# EDGAR Filing Document

**Accession Number:** 0001173489
**File Stem:** 0001437749-23-003453
**Filing Date:** 2023-2
**Character Count:** 66994
**Document Hash:** 462c412fb1fc212e7010d574d37902ae
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-23-003453.hdr.sgml**: 20230215

**ACCESSION NUMBER**: 0001437749-23-003453

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 17

**CONFORMED PERIOD OF REPORT**: 20230215

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230215

**DATE AS OF CHANGE**: 20230215

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CEVA INC
- **CENTRAL INDEX KEY:** 0001173489
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370]
- **IRS NUMBER:** 770556376
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-49842
- **FILM NUMBER:** 23633712

**BUSINESS ADDRESS:**
- **STREET 1:** 15245 SHADY GROVE ROAD
- **STREET 2:** SUITE 400
- **CITY:** ROCKVILLE
- **STATE:** MD
- **ZIP:** 20850
- **BUSINESS PHONE:** 240-308-8328

**MAIL ADDRESS:**
- **STREET 1:** 15245 SHADY GROVE ROAD
- **STREET 2:** SUITE 400
- **CITY:** ROCKVILLE
- **STATE:** MD
- **ZIP:** 20850

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CEVA  INC
- **DATE OF NAME CHANGE:** 20031208

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PARTHUSCEVA INC
- **DATE OF NAME CHANGE:** 20021101

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CEVA INC
- **DATE OF NAME CHANGE:** 20020515

ceva20230214_8k.htm

**UNITED STATES**

 **SECURITIES AND EXCHANGE COMMISSION**

 **Washington, D.C. 20549**

**FORM **8-K**

**CURRENT REPORT**

 **Pursuant to Section 13 or 15(d) of the**

 **Securities Exchange Act of 1934**

Date of report (Date of earliest event reported): February 15, 2023

**CEVA, INC.**

(Exact Name of Registrant as Specified in Its Charter)

**Delaware**

(State or Other Jurisdiction of Incorporation)

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| | |
|:---|:---|
| **000-49842**<br> (Commission File Number) | **77-0556376**<br> (I.R.S. Employer Identification No.) |
| **15245 Shady Grove Road, Suite 400**, **Rockville**, **MD**<br> (Address of Principal Executive Offices) | **20850**<br> (Zip Code) |

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**(**240**)-**308-8328**

(Registrant's Telephone Number, Including Area Code)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (*see* General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, $.001 per share | CEVA | The NASDAQ Stock Market LLC |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Security Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION**

On February 15, 2023, CEVA, Inc. (the "Company") announced its financial results for the quarter and year ended December 31, 2022. A copy of the press release, dated February 15, 2023, is attached and filed herewith as Exhibit 99.1. On the same day, the Company will hold a conference call to discuss its financial results for the fourth quarter and year ended December 31, 2022. A copy of the script of the conference call is attached hereto as Exhibit 99.2. This information, including Exhibits 99.1 and 99.2 attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Act of 1934, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference to such filing.

In addition to the disclosure of financial results for the quarter and year ended December 31, 2022 and 2021 in accordance with generally accepted accounting principles in the United States ("GAAP"), the press release and script also included non-GAAP gross margin, operating income, net income and diluted earnings per share (EPS) figures for the referenced periods.

Non GAAP gross margin for (1) the fourth quarter of 2022 excluded: (a) equity-based compensation expenses and (b) amortization of acquired intangibles and (2) the fourth quarter of 2021 excluded (i) additional NRE revenues associated with the purchase price allocation ("PPA") related to the acquisition of the Intrinsix business, (ii) equity-based compensation expenses and (iii) amortization of acquired intangibles.

Non-GAAP operating income for (1) the fourth quarter of 2022 excluded (a) equity-based compensation expenses, (b) the impact of the amortization of acquired intangibles associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (c) costs associated with the Intrinsix acquisition, (d) the impairment cost associated with the closing of an office and (e) retirement expenses of executives and (2) the fourth quarter of 2021 excluded (i) equity-based compensation expenses, (ii) the impact of the amortization of acquired intangibles associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (iii) costs associated with the Intrinsix acquisition and (iv) licensing, NRE and related revenues associated with the PPA related to the acquisition of the Intrinsix business.

