Q1 2024 CEVA Inc Earnings Call

Operator: Good day, and welcome to the SEVA Incorporated first quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's remarks, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your touchtone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Richard Kingston, Vice President, Market Intelligence, Investor, and Public Relations. Please go ahead.

Good day and welcome to the CEVA incorporated first quarter 'twenty 'twenty four earnings conference call.

All participants will be in listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero.

After today's remarks, there will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Richard Kingston, Vice President market Intelligence Investor and public Relations. Please go ahead.

Richard Kingston: Thank you Jason.

Richard Kingston: Good morning, everyone, and welcome to CEVA's first quarter 2024 earnings conference call. Joining me today on the call are Amir Panouche, Chief Executive Officer, and Yenive Ariely, Chief Financial Officer of Siva. Before handing over to Amir, I would like to remind everyone that today's discussion contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions, forward looking statements include statements about our market positioning, strategy and growth opportunities, Market Trends and Dynamics, CEVA's ability to execute on backlogged deals in the second quarter and to reach total revenue target for the year, expectations regarding demand for and benefits of our technologies, and our expectations and financial goals and guidance regarding future performance.

Richard Kingston: Good morning, everyone and welcome to <unk> first quarter 2024 earnings Conference call. Joining me today on the call are a mere knish Chief Executive Officer, and you need really chief financial officer of CEVA.

Richard Kingston: Before handing over to Amir I would like to remind everyone that today's discussion contains forward looking statements that involve risks and uncertainties as well as assumptions that if they materialize or prove incorrect could cause the results of CEVA to differ materially from those expressed or implied by such forward looking statements on assumptions.

Richard Kingston: Siva assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. In addition, following the divestment of the Intrinsics business, financial results from Intrinsics were transitioned to a discontinued operation beginning in the third quarter of 2023, and all prior period financial results have been recast accordingly. We will also be discussing certain non-gap financial measures, which we believe provide a more meaningful analysis of our core operating results and comparison of quarterly results.

Amir: Forward looking statements include statements about our market positioning strategy and growth opportunities market trends and dynamics, Steve its ability to execute on backlogs deals in the second quarter to reach total revenue target for the year.

Amir: Expectations regarding demand for our benefits all of our technologies.

Amir: Our expectations and financial goals and guidance regarding future performance.

Amir: Steve I assumes no obligation to update any forward looking statements or information, which speak as of their respective dates.

Amir: In addition, following the divestment of the intrinsic business financial results from intrinsic square transitioned to a discontinued operation beginning in the third quarter of 2023 and all prior period financial results have been recast accordingly.

Amir: We will also be discussing certain non-GAAP financial measures, which we believe provide a more meaningful analysis of our core operating results and comparison of quarterly results.

Richard Kingston: A reconciliation of non-GAAP financial measures is included in the earnings release we issued this morning and in the SEC filing section of our investor relations website at investors.ceva-ip.com. With that said, I'd like to turn the call over to Amir, who will review our business performance for the quarter, review the year, and provide some insight into our ongoing business. Amir? Thank you, Richard.

Amir: A reconciliation of non-GAAP financial measures is included in the earnings release, we issued this morning and in the SEC filing section of our Investor Relations website.

Amir: Busters Dot CEVA hyphen D S and heightened I P dot com.

Amir: With that said I'd like to turn the call over to Amir who will review our business performance for the quarter review the year I'll provide some insight into our ongoing business I'm here.

Amir: Thank you recharge hey, good morning, everyone and thank you for joining us today.

Amir Panush: Thank you, Richard. Good morning, everyone, and thank you for joining us today. Siva delivered first quarter results that reflected solid royalty trends with good year-over-year growth, while licensing was lower than we anticipated. Additionally, some deals we expected to close in the first quarter were delayed. I continue to be very encouraged by our diversified licensing pipeline and stronger backlog. We closed a significant multi-million dollar deal with a strategic customer at the beginning of the second quarter, and there is strong demand for our next generation IPs that are currently in development and are being licensed by early adopters who are looking to gain an advantage in the market. I will elaborate more on our expectations for our licensing business for the rest of the year shortly.

Amir: But delivered first quarter results that reflected solid royalty trends, we had good year over year growth, while licensing was lower than we anticipated. Some deals we expected to close in the first quarter, whereas it late I continue to be very encourage by our diversified licensing pipeline and stronger backup we claw.

Amir: The significant multi million dollar deal with a strategic customer in the beginning of the second quarter and there is strong demand for our next generation IP that are currently in development and I'll being license by early adopters, who are looking to gain an advantage in the market.

Amir: We'll elaborate more on our expectations for our licensing business for the rest of the year shortly.

Amir: First looking at the licensing business, we concluded in the quarter in more detail, we continue to expand our leadership in smart edge AP, completing 11 licensing deals across all of our key target market, namely consumer automotive industrial and infrastructure.

Amir Panush: First, looking at the licensing business we concluded in the quarter in more detail, we continue to expand our leadership in smart edge IP, completing 11 licensing deals across all of our key target markets, namely consumer, automotive, industrial, and infrastructure. These deals range from Bluetooth connectivity for wearables and IoT, 5G for RedCap and cellular V2X, Wi-Fi for access points, UWB for consumer devices, and audio for smartphones. More significantly, in the quarter, I'm very pleased to report that we signed deals for our next generation Bluetooth 6 and Wi-Fi 7 IP.

Amir: Yeah in this range for Bluetooth connectivity for Wearables, and Iot five G for Red Kap and settle our V to X Wi Fi for access points UW before consumer devices and ideal for smartphone.

Amir: Most significantly in the quarter I'm very pleased to report that we signed deals for our next generation Bluetooth and.

Amir: Wi Fi seven IP.

Amir Panush: Design activity around our Wi-Fi 7 IP is experiencing strong traction with both new and established wireless players and represents a positive catalyst for our licensing activities in 2024 and beyond. In the quarter, we're concluding a Wi-Fi deal with a strategic customer who is already in mass production with a combo chip based on our Wi-Fi 6 and Bluetooth 5 IP. These customers have managed to successfully compete with the largest incumbents in the wireless combo chip space for consumer, enterprise, and automotive and are now beginning to design their next generation Wi-Fi 7 chips to gain further market traction for the broad consumer devices that will require Wi-Fi 7 connectivity, including smartphones, tablets, laptops, wearables, and smart home devices.

Amir: Design activity around our Wi Fi seven IP is experiencing strong traction with both new and established wireless players and represents a positive catalyst of our licensing activities in 2024 and beyond.

Amir: In the quarter, we concluding a Wi Fi deal, we have a strategic customer who is already in mass production with a combo cheap based on our Wifi six and Bluetooth five IP.

Amir: These customers has managed to successfully.

Amir: Compete with the largest incumbent in the wireless combo cheap space for consumer enterprise and automotive and he is now beginning to design their next generation Wi Fi seven ships to gain further market traction for the both consumer devices.

Amir: How do we acquire Wi Fi seven connectivity.

Amir: Including smartphones tablets, laptops, wearables and smart home devices.

Amir Panush: In terms of market size, ABI Research forecasts that Wi-Fi 7 chipset shipments will exceed 1.7 billion units annually by 2028. As we have stated previously, due to its technical complexity, our Wi-Fi 7 IP commands a higher license fee and royalty rate than previous generations of Wi-Fi, which in turn drives ASP growth and enables us to drive more value per customer. Moreover, the large market size entices new entrants to the Wi-Fi market, while the complexity of the technology poses challenges to many of the existing wireless players to develop this technology internally.

Amir: In terms of market size Abi research forecasts that Wi Fi seven chip to chip shipment will exceed $1 7 billion units annually by 2028.

Amir: As we have stated previously used to its technical complexity, our Wi Fi seven IP commands, a higher license fee and royalty rate than previous generations of Wifi.

Amir: Which in turn drives a S b golf and enable us to drive more value per customer.

Amir: Moreover, the large market size introduces new entrants to the Wifi market, while the complexity of the technology for surface challenges many of the existing wireless players to develop this technology and Kennedy.

