advanced standards continue to be deployed globally, new use cases and applications that leverage the standard’s enormous bandwidth and ultra-low latency are emerging, including fixed wireless access, private networks, Low Earth Orbit (LEO) satellite networks and vehicle-to-everything (V2X) communications.
Number Total employees 424 Function Research and development 322 Sales and marketing 29 Administration 45 Technical support 28 Location Israel 248 France 60 Ireland 11 China 16 United States 33 Serbia 31 Elsewhere 25 We believe we are a respected employer in the countries where we have operations, and, with the help of our employees, we strive to be a responsible global corporate citizen and a more sustainable company.
Number Total employees 428 Function Research and development 323 Sales and marketing 34 Administration 45 Technical support 26 Location Israel 236 France 59 Ireland 11 China 17 United States 33 Serbia 34 Greece 20 Elsewhere 18 We believe we are a respected employer in the countries where we have operations, and, with the help of our employees, we strive to be a responsible global corporate citizen and a more sustainable company.
In addition, as of December 31, 2023, we have eight patent applications pending in the United States, eight pending patent applications in the EME region, three pending global (PCT) patent applications and three pending patent applications in the APAC region, totaling 22 pending patent applications.
In addition, as of December 31, 2024, we had six patent applications pending in the United States, nine pending patent applications in the EME region, three pending global Patent Corporation Treaty (PCT) patent applications and eight pending patent applications in the APAC region, totaling 26 pending patent applications.
In addition to the time and expense required for us to indemnify our licensees, a licensee’s development, marketing and sale of products embodying our solutions could be severely disrupted or shut down as a result of litigation. We also rely on trademark, copyright and trade secret laws to protect our intellectual property.
In addition to the time and expense required for us to indemnify our licensees, a licensee’s development, marketing and sale of products embodying our solutions could be severely disrupted or shut down as a result of litigation, and we could be liable to such licensees for additional amounts.
We actively pursue foreign patent protection in countries where we feel it is prudent to do so. Our policy is to apply for patents or for other appropriate statutory protection when we develop valuable new or improved technology. The status of patents involves complex legal and factual questions, and the breadth of claims allowed is uncertain.
We actively pursue foreign patent protection in countries where we feel it is prudent to do so. Our policy is to apply for patents or for other appropriate statutory protection when we develop valuable new or improved technology that is eligible for protection.
Ceva is a sustainability and environmentally conscious company. We have adopted both a Code of Business Conduct and Ethics and a Sustainability Policy, in which we emphasize and focus on environmental preservation, recycling, the welfare of our employees and privacy – which we promote on a corporate level.
We have adopted both a Code of Business Conduct and Ethics and a Sustainability Policy, in which we emphasize and focus on environmental preservation, recycling, the welfare of our employees and privacy – which we promote on a corporate level. At Ceva, we are committed to social responsibility, values of preservation and consciousness towards these purposes.
We were initially incorporated in Delaware on November 22, 1999 under the name DSP Cores, Inc. The current company was created through the combination of the DSP IP licensing division of DSP Group, Inc. and Parthus Technologies plc (Parthus) in November 2002.
Our current company was created through the combination of the DSP IP licensing division of DSP Group, Inc. and Parthus Technologies plc (Parthus) in November 2002.
By choosing to license our IP, manufacturers can achieve the advantage of creating their own differentiated solutions and develop their own unique product roadmaps. Through our licensing efforts, we have established a worldwide community developing Ceva-based solutions, and therefore we can leverage their strengths, customer relationships, proprietary technology advantages, and existing sales and marketing infrastructure.
Through our licensing efforts, we have established a worldwide community developing Ceva-based solutions, and therefore we can leverage their strengths, customer relationships, proprietary technology advantages, and existing sales and marketing infrastructure.
The advent of IoT has resulted in significant demand for connectivity IPs that address this burgeoning market, which includes smart True Wireless Stereo (TWS) earbuds, wearables, health monitoring, smart speakers, smart home appliances, and many other consumers and IoT devices.
The advent of Artificial Intelligence of Things (AIoT) and the push to add embedded AI capabilities to almost every device has resulted in significant demand for connectivity IP that address this growing market, which includes smart True Wireless Stereo (TWS) earbuds, wearables, health monitoring, smart speakers, smart home appliances, white goods, and many other consumer and IoT devices.
Ceva offers expertise developing complete solutions in a number of key growth markets, including consumer, automotive, industrial, infrastructure, mobile and PC. For these markets, we offer a comprehensive portfolio of IPs which include various types of specialized platforms for 5G, computer vision, sound, AI, Wi-Fi, Bluetooth, UWB, cellular-IoT solutions, sensor fusion and spatial audio.
We offer expertise developing complete solutions in a number of key growth end markets, including consumer IoT, automotive, industrial, infrastructure, mobile and PC. For these markets, we offer IP solutions that include various types of specialized platforms for 5G-Advanced, satellite communications, multi-standard wireless connectivity (incorporating Wi-Fi, Bluetooth, UWB, 802.15.4), wireless RF, cellular IoT, sensor fusion and spatial audio.
More than 17 billion of the world’s most innovative smart edge products from AI-infused smartwatches, IoT devices and wearables to autonomous vehicles, 5G mobile networks and more are powered by Ceva.
Since 2003, more than 19 billion of the world’s most innovative smart edge products from AI-infused smartwatches, IoT devices and wearables to autonomous vehicles, 5G mobile networks and more have been shipped with Ceva IP, with approximately 2 billion shipped in 2024 alone.
We have more than 450 employees worldwide, with research and development facilities in Israel, France, Serbia, Ireland, the United States, the United Kingdom and from 2024 also in Greece, and sales and support offices throughout Asia Pacific (APAC), Sweden, France, Israel and the United States.
With a global team of more than 400 development, support and sales professionals, we are headquartered in Rockville, Maryland, with research and development facilities in France, Greece, Ireland, Israel, Serbia, the United Kingdom and the United States and sales and support offices throughout Asia Pacific (APAC), Sweden, France, Israel, United Kingdom and the United States.
Yet, Wi-Fi and Bluetooth standards are constantly evolving, and the many new end applications are looking to benefit from these enhancements, which put further pressure on time to market on SoC vendors.
Moreover, many companies wish to integrate these connectivity technologies into System-on-Chip (SoC) designs rather than provide connectivity through an additional chip in the system. Yet, Wi-Fi and Bluetooth standards are constantly evolving, and the many new end applications are looking to benefit from these enhancements, which put further time-to-market pressure on systems and chip companies.
Design Gap The demand for smart edge devices, consumer, automotive, industrial, infrastructure, mobile and PC markets continue to grow. These devices require faster and low power connectivity, and a richer user experience that is aware and predictive. Semiconductor manufacturers face ever growing pressures to make smaller, feature-rich integrated circuits that are more reliable, less expensive and have greater performance.
These devices require faster and lower power connectivity, with richer user experience that is aware and predictive. Semiconductor manufacturers face ever growing pressures to make smaller, feature-rich integrated circuits that are more reliable, less expensive and have greater performance. These two trends are occurring concurrently in the face of decreasing product lifecycles and constrained battery power.
Given the “design gap,” as well as the increasing complexity and the unique skill set required to develop a smart edge SoC, many semiconductor design and manufacturing companies increasingly choose to license proven intellectual property, such as processor cores (e.g. DSP, CPU, GPU and NPU, connectivity platforms (e.g.
Given the “design gap,” as well as the increasing complexity and the unique skill set required to develop a smart edge SoC, many semiconductor design and manufacturing companies increasingly choose to license proven IP, such as processor cores (e.g., DSP, CPU, GPU and NPU), connectivity platforms (e.g., Bluetooth, Wi-Fi, UWB, 5G) and embedded software algorithms (e.g., sensor fusion, sound, spatial audio) and memory and physical IP from silicon IP companies like Ceva to complement their in-house development or to replace their internal development efforts for these technologies.
At Ceva, we are committed to social responsibility, values of preservation and consciousness towards these purposes. Our revenue mix comprises primarily of IP licensing fees and related revenues and royalties generated from the shipments of products deploying our IP. Related revenues include revenues from post contract support, training and sale of development systems and chips.
Our revenue mix primarily comprises IP licensing fees and related revenues and royalties generated from our customers’ shipments of smart edge products deploying our IP. Related revenues include revenues from post contract support, training and sale of development systems and chips. We were initially incorporated in Delaware on November 22, 1999 under the name DSP Cores, Inc.
While semiconductor manufacturing processes have advanced significantly to allow a substantial increase in the number of circuits placed on a single chip, resources for design capabilities have not kept pace with the advances in manufacturing processes, resulting in a growing “design gap” between the increasing manufacturing potential and the constrained design capabilities. 6 Table of Contents Ceva ’ s Business Ceva addresses the requirements of the consumer, industrial, infrastructure, mobile and PC markets by designing and licensing a broad range of robust processors, platforms and software which streamline the design of solutions for developing a wide variety of application specific solutions that address the connect, sense and infer use cases of smart edge devices.
Our Business We address the requirements of the consumer, industrial, infrastructure, automotive, mobile and PC markets by designing and licensing a broad range of robust processors, platforms, software and solutions which streamline the design of products for developing a wide variety of application specific solutions that address the connect, sense and infer use cases of smart edge devices.
We believe our business model offers us some key advantages. By not focusing on manufacturing or selling silicon products, we are free to widely license our technology and free to focus most of our resources on research and development.
By not focusing on manufacturing or selling silicon products, we are free to widely license our technology and focus most of our resources on research and development. By choosing to license our IP, manufacturers have the advantage of being able to solely focus on creating their own differentiated solutions and developing their own unique product roadmaps.
Our platforms for connect, sense and infer use cases in smart edge devices enables us to address the high volume markets of consumer, automotive, industrial, infrastructure, mobile and PC and work towards we license our technologies on a worldwide basis to semiconductor and OEM companies that design and manufacture products that combine Ceva-based solutions with their own differentiating technology.
Our Business Model Our mission is to be the partner of choice for transformative IP solutions for the smart edge. Our platforms for connect, sense and infer use cases in smart edge devices enables us to address the high-volume markets of consumer IoT, automotive, industrial, infrastructure, mobile and PC.
We also recognize chip design skills and expertise are scarce nowadays and more companies are deciding to develop chips in-house, creating an even greater demand for IP. 7 Table of Contents Our IP portfolio is strategically aligned to allow us to exploit the most lucrative “design gaps” in the growing demand for smart edge devices.
These devices are becoming more complex, integrating multiple technologies and standards into a single SoC. We also recognize chip design skills and expertise are scarce nowadays and more systems companies and OEMs are deciding to develop chips in-house, creating an even greater demand for IP.
Ceva is a trusted partner to over 400 of the leading semiconductor and original equipment manufacturer (OEM) companies targeting a wide variety of cellular and IoT end markets, including mobile, PC, consumer, automotive, smart-home, surveillance, robotics, industrial and medical.
For more than three decades, we have been a trusted partner to hundreds of leading semiconductor and original equipment manufacturer (OEM) companies servicing not just our largest target growth and incumbent markets, but also a wide variety of other end markets and applications, including smart-home, surveillance, robotics and medical.
By licensing rather than developing these technologies in-house, companies can now get access to the latest standards and profiles from Ceva without undertaking the expensive research and development costs required to develop these technologies internally. 5 Table of Contents Cellular IoT IPs Cellular IoT, and specifically Narrowband IoT (NB-IoT), LTE Cat-1 and the upcoming RedCap standards have become key technologies for any company wishing to connect low power IoT devices over long distances, using cellular networks.
Cellular IoT IP Cellular IoT, and specifically Narrowband IoT (NB-IoT), LTE Cat-1 and 5G RedCap standards, have become key technologies for companies wishing to connect low power IoT devices over long distances using cellular networks. By its nature, cellular is a very complex technology, with most of the industry knowledge held by a few large companies.
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With the industry’s only portfolio of comprehensive communications and scalable Edge AI IP, Ceva powers the connectivity, sensing, and inference in today’s most advanced smart edge products across consumer IoT, mobile, automotive, infrastructure, industrial, and personal computing.
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Commanding 67% of the wireless connectivity market share based on IP design revenues in 2023, according to IPnest, we believe we have the industry’s broadest portfolio of comprehensive wireless communications and processor IP platforms and embedded software solutions for the deployment of artificial intelligence (AI) algorithms and models directly onto local edge devices (Edge AI).
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The customers incorporate our IP into application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs) that they manufacture, market and sell to consumer electronics companies.
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We power the connectivity, sensing, and inference capabilities in today’s most advanced smart edge products across four large, diversified markets with significant opportunity for long-term growth, consumer Internet-of-Things (IoT), automotive, industrial and infrastructure, as well as in the mobile and personal computing (PC) markets where we have well-established customers and presence, which based on our research we believe will represent a $5 billion total addressable market by 2027.
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Our application software IP is licensed primarily to OEMs who embed it in their System on Chip (SoC) designs to enhance the user experience, and OEMs also license our hardware IP products and solutions for their SoC designs to create power-efficient, intelligent, secure and connected devices.
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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.
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Ceva’s wireless communications, sensing and Edge AI technologies are at the heart of some of today’s most advanced smart edge products. From Bluetooth connectivity, Wi-Fi, ultra-wide band (UWB) and 5G platform IP for ubiquitous, robust communications, to scalable Edge AI neural processing unit (NPU) IPs, sensor fusion processors and embedded application software that make devices smarter.
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We have established leadership positions in key technology areas, including reliable and secure wireless connectivity for use in both infrastructure and end points across multiple end markets, low-power and highly efficient audio and video/vision sensing and interface solutions and scalable neural-network-based AI processing. We are a sustainability and environmentally conscious company.
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Industry Background Short Range Wireless IPs Wi-Fi, Bluetooth and UWB are key technologies for any company looking to address the mobile, SmartHome, Enterprise, and IoT end markets. Moreover, many companies wish to integrate these connectivity technologies into SoC designs rather than provide connectivity through an additional chip in the system.
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We are committed to our customers’ success and intend to continue to drive innovation in smart connected systems in the AI era. 4 Table of Contents Industry Background Short Range Wireless IP Wi-Fi, Bluetooth and ultra-wideband (UWB) are key enabling technologies for any company looking to address the consumer IoT, automative, industrial, mobile, and PC end markets with Edge AI and IoT use cases.
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By its nature, cellular is a very complex technology, with most of the industry knowledge held within a few large companies.
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In many cases, companies need to support multiple wireless standards in a device, which further increases the complexity.
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Ceva's NeuPro NPU is tailored to meet the demands of AI applications. Offering high-performance inference capabilities while being power-efficient and offering high utilization, making it suitable for a wide range of smart edge devices, including smartphones, IoT devices, automotive, surveillance, and other smart cameras.
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By licensing from us rather than developing these technologies in-house, our customers aim to access the latest standards, profiles and state-of-the-art radio frequences (RF) and to improve their time-to-market without undertaking the expensive research and development costs required to develop these technologies internally.
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These two trends are occurring concurrently in the face of decreasing product lifecycles and constrained battery power.
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Our family of NeuPro NPUs are tailored to meet the full scale of AI applications, from tinyML and embedded AI through to Small Language Models, Large Language Models and Time Test Compute.