Non-GAAP net income and diluted earnings per share for (1) the fourth quarter of 2022 excluded (a) equity-based compensation expenses, (b) the impact of the amortization of acquired intangibles associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (c) costs associated with the Intrinsix acquisition, (d) income associated with the reevaluation of an investment in another company, (e) the impairment cost associated with the closing of an office and (f) retirement expenses of executives, and (2) the fourth quarter of 2021 excluded (i) equity-based compensation expenses, net of taxes, (ii) the impact of the amortization of acquired intangibles, net of taxes, associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, and (iii) costs associated with the Intrinsix acquisition, (iv) income, net of taxes, associated with the reevaluation of an investment in another company, (v) income tax benefits associated with the PPA related to the acquisition of the Intrinsix business, and (vi) licensing, NRE and related revenues associated with the PPA related to the acquisition of the Intrinsix business.

Non-GAAP gross margin for (1) the full year of 2022 excluded (a) equity-based compensation expenses and (b) amortization and impairment of acquired intangibles and (2) the full year of 2021 excluded (i) additional NRE revenues associated with the PPA related to the acquisition of the Intrinsix business, (ii) equity-based compensation expenses and (iii) amortization of acquired intangibles.

Non-GAAP operating income for (1) the full year 2022 excluded (a) equity-based compensation expenses, (b) the impact of the amortization of acquired intangibles associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (c) costs associated with the Intrinsix acquisition, (d) impairment charges relating to discontinued Immervision technology and non-performing assets of certain NB-IoT technology, (e) the impairment cost associated with the closing of an office and (f) retirement expenses for executives and (2) the full year 2021 excluded (i) equity-based compensation expenses and (ii) the impact of the amortization of acquired intangible assets associated with the acquisition of the Hillcrest Labs business and investments in NB-IoT and Immervision technologies, (iii) costs associated with the Intrinsix acquisition and (iv) licensing, NRE and related revenues associated with the PPA related to the acquisition of the Intrinsix business.

Non-GAAP net income and diluted earnings per share for (1) the full year 2022 excluded (a) equity-based compensation expenses, (b) the impact of the amortization of acquired intangibles associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (c) costs associated with the Intrinsix acquisition, (d) income, net of taxes, associated with the reevaluation of an investment in another company, (e) impairment charges relating to discontinued Immervision technology and non-performing assets of certain NB-IoT technology, (f) write-off of a deferred tax asset which was recorded in the income tax expense line item, (g) the impairment cost associated with the closing of an office, (h) retirement expenses of executives and (i) the adjustment as a result of implementing the US tax reform rule 174 and (2) for the full year 2021 excluded (i) equity-based compensation expenses, net of taxes, and (ii) the impact of the amortization of acquired intangibles, net of taxes, associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (iii) costs associated with the Intrinsix acquisition, (iv) income, net of taxes, associated with the reevaluation of an investment in another company, (v) income tax benefits associated with the PPA related to the acquisition of the Intrinsix business, and (vi) licensing, NRE and related revenues associated with the PPA related to the acquisition of the Intrinsix business.

The Company believes that the reconciliation of financial measures in the press release and script is useful to investors in analyzing the results for the quarters ended December 31, 2022 and 2021 because the exclusion of the applicable expenses may provide a more meaningful analysis of the Company's core operating results and comparison of quarterly results. Further, the Company believes it is useful for investors to understand how the expenses associated with the application of FASB ASC No. 718 are reflected on its statements of income. The reconciliation of financial measures should be reviewed in addition to and in conjunction with results presented in accordance with GAAP, and are intended to provide additional insight into the Company's operations that, when viewed with its GAAP results and the accompanying reconciliation, offer a more complete understanding of factors and trends affecting the Company's business. The reconciliation of financial measures should not be viewed as a substitute for the Company's reported GAAP results.