Amir Panush: As the only IP company in the market today offering licensable Wi-Fi 7 technology and the ability to license it together with our Bluetooth and UWB technologies, we are in an excellent position to repeat our success in the Wi-Fi 6 market for Wi-Fi 7. In Bluetooth, we added a new Bluetooth 6 customer in the quarter, who is a first-time customer for CEVA and a world leader in wireless audio. This customer decided to take advantage of our IP to accelerate their product development for the next generation of Bluetooth audio.

Amir: It's the only IP company in the market today offering licensed both Wi Fi seven technology and the ability to license it together with our Bluetooth and UW beat technologies. We are in an excellent position to repeat our success in the Wi Fi six market Oh Wi Fi seven.

Amir: In the Bluetooth, we haven't had that in your Bluetooth six customers in the quarter, who is a first time customer for CEVA and award in either in a wireless idea.

Amir: This customer decided to take advantage of our IP to accelerate their product development for the next generation of audio.

Amir: Although if the Bluetooth six point I'll start is not yet ratified we are among a small number of leaders and the salt IP licensing company that has the expertise and skills to develop next generation wireless technologies and of the market and they had the sundial itself.

Amir Panush: Although the Bluetooth 6.0 standard is not yet ratified, we are among a small number of leaders and the sole IP licensing company that has the expertise and skills to develop next-generation wireless technologies ahead of the market and ahead of the standard itself. We have successfully achieved this for a number of generations of both Bluetooth and Wi-Fi standards and have built an unrivaled position as the industry leader, a trusted partner for wireless IP for many years.

Amir: We have successfully achieved these point on both generations of both Bluetooth and Wi Fi standards and have built an unrivaled position as the industry leader and trusted partner for a wireless AP over many years.

Amir Panush: We have more than 100 customers and billions of devices shipped. Finally, on licensing, in relation to the licensing pipeline for the remainder of the year and our ability to extract more revenue per deal, I would like to share a few thoughts and data points. CEVA is one of the few select companies that have the technical capabilities, talent, and unique know-how to develop wireless, sensing, and edge AI IP to the level required by the most demanding customers.

Amir: More than 100 customers and billions of devices shipped.

Amir: Finally on licensing in relationship to the licensing pipeline for the remainder of the year and our ability to extract more revenue per deal.

Speaker Change: We'd like to share if your thoughts and data points.

Amir: Dave I was one of the few select companies that have the technical capabilities talent and unique knowhow developed wireless sensing and Ajay I IP to delever required by most demanding customers.

Amir Panush: I firmly believe that we can command higher licensing fees and royalties for our leading-edge products, and many of our ongoing customer discussions reinforce this. While a few deals that we had anticipated closing in the first quarter were delayed to later quarters, those deals remain in our sales pipeline, and some have already been signed since the first quarter.

Amir: I firmly believe that we can command higher licensing and royalties for our leading edge products and many of our ongoing customer discussion reinforced this belief.

Amir: If you did the attack that we had anticipated closing in the first quarter were delayed to later quarters. Those deals remain in our sales pipeline and some have already been signed since the first sports.

Amir: Yeah.

Amir Panush: Our value proposition around the three major smart edge use cases, Connect, sense, and infer, is clear and well understood by our customers and partners. In addition, we have already closed a meaningful multi-million dollar deal in the second quarter with a strategic customer for next-generation IP that we are currently developing. I will update you more on this deal in the next earnings call, but wanted to share that this deal reinforces our strategy to extract higher value for our technology due to our unrivaled technical leadership and the ROI gains that can be achieved when partnering with us.

Amir: Our value proposition around the three major smart edge use cases connect sensor and infer is clear and well understood by our customers and partners.

Amir: In addition, we have Oh, we have already closed and meaningful multimillion dollar deal in the second quarter, we have a strategic customer for next generation IP that we are currently developing I will update you more on this in the next earning call, but wanted to share the Disney and reinforces our strategy to extract higher volume forward technology.

Amir: Due to our unrivaled technical leadership and DIY against it can be achieved when partnering with us.

Amir Panush: We believe this, in turn, will serve to increase shareholder value through higher revenues, margins, and profits over time. We are laser-focused on this value-add strategy, leveraging our strong broad portfolio of SmartEdge IP. Turning now to royalties, we are pleased with our start of the year with a robust quarter, showing an impressive 33% revenue growth year over year and just a 14% seasonal sequential decline compared to a 28% sequential decline a year ago.

Amir: We believe this in turn will serve to increase shareholder value through higher revenues margins and profits overtime.

Amir: We are laser focused on this value add strategy, leveraging our strong broad portfolio of smart edge IP offering.

Amir: Turning now to royalties, we are pleased with our start to the year with a robust quarter, showing an impressive 33% revenue growth year over year, and just 14% seasonality sequential decline compared to a 28% sequential decline a year ago.

Amir Panush: We saw shipments volume up 25% year-over-year and an increase in every end market we serve, as restocking continues across the board in the IOT markets. Smartphone units, while up year over year, were down quite sharply from the fourth quarter, a similar trend to what we saw last year.

Amir: We saw shipments volume up 25% year over year increase in every end market. We serve is restocking continued across the board Iot market.

Amir: Smartphone units, while up year over year, we're down quite sharply from the fourth quarter, a similar trend to what we saw last year.

Amir Panush: Also, the infrastructure market remains soft, reflecting low CAPEX for 5G networks globally. From conversations with our customers, we expect smartphones to improve in the second quarter and throughout the year. Overall, the first quarter shipments increase our confidence that we are well positioned to grow our royalty business in 2024, although augmented during the year by new customer ramps. Exploring Our Portfolio of Wireless IPs For Consumer And Industrial Devices, and our Embedded Application Software for Special Audio in Headphones and Sensor Fusion Software for Intelligent Robots. Now, some commentary regarding developments in the quarter.

Amir: The infrastructure market remains soft and flat.

Amir: Reflecting low capex for five gene networks globally.

Amir: Conversation with all our customers, we expect smartphone to improve in the second quarter and throughout the year.

Amir: Overall, the first quarter shipments increased our confidence that we are well positioned to grow our royalty business in 2024.

Amir: Augmented during the year by new customer event.

Amir: Deploying our portfolio of wireless Aps for consumer and industrial devices.

Amir: In our embedded application software for special idea into hedge funds and sensor fusion software for intelligence Roberts.

Amir: Now some commentary regarding developments in the quarter in the first quarter. We also invested further in cementing our market leadership, expanding our product offering and so that's been in our ecosystem we.

Amir Panush: In the first quarter, we also invested further in cementing our market leadership, expanding our product offering, and strengthening our ecosystem. We announced a new UWB wireless IP for consumer devices, one that builds on our success in the UWB Solution for Automotive and which we have already licensed successfully to a customer disker. UWB is primed for takeoff in the consumer market, as the majority of smarts on OEM are now integrating this technology into their latest devices, which is a precursor to mass market deployment in endpoint devices.

Amir: We announced in U U W. B wireless IP for consumer devices.

Amir: To build on our success in U W. B submission Baltimore and.

Amir: And which we already licensed successfully to a customer this quarter.

Amir: W. B is primed for takeoff in the consumer market. It's the majority of smartphone Oems are now integrating this technology into their latest devices, which is the precursor to mass market deployment in endpoint devices.

Amir: Abi research forecasts that the global market. The few doesn't mean, you'll be enabled device device shipments will grow at a compound annual growth.

Amir Panush: ABI research forecasts that the global market of UWB-enabled device shipments will grow at a compound annual growth rate of 14% over the next five years, from 435 million units in 2023 to nearly 1.3 billion units by 2028.

Amir: Rate of 14% over the next five years.

Amir: 435 million units in 2023 to nearly 1.3 billion units by 2028.

Amir Panush: We are ideally positioned to leverage this market opportunity as it develops, already having mature IP available for licensing, and the ability to license it integrated with our Bluetooth Low Energy IP. In terms of our ecosystem, we announced a new partnership with ARM targeting 5G advanced infrastructure and non-terrestrial networks, NTN, aimed at lowering the barriers to entry for developing products targeting these two large markets. NTN, or Satellite Communication, is a hotbed of innovation these days, and together with Arm, we can deliver the processing power required by satellite companies and new entrants to bring 5G advanced networks to orbit, enabling the promise of global broadband connectivity and a host of new use cases on Earth that can leverage truly ubiquitous connectivity.