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Bluetooth, Wi-Fi, Ultra Wideband, 5G) and software algorithms (e.g. sensor fusion, sound, spatial audio) and memory and physical IPs from silicon intellectual property companies like Ceva rather than develop those technologies in-house.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFactors that may affect our quarterly results of operations in the future include, among other things: ● the gain or loss of significant licensees, partly due to our dependence on a limited number of customers generating a significant amount of quarterly revenues; ● any delay in execution of any anticipated IP licensing arrangement during a particular quarter; ● delays in revenue recognition for some license agreements based on percentage of completion of customized work or other accounting reasons; ● the timing and volume of orders and production by our customers, as well as fluctuations in royalty revenues resulting from fluctuations in unit shipments by our licensees; ● royalty pricing pressures and reduction in royalty rates due to an increase in volume shipments by customers, end-product price erosion and competitive pressures; 18 Table of Contents ● earnings or other financial announcements by our major customers that include shipment data or other information that implicates expectations for our future royalty revenues; ● the mix of revenues among IP licensing and related revenues, and royalty revenues; ● the timing of the introduction of new or enhanced technologies by us and our competitors, as well as the market acceptance of such technologies; ● the discontinuation, or public announcement thereof, of product lines or market sectors that incorporate our technology by our significant customers; ● our lengthy sales cycle and specifically in the third quarter of any fiscal year during which summer vacations slow down decision-making processes of our customers in executing contracts; ● delays in the commercialization of end products that incorporate our technology; ● currency fluctuations, mainly the Euro and the New Israeli Shekel versus the U.S. dollar; ● fluctuations in operating expenses and gross margins associated with the introduction of, and research and development investments in, new or enhanced technologies and adjustments to operating expenses resulting from restructurings; ● the approvals, amounts and timing of Israeli research and development government grants from the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel (the “IIA”), EU grants and French research tax credits; ● the impact of new accounting pronouncements, including the new revenue recognition rules; ● the timing of our payment of royalties to the IIA, which is impacted by the timing and magnitude of license agreements and royalty revenues derived from technologies that were funded by grant programs of the IIA; ● statutory changes associated with research tax benefits applicable to French technology companies; ● our ability to scale our operations in response to changes in demand for our technologies; ● entry into new end markets that utilize our signal processing IPs, software and platforms; ● changes in our pricing policies and those of our competitors; 19 Table of Contents ● restructuring, asset and goodwill impairment and related charges, as well as other accounting changes or adjustments, such as our third quarter 2022 write off of deferred tax assets, and the fourth quarter 2023 tax charges related to Internal Revenue Code (“IRC”) Section 174; ● general political conditions, including global trade wars resulting from tariffs and business restrictions and bans imposed by government entities, like the well publicized 2018 ban associated with ZTE and the October 2023 announcement of the further tightening of restrictions on the transfer to China of certain advanced AI chips, semiconductors and supercomputing items, as well as other regulatory actions and changes that may adversely affect the business environment; ● general economic conditions, including the current economic conditions, and its effect on the semiconductor industry and sales of consumer products into which our technologies are incorporated; ● delays in final product delivery due to unexpected issues introduced by our service or EDA tool providers; ● delays in ratification of standards for Bluetooth, Wi-Fi, UWB or cellular standards that can affect the introduction of new products; ● constraints on chip manufacturing capacity due to high demand or shutdowns of semiconductor fabrication plants and other manufacturing facilities; and ● reductions in demand for consumer and digital devices due to lockdowns or overall financial difficulties caused by future pandemic outbreaks or public health threats.
Biggest changeFactors that may affect our quarterly results of operations in the future include, among other things: ● the gain or loss of significant licensees, partly due to our dependence on a limited number of customers generating a significant amount of quarterly revenues; ● any delay in execution of any anticipated IP licensing arrangement during a particular quarter; 18 Table of Contents ● delays in revenue recognition for some license agreements based on percentage of completion of customized work or other accounting reasons; ● the timing and volume of orders and production by our customers, as well as fluctuations in royalty revenues resulting from fluctuations in unit shipments by our licensees; ● royalty pricing pressures and reduction in royalty rates due to an increase in volume shipments by customers, end-product price erosion and competitive pressures; ● earnings or other financial announcements by our major customers that include shipment data or other information that implicates expectations for our future royalty revenues; ● the mix of revenues among IP licensing and related revenues, and royalty revenues; ● the timing of the introduction of new or enhanced technologies by us and our competitors, as well as the market acceptance of such technologies; ● the discontinuation, or public announcement thereof, of product lines or market sectors that incorporate our technology by our significant customers; ● our lengthy sales cycle and specifically in the third quarter of any fiscal year during which summer vacations slow down decision-making processes of our customers in executing contracts; ● delays in the commercialization of end products that incorporate our technology; ● currency fluctuations, mainly the Euro and the New Israeli Shekel versus the U.S. dollar; ● fluctuations in operating expenses and gross margins associated with the introduction of, and research and development investments in, new or enhanced technologies and adjustments to operating expenses resulting from restructurings; ● the approvals, amounts and timing of Israeli research and development government grants from the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel (IIA), EU grants and French research tax credits; ● the impact of new accounting pronouncements, including the new revenue recognition rules; ● the timing of our payment of royalties to the IIA, which is impacted by the timing and magnitude of license agreements and royalty revenues derived from technologies that were funded by grant programs of the IIA; ● statutory changes associated with research tax benefits applicable to French technology companies; 19 Table of Contents ● our ability to scale our operations in response to changes in demand for our technologies; ● entry into new end markets that utilize our signal processing IP, software and platforms; ● changes in our pricing policies and those of our competitors; ● restructuring, asset and goodwill impairment and related charges, as well as other tax write-offs and tax and accounting changes or adjustments, such as the fourth quarter 2023 tax charges related to Internal Revenue Code (“IRC”) Section 174; ● geopolitical conditions, including global trade competition and regulatory enhancements resulting from tariffs and business restrictions imposed by government entities[, such as the restricted party lists promulgated, expanded and updated by the U.S. government during the last several years], and further tightening of restrictions on the transfer to China of certain advanced AI chips, semiconductors and supercomputing items, as well as other regulatory actions and changes that may adversely affect the business environment; ● general economic conditions, including the current economic conditions, and its effect on the semiconductor industry and sales of consumer products into which our technologies are incorporated; ● delays in final product delivery due to unexpected issues introduced by our service or EDA tool providers; ● delays in ratification of standards for Bluetooth, Wi-Fi, UWB or cellular standards that can affect the introduction of new products; ● constraints on chip manufacturing capacity due to high demand or shutdowns of semiconductor fabrication plants and other manufacturing facilities; and ● reductions in demand for consumer and digital devices due to lockdowns or overall financial difficulties caused by future pandemic outbreaks or public health threats.
Future acquisitions, joint ventures or minority equity investments by us could result in the following, any of which could seriously harm our results of operations or the price of our stock: ● issuance of equity securities that would dilute our current stockholders’ percentages of ownership; ● large one-time write-offs or equity investment impairment write-offs; ● incurrence of debt and contingent liabilities; ● difficulties in the assimilation and integration of operations, personnel, technologies, products and information systems of the acquired companies; ● inability to realize cost efficiencies or synergies, thereby incurring higher operating expenditures as a result of the acquisition; ● diversion of management’s attention from other business concerns; 25 Table of Contents ● contractual disputes; ● risks of entering geographic and business markets in which we have no or only limited prior experience; and ● potential loss of key employees of acquired organizations.
Future acquisitions, joint ventures or minority equity investments by us could result in the following, any of which could seriously harm our results of operations or the price of our stock: ● issuance of equity securities that would dilute our current stockholders’ percentages of ownership; ● large one-time write-offs or equity investment impairment write-offs; ● incurrence of debt and contingent liabilities; ● difficulties in the assimilation and integration of operations, personnel, technologies, products and information systems of the acquired companies; ● inability to realize cost efficiencies or synergies, thereby incurring higher operating expenditures as a result of the acquisition; ● diversion of management’s attention from other business concerns; ● contractual disputes; ● risks of entering geographic and business markets in which we have no or only limited prior experience; and 25 Table of Contents ● potential loss of key employees of acquired organizations.
These developments subject our worldwide operations to increased risks and, depending on their magnitude, could reduce net sales and therefore could have a material adverse effect on our business, financial condition and operating results. Our research and development expenses will increase relative to past periods due to our receiving fewer grants from the Israeli government.
These developments subject our worldwide operations to increased risks and, depending on their magnitude, could reduce net sales and therefore could have a material adverse effect on our business, financial condition and operating results. Our research and development expenses will increase relative to past periods due to our receiving fewer grants from the Israeli government and the EU.
Our French subsidiary is entitled to a new 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.
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 new French IP Box regime was enacted into the French tax law as of January 1, 2019, and the final version of the Official guidance of the French tax authorities (FTA) was published on April 22, 2020.
This French IP Box regime was enacted into the French tax law as of January 1, 2019, and the final version of the Official guidance of the French tax authorities (FTA) was published on April 22, 2020.
Some of the risks of doing business internationally include: ● unexpected changes in regulatory requirements; ● fluctuations in the exchange rate for the U.S. dollar; ● imposition of tariffs and other barriers and restrictions, including trade tensions such as U.S.-China trade tensions; ● burdens of complying with a variety of foreign laws, treaties and technical standards; ● uncertainty of laws and enforcement in certain countries relating to the protection of intellectual property; ● multiple and possibly overlapping tax structures and potentially adverse tax consequences; ● political and economic instability, including military activities, terrorist attacks and protectionist policies; and ● changes in diplomatic and trade relationships.
Some of the risks of doing business internationally include: ● unexpected changes in regulatory requirements; ● fluctuations in the exchange rate for the U.S. dollar; ● imposition of tariffs and other barriers and restrictions, including trade tensions such as U.S.-China trade tensions; ● burdens of complying with a variety of foreign laws, treaties and technical standards; ● uncertainty of laws and enforcement in certain countries relating to the protection of IP; ● multiple and possibly overlapping tax structures and potentially adverse tax consequences; ● political and economic instability, including military activities, terrorist attacks and protectionist policies; and ● changes in diplomatic and trade relationships.
We rely on a combination of patent, copyright, trademark, trade secret, mask work and other intellectual property rights, confidentiality procedures and IP licensing arrangements to establish and protect our proprietary rights. These agreements and measures may not be sufficient to protect our technology from third-party infringement or protect us from the claims of others.
We rely on a combination of patent, copyright, trademark, trade secret, mask work and other IP rights, confidentiality procedures and IP licensing arrangements to establish and protect our proprietary rights. These agreements and measures may not be sufficient to protect our technology from third-party infringement or protect us from the claims of others.
We compete on the basis of signal processing IP performance, first-to-market availability for latest generation wireless standards, overall chip cost, power consumption, flexibility, reliability, communication and multimedia software availability, design cycle time, tool chain, customer support, name recognition, reputation and financial strength.
We compete on the basis of signal processing IP performance, NPU efficiency, first-to-market availability for latest generation wireless standards, overall chip cost, power consumption, flexibility, reliability, communication and multimedia software availability, design cycle time, tool chain, customer support, name recognition, reputation and financial strength.
In addition, terrorist attacks, acts of war or military actions and/or other civil unrest may adversely affect the territories in which we operate, and our business, financial condition and operating results. ● Our research and development expenses will increase relative to past periods due to our receiving fewer grants from the Israeli government. 14 Table of Contents ● We depend on a limited number of key personnel who would be difficult to replace, and changes in our management and sales teams may adversely affect our operations. ● The sales cycle for our IP and related solutions is lengthy, and even approved projects may have structured payment terms, which makes forecasting of our customer orders and revenues difficult. ● We may seek to expand our business in ways that could result in diversion of resources and extra expenses, and our product development efforts may not generate an acceptable return, if any. ● Because our IP and related solutions are complex, the detection of errors in our products may be delayed, and if we deliver products with defects, our credibility will be harmed, the sales and market acceptance of our products may decrease and product liability claims may be made against us. ● We may not be able to adequately protect our intellectual property, and our business will suffer if we are sued for infringement of the intellectual property rights of third parties or if we cannot obtain licenses to these rights on commercially acceptable terms. ● Cybersecurity threats or other security breaches could compromise sensitive information belonging to us or our customers and could harm our business and our reputation.
In addition, terrorist attacks, acts of war or military actions and/or other civil unrest may adversely affect the territories in which we operate, and our business, financial condition and operating results. ● Our research and development expenses will increase relative to past periods due to our receiving fewer grants from the Israeli government and the EU. ● We face a highly competitive employment market and depend on a limited number of key personnel who would be difficult to replace, and changes in our management and sales teams may adversely affect our operations. ● The sales cycle for our IP and related solutions is lengthy, and even approved projects may have structured payment terms, which makes forecasting of our customer orders and revenues difficult. 14 Table of Contents ● We may seek to expand our business in ways that could result in diversion of resources and extra expenses, and our product development efforts may not generate an acceptable return, if any. ● Because our IP and related solutions are complex, the detection of errors in our products may be delayed, and if we deliver products with defects, our credibility will be harmed, the sales and market acceptance of our products may decrease and product liability claims may be made against us. ● We may not be able to adequately protect our IP, and our business will suffer if we are sued for infringement of the IP rights of third parties or if we cannot obtain licenses to these rights on commercially acceptable terms. ● Cybersecurity threats or other security breaches could compromise sensitive information belonging to us or our customers and could harm our business and our reputation.
As a consequence of the above referenced factors, as well as unforeseen factors in the future, the royalty rates we receive for use of our technology could decrease, thereby decreasing future anticipated revenues and cash flow. Royalty revenues were approximately 41%, 38%, and 44% of our total revenues for 2023, 2022 and 2021, respectively.
As a consequence of the above referenced factors, as well as unforeseen factors in the future, the royalty rates we receive for use of our technology could decrease, thereby decreasing future anticipated revenues and cash flow. Royalty revenues were approximately 44%, 41% and 38% of our total revenues for 2024, 2023 and 2022, respectively.
Our future growth will depend on the level of market acceptance of our third-party licensable intellectual property model, the variety of intellectual property offerings available on the market, and a shift in customer preference away from in-house development of proprietary signal processing IP towards licensing open signal processing IP cores and platforms.
Our future growth will depend on the level of market acceptance of our third-party licensable IP model, the variety of IP offerings available on the market, and a shift in customer preference away from in-house development of proprietary signal processing IP towards licensing open signal processing IP cores and platforms.
We do not sell our IP solutions directly to end-users; we license our technology primarily to semiconductor companies and electronic equipment manufacturers, who then incorporate our technology into the products they sell. As a result, we rely on our customers to incorporate our technology into their end products at the design stage.
We do not sell our IP solutions directly to end-users; we license our technology primarily to semiconductor companies and original equipment manufacturers, who then incorporate our technology into the products they sell. As a result, we rely on our customers to incorporate our technology into their end products at the design stage.
Furthermore, the third-party licensable intellectual property model is highly dependent on the market adoption of new services and products with standards that continue to advance, such as ubiquitous connectivity, and the increased use of advanced audio, voice, vision and motion sensing in conjunction with AI in the consumer, industrial, infrastructure, automotive, mobile and PC markets in which we participate.
Furthermore, the third-party licensable IP model is highly dependent on the market adoption of new services and products with standards that continue to advance, such as ubiquitous connectivity, and the increased use of advanced audio, voice, vision and motion sensing in conjunction with AI in the consumer, industrial, infrastructure, automotive, mobile and PC markets in which we participate.
Such market adoption is important because the increased cost associated with ownership and maintenance of the more complex architectures needed for the advanced services and products may motivate companies to license third-party intellectual property rather than design them in-house. The trends that would enable our growth are largely beyond our control.
Such market adoption is important because the increased cost associated with ownership and maintenance of the more complex architectures needed for the advanced services and products may motivate companies to license third-party IP rather than design them in-house. The trends that would enable our growth are largely beyond our control.
Should we fail to meet such conditions, these benefits would be cancelled and we would be subject to corporate tax in Israel at the standard corporate rate (23% in 2023) and could be required to refund tax benefits already received.
Should we fail to meet such conditions, these benefits would be cancelled and we would be subject to corporate tax in Israel at the standard corporate rate (23% in 2024) and could be required to refund tax benefits already received.
Actions of any nature, including future new trade controls, could affect specific customers, industries and technologies produced inside and outside the United States, and may reduce our revenues and adversely affect our business and financial results. New tariffs, trade measures and other geopolitical risks and instability could adversely affect our consolidated results of operations, financial position and cash flows.