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**ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.**

(d) Exhibits.

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| | |
|:---|:---|
| 99.1 | [Press release of CEVA, Inc., dated <u>February 15, 2023.</u>](ex_475333.htm) |
| 99.2 | [Script of the conference call of CEVA, Inc., dated <u>February 15, 2023.</u>](ex_475334.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | CEVA, INC. | CEVA, INC. |
| Date: February 15, 2023  | By: | <u>/s/Yaniv Arieli</u> |
|  |  | Yaniv Arieli |
|  |  | Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

![logo.jpg](logo.jpg)

**CEVA, Inc. Announces Fourth Quarter and Full Year 2022 Financial Results**

&nbsp;&nbsp;&nbsp;&nbsp;● *Full year* – *Record revenue of $134.6 million, up 10% year-over-year, driven by record licensing, NRE and related revenue of $89.3 million, up 23% year-over-year* 

&nbsp;&nbsp;&nbsp;&nbsp;● *Full year* – *Record 1.7 billion CEVA-powered devices sold around the world* 

&nbsp;&nbsp;&nbsp;&nbsp;● *Q4* – *Total revenue of $33.4 million, down 2% year-over-year* 

&nbsp;&nbsp;&nbsp;&nbsp;● *Q4* – *Licensing, NRE and related revenue up 5% year-over-year to $22.5 million,* 

&nbsp;&nbsp;&nbsp;&nbsp;● *Q4* – *Strategic deals signed with global automotive semiconductor for Ultra-Wideband digital car key platform and with world leading wearable audio OEM for 3D spatial audio headsets* 

**ROCKVILLE, MD., February 15, 2023**– CEVA, Inc. (NASDAQ: CEVA), the leading licensor of wireless connectivity and smart sensing technologies and co-creation solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2022.

Total revenue for the fourth quarter of 2022 was $33.4 million, a 2% decrease compared to $34.1 million reported for the fourth quarter of 2021. Fourth quarter 2022 licensing, non-recurring engineering (NRE) and related revenue was $22.5 million, an increase of 5% when compared to $21.3 million reported for the same quarter a year ago. Royalty revenue for the fourth quarter of 2022 was $10.9 million, a decrease of 14% when compared to $12.7 million reported for the fourth quarter of 2021.

Amir Panush, Chief Executive Officer of CEVA, stated: "We are pleased to finish a strong year with a solid fourth quarter in a challenging environment. Our licensing business underpinned the quarter, highlighted by multiple deals for each of our 5G, Wi-Fi 6 and Bluetooth technologies. We completed multiple important deals during the quarter, including a strategic agreement for our Ultra-Wideband IP with a global leader in automotive semiconductors and a licensing deal for our 3D spatial audio related software with one of the world's largest wearable audio brands. Royalty revenues reflect the broad consumer weakness and elevated inventory levels that affected demand for handsets and across IoT markets."

Mr. Panush continued: "After joining the company at the start of the year, I am encouraged by the strength of our business and its excellent long term growth prospects. Our IP portfolio is unique, addressing the pain points of the many companies that lack the wireless connectivity and smart sensing expertise required to address major growth markets in the semiconductor and consumer electronics industries. I am excited to unlock the untapped potential within CEVA to enhance value for all stakeholders and take us to the next level."

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During the quarter, twenty-two IP license and NRE agreements were concluded, targeting a wide variety of end markets and applications, including 5G for smartphones and cellular IoT, smart audio for consumer devices, AI for in-memory computing, Ultra-Wideband for digital car keys, and Wi-Fi 6 and Bluetooth connectivity for a range of consumer and IoT markets. Six agreements were with first-time customers. Geographically, nine of the deals signed were in China, six in Europe, four in the U.S. and three in APAC.