Amir: We are ideally positioned to leverage this market opportunity as it develops already having in mature IP available for licensing and the ability to license it integrated with our Bluetooth low energy IP.

Amir: In terms of our ecosystem, we announced a new partnership with <unk> targeting 50 advanced infrastructure and non tourist you on networks MTN.

Amir: Aimed at lowering the barriers to entry for developing for that targeting these two large markets N.

Amir: N T N or satellite communication is a hotbed of innovation. These days and together we've all we can deliver the processing power required by satellite companies and new entrants to bank five year defense networks to orbit, enabling department of global broadband connectivity and a host of new use cases on Earth.

Amir: Can leverage truly ubiquitous connectivity.

Amir Panush: We continue to gain market share in wireless connectivity with an unrivaled portfolio of wireless IP, spanning the most common standards like Bluetooth, Wi-Fi, and 5G through to emerging standards like UWB and MET. Connectivity is no longer considered a feature for electronic devices. Moreover, it's a very foundational innovation that allows AI to be deployed and accessed by edge devices. Without connectivity, there is no AI.

Amir: We continue to gain market share in wireless connectivity, we have an unrivaled portfolio of wireless IP spanning the most common startup like Bluetooth Wi Fi five G. Two emerging startups like UW being met or when activity is no longer consider feature for electronic.

Amir: For electronic devices. Moreover, it's a very foundational for innovation that allows AI to be deployed and access by edge devices.

Amir: We've always gone activity there is no way I, we're incredibly proud of our central role in the industry, enabling the connectivity and more than 1 billion devices annually that allows them to interact with AI and improve our daily lives.

Amir Panush: We're incredibly proud of our central role in the industry, enabling connectivity in more than 1 billion devices annually that allows them to interact with AI and improve our daily lives. For sensing and inference, we continue to experience strong demand for our software and hardware products targeting this use case. Our generative AI NPU scalable IP portfolio with market-leading performance is undergoing intense evaluation with a number of customers that we have identified as strategic design partners for this technology, and we will update you as these deals come to fruition.

Amir: On sensing and insurance, we continued to experience strong demand for our software and hardware product targeting these use cases.

Amir: We're generating V I N P O scalable IP portfolio with market, leading performing is undergoing intense evaluation with a number of customers that we have identified as strategic design partners for this technology and we will update you as this is comes to fruition.

Amir Panush: Our embedded application software, particularly around special audio, is also experiencing significant traction, and we reached an important milestone this quarter. We have the first headset integrating our real-space special audio and head tracking software going on sale to the public. The Nirvana Utopia headphones from India's number one wearables and hearable OEM, Boat, also features our Bluetooth and audio AI DSP, making this product a perfect illustration of our Connect, Sense, and Insert strategy, where we can provide multiple IPs to a single product and work directly with the OEM to bring the product to market.

Amir: Embedded application software, but you can only had one special audio is also experiencing significant traction and we reached an important milestone in this quarter. We have the first headsets integrating our latest space special ideal and head tracking software galangal and sell to the public.

Amir: Then he ivana it don't be a headphone from India's number one where I wasn't here, but OEM boat also features our Bluetooth audio AI DSP, making these products.

Amir: Effective illustration of our connect same thing first strategy, while we can provide multiple a piece to a single product and work directly with the OEM to bring the products to market.

Amir: Overall, we are very excited about our product lineup targeting smart edge devices, our dialogue dialogue with customers is very open and we understand the recurring pain points with our customers that we lost when discussing their smart edge roadmaps.

Amir Panush: Overall, we are very excited about our product lineup targeting smart edge devices. Our dialogue with customers is very open, and we understand the recurring pain points that our customers share with us when discussing their smart edge roadmap. With AI set to transform every industry and technology, semiconductors and OEMs need to define their strategies, not just to deal with the inference workload but also how to connect their devices and enable them with the ability to use sensors for voice, sound, vision, and motion.

Amir: We the AI set to transform every industry and technology <unk>.

Amir: Any conductors and Oems needs to define their strategies.

Amir: Just to deal with the inference workloads, but also how to connected devices and enable them with the ability to use sensors for voice sounds vision in motion.

Amir Panush: Without these three use cases being addressed in every smart edge device, from smart MCUs all the way to autonomous vehicles and 6G virtual LAN equipment, companies will not be able to compete in the smart edge era. We are ideally positioned to fill the knowledge and R&D gaps at companies that lack the ability to excel in all of these areas. Our portfolio of IP for Connect, Sense, and Infer use cases is highly synergetic with a broad range of FEMI and OEM customers across multiple industries, including the high-volume MCU players, where we already have significant traction for our connectivity IPs, and the TWF and wireless headphone market, where we estimate our Bluetooth customers to have between 45% and 50% market share today, excluding Apple products.

Amir: All of these three use cases being addressing every smart edge devices.

Amir: From smart empty use all the way through autonomous vehicle and sixth year virtual Wan equipment companies will not be able to compete in the smart edge era.

Amir: We are ideally positioned to fill the knowledge and dominant he gets it companies that like the ability to excel in all of these areas.

Amir: What sort of IP for connect Centennial for use cases, he's highly synergetic.

Amir: Broad range or send me, an OEM customers across multiple industries, including the high volume MCU players, where we already have significant traction for our connectivity IP and dws and wireless excellent market.

Amir: Well, we estimate our Bluetooth customers do have between 45 and 50% market share today, excluding Apple products.

Amir Panush: We intend to fully exploit our leadership in wireless connectivity to offer additional IP for sense and unfair as the use cases for smart edge devices grow, driving larger licensing deals and higher royalties per year. In summary, we have begun 2024 with royalty-bearing shipments up across all the end markets we serve, and we have a solid pipeline of new customers set to reach production as the year progresses. In licensing, the first quarters were challenged with only a few licenses.

Amir: Intend to fully exploit our leadership in wireless connectivity to offer additional IP for sense any infer is the use cases for smart edge devices cool driving larger licensing deals and higher royalty per unit.

Amir: In summary, we have begun 2024, we've royalty bearing shipments up across all the end markets. We serve and we have a solid pipeline of new customers set to reach production as the year progresses.

Amir: In licensing the first quarter's was challenged with a few license.

Speaker Change: Pardon me, ladies and gentlemen, it appears we have lost the connection to our speaker.

Operator: Pardon me, ladies and gentlemen. It appears we have lost the connection to our speaker. Please stand by while we reconnect. We thank you for your patience.

Speaker Change: Please standby, while we reconnect we thank you for your patience.

Speaker Change: [music].

Operator: Right.

Operator: [music].

unknown: ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??

Speaker Change: Pardon me, ladies and gentlemen, we have reconnected with the speakers you May proceed.

unknown: Sure.

Operator: Ladies and gentlemen, we have reconnected to the speakers. You may proceed.

Speaker Change: Did a mere finishes.

Speaker Change: Prepared remarks before we got disconnected.

Speaker Change: No I think the best thing to do just to repeat the summary paragraph.

Speaker Change: Okay. Okay. Thanks rich in summary, we have begun 2020 full we've royalty bearing shipments up across all the end markets. We serve and we have a solid pipeline of new customers set to reach production as the year progresses and.

Speaker Change: Licensing the first quarter was challenging with a few licensing agreements delayed until later in the year, but the overall the quality of licensing deals signed and the overall demand for our next generation IP is very encouraging.

Speaker Change: We have the portfolio of technologies that meet some of the critical pain points of semiconductors, and Oh, yeah, well Theyre Smart edge road map and I'm confident that we can meet our total revenue targets for the year and we have built and healthy backlog, which reinforces my belief on this.

Speaker Change: Overall I remain very positive of the 'twenty 'twenty four will be a golf year for CEVA, and we set up us to reach our longer term revenue margin and profitability targets.

Speaker Change: I look forward to meeting with many of you at conferences and Roadshows during the quarter.

Operator: Now I will turn the call over to M&A for the financials.

unknown: Did Amir finish his prepared remarks before we got disconnected?

Speaker Change: Thank you Amir and sorry about this.

unknown: No, I think the best thing to do is just repeat the summary paragraph.