Actions of any nature, including future new trade controls, could affect specific customers, industries and technologies produced inside and outside the United States, and may reduce our revenues and adversely affect our business and financial results. 22 Table of Contents New tariffs, trade measures and other geopolitical risks and instability could adversely affect our consolidated results of operations, financial position and cash flows.
Any failure to successfully develop future products would have a material adverse effect on our business, financial condition and results of operations. We may not be able to adequately protect our intellectual property. Our success and ability to compete depend in large part upon the protection of our proprietary technologies.
Any failure to successfully develop future products would have a material adverse effect on our business, financial condition and results of operations. We may not be able to adequately protect our IP. Our success and ability to compete depend in large part upon the protection of our proprietary technologies.
If we were forced to change any of our brand names, we could lose a significant amount of our brand identity. 26 Table of Contents Our business will suffer if we are sued for infringement of the intellectual property rights of third parties or if we cannot obtain licenses to these rights on commercially acceptable terms.
If we were forced to change any of our brand names, we could lose a significant amount of our brand identity. 26 Table of Contents Our business will suffer if we are sued for infringement of the IP rights of third parties or if we cannot obtain licenses to these rights on commercially acceptable terms.
Significant changes in U.S. generally accepted accounting principles, or GAAP, including the adoption of the new revenue recognition rules, could materially affect our financial position and results of operations. ● Changes in our tax rates or exposure to additional income tax liabilities or assessments could adversely impact our cash flow, financial condition and results of operations. ● The Israeli and French tax benefits that we currently receive and the government programs in which we participate require us to meet certain conditions and may be terminated or reduced in the future, which could increase our tax expenses. ● We are exposed to fluctuations in currency exchange rates. ● We are exposed to the credit and liquidity risk of our customers, and to credit exposure in weakened markets, which could result in material losses. ● If we determine that our goodwill and intangible assets have become impaired, we may incur impairment charges, which would negatively impact our operating results.
Significant changes in U.S. generally accepted accounting principles, or GAAP, including the adoption of the new revenue recognition rules, could materially affect our financial position and results of operations. ● Changes in our tax rates or exposure to additional income tax liabilities or assessments could adversely impact our cash flow, financial condition and results of operations. ● The Israeli and French and Greece tax benefits that we currently receive and the government programs in which we participate require us to meet certain conditions and may be terminated or reduced in the future, which could increase our tax expenses. ● We are exposed to fluctuations in currency exchange rates. ● Royalty reporting by our licensees may be inaccurate or understated. ● We are exposed to the credit and liquidity risk of our customers, and to credit exposure in weakened markets, which could result in material losses. ● If we determine that our goodwill and intangible assets have become impaired, we may incur impairment charges, which would negatively impact our operating results.
We are subject to the risk of adverse claims and litigation alleging infringement of the intellectual property rights of others. There are a large number of patents held by others, including our competitors, pertaining to the broad areas in which we are active. We have not, and cannot reasonably, investigate all such patents.
We are subject to the risk of adverse claims and litigation alleging infringement of the IP rights of others. There are a large number of patents held by others, including our competitors, pertaining to the broad areas in which we are active. We have not, and cannot reasonably, investigate all such patents.
As a result, our past operating results should not be relied upon as an indication of future performance. 20 Table of Contents We rely significantly on revenues derived from a limited number of customers who contribute to our royalty and license revenues. We derive a significant amount of revenues from a limited number of customers.
As a result, our past operating results should not be relied upon as an indication of future performance. We rely significantly on revenues derived from a limited number of customers who contribute to our royalty and license revenues. We derive a significant amount of revenues from a limited number of customers.
In addition, these factors may also adversely affect the market price of our common stock, and the voting and other rights of the holders of our common stock. Our stock price may be volatile so you may not be able to resell your shares of our common stock at or above the price you paid for them.
In addition, these factors may also adversely affect the market price of our common stock, and the voting and other rights of the holders of our common stock. 30 Table of Contents Our stock price may be volatile so you may not be able to resell your shares of our common stock at or above the price you paid for them.
If this requirement is not repealed or otherwise modified, it will materially increase our effective tax rate and reduce our operating cash flows. Furthermore, several countries, including the U.S. and Ireland, as well as the Organization for Economic Cooperation and Development have reached agreement on a global minimum tax initiative.
If this requirement is not repealed or otherwise modified, it will potentially materially increase our effective tax rate and reduce our operating cash flows in future years. Furthermore, several countries, including the U.S. and Ireland, as well as the Organization for Economic Cooperation and Development have reached agreement on a global minimum tax initiative.
The following industry players and factors may have a significant impact on our competitiveness: ● we compete directly in the signal processing cores space with Verisilicon, Cadence and Synopsys; ● we compete with CPU IP or configurable CPU IP providers (offering DSP configured CPU and/or DSP acceleration and/or connectivity capabilities to their IP), such as Arm, Synopsys and Cadence and the RISC-V open source; ● we compete with custom ASIC providers and internal engineering teams at companies such as Marvell, Broadcom, ST, and NXP that may design programmable DSP core products and signal processing cores in-house and therefore not license our technologies; ● we compete in the short-range wireless markets with Mindtree, Synopsys and internal engineering teams at companies such as Infineon, Silicon Labs and NXP; ● we compete in embedded imaging and vision market with Cadence, Synopsys, Videantis, Arm and Verisilicon; ● we compete in the AI processor market with AI processor and accelerator providers, including Arm, Cadence, Synopsys, Cambricon, Digital Media Professionals (DMP), Expedera, Imagination Technologies, Nvidia open source NVDLA and Verisilicon; ● we compete in the audio and voice applications market with Arm, Cadence, Synopsys and Verisilicon; and ● we compete in the embedded 3D Audio and Motion Sensing software market with Waves, Dolby, and CyweeMotion.
The following industry players and factors may have a significant impact on our competitiveness: ● we compete directly in the signal processing cores space with Verisilicon, Cadence and Synopsys; 15 Table of Contents ● we compete with CPU IP or configurable CPU IP providers (offering DSP configured CPU and/or DSP acceleration and/or connectivity capabilities to their IP), such as Arm, Synopsys and Cadence and the RISC-V open source; ● we compete with custom ASIC providers and internal engineering teams at companies such as Marvell, Broadcom, ST, and NXP that may design programmable DSP core products and signal processing cores in-house and therefore not license our technologies; ● we compete in the short-range wireless markets with Mindtree, IMEC and internal engineering teams at companies such as Infineon, Silicon Labs and NXP; ● we compete in embedded imaging and vision market with Cadence, Synopsys, Videantis, Arm and Verisilicon; ● we compete in the edge AI (NPU) processor market with AI processor and accelerator providers, including Arm, Cadence, Synopsys, Cambricon, Digital Media Professionals (DMP), Expedera, Imagination Technologies, Nvidia open source NVDLA and Verisilicon, and with internal engineering teams at companies such as Infineon, Silicon Labs and NXP; ● we compete in the audio and voice applications market with Arm, Cadence, Synopsys and Verisilicon; and ● we compete in the Spatial Audio and Motion Sensing software market with Waves, Dolby, and CyweeMotion and internal engineering teams at companies such as Apple.
Revenues from customers located in the Asia Pacific (APAC) region account for a substantial portion of these revenues, with significant concentration of revenues in China, which accounted for 59%, 63% and 59% of total revenues for 2023, 2022 and 2021, respectively.
Revenues from customers located in the Asia Pacific (APAC) region account for a substantial portion of these revenues, with significant concentration of revenues in China, which accounted for 49%, 59% and 63% of total revenues for 2024, 2023 and 2022 respectively.
You are advised, however, to consult any further disclosures we make in our reports filed with the Securities and Exchange Commission. 13 Table of Contents Summary Risk Factors Risks Related to Our Industry and Markets ● The markets in which we operate are highly competitive, and as a result we could experience a loss of sales, lower prices and lower revenues. ● Because our IP solutions are components of end products, if semiconductor companies and electronic equipment manufacturers do not incorporate our solutions into their end products or if the end products of our customers do not achieve market acceptance, we may not be able to generate adequate sales of our products. ● We depend on market acceptance of third-party semiconductor intellectual property. ● If we are unable to meet the changing needs of our end-users or address evolving market demands, our business may be harmed. ● Our operating results are affected by the highly cyclical nature of and general economic conditions in the semiconductor industry, including as a result of significant supply chain disruptions.
You are advised, however, to consult any further disclosures we make in our reports filed with the Securities and Exchange Commission. 13 Table of Contents Summary Risk Factors Risks Related to Our Industry and Markets ● The markets in which we operate are highly competitive, and as a result we could experience a loss of sales, lower prices and lower revenues. ● Because our IP solutions are components of end products, if semiconductor companies and electronic equipment manufacturers do not incorporate our solutions into their end products or if the end products of our customers do not achieve market acceptance, we may not be able to generate adequate sales of our products. ● We depend on market acceptance of third-party semiconductor intellectual property. ● If we are unable to meet the changing needs of our end-users or address evolving market demands, we may not be able to expand our current market positions and penetrate new markets, and our new products may not achieve widespread market acceptance, which may limit our additional revenue opportunities and harm our business may be harmed. ● Our operating results are affected by the highly cyclical nature of and general economic conditions in the semiconductor industry, including as a result of significant supply chain disruptions.
In 2023, such grants decreased significantly due to changes in the criteria adopted by the IIA regarding larger and better funded corporations, in light of the high interest rate environment and difficulties for smaller companies to raise money, and we expect to receive fewer grants from the IIA in the future relative to past periods as well.
In 2023 and 2024, such grants decreased significantly as compared to 2022 and previous years due to changes in the criteria adopted by the IIA regarding larger and better funded corporations, in light of the high interest rate environment and difficulties for smaller companies to raise money, and we expect to receive fewer grants from the IIA in the future relative to past periods as well.
This new elective regime requires a direct link between the income benefiting from the preferential treatment and the R&D expenditures incurred and contributing to that income. Qualifying income may be taxed at a favorable 10% CIT rate (plus social surtax, hence 10.3% in total).
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% CIT rate (plus social surtax, hence 10.3% in total).
While we anticipate that we can expand our customer base and revenues in Europe and the U.S., the present concentration of revenues from a single country significantly increases our risk profile, and the occurrence of any negative international political, economic or geographic events, including any financial crisis, trade restrictions or disputes or other major event causing business disruption in China, such as the heightening of tensions between China and Taiwan, the broader APAC region and other international jurisdictions, could result in significant revenue shortfalls.
While we anticipate that we can expand our customer base and revenues in Europe and the U.S., the present concentration of revenues from a single country significantly increases our risk profile, and the occurrence of any negative international political, economic or geographic events, including any financial crisis, trade restrictions or disputes or other major event causing business disruption in China, such as the heightening of tensions between China and Taiwan, the broader APAC region and other international jurisdictions, or increased pressure within China on using domestic over foreign technology, could result in significant revenue shortfalls.
We recorded aggregate research grants of $1,668,000, $4,850,000 and $3,595,000 in 2023, 2022 and 2021, respectively. To remain eligible for the grants we have received, we must meet certain development conditions and comply with periodic reporting obligations.
We recorded aggregate research grants of $1,407,000, $1,668,000 and $4,850,000 in 2024, 2023 and 2022, respectively. To remain eligible for the grants we have received, we must meet certain development conditions and comply with periodic reporting obligations.
Further, the high interest rate environment, macroeconomic trends and geopolitical concerns, including those related to the ongoing conflict between Russia and Ukraine, unrest in the Middle East arising from the conflict between Israel and Hamas, and economic slowdown in China, among other things, can negatively impact general consumer and IoT demand, chill the market for new technology investments and adversely affect our revenues.
Further, the high interest rate environment, macroeconomic trends and geopolitical concerns, including ongoing conflict between Russia and Ukraine, unrest in the Middle East, and economic slowdown in China, among other things, can negatively impact general consumer and IoT demand, chill the market for new technology investments and adversely affect our revenues.
We may in the future pursue acquisitions of businesses, products and technologies, establish joint venture arrangements, make minority equity investments or enhance our existing Cevanet partner eco-system to expand our business. We are unable to predict whether or when any prospective acquisition, equity investment or joint venture will be completed.
We may in the future pursue acquisitions of businesses, products and technologies, establish joint venture arrangements or make minority equity investments to expand our business. We are unable to predict whether or when any prospective acquisition, equity investment or joint venture will be completed.
Our product development efforts are time-consuming and expensive and may not generate an acceptable return, if any. Our product development efforts require us to incur substantial research and development expenses. Our research and development expenses were approximately $72.7 million, $70.3 million and $69.1 million for 2023, 2022 and 2021, respectively.
Our product development efforts are time-consuming and expensive and may not generate an acceptable return, if any. Our product development efforts require us to incur substantial research and development expenses. Our research and development expenses were approximately $71.6 million, $72.7 million and $70.3 million for 2024, 2023 and 2022, respectively.
Competition for skilled employees in our field is intense, and in the current environment where many employees have become accustomed to remote work environments and frequent job changes, integration of employees into our company culture and retention of employees is becoming increasingly difficult.
In the current environment where many employees have become accustomed to remote work environments and frequent job changes, integration of employees into our company culture and retention of employees is becoming increasingly difficult.
Moreover, current economic conditions may further prolong a customer’s decision-making process and design cycle. 16 Table of Contents Further, because we do not control the business practices of our customers, we do not influence the degree to which they promote our technology or set the prices at which they sell products incorporating our technology.
Moreover, adverse changes in global or regional economic conditions and geopolitical uncertainty may further prolong a customer’s decision-making process and design cycle. 16 Table of Contents Further, because we do not control the business practices of our customers, we do not influence the degree to which they promote our technology or set the prices at which they sell products incorporating our technology.
Approximately 90% of our total revenues for 2023, 88% for 2022 and 84% for 2021 were derived from customers located outside of the United States.
Approximately 81% of our total revenues for 2024, 90% for 2023 and 88% for 2022 were derived from customers located outside of the United States.
For example, our EURO cash balances increase significantly on a quarterly basis beyond our EURO liabilities from the CIR, which is generally refunded every three years.
For example, our EURO cash balances increase significantly on a quarterly basis beyond our EURO liabilities from the Crédit Impôt Recherche (CIR), which is generally refunded every three years.
Recognizing royalty revenue on a lag time basis is not permitted. As a result, the royalties we generate from customers is based on royalty of units shipped during the quarter as estimated by our customers, not a quarter in arrears that we previously report.
As a result, the royalties we generate from customers is based on royalty of units shipped during the quarter as estimated by our customers, not a quarter in arrears that we previously report.
Out of total cash, cash equivalents, bank deposits and marketable securities of $166.5 million at year end 2023, $136.4 million was held by our foreign subsidiaries, with only $30.1 million held in the U.S., which could make capital expenditures to expand operations in the U.S., or our conducting strategic transactions in the U.S., more expensive.
Out of total cash, cash equivalents, bank deposits and marketable securities of $163.6 million at year end 2024, $135.1 million was held by our foreign subsidiaries, with only $28.5 million held in the U.S., which could make capital expenditures to expand operations in the U.S., or our conducting strategic transactions in the U.S., more expensive.
Risks Related to Our Global Operating Business ● Our quarterly operating results fluctuate from quarter to quarter due to a variety of factors, including our lengthy sales cycle, and may not be a meaningful indicator of future performance. ● We rely significantly on revenues derived from a limited number of customers who contribute to our royalty and license revenues. ● Our business is dependent on IP licensing and related revenues, which may vary from period to period. ● Royalty and other payment rates could decrease for existing and future license agreements and other customer agreements, which could materially adversely affect our operating results. ● We generate a significant amount of our total revenues, especially royalty revenues, from the mobile market (for mobile handsets) and our business and operating results may be materially adversely affected if our solutions are not incorporated in end products in these highly competitive markets. ● Because we have significant international operations, with a significant concentration of revenues in China, we may be susceptible to political, economic and other conditions relating to our international operations that could increase our operating expenses and disrupt our revenues and business.