GAAP gross margin for the fourth quarter of 2022 was 82%, as compared to GAAP gross margin of 83% for the same period in 2021. GAAP operating loss for the fourth quarter was $1.6 million, as compared to a GAAP operating income of $1.6 million for the same period in 2021. GAAP net income for the fourth quarter of 2022 was $1.9 million, as compared to a GAAP net income of $3.9 million reported for the same period in 2021. GAAP diluted earnings per share for the fourth quarter of 2022 was $0.08, as compared to a GAAP diluted earnings per share of $0.17 for the same period in 2021.

Non-GAAP gross margin for the fourth quarter of 2022 was 85%, as compared to non-GAAP gross margin of 87% for the same period in 2021. Non-GAAP operating income for the fourth quarter of 2022 was $5.3 million, as compared to $7.2 million reported for the fourth quarter of 2021. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2022 were $5.6 million and $0.23, respectively, compared with $5.3 million and $0.22 reported for the fourth quarter of 2021.<sup>1</sup>

**Full Year 2022 Review**

Chief Financial Officer, Yaniv Arieli explained, "Our record revenue in 2022 reflects the growing strength and demand for our diversified IP portfolio. Our annual licensing, NRE and related record revenues were up 23% year-over-year, an incredible achievement against the uncertain macroeconomic backdrop. In royalties, we are encouraged by our base station and IoT royalty category, which generated record revenue of $29.2 million from a record 1.4 billion CEVA-powered devices. The continued ramp down of 4G smartphone royalties attributed to a large Tier 1 OEM weighed on handset baseband royalties. Combined, we reached a record 1.7 billion shipments of CEVA-powered devices around the world. At the end of the year, our balance sheet remains very strong with no debt, which will allow us to pursue both organic and inorganic investments to drive long-term profitable growth."

Total revenue for 2022 was $134.6 million, an increase of 10%, when compared to $122.7 million reported for 2021. Licensing, NRE and related revenue for 2022 was a record $89.3 million, an increase of 23% when compared to $72.8 million reported for 2021. Royalty revenue for 2022 was $45.4 million, representing a decrease of 9%, as compared to $49.9 million reported for 2021.

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<sup>1</sup> *Non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP earnings (loss) per share are described in relation to their most directly comparable GAAP measures under "Use of Non-GAAP Financial Measures" below.*

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GAAP gross margin for 2022 was 80%, as compared to GAAP gross margin of 86% for the same period in 2021. GAAP operating loss for 2022 was $5.4 million, as compared to a GAAP operating income of $3.5 million reported for 2021. GAAP net loss and diluted loss per share for 2022 were $23.2 million and $1.00, respectively, compared to GAAP net income and diluted earnings per share of $0.4 million and $0.02, respectively, reported for 2021.

Non-GAAP gross margin for 2022 was 84%, as compared to non-GAAP gross margin of 88% for the same period in 2021. Non-GAAP operating income for 2022 was $22.3, compared with $22.7 million reported for 2021. Non-GAAP net income and diluted earnings per share for 2022 were $18.8 million and $0.78, respectively, representing an increase of 23% and 20%, respectively, over $15.3 million and $0.65 reported for 2021.

**Non-GAAP Financial Measures**

This earnings release discusses non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP earnings (loss) per share, which are not financial measures as defined by GAAP. These financial measures are presented as supplemental measures of operating performance because the exclusion of certain expenses discussed below may provide a more meaningful analysis of our core operating results and comparison of quarterly results. Further, we believe it is useful for investors to understand how the expenses associated with the application of FASB ASC No. 718 are reflected on our statements of income. The reconciliation of financial measures should be reviewed in addition to and in conjunction with results presented in accordance with GAAP, and are intended to provide additional insight into our operations that, when viewed with its GAAP results and the accompanying reconciliation, offer a more complete understanding of factors and trends affecting our business. Other companies may define or calculate these measures differently, limiting the usefulness as a comparative measure. Because of these limitations, these non-GAAP financial measures should not be considered in isolation or as substitute for or superior to performance measures calculated in accordance with GAAP and should be read in conjunction with the financial statement tables.