Speaker Change: Admit a will now start with the review of the results of operations for the first quarter of 2020.

Speaker Change: Revenue for the first quarter was $22 $1 million as compared to $26 3 million for the same quarter last year. The revenue breakdown is as follows.

Amir Panush: In summary, we have begun 2024 with royalty-bearing shipments up across all the end markets we serve, and we have a solid pipeline of new customer sets to reach production as the year progresses. In licensing, the first quarter was challenged with a few licensing agreements delayed until later in the year.

Amir Panush: But overall, the quality of licensing deals signed and the overall demand for our next generation IPs is very encouraging. We have a portfolio of technologies that meet some of the critical pain points of semiconductors and OEMs for their smart edge roadmaps, and I'm confident that we can meet our total revenue targets for the year, and we have built a healthy backlog which reinforces my belief in this. Overall, I remain very positive that 2024 will be a growth year for SIVA and will set us up to reach our longer-term revenue, margin, and profitability targets. I look forward to meeting with many of you at conferences and roadshows during the fortnight. Now, I will turn the call over to Yaniv for the financial details.

Yaniv Arieli: Thank you, Amir. I'm sorry about that. I will now start with the review of the results of our operations for the first quarter of 2020. Revenue for the first quarter was $22.1 million, as compared to $26.3 million for the same quarter last year. The revenue breakdown is as follows: Licensing and related revenue was $11.4 million, reflecting 52% of our total revenue, as compared to $18.2 million for the same quarter last year. Royalty revenue was $10.7 million, reflecting 48% of our total revenue, as compared to $8 million for the same quarter last year.

Yaniv Arieli: Licensing and related revenue was 11 4 million, reflecting 52% of our total revenue.

Yaniv Arieli: $18 2 million for the same quarter last year.

Yaniv Arieli: Royalty revenue was $10 $7 million, reflecting 48% of our total revenue as compared to $8 million for the same quarter last year.

Yaniv Arieli: This represented an impressive 33% revenue growth year over year, and just a 14% seasonal decline compared to a 28% seasonal decline a year ago. Gross margin was 89% on GAAP and 90% on non-GAAP basis compared to 87% and 88% on GAAP and non-GAAP basis, respectively, a year ago.

Yaniv Arieli: This represents an impressive 33% revenue growth year over year.

Yaniv Arieli: Just the 14% seasonal decline compared to a 28% seasonal decline a year ago.

Yaniv Arieli: Gross margin was 89% and GAAP and 90% a non-GAAP basis.

Yaniv Arieli: 87% and 88% of GAAP, and non-GAAP basis, respectively, a year ago.

Yaniv Arieli: Total GAAP operating expenses for the first quarter were 24, and a half million dollars at the lower end the lower range.

Yaniv Arieli: Total GAAP operating expenses for the first quarter were $24.5 million, at the lower end of our range. Total Long Gap operating expenses for the first quarter, excluding equity-based compensation expenses, mortization of intangibles, and deal costs were $20.7 million below the mid-range of our, use the specific cost monitoring and controls. As we've talked about in prior earnings, Gap's operating loss for the first quarter of 2024 was $5 million as compared to Gap's operating loss of $2.6 million for the same period in 2020. Gap and on-gap taxes were $1.7 million above our estimates due to the geography of deal signs.

Yaniv Arieli: Total non-GAAP operating expenses for the first quarter, excluding equity based compensation expenses amortization of intangibles and deal costs were $27 million below the midrange of our guidance due to specific cost monitoring and costs and controls.

Yaniv Arieli: As we've talked about.

Yaniv Arieli: In prior earnings call.

Yaniv Arieli: GAAP operating loss for the first quarter of 'twenty, 'twenty, four or $5 million.

Yaniv Arieli: GAAP operating loss of $2 $6 million for the same period in 2023.

Yaniv Arieli: GAAP and non-GAAP taxes were $1 $7 million above our estimate due to the geographies of deal signed.

Yaniv Arieli: GAAP net loss for the first quarter of 2024 was $5 $4 million and diluted loss per share was 23 cents as compared to a net loss of $2 $7 million and diluted loss per share of 12 for the same quarter last year non.

Yaniv Arieli: Gap not lost for the first quarter of 2024 was $5.4 million, and the alluded loss per share was $0.23 as compared to a net loss of $2.7 million and the alluded loss per share of 12 cents for the same quarter last year. Non-GAAP-length loss and diluted loss per share for the first quarter of 2024 were $1.3 million and 5 cents, respectively, as compared to net income of $1.2 million and diluted income per share, 5 cents, reported for the same quarter last year, with respect to other related data.

Yaniv Arieli: non-GAAP net loss and diluted loss per share for the first quarter of 'twenty, four or $1.3 million.05, respectively as compared to net income of $1 2 million and diluted income per share five states reported for the same quarter last year.

Yaniv Arieli: With respect to other related data.

Yaniv Arieli: 50 units by CEVA licensees during the first score of 24 371 million units up 25% from the first quarter 23 reported shipments.

Yaniv Arieli: Shipped units by CEVA's licensees during the first quarter of 2024 were 371 million units, up 25% from the first quarter of 2023 reported shipments. Of these 371 million units shipped, 61 million units, or 16% were for mobile handsets. 283 million units were for consumer IoT products, up from 250 million units for the first quarter of last year. 27 million units were for IIoT products, up from 18 million for the first year of 2030. Bluetooth should... $202 million for the quarter, up 6% year over year. Cellular IoT shipments were 36 million units, up 24% year over year. Wi-Fi shipments were 31 million units. 50% of them went to Eurovision. As the mayor mentioned earlier, Stiffman's.

Yaniv Arieli: 371 million units shipped 61 million units or 16% more for mobile handsets modems.

Yaniv Arieli: 283 million units were for consumer Iot products up from 250 million units for the first quarter of last year.

Yaniv Arieli: One 7 million units worth for Iot products up from $18 million for.

Yaniv Arieli: For the first year with 23, Bluetooth shipments were $202 million for the quarter up 6% year over year.

Yaniv Arieli: Still a lot of Iot shipments was 36 million units up 24% during the year.

Yaniv Arieli: Life's like shipments were 31 million units up.

Yaniv Arieli: 50% year over year.

Yaniv Arieli: As the mayor mentioned earlier shipments.

Yaniv Arieli: We're up year over year across all our end markets in total royalty revenues, excluding mobile handset modem was the highest quarter since the third quarter of 2022 suppressing $8 million.

Yaniv Arieli: We're up year-over-year across all our end markets in total royalty revenue. Excluding mobile handset modems, it was the highest quarter since the third quarter of 2022, suppressing $8 million, and for the balance, you know. As of March 31st, 2021, 2024, Steve had cash, cash, capital, balances, marketable securities, and bank deposits of approximately $159 million. In the first quarter of 24, we purchased approximately 57,000 shares for approximately $1.3 million. As of today, around 643,000 shares are available for purchase under the repurchase program, which was expanded back in November of last year.

Yaniv Arieli: Our DSOs for the first quarter were for 58 days back to normal levels and higher than the prior quarter's 32. During the quarter, we used $7.3 million cash from operations activities. Ongoing depreciation and amortization was $1 million, and the purchase of fixed assets was $0.9 million. At the end of the first quarter, our headcount was 433 people, of whom 356 are engineers.

Yaniv Arieli: Engineers.

Speaker Change: Now for the guidance of the second quarter of 2024.

Yaniv Arieli: Now for the guidance for the second quarter of 2015. As Amir stated earlier, we've signed a number of deals at the start of the second quarter and also have good visibility into the potential deal flow for a wide range of technologies and markets. On royalties, we expect year-over-year growth in the second quarter and are monitoring the timing of new products in production from our. All in all, we forecast sequential growth in overall revenues for the second quarter of 6 to 16%, primarily from licenses.

Yaniv Arieli: The mere stated earlier.

Yaniv Arieli: Sign the number of deals at the start of the second quarter.

Yaniv Arieli: And also have good visibility into the second quarter potential deal flow.

Yaniv Arieli: For a wide range of technologies and markets.

Yaniv Arieli: On royalties.