Risks Related to Our Global Operating Business ● Our quarterly operating results fluctuate from quarter to quarter due to a variety of factors, including our lengthy sales cycle, and may not be a meaningful indicator of future performance. ● We rely significantly on revenues derived from a limited number of customers who contribute to our royalty and license revenues. ● Our business is dependent on IP licensing and related revenues, which may vary from period to period. ● Royalty and other payment rates could decrease for existing and future license agreements and other customer agreements, which could materially adversely affect our operating results. ● Because we have significant international operations, with a significant concentration of revenues in China, we may be susceptible to political, economic and other conditions relating to our international operations that could increase our operating expenses and disrupt our revenues and business.
For example, the semiconductor industry faced significant global supply chain disruptions as a result of the COVID-19 pandemic, both as a consequence of increased demand for devices enabling wireless connectivity and remote environments and supply constraints arising from the imposition of government restrictions on staffing and facility operations.
For example, the semiconductor industry faced significant global supply chain disruptions as a result of the COVID-19 pandemic, both as a consequence of increased demand for devices enabling wireless connectivity and remote environments and supply constraints arising from the imposition of government restrictions on staffing and facility operations, and has more recently experienced disruptions and uncertainty due to cross-border tariffs.
A significant portion of our business is conducted outside the United States. Although most of our revenues are transacted in U.S. dollars, we may be exposed to currency exchange fluctuations in the future as business practices evolve and we are forced to transact business in local currencies.
Although most of our revenues are transacted in U.S. dollars, we may be exposed to currency exchange fluctuations in the future as business practices evolve and we are forced to transact business in local currencies.
Two royalty paying customers each represented 10% or more of our total royalty revenues for 2022, and collectively represented 46% of our total royalty revenues for 2022, and three royalty paying customers each represented 10% or more of our total royalty revenues for 2021, and collectively represented 57% of our total royalty revenues for 2021.
Two royalty paying customers each represented 10% or more of our total royalty revenues for 2023, and collectively represented 45% of our total royalty revenues for 2023. Two royalty paying customers each represented 10% or more of our total royalty revenues for 2022, and collectively represented 46% of our total royalty revenues for 2022.
Although substantially all of our sales currently are made to customers outside of Israel, we are nonetheless directly influenced by the political, economic and military conditions affecting Israel, including Israel’s war with Hamas that began on October 7, 2023.
Although substantially all of our sales currently are made to customers outside of Israel, we are nonetheless directly influenced by the political, economic and military conditions affecting Israel, including Israel’s war with Hamas that began on October 7, 2023 or the subsequent war in the north with Hezbollah in Lebanon and the attacks from Iran and Yeman.
The expansion of our Cevanet partner eco-system also may not achieve the anticipated benefits. The occurrence of any of these events could harm our business, financial condition or results of operations. Future acquisitions, investments or joint ventures may require substantial capital resources, which may require us to seek additional debt or equity financing.
The occurrence of any of these events could harm our business, financial condition or results of operations. Future acquisitions, investments or joint ventures may require substantial capital resources, which may require us to seek additional debt or equity financing.
For example, the ongoing geopolitical and economic uncertainty between the U.S. and China, the unknown impact of current and future U.S. and Chinese trade regulations and other geopolitical risks with respect to China and Taiwan, may cause disruptions in the semiconductor industry and its supply chain, decreased demand from customers for the ultimate products using our IP solutions, or other disruptions which may, directly or indirectly, materially harm our business, financial condition and results of operations. 22 Table of Contents In addition, critical metals and materials used in semiconductors, such as Palladium, are sourced in Russia, and sanctions against Russia could impact the semiconductor supply chain.
For example, the ongoing geopolitical and economic uncertainty between the U.S. and China, the unknown impact of current and future U.S. and Chinese trade regulations and other geopolitical risks with respect to China and Taiwan, may cause further disruptions in the semiconductor industry and its supply chain, decreased demand from customers for the ultimate products using our IP solutions, or other disruptions which may, directly or indirectly, materially harm our business, financial condition and results of operations.
Risks Related to Finance, Accounting and Taxation The nature of our business requires the application of complex revenue recognition rules. Significant changes in U.S. generally accepted accounting principles, or GAAP, including the adoption of the new revenue recognition rules, could materially affect our financial position and results of operations.
Significant changes in U.S. generally accepted accounting principles, or GAAP, including the adoption of the new revenue recognition rules, could materially affect our financial position and results of operations.
New accounting pronouncements and changes in accounting principles have occurred in the past and are expected to occur in the future, which may have a significant effect on our financial results.
New accounting pronouncements and changes in accounting principles have occurred in the past and are expected to occur in the future, which may have a significant effect on our financial results. Recognizing royalty revenue on a lag time basis is not permitted.
For example, in October 2023 the U.S. Department of Commerce Bureau of Industry and Security tightened restrictions and compliance burdens on the transfer to China of certain advanced artificial intelligence chips, semiconductors and supercomputing items, software and technology subject to U.S. export controls, in addition to restricting sales to certain semiconductor fab facilities in China.
Department of Commerce Bureau of Industry and Security tightened export controls, restrictions and compliance burdens on the transfer to China of certain advanced computing chips, semiconductors and supercomputing items, software and technology subject to U.S. export controls, including certain non-U.S. origin items, in addition to restricting transactions with certain semiconductor fab facilities in China.
We currently receive research grants mainly from programs of the IIA.
We currently receive research grants mainly from programs of the IIA and to some extent from the EU.
Because the techniques used to obtain unauthorized access to networks, or to sabotage systems, change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Furthermore, in the operation of our business we also use third-party vendors that store certain sensitive data.
Because the techniques used to obtain unauthorized access to networks, or to sabotage systems, change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.
Risks Related to Ownership of Our Common Stock ● The anti-takeover provisions in our certificate of incorporation and bylaws could prevent or discourage a third party from acquiring us. ● Our stock price may be volatile so you may not be able to resell your shares of our common stock at or above the price you paid for them. 15 Table of Contents Risks Related to Our Industry and Markets The markets in which we operate are highly competitive, and as a result we could experience a loss of sales, lower prices and lower revenues.
Risks Related to Ownership of Our Common Stock ● The anti-takeover provisions in our certificate of incorporation and bylaws could prevent or discourage a third party from acquiring us. ● Our stock price may be volatile so you may not be able to resell shares of our common stock at or above the price you paid for them.
Tensions between the U.S. and China have been escalating since 2018 and are not fully resolved yet, and a number of factors may exacerbate these tensions in the future.
Tensions between the U.S. and China have been escalating since 2018, and a number of factors may exacerbate these tensions in the future, including the change in the U.S. administration this year.
The high interest rate environment and macroeconomic concerns related to slowdown may continue throughout the first half of 2024, or longer, and distort more traditional seasonality trends. Moreover, the semiconductor and consumer electronics industries remain volatile, which makes it extremely difficult for our customers and us to accurately forecast financial results and plan for future business activities.
While the high interest rate environment and macroeconomic concerns related to slowdowns experienced in 2023 and 2024 have largely abated, these conditions continue in certain areas, and distort more traditional seasonality trends. 20 Table of Contents Moreover, the semiconductor and consumer electronics industries remain volatile, which makes it extremely difficult for our customers and us to accurately forecast financial results and plan for future business activities.
In addition, new tariffs, trade measures and other geopolitical risks and instability could adversely affect our consolidated results of operations, financial position and cash flows. ● In order to sustain the future growth of our business, we must penetrate new end markets and our new products must achieve widespread market acceptance, but such additional revenue opportunities may not be implemented and may not be achieved. ● Our success will depend on our ability to successfully manage our geographically dispersed operations. ● Our operations in Israel may be adversely affected by instability in the Middle East region, including with respect to the war between Israel and Hamas that began on October 7, 2023.
In addition, new tariffs, trade measures and other geopolitical risks and instability could adversely affect our consolidated results of operations, financial position and cash flows. ● Our success will depend on our ability to successfully manage our geographically dispersed operations. ● Our operations in Israel may be adversely affected by instability in the Middle East region, including with respect to the war between Israel and Hamas that began on October 7, 2023 or the subsequent war in the north with Hezbollah in Lebanon.
If we determine that our goodwill and intangible assets have become impaired, we may incur impairment charges, which would negatively impact our operating results. Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations.
If we determine that our goodwill and intangible assets have become impaired, we may incur impairment charges, which would negatively impact our operating results.
Changes in, and responses to, U.S. trade policy could reduce the competitiveness of our products and cause our sales and revenues to drop, which could materially and adversely impact our business and results of operations.
Changes in, and responses to, U.S. trade policy could reduce the competitiveness of our products and cause our sales and revenues to drop, which could materially and adversely impact our business and results of operations. Our success will depend on our ability to successfully manage our geographically dispersed operations. Most of our research and development staff is located in Israel.
We also have research and development teams in France, Ireland, United Kingdom, the United States, and we most recently opened a design center in Serbia in April 2023 and in Greece in January 2024.
We also have research and development teams in Greece, France, Ireland, Serbia, the United Kingdom and the United States.
This has resulted a foreign exchange loss of $1.27 million during 2021 due to the devaluation of our Euro cash balances as the U.S. dollar strengthened significantly during this period as compared to the Euro, and a foreign exchange gain of $0.07 million and $0.69 million during 2022 and 2023, respectively. 29 Table of Contents We are exposed to the credit and liquidity risk of our customers, and to credit exposure in weakened markets, which could result in material losses.
This has resulted in a foreign exchange loss of $1.01 million (due to the devaluation of our Euro cash balances as the U.S. dollar strengthened significantly during this period as compared to the Euro), a foreign exchange gain of $0.69 million and a foreign exchange gain of $0.07 million for 2024, 2023 and 2022, respectively.
Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions that could result in unauthorized disclosure or loss of sensitive data.
Despite our security measures, our IT Systems may be vulnerable to attacks by hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), or breached due to employee error, malfeasance or other disruptions that could result in unauthorized access to, disclosure or loss of sensitive data.
Also, the timing of such payments from the IIA may vary from year to year and quarter to quarter, and we have no control on the timing of such payments. We depend on a limited number of key personnel who would be difficult to replace, and changes in our management and sales teams may adversely affect our operations.
We face a highly competitive employment market and depend on a limited number of key personnel who would be difficult to replace, and changes in our management and sales teams may adversely affect our operations.
Different interpretations of the French law by the French taxing authorities regarding the French IP Box regime may impose higher tax rates on our French operations and our overall tax expenses could increase.
Different interpretations of the French law by the French tax authorities regarding the French IP Box regime may impose higher tax rates on our French operations and our overall tax expenses could increase. We are exposed to fluctuations in currency exchange rates. A significant portion of our business is conducted outside the United States.
During such downturns, we typically experience new design start push outs, greater pricing pressure and shifts in product and customer mix, which can adversely affect our gross margin and net income.
During such downturns, we typically experience new design start push outs, greater pricing pressure and shifts in product and customer mix, which can adversely affect our gross margin and net income. Furthermore, any future upturn in the semiconductor industry could result in increased competition for market share in the growing signal processing IP and wireless connectivity markets.
Our success depends to a significant extent upon certain of our key employees and senior management, the loss of whom could materially harm our business.
In addition, as we continue to expand our global presence, our success will increasingly depend to a significant extent upon certain of our key employees, senior management and core sales and marketing personnel, the loss of whom could materially harm our business.
Each of these factors could decrease consumer spending and business investment in technologies and products that contain semiconductors. We have previously experienced a reduction in revenue and operating losses during downturns in the semiconductor industry, and various market data suggests that the semiconductor industry may be facing such a negative cycle presently.
Each of these factors could decrease consumer spending and business investment in technologies and products that contain semiconductors. We have previously experienced a reduction in revenue and operating losses during downturns in the semiconductor industry, and current macroeconomic factors affecting customer demand have been aggravated by certain factors such as high interest rates and geopolitical instability.
Many of our competitors are striving to increase their share of the growing signal processing IP and wireless connectivity markets and are reducing their licensing and royalty fees to attract customers.
Aggressive competition could result in substantial declines in the prices that we are able to charge for our IP or the loss of design wins to competitors. Many of our competitors are striving to increase their share of the NPU, signal processing IP and wireless connectivity markets and are reducing their licensing and royalty fees to attract customers.
Sales to UNISOC (formerly Spreadtrum Communications, Inc.), accounted for 13%, 16% and 21% of our total revenues for 2023, 2022 and 2021, respectively. With respect to our royalty revenues, two royalty paying customers each represented 10% or more of our total royalty revenues for 2023, and collectively represented 45% of our total royalty revenues for 2023.
Sales to UNISOC (formerly Spreadtrum Communications, Inc.), accounted for 15%, 13% and 16% of our total revenues for 2024, 2023 and 2022, respectively.
We are dependent upon our ability to identify, attract, motivate and retain qualified engineers and other personnel with the requisite educational background and industry experience, and cannot assure you that in the future we will be successful in attracting and retaining the required personnel.
We face a highly competitive employment market and are dependent upon our ability to identify, attract, motivate and retain qualified engineers with the requisite educational background and industry experience.
Further, we cannot assure you that the markets we chose to invest in will continue to be significant sources of revenue in the future.
Further, we cannot assure you that the markets we chose to invest in will continue to be significant sources of revenue in the future. For example, while in May 2023, we acquired VisiSonics’ spatial audio business to bolster our position in wearables, we may not realize the benefits from this acquisition.
These risks and uncertainties could result in operational and administrative inefficiencies and added costs, which could adversely impact our results of operations. 24 Table of Contents The sales cycle for our IP and related solutions is lengthy, and even approved projects may have structured payment terms, which makes forecasting of our customer orders and revenues difficult.
The loss of any of our senior management team or a significant number of our engineers could significantly disrupt our development efforts or business relationships and our ability to continue to innovate and to meet customers’ needs. 24 Table of Contents The sales cycle for our IP and related solutions is lengthy, and even approved projects may have structured payment terms, which makes forecasting of our customer orders and revenues difficult.
For example, while in May 2023, we acquired VisiSonics’ spatial audio business to bolster our position in wearables, we may not realize the benefits from this acquisition. 17 Table of Contents Our operating results are affected by the highly cyclical nature of and general economic conditions in the semiconductor industry, including in connection with significant supply chain disruptions.
The first product we launched out of this group was announced in January 2025 at the CES trade show, but we are yet unsure of its commercial success. 17 Table of Contents Our operating results are affected by the highly cyclical nature of and general economic conditions in the semiconductor industry, including in connection with significant supply chain disruptions.
The markets for the products in which our technology is incorporated are highly competitive. Aggressive competition could result in substantial declines in the prices that we are able to charge for our intellectual property or the loss of design wins to competitors.
Risks Related to Our Industry and Markets The markets in which we operate are highly competitive, and as a result we could experience a loss of sales, lower prices and lower revenues. The markets for semiconductors in general, and for the products in which our technology is incorporated in particular, are highly competitive.
Cybersecurity threats or other security breaches could compromise sensitive information belonging to us or our customers and could harm our business and our reputation. We store sensitive data, including intellectual property, proprietary business information and our customer and employee information.
Cybersecurity threats or other security breaches could compromise sensitive information belonging to us or our customers and could harm our business and our reputation. We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, “IT Systems”).
Removed
In order to sustain the future growth of our business, we must penetrate new markets and our new products must achieve widespread market acceptance, but such additional revenue opportunities may not be implemented and may not be achieved. In order to expand our business and increase our revenues, we must penetrate new markets and introduce new products.
Added
The rapid pace of technological change, including as a result of the proliferation of AI and high demand for AI-related products and services, can create opportunities for our competitors and harm our competitiveness in the market if our products do not evolve or we are unable to effectively keep up with such changes.
Removed
We have invested significant resources in pursuing potential opportunities for revenue growth and to diversify our revenue streams.