Non-GAAP gross margin for the fourth quarter of 2022 excluded: (a) equity-based compensation expenses of $0.4 million and, (b) amortization of acquired intangibles of $0.4 million. Non-GAAP gross margin for the fourth quarter of 2021 excluded: (a) additional NRE revenues associated with the purchase price allocation (PPA) related to Intrinsix acquisition of $0.2 million, (b) equity-based compensation expenses of $0.3 million and (c) amortization of acquired intangibles of $1.0 million.

Non-GAAP operating income for the fourth quarter of 2022 excluded: (a) equity-based compensation expenses of $4.1 million, (b) the impact of the amortization of acquired intangibles of $0.9 million associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (c) $0.3 million of costs associated with the Intrinsix acquisition, (d) impairment cost of $0.3 million associated with the closing of an office and (e) $1.3 million associated with retirement expenses of executives. Non-GAAP operating income for the fourth quarter of 2021 excluded: (a) equity-based compensation expenses of $3.5 million, (b) the impact of the amortization of acquired intangibles of $1.6 million associated with the acquisition of the Intrinsix and Hillcrest Labs business and investments in NB-IoT and Immervision technologies, (c) $0.3 million of costs associated with the Intrinsix acquisition and (d) an addition of $0.2 million in licensing, NRE and related revenues associated with purchase price allocation for the Intrinsix acquisition.

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Non-GAAP net income and diluted earnings per share for the fourth quarter of 2022 excluded: (a) equity-based compensation expenses of $4.1 million, (b) the impact of the amortization of acquired intangibles of $0.9 million associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT technologies, (c) $0.3 million of costs associated with the Intrinsix acquisition, (d) $0.2 million associated with the reevaluation of an investment in another company, (e) impairment cost of $0.3 million associated with close of an office, (f) $1.3 million associated with retirement expenses of executives and (g) $3.5 million adjustment as a result of implementing the US tax reform rule 174. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2021 excluded: (a) equity-based compensation expenses, net of taxes, of $2.7 million, (b) the impact of the amortization of acquired intangibles, net of taxes, of $1.4 million associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (c) $0.3 million of costs associated with the Intrinsix acquisition, (d) $1.5 million of income, net of taxes associated with the reevaluation of an investment in another company, (e) $1.7 million of income tax benefit associated with the purchase price allocation related to the Intrinsix acquisition and (f) an addition of $0.2 million in licensing, NRE and related revenues associated with purchase price allocation for the Intrinsix acquisition.

Non-GAAP gross margin for 2022 excluded: (a) equity-based compensation expenses of $1.5 million and, (b) amortization and impairment of acquired intangibles of $3.9 million. Non-GAAP gross margin for 2021 excluded: (a) additional NRE revenues associated with the purchase price allocation (PPA) related to Intrinsix acquisition of $0.2 million, (b) equity-based compensation expenses of $0.8 million and (c) amortization of acquired intangibles of $1.6 million.

Non-GAAP operating income for 2022 excluded: (a) equity-based compensation expenses of $14.5 million, (b) the impact of the amortization of acquired intangibles of $4.7 million associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (c) $1.3 million of costs associated with the Intrinsix acquisition, (d) impairment charges of $5.5 million relating to discontinued Immervision technology and non-performing assets of certain NB-IoT technology, $3.5 million of which was recorded in operating expenses and $2.0 million of which was recorded in cost of revenues, (e) impairment cost of 0.3 million associated with close of an office and (f) an addition of $1.3 million associated with retirement expenses of executives. Non-GAAP operating income for 2021 excluded: (a) equity-based compensation expenses of $13.1 million, (b) the impact of the amortization of acquired intangibles of $4.3 million associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (c) $1.7 million of costs associated with the Intrinsix acquisition and (d) an addition of $0.2 million in licensing, NRE and related revenues associated with purchase price allocation for the Intrinsix acquisition.