Yaniv Arieli: <unk> year over year growth in the second quarter and are monitoring the timing of new product introduction from our customers.

Yaniv Arieli: All in all we forecast sequential growth.

Yaniv Arieli: Revenue for the second quarter of 6% to 16% primarily from license.

Yaniv Arieli: Gross margin is expected to be similar to the first quarter approximately 88% on GAAP based at a 90%.

Yaniv Arieli: Gross margin is expected to be similar to the first quarter, approximately 88% on gap-based and 90% on non-gap-based, excluding an aggregate of $0.2 million of equity-based compensation expenses and $0.1 million of amortization of acquired goods. Gap OpEx for the second quarter is expected to be in the range of $24.5 to $25.5 million, slightly higher than the first quarter and in line with our annual, Over anticipated total operating expense for the second quarter, $3.8 million is expected to be attributed to equity-based compensation expenses, and half a million dollars for the amortization of the acquired intangible.

Yaniv Arieli: Got basin, excluding an aggregate of zero point $2 million of equity based compensation expenses of zero point $1 million over motivation of acquired intangible.

Yaniv Arieli: Gap Opex for the second quarter.

Yaniv Arieli: Specter to be in the range of 24, and a half to 25 and a half million dollars.

Yaniv Arieli: Slightly higher than the first quarter and in line with our annual plans.

Yaniv Arieli: Overanticipated total operating expense for the second quarter of $3.8 million is expected to be afraid to equity based compensation expenses.

Yaniv Arieli: Mmm half a million dollars for the amortization of the <unk>.

Yaniv Arieli: Quiet intangibles.

Yaniv Arieli: Or non-GAAP opex.

Yaniv Arieli: Our non-gap expenses are expected to be at the same level as the first quarter, in the range of $20.2 to $21.2 million. We'll continue to monitor our expenses closely and look for ways to further improve our operating efficiency. Their interest income is expected to be approximately $1.3 million. Taxes for the quarter are expected to be approximately $1.7 million, and the share count for the second quarter is expected to be around $25 million.

Yaniv Arieli: Is expected to be at the same level as the first quarter.

Yaniv Arieli: The range of $22 million to $21.2 million.

Yaniv Arieli: We'll continue to monitor expenses closely and look for ways to further improve our operating efficiency.

Yaniv Arieli: Net interest income is expected to be approximately $1.3 million tax.

Yaniv Arieli: Taxes for the quarter are expected to be approximately $1.7 million in the shower count for the second quarter is expected to be around 25 million chips.

Operator: Jason, you could open the Q&A.

Yaniv Arieli: Jason you could open the Q&A efficiently.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we'll pause momentarily to assemble our roster. And our first question comes from Matt Ramsay from TD Cowan. Please go ahead.

Jason: Thank you we will now begin the question and answer session to ask a question you May press stars and one on your Touchtone phone, if you're using a speaker phone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then too.

Operator: At this time, we will pause momentarily to assemble our roster.

Matthew D. Ramsay: And our first question comes from Matt Ramsey from T. D. Cowan. Please go ahead.

Matthew D. Ramsay: Thank you very much everybody good afternoon good morning.

Matthew D. Ramsay: Thank you very much, everybody. Good afternoon. Good morning.

Matthew D. Ramsay:

Amir Panush: I have a few questions. I guess it's the first one on licensing, guys. It's totally normal for deals to sort of flip around across quarterly boundaries, but I know you mentioned in the script that there are some deals that you might have expected to sign that got pushed a little bit, but it didn't sound super clear to me whether all of those things that slipped out of Q1 were just kind of across the quarterly boundary and going to get done in Q2, or if they might have been pushed a little bit longer than that. And if it's the latter, maybe you could just kind of talk about what's going on in the environment that might be delaying a few of the deals longer than would be typical. Thanks.

Matthew D. Ramsay: I have a few questions I guess, the first one on licensing guys, but.

Amir Panush: Totally.

Amir Panush: I'm all for deals to sort of flip around across quarterly boundaries and.

Amir Panush: But I know you mentioned in the script there was some deals that might've might've expected assigned I got pushed a little bit but it it didn't sound Super clear to me whether.

Amir Panush: All of those things that slipped out of Q1 word or just kind of across the quarterly boundary and kind of get dawn in Q2 or if they might've been.

Amir Panush: Flipped up a little bit longer than that and.

Amir Panush: If it's the latter maybe you could just kind of talk about.

Amir Panush: What's going on in the environment that that might be delaying a few of the deal for longer than would be typical thanks.

Speaker Change: Yeah, and thank you ma'am.

Amir Panush: Yeah, thank you, Matt. I would say first, some of the deals that we already signed in Q2, as we also mentioned in the pre-event remarks. And then we expect some of the other deals to still sign in Q2. But also, there are some deals that get delayed more towards the next quarter after that. And as part of the overall evaluation, that takes longer in some cases, especially for the more complicated systems that our customers need to evaluate sometimes all the way to the hardware capabilities of their own.

Amir Panush: First time of the day is.

Amir Panush: They also mentioned <unk> remarks is that we already sign and Q2.

Amir Panush: And then we expect also some of that <unk> and which is but also there are some days that to get delayed more towards them. The next quarter after that.

Amir Panush: And that's part of the overall evaluation that takes longer in some cases, especially for the more complicated system.

Amir Panush: That our customers need to evaluate the day, sometimes all the way into the how the capabilities that one system.

Matt: Got it so it sounds like nothing nothing atypical are different in the environment, just kind of normal course of business type stuff is that fair.

Amir Panush: Got it. So it sounds like nothing, nothing atypical or different in the environment, just kind of normal course of business type stuff. Is that fair?

Amir Panush: That's fair. I would say that the one thing that we highlight more specifically for this quarter is a strategic deal with a customer that we already have, a multimillion-dollar deal that we expected to close in this quarter in Q1. And the evaluation of the technology, the agreements on both the technology and the commercial agreements were all set within the quarter. But the signature process of the customer took longer than anticipated, and this deal was already closed. Because the timing and the magnitude of the deal we mentioned earlier,

Speaker Change: <unk> I would say that the one thing that we highlight more specifically for this quarter or the.

Amir Panush: The strategic deal with our customers that our customers.

Amir Panush: Customer if you already have an only 2 million dollar deal.

Amir Panush: We expect it to close in this quarter in Q1, and the valuation of the technology of the agreements on both of the college into commercial examines was all set within the quarter.

Amir Panush: The process signature of the customer took longer than anticipated and the seal was already closed.

Amir Panush: Yeah.

Amir Panush: Because the timing and magnitude of the daily and mentioned that specific.

Amir Panush: Got it. Thanks for all that.

Speaker Change: Got it now thank thanks for the all of that I I guess for me onto some maybe more important technology questions. I wanted to ask about sort of two emerging technologies that you guys seem to be.

Amir Panush: I guess, for me, on to some maybe more important technology questions. I wanted to ask about sort of two emerging technologies that you guys seem to be investing in a lot and are well-positioned for. The first one is Wi-Fi 7, and the second one is UWB. So on Wi-Fi 7, maybe you could give us a little bit more on the expected pace of adoption of the technology and what both the licensing and royalty economics look like for your company relative to Wi-Fi 6.

Amir Panush: Thing and a lot and are well positioned for I got as the first one is Wifi seven.

Amir Panush: And the second one is is U W. B so.

Amir Panush: Five seven maybe you could give us a little bit more on expected pace of adoption of the technology and what the the both the licensing and royalty economics look like for your company relative to Wifi, six and and U W. B I I'd be interested in.

Amir Panush: And UWB, I'd be sort of interested in hearing about the breadth of different relationships and, I guess, what the pipeline looks like for UWB deals, both breadth and timing, because these are both sort of exciting new technologies. I'm kind of interested to hear where you guys are in the progression on each one. Thank you.

Amir Panush: [noise] hearing about what the breaths of different relationships and and I guess, what the pipeline looks like for uwp deals, both breath and timing cause these or both.

Amir Panush: Sort of exciting new technologies I'm kind of interested to hear what were you guys are in the progression on each one thank you.

Speaker Change: Yeah definitely I actually got it I'll start with the <unk> that given a step.