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We expect that the market for our products will continually evolve and will be subject to rapid technological change. For example, new products and disruptive technologies are being developed, and companies with which we compete have implemented AI strategies for products and service offerings.
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Our continued success will depend significantly on our ability to accurately anticipate changes in industry standards and to continue to appropriately fund development efforts to enhance our existing products or introduce new products in a timely manner to keep pace with technological developments.
Added
In January 2024, we acquired an RF design group in Greece, as part of our Ceva-Waves Links new product offering for BT & WiFi radio technologies.
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However, there are no assurances that we will develop products relevant for the marketplace or gain significant market share in those competitive markets.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe cybersecurity team, along with internal security stakeholders, are the team members principally responsible for overseeing and implementing our cybersecurity risk management program. Our cybersecurity team members each possess 15-25 years of cybersecurity experience, with strong educational qualifications including post-secondary education, industry certifications and other relevant developmental training.
Biggest changeOur cybersecurity team members each possess 15-35 years of cybersecurity experience, with strong educational qualifications including post-secondary education, industry certifications and other relevant developmental training. The cybersecurity team works collaboratively across the Company to implement customized programs designed to protect and respond to cybersecurity threats and to promptly respond to any cybersecurity incidents.
These safeguards include firewalls, intrusion prevention and detection systems, anti-malware functionality, access controls and ongoing vulnerability assessments. ● Third-Party Management : We screen venders, service providers and other third parties that may gain access to our systems based on their expertise, reliability, reputation and industry credentials, and have implemented measures to further enable us to identify and oversee cybersecurity risks presented users of our systems.. ● Education : All of our employees are trained at least annually on cybersecurity threats and our information security procedures, which reinforces our information security policies, standards and practices. ● Incident Response Planning : We have established and continue to maintain an incident response plan that addresses our response to a cybersecurity incident. ● Communication and Coordination : We utilize a cross-functional approach to address the risk from cybersecurity threats, involving management personnel from the technology, operations, legal, risk management, internal audit and other key business functions, as well as including our board of directors in an ongoing dialogue regarding cybersecurity threats and incidents. ● Governance : Our board of directors’ oversight of cybersecurity risk management is supported by our Chief Financial Officer and Compliance Officer, who interacts directly with, and is provided relevant information by, our cybersecurity team.
These safeguards include firewalls, intrusion prevention and detection systems, anti-malware functionality, access controls and ongoing vulnerability assessments. ● Third-Party Management : We screen vendors, service providers and other third parties that may gain access to our systems based on their expertise, reliability, reputation and industry credentials, and have implemented measures to further enable us to identify and oversee cybersecurity risks presented users of our systems. ● Education : All of our employees are trained at least annually on cybersecurity threats and our information security procedures, which reinforces our information security policies, standards and practices. ● Incident Response Planning : We have established and continue to maintain an incident response plan that addresses our response to a cybersecurity incident. ● Communication and Coordination : We utilize a cross-functional approach to address the risk from cybersecurity threats, involving management personnel from the technology, operations, legal, risk management, internal audit and other key business functions, as well as including our board of directors in an ongoing dialogue regarding cybersecurity threats and incidents. ● Governance : Our board of directors’ oversight of cybersecurity risk management is supported by our Chief Financial Officer and Compliance Officer, who interacts directly with, and is provided relevant information by, our cybersecurity team.
Our board receives regular presentations and reports from the management team on information regarding the policies, processes and practices that we implement to address risks from cybersecurity threats including, for example, discussion of recent developments, evolving standards, third-party and independent reviews, the threat environment and technological trends.
Our board periodically receives presentations and reports from the management team on information regarding the policies, processes and practices that we implement to address risks from cybersecurity threats including, for example, discussion of recent developments, evolving standards, third-party and independent reviews, the threat environment and technological trends.
We regularly engage consultants, auditors and other third parties to perform assessments on our cybersecurity measures. The assessments include information security maturity evaluations, independent environmental security control reviews, operating effectiveness and penetration testing. We make adjustments to our cybersecurity processes and practices as necessary based on the information provided by the third-party assessments and reviews.
We periodically engage consultants, auditors and other third parties to perform assessments on our cybersecurity measures. The assessments include information security maturity evaluations, independent environmental security control reviews, operating effectiveness and penetration testing. We make adjustments to our cybersecurity processes and practices as necessary based on the information provided by the third-party assessments and reviews.
Risk Management and Strategy Our cybersecurity program focuses on the following areas: ● Vigilance : We maintain 24/7 cybersecurity threat operations in order to rapidly detect, contain and respond to cybersecurity threats and incidents. ● Systems Safeguards : We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats.
Risk Management and Strategy Our cybersecurity program focuses on the following areas: ● Vigilance : We maintain 24/7 cybersecurity threat operations designed to rapidly detect, contain and respond to cybersecurity threats and incidents. ● Systems Safeguards : We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats.
We generally approach cybersecurity threats through a cross-functional approach which endeavors to: (i) prevent and mitigate cybersecurity threats to the Company; (ii) maintain the confidence of our customers, clients and business partners; (iii) preserve the confidentiality of our employee’s information; and (iv) protect our intellectual property.
We generally approach cybersecurity threats through a cross-functional approach which endeavors to: (i) prevent and mitigate cybersecurity threats to the Company; (ii) maintain the confidence of our customers, clients and business partners; (iii) preserve the confidentiality of our employee’s information; and (iv) protect our IP.
While our board of directors has the ultimate oversight responsibility over the management of cybersecurity risk, our audit committee reviews the risk management process relating to cybersecurity on a regular basis. We evaluate the effectiveness of our cybersecurity threat risk management through the assessment and testing of our processes and practices.
While our board of directors has the ultimate oversight responsibility over the management of cybersecurity risk, our audit committee reviews the risk management process relating to cybersecurity on a regular basis. 31 Table of Contents We evaluate the effectiveness of our cybersecurity threat risk management through the assessment and testing of our processes and practices.
Additionally, to the extent we identify any cybersecurity incident that could pose a significant risk to the Company, the board will receive prompt and timely information regarding the incident and ongoing updates until such incidents have been addressed. 31 Table of Contents Our cybersecurity team is composed of the global head of Information Technology & Management Information Systems, the Chief Information Security Officer (“CISO”) and deputy CISO.
Additionally, to the extent we identify any cybersecurity incident that could pose a significant risk to the Company, the board will receive prompt and timely information regarding the incident and ongoing updates until such incidents have been addressed.
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We believe this collective experience allows us to effectively manage risks emerging from cybersecurity threats. The cybersecurity team works collaboratively across the Company to implement customized programs designed to protect and respond to cybersecurity threats and to promptly respond to any cybersecurity incidents.
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Our cybersecurity team is composed of the global head of Information Technology & Management Information Systems, the Chief Information Security Officer (“CISO”) and deputy CISO. This cybersecurity team, along with internal security stakeholders, are the team members principally responsible for overseeing and implementing our cybersecurity risk management program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeTogether with our principal offices, these ten facilities cover an aggregate of approximately 97,689 square feet, ranging from 1,132 square feet to 57,425 square feet, with lease terms expiring from 2024 to 2034.
Biggest changeTogether with our principal offices, these 13 facilities cover an aggregate of approximately 103,600 square feet, ranging from 1,079 square feet to 57,425 square feet, with lease terms expiring from 2025 to 2034. 32 Table of Contents
We also lease seven other buildings for our main additional engineering, sales, marketing, administrative, support and operations, including two other facilities located in China, and one other facility located in each of the U.S., U.K., Ireland, Serbia and Japan.
We also lease 10 other buildings for our main additional engineering, sales, marketing, administrative, support and operations, including two other facilities located in China, three other facilities located in Greece and one other facility located in each of the U.S., U.K., Ireland, Serbia and Japan.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we are involved in litigation relating to claims arising out of our operations in the normal course of business. We are not a party to any legal proceedings, the adverse outcome of which, in management’s opinion, would have a material adverse effect on our results of operations or financial position.
Biggest changeWe are not a party to any other legal proceedings, the adverse outcome of which, in management’s opinion, would have a material adverse effect on our results of operations or financial position.
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ITEM 3. LEGAL PROCEEDINGS We are subject to legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. As of December 31, 2024, these matters have resulted in provision of approximately $300,000 on the consolidated balance sheet.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES Not applicable. 32 Table of Contents EXECUTIVE OFFICERS OF THE REGISTRANT Below are the names, ages and principal recent business experience of our current executive officers. All such persons have been appointed by our board of directors to serve until their successors are elected and qualified or until their earlier resignation or removal.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES Not applicable. 33 Table of Contents EXECUTIVE OFFICERS OF THE REGISTRANT Below are the names, ages and principal recent business experience of our current executive officers. All such persons have been appointed by our board of directors to serve until their successors are elected and qualified or until their earlier resignation or removal.
Boukaya holds a B.Sc. in Electronic Engineering from the Technion Technology Institute, graduated from Executive Program of Stanford Graduate School of Business, and holds several patents on DSP technology. Gweltaz Toquet , age 51, has served as our Chief Commercial Officer since January 2023. Mr.
Boukaya holds a B.Sc. in Electronic Engineering from the Technion Technology Institute, graduated from Executive Program of Stanford Graduate School of Business, and holds several patents on DSP technology. Gweltaz Toquet , age 52, has served as our Chief Commercial Officer since January 2023. Mr.
Amir Panush , age 50, joined our board of directors on February 13, 2024 and has served as our Chief Executive Officer since January 2023. He joined us from InvenSense, Inc., a TDK group company, where he served as Chief Executive Officer and General Manager of TDK Corporation’s MEMS Sensors Business Group. Mr.
Amir Panush , age 51, joined our board of directors on February 13, 2024 and has served as our Chief Executive Officer since January 2023. He joined us from InvenSense, Inc., a TDK group company, where he served as Chief Executive Officer and General Manager of TDK Corporation’s MEMS Sensors Business Group. Mr.
Toquet held several roles in sales, business development, product marketing and business line management at Freehand DSP and Texas Instruments. Mr. Toquet holds a Master of Science in Engineering degree from Institut Supérieur d’Electronique de Paris (ISEP). 33 Table of Contents PART II
Toquet held several roles in sales, business development, product marketing and business line management at Freehand DSP and Texas Instruments. Mr. Toquet holds a Master of Science in Engineering degree from Institut Supérieur d’Electronique de Paris (ISEP). 34 Table of Contents PART II
Michael Boukaya , age 49, has served as our Chief Operating Officer since April 2019. Prior to this position, Mr. Boukaya served as our Vice President and General Manager of the wireless business unit since 2014. Previously, Mr.
Michael Boukaya , age 50, has served as our Chief Operating Officer since April 2019. Prior to this position, Mr. Boukaya served as our Vice President and General Manager of the wireless business unit since 2014. Previously, Mr.
Yaniv Arieli , age 55, has served as our Chief Financial Officer since May 2005. Prior to his current position, Mr. Arieli served as President of U.S.
Yaniv Arieli , age 56, has served as our Chief Financial Officer since May 2005. Prior to his current position, Mr. Arieli served as President of U.S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) Month #1 (October 1, 2023 to October 31, 2023) __ __ __ 143, 721 Month #2 (November 1, 2023 to November 30, 2023) 91,042 $ 21.83 91,042 752, 679 Month #3 (December 1, 2023 to December 31, 2023) 52,679 $ 22.26 52,679 700, 000 TOTAL 143,721 $ 21.99 143,721 700, 000 (2) (1) 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 further extended collectively by an additional 6,400,000 shares in 2010, 2013, 2014, 2018 and 2020.
Biggest changePeriod (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) Month #1 (October 1, 2024 to October 31, 2024) __ __ __ 356, 396 Month #2 (November 1, 2024 to November 30, 2024) __ __ __ 1,056, 396 Month #3 (December 1, 2024 to December 31, 2024) 31,615 $ 31.63 31,615 1,024, 781 TOTAL 31,615 $ 31.63 31,615 1,024, 781 (2) (1) 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 further extended collectively by an additional 7,100,000 shares in 2010, 2013, 2014, 2018, 2020 and 2023.
This graph assumes the investment of $100 in our common stock (at the closing price of our common stock on December 31, 2018), the S&P SSII and the Russell 2000 Index on December 31, 2018, and assumes dividends, if any, are reinvested.
This graph assumes the investment of $100 in our common stock (at the closing price of our common stock on December 31, 2019), the S&P SSII and the Russell 2000 Index on December 31, 2019, and assumes dividends, if any, are reinvested.
Issuer Purchases of Equity Securities The table below sets forth the information with respect to repurchases of our common stock during the three months ended December 31, 2023.
Issuer Purchases of Equity Securities The table below sets forth the information with respect to repurchases of our common stock during the three months ended December 31, 2024.
On November 7, 2023, our Board of Directors authorized the repurchase of an additional 700,000 shares of our common stock pursuant to Rule 10b-18 of the Exchange Act.
On November 7, 2024, our Board of Directors authorized the repurchase of an additional 700,000 shares of our common stock pursuant to Rule 10b-18 of the Exchange Act.
(2) The number represents the number of shares of our common stock that remain available for repurchase pursuant to our share repurchase program. 2024 Annual Meeting of Stockholders We anticipate that the 2024 annual meeting of our stockholders will be held virtually on May 21, 2024.
(2) The number represents the number of shares of our common stock that remain available for repurchase pursuant to our share repurchase program. 2025 Annual Meeting of Stockholders We anticipate that the 2025 annual meeting of our stockholders will be held virtually on May 5, 2025.
Equity Compensation Plan Information Information as of December 31, 2023 regarding options, SARs, RSUs and PSUs granted under our stock plans and remaining available for issuance under those plans will be contained in the definitive 2024 Proxy Statement for the 2024 annual meeting of stockholders to be held on May 21, 2024 and incorporated herein by reference.
Equity Compensation Plan Information Information as of December 31, 2024 regarding options, stock appreciation rights, restricted stock units (RSUs) and performance-based RSUs granted under our stock plans and remaining available for issuance under those plans will be contained in the definitive 2025 Proxy Statement for the 2025 annual meeting of stockholders to be held on May 5, 2025 and incorporated herein by reference.
Dividends We have historically not paid dividends and have no foreseeable plans to pay dividends. 34 Table of Contents Stock Performance Graph Notwithstanding anything to the contrary set forth in any of the Company ’ s previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate this proxy statement or future filings made by the Company under those statutes, the below Stock Performance Graph shall not be deemed filed with the United States Securities and Exchange Commission and shall not be deemed incorporated by reference into any of those prior filings or into any future filings made by the Company under those statutes. 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Ceva, Inc. 100.00 122.05 205.98 195.74 115.78 102.78 S&P Semiconductors 100.00 165.23 268.27 383.86 265.98 359.96 Russell 2000 100.00 125.52 150.58 172.90 137.56 160.85 The stock performance graph above compares the percentage change in cumulative stockholder return on the common stock of our company for the period from December 31, 2018, through December 31, 2023, with the cumulative total return on the S&P Semiconductors Select Industry Index (S&P SSII) and the Russell 2000 Index.
Dividends We have historically not paid dividends and have no foreseeable plans to pay dividends. 35 Table of Contents Stock Performance Graph Notwithstanding anything to the contrary set forth in any of the Company ’ s previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate this proxy statement or future filings made by the Company under those statutes, the below Stock Performance Graph shall not be deemed filed with the United States Securities and Exchange Commission and shall not be deemed incorporated by reference into any of those prior filings or into any future filings made by the Company under those statutes. 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Ceva, Inc. 100.00 168.77 160.39 94.87 84.21 116.98 S&P Semiconductors 100.00 162.36 232.31 160.97 217.85 242.18 Russell 2000 100.00 119.96 137.74 109.59 128.14 142.93 The stock performance graph above compares the percentage change in cumulative stockholder return on the common stock of our company for the period from December 31, 2019, through December 31, 2024, with the cumulative total return on the S&P Semiconductors Select Industry Index (S&P SSII) and the Russell 2000 Index.