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Non-GAAP net income and diluted earnings per share for 2022 excluded: (a) equity-based compensation expenses of $14.5 million, (b) the impact of the amortization of acquired intangibles of $4.7 million associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (c) $1.3 million of costs associated with the Intrinsix acquisition, (d) $2.0 million, net of taxes, associated with the reevaluation of an investment in another company, (e) impairment charges of $5.5 million relating to discontinued Immervision technology and non-performing assets of certain NB-IoT technology, $3.5 million of which was recorded in operating expenses and $2.0 million of which was recorded in cost of revenues, (f) $15.8 million write-off of a deferred tax asset, including withholding tax assets that we will not be able to utilize as a tax credit, which was recorded in the income tax expense line item, (g) impairment cost of $0.3 million associated with the closure of an office, (h) $1.3 million associated with retirement expenses of executives and (i) $3.5 million adjustment as a result of implementing the US tax reform rule 174. Non-GAAP net income and diluted earnings per share for 2021 excluded: (a) equity-based compensation expenses, net of taxes, of $12.2 million, (b) the impact of the amortization of acquired intangibles, net of taxes, of $4.0 million associated with the acquisition of the Intrinsix and Hillcrest Labs businesses and investments in NB-IoT and Immervision technologies, (c) $1.7 million of costs associated with the Intrinsix acquisition, (d) $1.5 million of income, net of taxes, associated with the reevaluation of an investment in another company, (e) $1.7 million of income tax benefit associated with the purchase price allocation related to the Intrinsix acquisition and (f) an addition of $0.2 million in licensing, NRE and related revenues associated with purchase price allocation for the Intrinsix acquisition.

**CEVA Conference Call**

On February 15, 2023, CEVA management will conduct a conference call at 8:30 a.m. Eastern Time to discuss the operating performance for the quarter.

The conference call will be available via the following dial in numbers:

● U.S. Participants: Dial 1-844-435-0316 (Access Code: CEVA)

● International Participants: Dial +1-412-317-6365 (Access Code: CEVA)

The conference call will also be available live via webcast at the following link: https://app.webinar.net/oyrGOxy1jmL Please go to the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software.

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For those who cannot access the live broadcast, a replay will be available by dialing +1-877-344-7529 or +1-412-317-0088 (access code: 8919126) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on February 22, 2023. The replay will also be available at CEVA's web site www.ceva-dsp.com.

**Forward Looking Statements**

This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions. Forward-looking statements include statements regarding CEVA's growth prospects and potential. The risks, uncertainties and assumptions that could cause differing CEVA results include: the scope and duration of the COVID-19 pandemic; the extent and length of the restrictions associated with the COVID-19 pandemic and the impact on customers, consumer demand and the global economy generally; the ability of CEVA DSP cores and other technologies to continue to be strong growth drivers for us; our success in penetrating new markets, including in the base station and IoT markets, and maintaining our market position in existing markets; our ability to diversify the company's royalty streams, the ability of products incorporating our technologies to achieve market acceptance, the maturation of the connectivity, IoT and 5G markets, the effect of intense industry competition and consolidation, global chip market trends, including supply chain issues as a result of COVID-19 and other factors, the possibility that markets for CEVA's technologies may not develop as expected or that products incorporating our technologies do not achieve market acceptance; our ability to timely and successfully develop and introduce new technologies; our ability to successfully integrate Intrinsix into our business; and general market conditions and other risks relating to our business, including, but not limited to, those that are described from time to time in our SEC filings. CEVA assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

###

**About CEVA, Inc.**

CEVA is the leading licensor of wireless connectivity and smart sensing technologies and co-creation solutions for a smarter, safer, connected world. We provide Digital Signal Processors, AI engines, wireless platforms, cryptography cores and complementary software for sensor fusion, image enhancement, computer vision, voice input and artificial intelligence. These technologies are offered in combination with our Intrinsix IP integration services, helping our customers address their most complex and time-critical integrated circuit design projects. Leveraging our technologies and chip design skills, many of the world's leading semiconductors, system companies and OEMs create power-efficient, intelligent, secure and connected devices for a range of end markets, including mobile, consumer, automotive, robotics, industrial, aerospace & defense and IoT.