Amir Panush: Yeah, definitely. Actually, I'll start with Wi-Fi 6 and take even a step back before Wi-Fi 7. Even with Wi-Fi 6, in terms of royalty overall, we are still early in the cycle of our customers transitioning from Wi-Fi Fa-4 to Wi-Fi 6 in high volume. So we expect it to be a very good 10-win as we go through the rest of the year on the royalty side.

Amir Panush: Back then before Wifi seven even with Wifi six in terms of four is the overall, we are still <unk> to call customer transitioning for life or for it to life by six into high volume and so we expect it to be a very good tailwinds as we go through the rest of the year onto royalty sites and soaked licensing definitely we are extremely encouraged to see.

Amir Panush: In terms of licensing, definitely, we are extremely encouraged to see some of our existing customers as well as new customers, but licensing Wi-Fi 7. This specifically, as you mentioned, as we signed this quarter with a customer that had already licensed Wi-Fi 6 and Bluetooth from us in the past. It's really encouraging to see the trust that we have in the marketplace and the performance that we achieved for our customers, so that they repeat and come back to us.

Amir Panush: Some of our existing customers as well as new customers.

Amir Panush: [noise] Wifi seven this is specific that you mentioned as we assign this quarter was about the customer that's already licensed in the past life by 602 from us extremely encouraging to see that the trust that we have in the marketplace and typify that way to sell a coupla, whether they repeat them to come back to us and.

Amir Panush: Penetration of Wi-Fi 7 in terms of licensing and development of those technologies is really right now ramping up quite nicely through 2024. It started as an access point; now we see more on the client side. It is a high-performance, high-throughput type of technology, so the propagation starts more from the high end and then, over time, will propagate lower in terms of the different tiers of the market. But also, for us, the transition from Wi-Fi 4 to Wi-Fi 6 and Wi-Fi 7 is a great tailwind in terms of the average deal size as well as the average royalty that we get per device because we really provide more value, more sophistication, and a time-to-market advantage to our customers.

Amir Panush: <unk> of Wifi seven in terms of licensing and developments of those technologies really right now and ramping up quite nicely to the through 2024.

Amir Panush: It started off as an access point now we see a mall also on the client side. It isn't I performance high throughput type of technology for the propagation start small from the high end and then over time will hopefully get lower in terms of the different tiers of the market.

Amir Panush: But also a sloth and the transition from Wifi for Wi Fi six and Wifi seven.

Amir Panush: And it's a great the tailwind in terms of the average in size as well as their their fridge royalty that we care that we get for a device cause we really provide more value more sophistication and and time to market advantage to our customers. So I'll go. This is a very strong tran.

Amir Panush: So overall, this is a very strong trend, and we're encouraged to see also the Wi-Fi volume. Going to the UWB questions... definitely Qualcomm announcements and coming to market with the UWB combo with other technology for mobile devices. This is a very important precursor for the UWB to penetrate beyond automotive into the consumer. And most of the previous deals that we talked about were in the automotive industry.

Amir Panush: Quite should see also the Wifi volume.

Amir Panush: Increased very nice of you over here at this corner.

Amir Panush: Yeah.

Amir Panush: Going to the UW be questions and.

Amir Panush: Definitely Qualcomm announcements and coming to market, we have a UW be combo with technology for their mobile devices.

Amir Panush: Is it very important b cursor for them to do it for the U W. B to penetrate beyond if I'm walking into the consumer.

Amir Panush: And most of the previous deal that we talked about where in the automotive now <unk>, we have a very nice deal in the consumer space and.

Amir Panush: Now this quarter, we have a very nice deal in the consumer space. And we definitely see the Qualcomm announcement, the penetration into mobile phones, and overall the understanding of more of the use cases of UWB, and FIRA 2.0 certification body also really ratifying their solution, which they think is a very good tailwind for the demand in the marketplace. Having said that, overall, I would say UWB technology penetration is going to be average.

Amir Panush: And and we definitely see the Qualcomm announcement, the penetration into mobile phones.

Amir Panush: The understanding of mostly use cases of UW b and forgot to <unk> Oh, a certification body also really rocky finding their solution.

Amir Panush: Would think it very good the tailwind for the demand in the marketplace, having said that although all I would say UW beat technology penetration rate.

Amir Panush: Is going to be on average.

Amir Panush: Smaller or lower than what you typically see with the more incumbent Wi-Fi technologies. And the other piece, of course, for UWB, a lot of demand for UWB with Bluetooth technology and in the more high-end devices, even with Wi-Fi as a combo. So again, we are well positioned to take advantage of that trend.

Amir Panush: More than one lower than what you typically see with them all incumbents beautiful Lifeflight technology Okay.

Amir Panush: And the other piece of course for you W. B a lot of demand for you W. B with lots of technology.

Amir Panush: And the more high end devices, even with Wifi is called sorry, again, we all went position to take advantage of that right.

Speaker Change: [noise] no. Thank you for all the the detailed Amir jump back in the queue. Thanks guys.

Matthew D. Ramsay: No, thank you for all the details, Amir. I'll jump back in the queue. Thanks, guys.

Speaker Change: Thank you.

Operator: The next question comes from Kevin Cassidy from Rosenblatt Securities. Please go ahead.

Matthew D. Ramsay: The next question comes from Kevin Cassidy from Rosenblatt Securities. Please go ahead.

Kevin Edward Cassidy: Yeah. Thanks for taking my question.

Kevin Edward Cassidy: Yeah, thanks for taking my question. Just as you're writing more licenses, coming up with agreements with licenses that include more technology, as you mentioned, the strategies to sell, sensing connectivity, and the processing. Is that considered one license now or is there going to be a change as the value of the license goes up, and there'll be fewer numbers when you report each quarter, or are they still going to be considered separate licenses but just in one design?

Kevin Edward Cassidy: Just as your.

Kevin Edward Cassidy: Writing more licenses I got I got are coming up with agreements with licenses that include more technology. As you mentioned the strategies to sell something kind of activity in the processing.

Kevin Edward Cassidy: Is that considered one license now or or just is there gonna be a change of the value of the license goes up and there'll be fewer numbers I can when you report each border or are they still going to be considered a separate licenses, but just in one design.

Speaker Change: A good question given we we <unk> separately, if they use different technologies to keep pace. The the wildfire Bluetooth okay with an a UW be we will cover the multiple is if they are indeed plan to be combining.

Yaniv Arieli: A good question. Kevin, we count them separately. If they use different technologies in order to keep paste of a Wi-Fi, a Bluetooth socket, and a UWB, we will call them multiple deals if they are indeed planned to be combined into a single product. On the product itself, the agreement is one agreement that includes whatever type of technologies the customer would like to license and partner with us for. Of course, if it's integrated in a single chip, the royalty will be applied to the entire chip price, either as a percentage of the chip or cents per chip, and we'll take into account that usually those chips are higher priced, so ASPs would be higher. Our take of that, whether it's sense or percentage, would be higher because of the knowledge and the expertise and the advantage we're bringing to the table by combining multiple

Yaniv Arieli: Combining the single product or the product itself that the agreement is one agreement that includes all whatever type.

Yaniv Arieli: Type of technologies, the customer, we'd like to license and partner with US for of course, if it's integrated into a single chip the royalty will be applied on the entire a shift cries either as a percentage of the chest or sense purchase and will take into account the usually those chips are.

Yaniv Arieli: All your price is these would be higher hour take of that whether it's sense or percentage would be higher because of the knowledge and the expertise.

Yaniv Arieli: Vantage, we're bringing to the table like combining multiple technologies.

Yaniv Arieli: And to add on, Yaniv, thanks. Basically, Kevin, what we announced is the CEVA Wavelengths, where we provide added value of those combined technologies if our customers need that support and would like to license that. And overall, I would say, as we look historically at our deals and connectivities, as we propagate into the more advanced... [inaudible]

Yaniv Arieli: Yeah.

Yaniv Arieli: <unk> basically Kevin what we are now so the receiver wavelengths wherever we provide added value of those combined technologies and if our customers need.

Yaniv Arieli: Need that support in winter I would like to license it and.

Yaniv Arieli: Overall, I would say as we look historically into our ideas and connectivities as we propagate into the more advanced.