As of February 29, 2024, there were approximately 303 holders of record, which we believe represents approximately 32,133 beneficial holders.
As of February 18, 2025, there were approximately 274 holders of record, which we believe represents approximately 38,744 beneficial holders.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase in total operating expenses for 2022 as compared to 2021 principally reflected (1) an impairment charge of $3.6 million with respect to Immervision technology acquired in August 2019, as we decided to cease the development of this product line, (2) higher salary and employee-related costs, and (3) higher outsourcing personal and services costs, partially offset with higher research grants received, mainly from the IIA. 47 Table of Contents Research and Development Expenses, Net 2021 2022 2023 Research and development expenses, net (in millions) $ 69.1 $ 70.3 $ 72.7 Change year-on-year — 1.8 % 3.4 % The net increase in research and development expenses for 2023 as compared to 2022 principally reflected lower research grants received, mainly from the IIA, lower customization work for our licensees and higher non-cash equity-based compensation expenses, partially offset by lower salaries and employee-related costs mainly associated with lower employee-related performance costs.
Biggest changeResearch and Development Expenses, Net 2022 2023 2024 Research and development expenses, net (in millions) $ 70.3 $ 72.7 $ 71.6 Change year-on-year — 3.4 % (1.5 )% The net decrease in research and development expenses for 2024 as compared to 2023 principally reflected higher allocation of customization work for our licensees to cost of revenues and lower salaries and employee-related costs.
We estimate the fair value of stock option awards on the date of grant using the Black & Scholes model. Credit Losses of Marketable Securities Marketable securities consist mainly of corporate bonds. We determine the appropriate classification of marketable securities at the time of purchase and re-evaluate such designation at each balance sheet date.
We estimate the fair value of stock option awards on the date of grant using the Black & Scholes model. Credit Losses Marketable securities consist mainly of corporate bonds. We determine the appropriate classification of marketable securities at the time of purchase and re-evaluate such designation at each balance sheet date.
In accordance with FASB ASC No. 320, “Investments Debt Securities,” we classify marketable securities as available-for-sale. Available-for-sale 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.
In accordance with FASB ASC No. 320, “Investments Debt Securities,” we classify marketable debt securities as available-for-sale. Available-for-sale 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.
Cost of revenues includes labor-related costs and, where applicable, costs related to overhead, subcontractors, materials, travel, royalty expenses payments to the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel (the IIA), amortization of acquired assets and non-cash equity-based compensation expenses.
Cost of revenues includes labor-related costs and, where applicable, costs related to overhead, subcontractors, materials, travel, royalty expenses payments to the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel (IIA), amortization of acquired assets and non-cash equity-based compensation expenses.
We intend to continue to capitalize on the semiconductor momentum with our portfolio of technologies to enable three main use cases associated with smart edge devices: connect, sense and infer. We intend to focus on four main markets, which are consumer, automotive, industrial and infrastructure, which we believe are large, diversified and represent the greatest opportunities for long-term growth.
We intend to continue to capitalize on the semiconductor momentum with our portfolio of technologies to enable three main use cases associated with smart edge devices: connect, sense and infer. We focus on four main markets, which are consumer IoT, automotive, industrial and infrastructure, which we believe are large, diversified and represent the greatest opportunities for long-term growth.
Tax Reform”) enacted on December 22, 2017 resulted in changes in our corporate tax rate, our deferred income taxes, and the taxation of foreign earnings. It is not currently possible to accurately determine the potential comprehensive impact of these or future changes, but these changes could have a material impact on our business and financial condition.
Tax Reform”) enacted on December 22, 2017 resulted in changes in our corporate tax rate, our deferred income taxes, and the taxation of foreign earnings. It is not currently possible to accurately determine the potential comprehensive impact of future changes, but these changes could have a material impact on our business and financial condition.
The Amendment, among other things, prescribes special tax tracks for technological enterprises, which are subject to rules that were issued by the Minister of Finance in April 2017. The new tax track under the Amendment, which is applicable to our Israeli subsidiary, is the “Technological Preferred Enterprise”.
The Amendment, among other things, prescribes special tax tracks for technological enterprises, which are subject to rules that were issued by the Minister of Finance in April 2017. The tax track under the Amendment, which is applicable to our Israeli subsidiary, is the “Technological Preferred Enterprise”.
This sensor hub AI DSP enables us to address the transformation in devices enabled by these applications, and expand our footprint and content in smartphones, drones, consumer cameras, surveillance, automotive ADAS, voice-enabled devices and industrial IoT applications. ● Transformer and classic neural networks are increasingly being deployed in a wide range of devices in order to make these devices “smarter.” Our newest generation family of AI NPUs present a highly-efficient and high performance architecture to enable generative and classic AI on any device including communication gateways, optically connected networks, cars, notebooks and tablets, AR/VR headsets, smartphones, and any other cloud or edge use case from the edge all the way to the cloud.
This sensor hub AI DSP enables us to address the transformation in devices enabled by these applications, and expand our footprint and content in smartphones, drones, consumer cameras, surveillance, automotive ADAS, voice-enabled devices and industrial IoT applications. ● Transformer and classic neural networks are increasingly being deployed in a wide range of devices to make these devices “smarter.” Our newest generation family of NeuPro-M AI NPUs present a highly efficient and high-performance architecture to enable generative and classic AI on any device including communication gateways, optically connected networks, cars, notebooks and tablets, AR/VR headsets, smartphones, and any other cloud or edge use case from the edge all the way to the cloud.
The increase in interest income and gains and losses from marketable securities, net, for 2022 as compared to 2021 reflected higher yields, offset with lower combined cash, bank deposits and marketable securities balances held. 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.
The increase in interest income and gains and losses from marketable securities, net, for 2023 as compared to 2022 reflected higher yields, offset with lower combined cash, bank deposits and marketable securities balances held. 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.
Allowance for credit losses on available for sale debt securities are recognized as a charge in financial income on the consolidated statements of income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss). For the years ended December 31, 2023, 2022 and 2021, credit losses were immaterial.
Allowance for credit losses on available for sale debt securities are recognized as a charge in financial income on the consolidated statements of income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss). For the years ended December 31, 2024, 2023 and 2022, credit losses were immaterial.
At December 31, 2023, our income tax payable, net of withholding tax credits, included $462,000 related to uncertain tax positions. Due to uncertainties in the timing of the completion of tax audits, the timing of the resolution of these positions is uncertain and we are unable to make a reasonably reliable estimate of the timing of payments.
At December 31, 2024, our income tax payable, net of withholding tax credits, included $462,000 related to uncertain tax positions. Due to uncertainties in the timing of the completion of tax audits, the timing of the resolution of these positions is uncertain and we are unable to make a reasonably reliable estimate of the timing of payments.
RESULTS OF OPERATIONS The following table presents line items from our consolidated statements of income (loss) as percentages of our total revenues for the periods indicated: 2021 2022 2023 Consolidated Statements of Income (Loss) Data: Revenues: Licensing and related revenue 56.2 % 62.4 % 59.1 % Royalties 43.8 % 37.6 % 40.9 % Total revenues 100.0 % 100.0 % 100.0 % Cost of revenues 9.1 % 12.5 % 12.0 % Gross profit 90.9 % 87.5 % 88.0 % Operating expenses: Research and development, net 60.7 % 58.3 % 74.6 % Sales and marketing 10.8 % 9.5 % 11.3 % General and administrative 11.2 % 11.8 % 15.3 % Amortization of intangible assets 2.0 % 1.7 % 0.6 % Impairment of assets — 2.9 % — Total operating expenses 84.7 % 84.2 % 101.8 % Operating income (loss) 6.2 % 3.3 % (13.8 )% Financial income, net 0.2 % 2.3 % 5.4 % Remeasurement of marketable equity securities 1.7 % (2.1 )% (0.0 )% Income (loss) before taxes on income 8.1 % 3.5 % (8.4 )% Taxes on income 6.0 % 15.0 % 10.5 % Net income (loss) from continuing operations 2.1 % (11.5 )% (18.9 )% Net income (loss) from discontinued operations (1.8 )% (7.7 )% 6.7 % Net income (loss) 0.3 % (19.2 )% (12.2 )% 43 Table of Contents Discussion and Analysis Below we provide information on the significant line items in our consolidated statements of income (loss) for each of the past three fiscal years, including the percentage changes year-on-year, as well as an analysis of the principal drivers of change in these line items from year-to-year.
RESULTS OF OPERATIONS The following table presents line items from our consolidated statements of loss as percentages of our total revenues for the periods indicated: 2022 2023 2024 Consolidated Statements of Loss Data: Revenues: Licensing and related revenue 62.4 % 59.1 % 56.1 % Royalties 37.6 % 40.9 % 43.9 % Total revenues 100.0 % 100.0 % 100.0 % Cost of revenues 12.5 % 12.0 % 11.9 % Gross profit 87.5 % 88.0 % 88.1 % Operating expenses: Research and development, net 58.3 % 74.6 % 67.0 % Sales and marketing 9.5 % 11.3 % 11.8 % General and administrative 11.8 % 15.3 % 15.8 % Amortization of intangible assets 1.7 % 0.6 % 0.6 % Impairment of assets 2.9 % — — Total operating expenses 84.2 % 101.8 % 95.2 % Operating income (loss) 3.3 % (13.8 )% (7.1 )% Financial income, net 2.3 % 5.4 % 4.6 % Remeasurement of marketable equity securities (2.1 )% (0.0 )% (0.1 )% Income (loss) before taxes on income 3.5 % (8.4 )% (2.6 )% Taxes on income 15.0 % 10.5 % 5.6 % Net loss from continuing operations (11.5 )% (18.9 )% (8.2 )% Net income (loss) from discontinued operations (7.7 )% 6.7 % — Net loss (19.2 )% (12.2 )% (8.2 )% 43 Table of Contents Discussion and Analysis Below we provide information on the significant line items in our consolidated statements of loss for each of the past three fiscal years, including the percentage changes year-on-year, as well as an analysis of the principal drivers of change in these line items from year-to-year.
Realized gains and losses on sales of marketable securities, as determined on a specific identification basis, are included in financial income, net. The amortized cost of marketable securities is adjusted for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in financial income, net.
Realized gains and losses on sales of marketable securities, as determined on a specific identification basis, are included in financial income, net. The amortized cost of marketable securities is adjusted for amortization of premium and accretion of discount, both of which, together with interest, are included in financial income, net.
The decrease in provision for income taxes in 2023 as compared to 2022 principally reflected the impact of a charge to record a valuation allowance in 2022 due to a change in the estimation for taxable income for future years of our Israeli operations (as further described below), offset with a charge to our deferred tax assets in the US primarily related to a reduction of estimated forecasted GILTI inclusions, and additional tax charges as a result of the completion of a tax audit in a certain foreign tax jurisdiction.
The decrease in provision for income taxes in 2023 as compared to 2022 principally reflected the impact of a charge to record a valuation allowance in 2022 due to a change in the estimation for taxable income for future years of our Israeli operations (as further described below), offset with a charge to our deferred tax assets in the U.S. primarily related to a reduction of estimated forecasted GILTI inclusions, and additional tax charges as a result of the completion of a tax audit in a certain foreign tax jurisdiction.
However, a portion of our employees in Israel have been called to active reserve duty and additional employees may be called in the future, if needed. The Company has executed its business continuity plan with respect to those employees.
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. The Company has executed its 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. 38 Table of Contents CRITICAL ACCOUNTING POLICIES, ESTIMATES AND ASSUMPTIONS Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP).
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. CRITICAL ACCOUNTING POLICIES, ESTIMATES AND ASSUMPTIONS Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP).
Recently Issued Accounting Pronouncement In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies the guidance when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.
Accounting Standards In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies the guidance when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.
Although our Israeli and Irish subsidiaries, and, from 2022 onward, our French subsidiary, are taxed at rates substantially lower than U.S. tax rates, the tax rates in these jurisdictions 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.
Although our Israeli, French and Irish subsidiaries are taxed at rates substantially lower than U.S. tax rates, the tax rates in these jurisdictions 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.
The increase in revenues in absolute dollars and percentage in the EME region from 2022 to 2023 is primarily due to a significant new Wi-Fi / Bluetooth combo deal with a leading platform OEM in the electronics maker community whose devices are widely used in education and prototyping.
Revenues in the EME region remained constant from 2023 to 2024. The increase in revenues in absolute dollars and percentage in the EME region from 2022 to 2023 is primarily due to a significant new Wi-Fi / Bluetooth combo deal with a leading platform OEM in the electronics maker community whose devices are widely used in education and prototyping.
As of December 31, 2023, the net amount of intangible assets associated with the acquisitions was $1.7 million. Impairment of Assets In 2022, we recorded an impairment charge of $3.6 million with respect to Immervision technology acquired in August 2019, as we decided to cease the development of this product line.
As of December 31, 2024, the net amount of intangible assets associated with the acquisitions was $1.1 million. Impairment of Assets In 2022, we recorded an impairment charge of $3.6 million with respect to Immervision technology acquired in August 2019, as we decided to cease the development of this product line.
ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2023-09.
ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2023-09.
With respect to our royalty revenues, two royalty paying customers each represented 10% or more of our total royalty revenues for 2023, and collectively represented 45% of our total royalty revenues for 2023. Two royalty paying customers each represented 10% or more of our total royalty revenues for 2022, and collectively represented 46% of our total royalty revenues for 2022.
With respect to our royalty revenues, two royalty paying customers each represented 10% or more of our total royalty revenues for 2024, and collectively represented 46% of our total royalty revenues for 2024. Two royalty paying customers each represented 10% or more of our total royalty revenues for 2023, and collectively represented 45% of our total royalty revenues for 2023.
For more information about our provision for income taxes, see Note 14 to the attached Notes to Consolidated Financial Statement for the year ended December 31, 2023.
For more information about our provision for income taxes, see Note 14 to the attached Notes to Consolidated Financial Statement for the year ended December 31, 2024.
As a result, this amount is not included in the above table. In addition, at December 31, 2023, the amount of accrued severance pay was $7,524,000. Severance pay relates to accrued severance obligations to our Israeli employees as required under Israeli labor laws. These obligations are payable only upon termination, retirement or death of the respective employee.
As a result, this amount is not included in the above table. In addition, at December 31, 2024, the amount of accrued severance pay was $7,365,000. Severance pay relates to accrued severance obligations to our Israeli employees as required under Israeli labor laws. These obligations are payable only upon termination, retirement or death of the respective employee.
Most of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Stand-alone selling prices of IP license are typically estimated using the residual approach.
Most of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Stand-alone selling prices of IP licenses are typically estimated using the residual approach, since the selling price is uncertain.
Non-cash equity-based compensation expenses included in cost of revenues for the years 2023, 2022 and 2021 were $826,000, $687,000, and $513,000, respectively. Royalty expenses relate to royalties payable to the IIA that amount to 3%-3.5% of the actual sales of certain of our products, the development of which previously included grants from the IIA.
Non-cash equity-based compensation expenses included in cost of revenues for the years 2024, 2023 and 2022 were $713,000, $826,000 and $687,000, respectively. Royalty expenses relate to royalties payable to the IIA that amount to 3%-3.5% of the actual sales of certain of our products, the development of which previously included grants from the IIA.
Sales to UNISOC represented 13%, 16% and 21% of our total revenues for 2023, 2022 and 2021, respectively. Generally, the identity of our other customers representing 10% or more of our total revenues varies from period to period, especially with respect to our licensing customers as we generate licensing revenues generally from new customers on a quarterly basis.
Sales to UNISOC represented 15%, 13% and 16% of our total revenues for 2024, 2023 and 2022, respectively. Generally, the identity of our other customers representing 10% or more of our total revenues varies from period to period, especially with respect to our licensing customers as we generate licensing revenues generally from new customers on a quarterly basis.