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Our DSP-based solutions include platforms for 5G baseband processing in mobile, IoT and infrastructure, advanced imaging and computer vision for any camera-enabled device, audio/voice/speech and ultra-low-power always-on/sensing applications for multiple IoT markets. For sensor fusion, our Hillcrest Labs sensor processing technologies provide a broad range of sensor fusion software and inertial measurement unit ("IMU") solutions for markets including hearables, wearables, AR/VR, PC, robotics, remote controls and IoT. For wireless IoT, our platforms for Bluetooth (low energy and dual mode), Wi-Fi 4/5/6 (802.11n/ac/ax), Ultra-wideband (UWB), NB-IoT and GNSS are the most broadly licensed connectivity platforms in the industry.

CEVA is a sustainable and environmentally conscious company, adhering to our Code of Business Conduct and Ethics. As such, 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.

Visit us at www.ceva-dsp.com and follow us on Twitter, YouTube<u>,</u> Facebook, LinkedIn and Instagram.

**For More Information Contact:**

Yaniv Arieli CEVA, Inc. CFO +1.650.417.7941 <u>yaniv.arieli@ceva-dsp.com</u> Richard Kingston CEVA, Inc. VP Market Intelligence, Investor & Public Relations +1.650.417.7976 <u>richard.kingston@ceva-dsp.com</u> 

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**CEVA, INC. AND ITS SUBSIDIARIES**

CONSOLIDATED STATEMENTS OF INCOME (LOSS) – U.S. GAAP

*U.S. dollars in thousands, except per share data*

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Year ended** | **Year ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** |
| Revenues: |  |  |  |  |
| Licensing, NRE and related revenues | $22475 | $21327 | $89259 | $72827 |
| Royalties | 10927 | 12730 | 45389 | 49879 |
| Total revenues | 33402 | 34057 | 134648 | 122706 |
| Cost of revenues | 5875 | 5923 | 27052 | 16827 |
| Gross profit | 27527 | 28134 | 107596 | 105879 |
| Operating expenses: |  |  |  |  |
| Research and development, net | 20284 | 18694 | 78501 | 72504 |
| Sales and marketing | 3846 | 3504 | 12902 | 12861 |
| General and administrative | 4493 | 3762 | 15322 | 14296 |
| Amortization of intangible assets | 474 | 618 | 2724 | 2710 |
| Impairment of assets |  |  | 3556 |  |
| Total operating expenses | 29097 | 26578 | 113005 | 102371 |
| Operating income (loss) | (1570) | 1556 | (5409) | 3508 |
| Financial income (loss), net | 2009 | (148) | 2812 | 197 |
| Remeasurement of marketable equity securities | (240) | 1983 | (2511) | 1983 |
| Income (loss) before taxes on income | 199 | 3391 | (5108) | 5688 |
| Income tax expense (benefit) | (1741) | (487) | 18075 | 5292 |
| Net Income (loss) | $1940 | $3878 | $(23183) | $396 |
| Basic net income (loss) per share | $0.08 | $0.17 | $(1.00) | $0.02 |
| Diluted net income (loss) per share | $0.08 | $0.17 | $(1.00) | $0.02 |
| Weighted-average shares used to compute net income (loss) per share (in thousands): |  |  |  |  |
| Basic | 23197 | 22977 | 23172 | 22819 |
| Diluted | 23406 | 23359 | 23172 | 23251 |