Yaniv Arieli: <unk> releases of the technology, if I'm looking for a 4.02, all the way now and the future 6.0, adding Wifi I'm going for Wifi, six and seven and then the combination.

Yaniv Arieli: We really see on average does it deal sizes going is what is the potential warranty that comes with it.

Speaker Change: Okay. Thanks to those details <unk> and just in general.

Amir Panush: Okay, thanks for those details. And just in general, you know, China has been a big market for you. And with the US sanctions, is it getting worse for you? Or are there fewer new designs starting in China? Maybe just give us the landscape of what's happening in China.

Amir Panush: China has been a big market for you and have a U S. Sanctions is there is a getting worse for you or are there fewer new design starting in China, maybe just.

Amir Panush: Give us the landscape or what's happening in China.

Amir Panush: First one regulation actually we haven't seen any material change or any meaningful change this quarter.

Amir Panush: First, on regulation, actually, we haven't seen any material change or any meaningful change this quarter, broadly, quite recently, so no impact at all in terms of any change. I would still say China is an important market for us in terms of lots of innovation in the semiconductor industry and overall for all the different types of technologies. We're actually encouraged to see that this quarter, I would say, overall, the market condition in China has stabilized, and there is very good innovation and demand for technology.

Amir Panush: <unk> quite recently and so no not no impact the at the all the time. So if any change I would say still China is is important market for us insensitive lots of innovation and in the semiconductor industry and overall for all the different types of technologies and well actually encouraged to see that this quarter I would say overall.

Amir Panush: The market is conditioning, China, I think has stabilized and there is a very good innovation and demand for technology.

Amir Panush: I think from the royalty report that we provided, on average, our customer base is doing quite well in the market, so this is also a very... and positive indication for us as we will continue through the year.

Amir Panush: And I think from the reality report that we've provided on average our customer base.

Amir Panush: Are doing quite well in the market. So this is a also right.

Amir Panush: Positive indication for us as we will continue to to the ear.

Yaniv Arieli: Kevin, I'll add to that that this is the first time in many years that we've seen sequential flattish revenue for many of our Chinese customers in the IOT space reporting from Q4 to Q1, not a down quarter like it usually was, but really a flat or even a stronger quarter in some cases. So it was very encouraging.

Amir Panush: <unk>. This is the first time in many years that we've seen sequential lavished revenue for many workers Chinese customers and Iot's space reporting form queue for the T. One not a downpour like.

Yaniv Arieli: Usually was but really <unk>.

Yaniv Arieli: Even the stronger.

Yaniv Arieli: In some in some cases, so it was very encouraging.

Kevin: Okay, great. Thank you.

Kevin Edward Cassidy: Okay, great, thank you.

Speaker Change: Okay. Thank you maybe just yeah.

Operator: Again, if you have a question, please press star 1.

Speaker Change: Okay. Let's go ahead question. Please press Star then one.

Operator: Our next question comes from Chris Reimer from Barclays. Please go ahead.

Operator: Hi, thanks for taking my questions. Can you talk just a little bit about the path to achieving the year-end guide? I believe you were projecting four to eight percent top-line growth back in four

Speaker Change: [noise] hi, Thanks for taking my questions can you talk just a little bit about the past can achieving the deer and guide I believe you are projecting 48% top line growth backing for Q.

Operator: If you could just <unk>.

Speaker Change: Kind of reminded how how sequentially that cat she take place and then on the partnership tide. If she could talk about the kind of exposure you have with with your partner shapes, especially with the boat and what kind of what kind of products.

Operator: Are.

Operator: Or working with you there.

Speaker Change: Hi, Chris I would start with the first part of them you will take over for the second and so with this guy the in the beginning of the year a 48% the top line growth. We did talk about the <unk> Opex and gave the rain.

Chris Reimer: Hi Chris, I'll start with the first part, and Amir will take over for the second. So we did guide for a 4 to 8% top line growth at the beginning of the year. We did talk about the sladdish non-grasp of OPEX and gave a range of 93 to 96 million dollars for the year. We're not changing those two numbers today. We also said at the beginning of the year that the second half would be stronger than the first year.

Chris Reimer: Oh, the $93 billion to $96 billion for the year, we're not saying that those two numbers today. We also said at the beginning of the year that the second half will be stronger than the first year.

Chris Reimer: So with all that said, nothing has really changed in our plan. Yes, we talked about the deal being delayed, and a few deals being delayed. We also mentioned that some of those deals were signed in Q2, so maybe it's just some shift between those two corners. But the way we're seeing it with a pretty strong Q1, much stronger than historical seasonality, trend, and growth in all the different product volumes on a year-over-year basis, which is also quite remarkable, we haven't seen that for a long time, and we're feeling good.

Amir Panush: So with all that said nothing is the is really change the plan, yes, we talked about the deal.

Chris Reimer: Being delayed a few deals being delayed we also mentioned that some of those deals were signed up to do so maybe it's just some shifts between those two corners, but the way we are seeing it with a pretty strong.

Chris Reimer: Q1.

Chris Reimer: Much stronger than historical seasonality sprang and growth and all the different products volume on a year over year basis, which is also something quite.

Chris Reimer: Remarkable we haven't seen that for a long time.

Chris Reimer: <unk> well with the rest of the year or the licensing royalties each one of them have different <unk> from time to time get delayed the but the our plans are not changing from that from the expense point of view of trying to manage this carefully the guidance for second quarters.

Chris Reimer: Exactly the same 90% gross margins of non-GAAP in the same range of expenses on Opex and with more revenue flowing in there we should have the leverage to reach the targets that's.

Chris Reimer: That's the way we see it today.

Chris Reimer: Obviously things could change but the.

Chris Reimer: This is what we're focused on the achievement for 2024.

Chris Reimer: Uh-huh can S for the partnership.

Amir Panush: And as for the partnership with BOTE, so BOTE is the number one Indian hearable, wearable OEM in the marketplace, and we believe they are number two to Apple worldwide. We have a very, very good partnership with them, working with them directly as an OEM. We offer them basically a combination of the silicon that they're using, and within there, there is the IP, our connectivity IP, as well as the DSP AI IP.

Amir Panush: Yeah, that's for the partnership with the boat and so both is that the number one in India on here about the wearable.

Amir Panush: Oh yeah.

Amir Panush: In the market place and we believe there are a number two after the worldwide and we have a very very good partnership we've been working with the Iraqis and O M.

Amir Panush: We offer them basically a combination of the silicon a day using that we have in there. There is the iced tea, our connectivity I P as well as the D. S. P. A I T and on top of that we provide them a softer iced tea.

Amir Panush: And on top of that, we provided them with software IP to run 3D special audio for hearable and wearable devices. And then they've just launched the first product using this type of all these three technologies combined in their device that they shared in the, in the, in my remarks, and we will see that keep penetrating across the product.

Amir Panush: <unk> C D special idea for a year ago and wearable devices and then they've just launched the first four that using this type of all of these three technologies combined into a device that they shared in the in the in my remarks, and then we will see that keeps penetrating it close to for that line.

Speaker Change: Got it okay. Thanks for that.

Chris Reimer: Got it. Okay. Thanks for that. That's it for me.

Speaker Change: That's it for me.

Speaker Change: Thank you Chris.

Operator: Thank you, Chris.

Chris Reimer: Okay.

Speaker Change: There are no more questions in the queue. This concludes our question and answer session.

Operator: There are no more questions in the queue. This concludes our question and answer session. I think David is there. Sorry about that. Yes, the next question comes from David O'Connor from BNP Paribas. Please go ahead.

David O'Connor: Nathan I think Kevin David is there sorry about that yes next question.

Operator: David O'connor from BNP pair of US. Please go ahead.

David O'Connor: Awesome, good morning. Thanks for squeezing in, guys.

David O'Connor: Awesome. Good morning, Thanks for squeeze me in guys, maybe just one or two follow ups on my site Uhm. So firstly, just a flattish revenues in China customers Q4 to Q1, Uhm can you give us a bit more color was that you two tiny units or was it just more content is your symptom that was inventory replenishment window within markets or.