We determine revenue recognition through the following steps: ● Identification of the contract with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when, or as, we satisfy a performance obligation.
We determine revenue recognition through the following steps: ● Identification of the contract with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; 40 Table of Contents ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when, or as, we satisfy a performance obligation.
A Technological Preferred Enterprise, as defined in the Amendment, that is located in the center of Israel (where our Israeli subsidiary is currently located), is taxed at a rate of 12% on profits deriving from intellectual property.
A Technological Preferred Enterprise, as defined in the Amendment, that is located in the center of Israel (where our Israeli subsidiary is currently located), is taxed at a rate of 12% on profits deriving from IP.
A substantial portion of our taxable income is generated in Israel and France, as well as potentially in the U.S. due to GILTI and the requirement to capitalize R&D expenditures under IRC Section 174 over 5 years if sourced from the U.S. and over 15 years if sourced internationally.
A substantial portion of our taxable income is generated in Israel and France, as well as potentially in the U.S. due to GILTI and the requirement to capitalize research and development expenditures under IRC Section 174 over 5 years if sourced from the U.S. and over 15 years if sourced internationally.
Capital equipment purchases of computer hardware and software used in engineering development, furniture and fixtures amounted to approximately $2.9 million in 2023, $3.5 million in 2022 and $2.2 million in 2021. In 2023, we had a cash inflow of $30.6 million following the sale of Intrinsix.
Capital equipment purchases of computer hardware and software used in engineering development, furniture and fixtures amounted to approximately $3.0 million in 2024, $2.9 million in 2023 and $3.5 million in 2022. In 2024 and 2023, we had a cash inflow of $0.5 million and $30.6 million, respectively, following the sale of Intrinsix.
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 new elective regime requires a direct link between the income benefiting from the preferential treatment and the R&D expenditures incurred and contributing to that income.
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.
Royalty rates from these products are comprised of a range of ASPs, spanning from high volume Bluetooth and Wi-Fi to high value sensor fusion and base station RAN. The royalty ASP of our other products will be in between the two ranges.
Royalty rates from these products comprise a range of ASPs, from high volume Bluetooth and Wi-Fi to high value sensor fusion and base station RAN. The royalty ASP of our other products will be in between the two ranges.
The amortization charges in 2023 were incurred in connection with the amortization of intangible assets associated with the acquisition of the Hillcrest Labs and VisiSonics business. The amortization charges in 2022 and 2021 were incurred in connection with the amortization of intangible assets associated with the acquisition of the Hillcrest Labs and the strategic investment in Immervision.
The amortization charges in both 2024 and 2023 were incurred in connection with the amortization of intangible assets associated with the acquisition of the Hillcrest Labs and VisiSonics business. The amortization charges in 2022 were incurred in connection with the amortization of intangible assets associated with the acquisition of the Hillcrest Labs and the strategic investment in Immervision.
Hillcrest Labs’ innovative and proven MotionEngine™ software supports a broad range of merchant sensor chips and is processor-agnostic in order to address the requirements of any OEM or semiconductor company that wishes to enhance their customer user experience. The MotionEngine software has already shipped in more than 300 million devices, indicative of its market traction and excellence.
Our innovative and proven MotionEngine software supports a broad range of merchant sensor chips and is processor-agnostic to address the requirements of any OEM or semiconductor company that wishes to enhance their customer user experience. The MotionEngine software has already shipped in more than 400 million devices, indicative of its market traction and excellence.
Our amortization charges were $0.4 million, $0.6 million and $0.7 million for 2023, 2022 and 2021, respectively. In 2022 we recorded impairment charges of $2.0 relating to discontinued Immervision technology and non-performing assets of certain NB-IoT technology.
Our amortization charges were $0.5 million, $0.4 million and $0.6 million for 2024, 2023 and 2022, respectively. In 2022 we recorded impairment charges of $2.0 relating to discontinued Immervision technology and non-performing assets of certain NB-IoT technology.
Non-cash equity-based compensation expenses included in research and development expenses, net for the years 2023, 2022 and 2021 were $9,133,000, $8,259,000 and $7,187,000, respectively. Research and development expenses are net of related government research grants, UK tax credits and research tax benefits applicable to CIR.
Non-cash equity-based compensation expenses included in research and development expenses, net for the years 2024, 2023 and 2022 were $9,298,000, $9,133,000 and $8,259,000, respectively. Research and development expenses are net of related government research grants, UK tax credits and research tax benefits applicable to CIR.
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%. 50 Table of Contents Our French subsidiary is now entitled to a new tax benefit of 10% applied to specific revenues under the French IP Box regime.
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.
Licensing and related revenue accounted for 59.1% of our total revenues for 2023, compared with 62.4% and 56.2% of our total revenues for 2022 and 2021, respectively.
Licensing and related revenue accounted for 56.1% of our total revenues for 2024, compared with 59.1% and 62.4% of our total revenues for 2023 and 2022, respectively.
We recorded UK tax credits and CIR benefits of $2,641,000, $2,316,000 and $2,547,000 for 2023, 2022 and 2021, respectively. Research and development expenses consist primarily of salaries and associated costs, facilities expenses associated with research and development activities, project-related expenses connected with the development of our intellectual property which are expensed as incurred, and non-cash equity-based compensation expenses.
We recorded UK tax credits and CIR benefits of $2,954,000, $2,641,000 and $2,316,000 for 2024, 2023 and 2022, respectively. Research and development expenses consist primarily of salaries and associated costs, facilities expenses associated with research and development activities, project-related expenses connected with the development of our IP which are expensed as incurred, and non-cash equity-based compensation expenses.
The total number of general and administrative personnel was 45 in 2023, as compared with 46 in 2022 and 50 in 2021.
The total number of general and administrative personnel was 45 in 2024, as compared with 45 in 2023 and 46 in 2022.
Royalty Revenues 2021 2022 2023 Royalty revenues (in millions) $ 49.9 $ 45.4 $ 39.9 Change year-on-year — (9.0 )% (12.2 )% We generate royalty revenues from our customers who ship units of chips incorporating our technologies. Our royalty revenues represent what our customers shipped during any quarter, or our best estimates for such shipments.
Royalty Revenues 2022 2023 2024 Royalty revenues (in millions) $ 45.4 $ 39.9 $ 46.9 Change year-on-year — (12.2 )% 17.8 % We generate royalty revenues from our customers who ship units of chips incorporating our technologies. Our royalty revenues represent what our customers shipped during any quarter, or our best estimates for such shipments.
In the coming year, we expect our licensing and related revenues business will continue to expand into new markets and use cases in the industrial IoT (IIoT) and consumer IoT, offering connectivity platforms, sensing platforms and software, AI solutions (including AI engines, NPUs and software) and more.
In 2025, we expect our licensing and related revenues business will continue to expand into new markets and use cases for industrial IoT (IIoT) and consumer IoT devices, offering connectivity platforms, sensing platforms and software, AI solutions (including AI engines, NPUs and software) and more.
Financial Income, net 2021 2022 2023 (in millions) Financial income, net $ 0.20 $ 2.81 $ 5.26 of which: Interest income and gains and losses from marketable securities, net $ 1.47 $ 2.74 $ 4.57 Foreign exchange gain (loss) $ (1.27 ) $ 0.07 $ 0.69 Financial income, net, consists of interest earned on investments, gains and losses from sale of marketable securities, accretion (amortization) of discount (premium) on marketable securities and foreign exchange movements.
Financial Income, net 2022 2023 2024 (in millions) Financial income, net $ 2.81 $ 5.26 $ 4.88 of which: Interest income and gains and losses from marketable securities, net $ 2.74 $ 4.57 $ 5.89 Foreign exchange gain (loss) $ 0.07 $ 0.69 $ (1.01 ) Financial income, net, consists of interest earned on investments, gains and losses from sale of marketable securities, accretion (amortization) of discount (premium) on marketable securities and foreign exchange movements.
The discussion should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2023, both appearing elsewhere in this annual report. Headquartered in Rockville, Maryland, Ceva is the leader in innovative silicon and software IP solutions that enable smart edge products to connect, sense, and infer data more reliably and efficiently.
The discussion should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2024, both appearing elsewhere in this annual report. We are the leader in innovative silicon and software IP solutions that enable smart edge products to connect, sense, and infer data more reliably and efficiently.
Three royalty paying customers each represented 10% or more of our total royalty revenues for 2021, and collectively represented 57% of our total royalty revenues for 2021. We expect that a significant portion of our future revenues will continue to be generated by a limited number of customers.
Two royalty paying customers each represented 10% or more of our total royalty revenues for 2022, and collectively represented 46% of our total royalty revenues for 2022. We expect that a significant portion of our future revenues will continue to be generated by a limited number of customers.
Research and development expenses, net of related government grants and French research tax benefits applicable to CIR, were 74.6% of our total revenues for 2023, as compared with 58.3% for 2022 and 60.7% for 2021. We recorded research grants under funding programs of $1,668,000 in 2023, compared with $4,850,000 in 2022 and $3,595,000 in 2021.
Research and development expenses, net of related government grants and French research tax benefits applicable to CIR, were 67.0% of our total revenues for 2024, as compared with 74.6% for 2023 and 58.3% for 2022. We recorded research grants under funding programs of $1,407,000 in 2024, compared with $1,668,000 in 2023 and $4,850,000 in 2022.
Research from Bloomberg Intelligence forecasts that hardware revenue associated with computer vision AI products and conversational AI devices will reach $61 billion and $108 billion, respectively by 2030, indicating the size of the market opportunity.
Research from Bloomberg Intelligence forecasts that hardware revenue associated with computer vision AI products and conversational AI devices will reach $58 billion and $110 billion, respectively by 2032, indicating the size of the market opportunity.
Non-cash equity-based compensation expenses included in general and administrative expenses for the years 2023, 2022 and 2021 were $3,795,000, $2,888,000 and $3,291,000, respectively. Amortization of Intangible Assets Our amortization charges were $0.6 million, $2.0 million and $2.3 million for 2023, 2022 and 2021 respectively.
Non-cash equity-based compensation expenses included in general and administrative expenses for the years 2024, 2023 and 2022 were $3,763,000, $3,795,000 and $2,888,000, respectively. 48 Table of Contents Amortization of Intangible Assets Our amortization charges were $0.6 million, $0.6 million and $2.0 million for 2024, 2023 and 2022 respectively.
Geographic Revenue Analysis 2021 2022 2023 (in millions, except percentages) United States $ 17.8 15.7 % $ 14.2 11.8 % $ 9.6 9.8 % Europe, Middle East (EME) $ 6.9 6.0 % $ 9.9 8.2 % $ 12.2 12.5 % Asia Pacific (APAC) (1) $ 89.1 78.3 % $ 96.5 80.0 % $ 75.7 77.7 % (1) China $ 67.5 59.3 % $ 75.7 62.8 % $ 57.5 59.0 % A majority of our revenues during the past three years have originated in the APAC region, with China representing the largest revenue share of countries in the APAC region.
Geographic Revenue Analysis 2022 2023 2024 (in millions, except percentages) United States $ 14.2 11.8 % $ 9.6 9.8 % $ 20.3 19.0 % Europe, Middle East (EME) $ 9.9 8.2 % $ 12.2 12.5 % $ 12.8 12.0 % Asia Pacific (APAC) (1) $ 96.5 80.0 % $ 75.7 77.7 % $ 73.8 69.0 % (1) China $ 75.7 62.8 % $ 57.5 59.0 % $ 52.7 49.3 % A majority of our revenues during the past three years have originated in the APAC region, with China representing the largest revenue share of countries in the APAC region.
In addition, during the same period, bank deposits and marketable securities were sold or redeemed for cash amounting to $28.8 million. During 2022, we invested $63.9 million of cash in bank deposits and marketable securities with maturities up to 45 months from the balance sheet date.
During 2023, we invested $42.0 million of cash in bank deposits and marketable securities with maturities up to 36 months from the balance sheet date. In addition, during the same period, bank deposits and marketable securities were sold or redeemed for cash amounting to $28.8 million.
We consider the post contract support performance obligation as a distinct performance obligation that is satisfied over time, and as such, we recognize revenue for post contract support on a straight-line basis over the period for which technical support is contractually agreed to be provided to the licensee, typically 12 months.
We consider the post contract support performance obligation as a distinct performance obligation that is satisfied over time, and as such, we recognize revenue for post contract support on a straight-line basis over the period for which technical support is contractually agreed to be provided to the licensee (typically 12 months, since the services have a consistent continuous pattern of transfer to the customers).
Out of total cash, cash equivalents, bank deposits and marketable securities of $166.5 million at year end 2023, $136.4 million was held by our foreign subsidiaries. Our intent is to permanently 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.
Out of total cash, cash equivalents, bank deposits and marketable securities of $163.6 million at year end 2024, $135.1 million was held by our foreign subsidiaries. Our intent is to permanently 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.
The following table sets forth use cases for Ceva technology portfolio as percentages of our total revenues in each of the periods set forth below: Year ended December 31, 2021 2022 2023 Connect (baseband for handset and other devices, Bluetooth, Wi-Fi and NB-IoT) 77 % 78 % 82 % Sense & Infer (sensor fusion, audio, sound, imaging, vision and AI) 23 % 22 % 18 % 44 Table of Contents We expect to continue to generate a significant portion of our revenues for 2024 from the above technologies.
The loss of any significant customer could adversely affect our near-term future operating results. 44 Table of Contents The following table sets forth use cases for Ceva technology portfolio as percentages of our total revenues in each of the periods set forth below: Year ended December 31, 2022 2023 2024 Connect (baseband for handset and other devices, Bluetooth, Wi-Fi and NB-IoT) 78 % 82 % 84 % Sense & Infer (sensor fusion, audio, sound, imaging, vision and AI) 22 % 18 % 16 % We expect to continue to generate a significant portion of our revenues for 2025 from the above technologies.
We capitalize sales commission as costs of obtaining a contract when they are incremental and, if they are expected to be recovered, amortized in a manner consistent with the pattern of transfer of the good or service to which the asset relates.
We capitalize sales commission as costs of obtaining a contract when they are incremental and, if they are expected to be recovered, amortized in a manner consistent with the pattern of transfer of the good or service to which the asset relates. If the expected amortization period is one year or less, the commission fee is expensed when incurred.
When contracts involve a significant financing component, we adjust the promised amount of consideration for the effects of the time value of money if the timing of payments agreed to by the parties to the contract (either explicitly or implicitly) provide the customer with a significant benefit of financing, unless the financing period is under one year and only after the products or services were provided, as we elected to use the practical expedient under ASC 606.
Revenues from the sale of development systems and chips are recognized when control of the promised goods or services are transferred to the customers. 41 Table of Contents When contracts involve a significant financing component, we adjust the promised amount of consideration for the effects of the time value of money if the timing of payments agreed to by the parties to the contract (either explicitly or implicitly) provide the customer with a significant benefit of financing, unless the financing period is under one year and only after the products or services were provided, as we elected to use the practical expedient under ASC 606.
Investing Activities Net cash provided by investing activities in 2023 was $10.8 million, as compared to net cash used in investing activities of $15.1 million in 2022 and net cash used in investing activities of $16.7 million in 2021.
Investing Activities Net cash used in investing activities in 2024 was $2.4 million, as compared to net cash provided by investing activities of $10.8 million in 2023 and net cash used in investing activities of $15.1 million in 2022.
In November 2023, our board of directors authorized the repurchase by us of an additional 700,000 shares of common stock pursuant to Rule 10b-18 of the Exchange Act. In 2023, we repurchased 278,799 shares of common stock pursuant to our share repurchase program at an average purchase price of $22.11 per share, for an aggregate purchase price of $6.2 million.