David O'Connor: Maybe just one or two follow-ups on my side. So firstly, just the slavish revenues in China, customers Q4 to Q1, can you give us a bit more color, was that due to kind of units, or was it just more content? Is your sense of that was inventory replenishment and those in markets, or just new products coming to the market at those higher ASPs that you talked about and even follow-up?

David O'Connor: Just new products come into the market at those higher <unk> that you talked about and they will follow.

David O'Connor: Yeah, you know usually the seasonality and Iot devices mobile hasn't been the case for many many years of Q1 is lower in volume the new phone introduction than the fourth quarter of the Christmas holiday season.

Yaniv Arieli: Yeah, you know, usually the seasonality in IoT devices, mobile hasn't been the case for many, many years; Q1 is lower in volume and new phone introductions than the fourth quarter of the Christmas holiday season. What we saw this quarter with 25% unit growth, year over year, and sequentially some of our customers, which may be Chinese customers, but they're shipping on a worldwide basis. As Amir mentioned earlier, in headsets and earbuds, we are probably 45 to 50% worldwide market share, our technology is embedded in, excluding Apple.

Yaniv Arieli: What we saw this quarter of with 25% the unit growth year over year and sequentially some of our customers, which maybe is Chinese customers, but they're shipping on a worldwide basis and a mere mentioned earlier on the headset.

Yaniv Arieli: Headset.

Yaniv Arieli: <unk>, we are probably 45% to 50% worldwide market share our technology is embedded in excluding Apple. So in some of these devices and overall Iot devices that were should we saw flattish units, we didn't see a decline in that's probably from inventory and build a.

Yaniv Arieli: So in some of these devices and the overall IT devices that were shipped, we saw flattish units. We didn't see a decline. And that's probably from inventory and the build out and filling the channels with a pretty strong start for the year. Does that answer your question? Yeah, that's that.

Yaniv Arieli: Out in the filling the channels.

Yaniv Arieli: With a pretty strong start for the year.

Speaker Change: Does that answer your question Yeah. That's that's that's very helpful. And then maybe maybe just one on the kind of horror value deals that she was so you need a licensing employed royalty rate can you give us any kind of framework hope to think about that was kind of higher what would you rate the birth of your kind of classic right and also the licensing.

Yaniv Arieli: Yeah, that's very helpful. And then maybe just one on the kind of higher-value deals that you're signing and licensing and the higher royalty rate. Can you give us any kind of framework to think about those kind of higher royalty rates versus your kind of classic rates? And also, the licensing deal, can you help as well kind of give us just a sense of kind of how big they are versus your kind of classic licensing deals? I know every deal is different, but just kind of how to think about that from a kind of numbers perspective. That'd be helpful. Thanks, guys.

Yaniv Arieli: <unk> can you help <unk> kind of give us just the sense of kind of watch how big their versus your classic kind of licensing deals I know every deal is different but just kind of help to think about that from what kind of numbers perspective that'd be helpful. Thanks, guys.

Yaniv Arieli: Yeah, not not sure we could help that much I mean, when we talk about multi million dollar deal. These are bigger deal the larger deals in volume than we have in the past. So it could be a few million dollars for a specific deal depends then that technology in the market segment.

Yaniv Arieli: Yeah, not sure we could help that much. I mean, when we talk about multi-million dollar deals, these are bigger deals and larger in volume than we have had in the past. So it could be a few million dollars for a specific deal, depending on the technology and the market segment. Maybe historically, in the past, those were a few hundred thousand for a single use, up to a million. And today, depending on that technology and how many technologies we integrate into an agreement, it could be a much higher number than that.

Yaniv Arieli: May be strictly in the past the those where few hundred thousand for a single use up to a million and today depend on that technology and how many technologies, we integrate into an agreement it could be much higher numbers than that maybe that's a little bit of the of the flavor and the same goes with ASB.

Yaniv Arieli: Maybe that's a little bit of the flavor, and the same goes with ASP. The percentages, if it's multiple technologies, are higher than just a standalone Bluetooth deal that we licensed five years ago. I think that's what we're referring to, that the more content we add to these agreements, multiple technologies, newer technologies that come into play. And that's true across the newer Wi-Fi, Bluetooth, UWB, as well as AI. And then the softer packages that we have, an offering that we have today, we are able to charge higher percentages of the chip price at the end of the day or higher chip prices.

David O'Connor: That's very helpful. Thank you.

David O'Connor: Percentages, if it's multiple technologies are higher than just a standalone Bluetooth deal.

David O'Connor: The that we license the five years ago.

David O'Connor: I think that's what you were referring to the the more content, we add to these agreements multiple technologies newer technologies that come into play and that's true across the newer wi-fi Bluetooth UW b as well as they are and then the software packages that we have two offerings that we have.

David O'Connor: Today, we are able to Ah charges.

David O'Connor: Higher percentages of the check price at the end of the day or <unk> <unk>.

Speaker Change: And maybe that was very helpful. Thank you.

David O'Connor: Yep.

Richard Kingston: Just a compliment on Yaniv's comments regarding royalty in China. Generally speaking, for this quarter, we are really encouraged by our customers worldwide and as well as in China in terms of their volume shipments. And part of that is the tailwinds that we discussed last year, where we see basically Wi-Fi penetrating more and more. We see the combination of the different technologies, the higher ASP with those different product mixes that go to market, as well as more and more new customers that are ramping either Bluetooth or Wi-Fi and, in the future, always WB technology, as well as the Neoban IoT O5G4 Red Cap.

Speaker Change: <unk> compliment on the on your end any comments regarding the royalty and in China generally speaking for a discourse that way I really encourage actually with our customers worldwide and is what is in China in terms of their wondering shipments and and part of that is the penguins that we discussed last year.

Richard Kingston: [noise] received basically Wifi penetrating more and more we see that the combination of a decent technologies. They hire a S. P with dose a different product mix that goes to market as well as more and more new customers that are ramping either blue to fly a Wifi and then a few Charlie Uwp technologies.

Richard Kingston: <unk> and then I'm Gonna go to your five G for Red Cape So all in all <unk> this quarter, which typically is and consumer market is any lower than two four we.

Richard Kingston: So all in all, for this quarter, which typically is in consumer markets, is any lower than Q4. We have seen really great year-over-year growth, as well as very strong demand for our customers.

Richard Kingston: We have seen a really great your ear over a year ago as well as on the quarter over quarter basis, very strong demand for our customer base.

Richard Kingston: Awesome.

Speaker Change: Okay. Thank you.

Richard Kingston: This concludes our question and answer session I would like to turn the conference back over to Richard Kingson for any closing remarks.

Richard Kingston: This concludes our question and answer session. I would like to turn the conference back over to Richard Kingston for any closing remarks.

Richard Kingston: Great.

Richard Kingston: Thank you all for joining us today and for your continued interest in Siva <unk>.

Richard Kingston: Thank you all for joining us today and for your continued interest in CEVA. As a reminder, the prepared remarks for this conference call are filed as an exhibit to the current Form 8k and are accessible through the investor section of our website. With regard to upcoming events, we will be participating in the following conferences: Oppenheimer 25th Annual Israeli Conference, May 26th in Tel Aviv; Cowan 52nd Annual TMT Conference, May 29th in New York; The Mizzou Technology Conference, June 12th in New York; and Rosenblatt's 4th Annual Virtual Tech Summit 2024, June 13th, which will be held virtually. Further information on these events and all events we will be participating in can be found in the investors section of our website. Thank you, and goodbye.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: As a reminder of the prepared remarks for this conference call are filed other exhibit to the current form a K accessible through the investors section of our website.

Operator: With regards to upcoming events, we will be participating in the following conferences Oppenheimer 25th annual Israeli conference May 26th in Tel Aviv.

Operator: Taiwan, 52nd annual T. M. T Conference May 29th in New York, The Mizuno Technology Conference June 12th in New York Rosenblatts fourth annual virtual Tech Summit 2024 June 13th that'd be held virtually.

Operator: For the information on these events and all events, we will be participating in can be found on the investors section of our website. Thank you and goodbye.

Operator: The conferences now concluded.

Operator: Thank you for attending today's presentation you may now disconnect.

Operator: [noise] [music].

unknown: BF-WATCH TV 2021