In November 2024, our board of directors authorized the repurchase by us of an additional 700,000 shares of common stock pursuant to Rule 10b-18 of the Exchange Act. In 2024, we repurchased 375,219 shares of common stock pursuant to our share repurchase program at an average purchase price of $22.54 per share, for an aggregate purchase price of $8.5 million.
Sales and Marketing Expenses 2021 2022 2023 Sales and marketing expenses (in millions) $ 12.2 $ 11.5 $ 11.0 Change year-on-year — (6.2 )% (3.8 )% The decrease in sales and marketing expenses for 2023 as compared to 2022 principally reflected lower salary and employee related costs, mainly associated with a one-time separation charge recorded in 2022 as a result of the departure of our former executive vice president of worldwide sales.
The decrease in sales and marketing expenses for 2023 as compared to 2022 principally reflected lower salary and employee related costs, mainly associated with a one-time separation charge recorded in 2022 as a result of the departure of our former executive vice president of worldwide sales.
ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2023-07.
ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We adopted ASU 2023-07 as of December 15, 2024.
The net increase in research and development expenses for 2022 as compared to 2021 principally reflected higher outsourcing personal and services costs and higher non-cash equity-based compensation expenses, partially offset by higher research grants received, mainly from the IIA, and higher customization work for our licensees.
The net increase in research and development expenses for 2023 as compared to 2022 principally reflected lower research grants received, mainly from the IIA, lower customization work for our licensees and higher non-cash equity-based compensation expenses, partially offset by lower salaries and employee-related costs mainly associated with lower employee-related performance costs.
We also license our technology directly to OEMs, which are considered end users. 39 Table of Contents We account for our IP license revenues and related services, which provide our customers with rights to use our IP, in accordance with ASC 606, "Revenue from Contracts with Customers" (ASC 606"). A license may be perpetual or time limited in its application.
We account for our IP license revenues and related services, which provide our customers with rights to use our IP, in accordance with ASC 606, "Revenue from Contracts with Customers" (ASC 606"). A license may be perpetual or time limited in its application.
Revenues are recognized when control of the promised goods or services are transferred to the customers in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.
The following is a description of principal activities from which we generate revenue. Revenues are recognized when control of the promised goods or services are transferred to the customers in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.
Operating Expenses 2021 2022 2023 (in millions) Research and development, net $ 69.1 $ 70.3 $ 72.7 Sales and marketing $ 12.2 $ 11.5 $ 11.0 General and administration $ 12.8 $ 14.2 $ 14.9 Amortization of intangible assets $ 2.3 $ 2.0 $ 0.6 Impairment of assets $ — $ 3.6 $ — Total operating expenses $ 96.4 $ 101.6 $ 99.2 Change year-on-year — 5.3 % (2.3 )% The decrease in total operating expenses for 2023 as compared to 2022 principally reflected: (1) an impairment charge of $3.6 million recorded in the third quarter of 2022 with respect to Immervision technology acquired in August 2019, as we decided to cease the development of this product line; (2) lower amortization of intangible assets, mainly related to Immervision; and (3) lower salary and employee-related costs, mainly associated with lower employee-related performance costs, partially offset with lower research grants received, mainly from the IIA, and higher non-cash equity-based compensation expenses.
The decrease in total operating expenses for 2023 as compared to 2022 principally reflected: (1) an impairment charge of $3.6 million recorded in the third quarter of 2022 with respect to Immervision technology acquired in August 2019, as we decided to cease the development of this product line; (2) lower amortization of intangible assets, mainly related to Immervision; and (3) lower salary and employee-related costs, mainly associated with lower employee-related performance costs, partially offset with lower research grants received, mainly from the IIA, and higher non-cash equity-based compensation expenses.
We had a cash outflow of $39.2 million with respect to investments in marketable securities and a cash inflow of $36.1 million with respect to maturity, and sale, of marketable securities during 2021. Included in the cash inflow during 2021 was net proceeds of $18.5 million from bank deposits.
We had a cash outflow of $46.9 million with respect to investments in marketable securities and a cash inflow of $39.6 million with respect to maturity, and sale, of marketable securities during 2024. Included in the cash inflow during 2024 was net proceeds of $8.0 million from bank deposits.
This has resulted in a foreign exchange gain of $0.69 million, a foreign exchange gain of $0.07 million and a foreign exchange loss of $1.27 million (due to the devaluation of our Euro cash balances as the U.S. dollar strengthened significantly during this period as compared to the Euro) for 2023, 2022 and 2021, respectively. 49 Table of Contents Remeasurement of marketable equity securities We recorded a loss of $0.0 million, a loss of $2.5 million, and a gain of $2.0 million in 2023, 2022 and 2021, respectively, related to remeasurement of marketable equity securities.
This has resulted in a foreign exchange loss of $1.01 million (due to the devaluation of our Euro cash balances as the U.S. dollar strengthened significantly during this period as compared to the Euro), a foreign exchange gain of $0.69 million and a foreign exchange gain of $0.07 million for 2024, 2023 and 2022, respectively.
Licensing and related revenue 2021 2022 2023 Licensing and related revenue (in millions) $ 64.0 $ 75.2 $ 57.6 Change year-on-year — 17.6 % 23.5 % Licensing and related revenue was $57.6 million, 23% down in 2023 as compared to 2022.
Licensing and related revenue 2022 2023 2024 Licensing and related revenue (in millions) $ 75.2 $ 57.6 $ 60.0 Change year-on-year — (23.5 )% 4.2 % Licensing and related revenue was $60.0 million, representing a 4% increase in 2024 as compared to 2023.
CURRENT TRENDS We believe that as the continuing digital transformation drives industries to become connected and intelligent, our ubiquitous technology and collaborative business model present a significant and secular growth prospect.
CURRENT TRENDS We believe that with digital transformation being a long-term trend that continues to drive industries to become connected and intelligent, our ubiquitous technology and collaborative business model present a significant and secular growth prospect.
The increase in general and administrative expenses for 2022 as compared to 2021 principally reflected higher salaries and related costs. General and administrative expenses as a percentage of our total revenues were 15.3% for 2023, as compared with 11.8% for 2022 and 11.2% for 2021.
The increase in general and administrative expenses for 2023 as compared to 2022 principally reflected higher professional services cost and higher non-cash equity-based compensation expenses, partially offset with lower salaries and related costs. General and administrative expenses as a percentage of our total revenues were 15.8% for 2024, as compared with 15.3% for 2023 and 11.8% for 2022.
In addition, during the same period, bank deposits and marketable securities were sold or redeemed for cash amounting to $52.3 million. During 2021, we invested $40.7 million of cash in bank deposits and marketable securities with maturities up to 57 months from the balance sheet date.
During 2022, we invested $63.9 million of cash in bank deposits and marketable securities with maturities up to 45 months from the balance sheet date. In addition, during the same period, bank deposits and marketable securities were sold or redeemed for cash amounting to $52.3 million. All of our marketable securities are classified as available-for-sale.
Cash provided by operating activities in 2021 was $25.8 million and consisted of a net income of $0.4 million, adjustments for non-cash items of $19.6 million, and changes in operating assets and liabilities of $5.8 million.
Operating Activities Cash provided by operating activities in 2024 was $3.5 million and consisted of a net loss of $8.8 million, adjustments for non-cash items of $20.0 million, and changes in operating assets and liabilities of $7.7 million.
Ceva is a sustainability and environmentally conscious company. We have adopted both a Code of Business Conduct and Ethics and a Sustainability Policy, in which we emphasize and focus on environmental preservation, recycling, the welfare of our employees and privacy – which we promote on a corporate level.
We have adopted both a Code of Business Conduct and Ethics and a Sustainability Policy, in which we emphasize and focus on environmental preservation, recycling, the welfare of our employees and privacy – which we promote on a corporate level. At Ceva, we are committed to social responsibility, values of preservation and consciousness towards these purposes.
Revenue Recognition Significant management judgments and estimates must be made and used in connection with the recognition of revenue in any accounting period. Material differences in the amount of revenue in any given period may result if these judgments or estimates prove to be incorrect or if management’s estimates change on the basis of development of business or market conditions.
Material differences in the amount of revenue in any given period may result if these judgments or estimates prove to be incorrect or if management’s estimates change on the basis of development of business or market conditions. Management’s judgments and estimates have been applied consistently and have been reliable historically.
We have classified all marketable securities as short-term, even though the stated maturity date may be one year or more beyond the current balance sheet date, because these securities are available to support current operations and we may sell these debt securities prior to their stated maturities . 42 Table of Contents We determine realized gains or losses on sale of marketable securities on a specific identification method and record such gains or losses as financial income, net.
We have classified all marketable securities as short-term, even though the stated maturity date may be one year or more beyond the current balance sheet date, because these securities are available to support current operations, and we may sell these debt securities prior to their stated maturities.
The increase in interest income and gains and losses from marketable securities, net, for 2023 as compared to 2022 reflected higher yields, offset with lower combined cash, bank deposits and marketable securities balances held.
The increase in interest income and gains and losses from marketable securities, net, for 2024 as compared to 2023 principally reflected higher combined cash, bank deposits and marketable securities balances held (mainly because of cash received from the sale of Intrinsix in October 2023) and higher yields.
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 further extended collectively by an additional 6,400,000 shares in 2010, 2013, 2014, 2018 and 2020.
Financing Activities Net cash used in financing activities in 2024 was $5.6 million, as compared to net cash used in financing activities of $2.8 million in 2023 and net cash used in financing activities of $3.3 million in 2022. 52 Table of Contents 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 further extended collectively by an additional 7,100,000 shares in 2010, 2013, 2014, 2018, 2020 and 2023.
LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2023, we had approximately $23.3 million in cash and cash equivalents, $10.5 million in short term bank deposits, $132.7 million in marketable securities, and $0.0 million in long term bank deposits totaling $166.5 million, as compared to $146.5 million at December 31, 2022.
LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2024, we had approximately $18.5 million in cash and cash equivalents, $2.0 million in short term bank deposits and $143.1 million in marketable securities, totaling $163.6 million, as compared to $166.5 million at December 31, 2023.
Amortization of acquired assets related to the purchase of a license of NB-IoT technologies in the first quarter of 2018, to a strategic investment in Immervision in the third quarter of 2019, and to certain intangible assets associated with the VisiSonics acquisition in the second quarter of 2023.
The obligation to pay these royalties is contingent on actual sales of these products. Amortization of acquired assets related to the purchase of a license of NB-IoT technologies in the first quarter of 2018 and to certain intangible assets associated with the VisiSonics acquisition in the second quarter of 2023.
These semiconductor companies then manufacture, market and sell custom-designed chipsets to OEMs of a variety of consumer electronics products.
These semiconductor companies then manufacture, market and sell custom-designed chipsets to OEMs of a variety of consumer electronics products. We also license our technology directly to OEMs, which are considered end users.
In particular, we believe that Wi-Fi presents a significant royalty revenue opportunity, given our dominant market position in licensing Wi-Fi 6 with more than 40 customers to date and leadership position in Wi-Fi 7 IP. ● Our PentaG2 platform and digital signal processors (DSPs) for 5G mobile broadband and 5G RedCap is the most comprehensive baseband IP platform in the industry today and provides newcomers and incumbents with a comprehensive solution to address the need for 5G processing for fixed wireless access, satellite communications and a range of connected devices such as robots, cars, smart cities and other devices for industrial applications. ● Our PentaG RAN platform for 5G RAN settings is the most comprehensive baseband processor IP in the industry today and provides newcomers and incumbents with a comprehensive solution to address the need for 5G and other communications in data centers and infrastructure. ● The high volume consumer audio markets, including True Wireless Stereo (TWS) earbuds, smartwatches, AR and VR headsets, and other wearable assisted devices, offers an incremental growth segment for us for our Bluetooth, Audio AI DSPs and software IPs.
In addition, we believe that Wi-Fi continues to present a significant royalty revenue opportunity, given our leading market position in licensing Wi-Fi 6 with more than 40 customers to date and leadership position in Wi-Fi 7 IP. ● We believe our PentaG2 platform and digital signal processors (DSPs) for 5G mobile broadband and 5G RedCap is one of the most comprehensive baseband IP platforms in the industry today and provides newcomers and incumbents with a comprehensive solution to address the need for 5G processing for fixed wireless access, satellite communications and a range of connected devices such as robots, cars, smart cities and other devices for industrial applications.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe recognized a net loss of $1.08 million, a net loss of $1.29 million and a net gain of $0.17 million for 2023, 2022 and 2021, respectively, related to forward and options contracts. We note that hedging transactions may not successfully mitigate losses caused by currency fluctuations.
Biggest changeAs of December 31, 2024, the amount of other comprehensive gain (loss) from our forward and option contracts, net of taxes, was $0. We recognized a net gain of $0.91 million, a net loss of $1.08 million and a net loss of $1.29 million for 2024, 2023 and 2022, respectively, related to forward and options contracts.
During 2023, 2022 and 2021, we recorded accumulated other comprehensive gain of $1,095,000, accumulated other comprehensive loss of $162,000 and accumulated other comprehensive gain of $55,000, respectively, from our forward and option contracts, net of taxes, with respect to anticipated payroll expenses for our non-U.S. employees.
During 2024, 2023 and 2022, we recorded accumulated other comprehensive loss of $988,000, accumulated other comprehensive gain of $1,095,000 and accumulated other comprehensive loss of $162,000, respectively, from our forward and option contracts, net of taxes, with respect to anticipated payroll expenses for our non-U.S. employees.
As we hold such bonds with unrealized losses to recovery, no credit loss was recognized during 2023. 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 $4.57 million in 2023, $2.74 million in 2022 and $1.47 million in 2021.
As we hold such bonds with unrealized losses to recovery, no credit loss was recognized during 2024. 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 $5.89 million in 2024, $4.57 million in 2023 and $2.74 million in 2022.
The increase in interest income and gains and losses from marketable securities, net, for 2022 as compared to 2021 reflected higher yields, offset with lower combined cash, bank deposits and marketable securities balances held. We are exposed primarily to fluctuations in the level of U.S. interest rates.
The increase in interest income and gains and losses from marketable securities, net, for 2023 as compared to 2022 reflected higher yields, offset with lower combined cash, bank deposits and marketable securities balances held. 54 Table of Contents We are exposed primarily to fluctuations in the level of U.S. interest rates.
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 December 31, 2023, the unrealized losses associated with our investments were approximately $3.7 million due to the dramatic changes in the interest rate environment that took place in 2022.
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 December 31, 2024, the unrealized losses associated with our investments were approximately $1.5 million due to the dramatic changes in the interest rate environment that took place in 2022.
We expect to continue to experience the effect of exchange rate and currency fluctuations on an annual and quarterly basis. 54 Table of Contents The majority of our cash and cash equivalents are invested in high grade certificates of deposits with major U.S., European and Israeli banks.
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. The majority of our cash and cash equivalents are invested in high grade certificates of deposits with major U.S., European and Israeli banks.
The increase in interest income and gains and losses from marketable securities, net, for 2023 as compared to 2022 reflected higher yields, offset with lower combined cash, bank deposits and marketable securities balances held.
The increase in interest income and gains and losses from marketable securities, net, for 2024 as compared to 2023 principally reflected higher combined cash, bank deposits and marketable securities balances held (mainly because of cash received from the sale of Intrinsix in October 2023) and higher yields.
This has resulted in a foreign exchange gain of $0.69 million, a foreign exchange gain of $0.07 million and a foreign exchange loss of $1.27 million for 2023, 2022 and 2021, respectively.
This has resulted in a foreign exchange loss of $1.01 million (due to the devaluation of our Euro cash balances as the U.S. dollar strengthened significantly during this period as compared to the Euro), a foreign exchange gain of $0.69 million and a foreign exchange gain of $0.07 million for 2024, 2023 and 2022, respectively.
Removed
As of December 31, 2023, the amount of other comprehensive gain from our forward and option contracts, net of taxes, was $988,000, which will be recorded in the consolidated statements of income during the following seven months.

Other CEVA 10-K year-over-year comparisons