---

------

**Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures**

*U.S. Dollars in thousands, except per share amounts*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Year ended** | **Year ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** |
| **GAAP net income (loss)** | $1940 | $3878 | $(23183) | $396 |
| Equity-based compensation expense included in cost of revenues | 385 | 309 | 1461 | 818 |
| Equity-based compensation expense included in research and development expenses | 2359 | 1852 | 8540 | 7287 |
| Equity-based compensation expense included in sales and marketing expenses | 485 | 441 | 1550 | 1626 |
| Equity-based compensation expense included in general and administrative expenses | 893 | 946 | 2954 | 3324 |
| Income tax benefit related to equity-based compensation expenses |  | (842) |  | (842) |
| Amortization, Impairment and Write-off of intangible assets, net of taxes, related to acquisition of Intrinsix and Hillcrest Labs business, investments in NB-IoT and Immervision technologies | 869 | 1388 | 10229 | 3959 |
| Impairment cost associated with close of an office | 318 |  | 318 |  |
| Costs associated with the Intrinsix acquisition | 326 | 342 | 1303 | 1730 |
| Income (loss) associated with the remeasurement of marketable equity securities, net of taxes. | 240 | (1528) | 1989 | (1528) |
| Income tax expense as a result of a write off of a deferred tax asset and withholding tax that can't be utilized |  |  | 15845 |  |
| Retirement expenses of executives | 1271 |  | 1271 |  |
| Adjustment related to implementing of US tax reform rule 174 | (3484) |  | (3484) |  |
| Income tax benefit and additional NRE revenues associated with the purchase price allocation (PPA) related to Intrinsix acquisition |  | (1481) | 42 | (1481) |
| **Non-GAAP net income** | $5602 | $5305 | $18835 | $15289 |
| GAAP weighted-average number of Common Stock used in computation of diluted net loss and earning per share (in thousands) | 23406 | 23359 | 23172 | 23251 |
| Weighted-average number of shares related to outstanding stock-based awards (in thousands) | 684 | 375 | 839 | 314 |
| Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands) | 24090 | 23734 | 24011 | 23565 |
| **GAAP diluted income (loss) per share** | $0.08 | $0.17 | $(1.00) | $0.02 |
| Equity-based compensation expense, net of taxes | $0.18 | $0.10 | $0.62 | $0.51 |
| Amortization, Impairment and Write-off of intangible assets, net of taxes, related to acquisition of Intrinsix and Hillcrest Labs business, investments in NB-IoT and Immervision technologies | $0.04 | $0.06 | $0.43 | $0.17 |
| Impairment cost associated with close of an office | $0.01 | $— | $0.01 | $— |
| Costs associated with the Intrinsix acquisition | $0.01 | $0.01 | $0.06 | $0.07 |
| Income (loss) associated with the remeasurement of marketable equity securities, net of taxes. | $0.01 | $(0.06) | $0.09 | $(0.06) |
| Income tax expense as a result of a write off of a deferred tax asset and withholding tax that can't be utilized | $— | $— | $0.67 | $— |
| Retirement expenses of executives | $0.05 | $— | $0.05 | $— |
| Adjustment related to implementing of US tax reform rule 174 | $(0.15) |  | $(0.15) |  |
| Income tax benefit and additional NRE revenues associated with the purchase price allocation (PPA) related to Intrinsix acquisition | $— | $(0.06) | $— | $(0.06) |
| **Non-GAAP diluted earnings per share** | $0.23 | $0.22 | $0.78 | $0.65 |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Year ended** | **Year ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** |
| **GAAP Operating Income (loss)** | $(1570) | $1556 | $(5409) | $3508 |
| Equity-based compensation expense included in cost of revenues | 385 | 309 | 1461 | 818 |
| Equity-based compensation expense included in research and development expenses | 2359 | 1852 | 8540 | 7287 |
| Equity-based compensation expense included in sales and marketing expenses | 485 | 441 | 1550 | 1626 |
| Equity-based compensation expense included in general and administrative expenses | 893 | 946 | 2954 | 3324 |
| Amortization, Impairment and Write-off of intangible assets related to acquisition of Intrinsix and Hillcrest Labs business, investments in NB-IoT and Immervision technologies | 869 | 1614 | 10229 | 4260 |
| Impairment cost associated with close of an office | 318 |  | 318 |  |
| Costs associated with the Intrinsix acquisition | 326 | 342 | 1303 | 1730 |
| Retirement expenses of executives | 1271 |  | 1271 |  |
| Additional NRE revenues associated with the purchase price allocation (PPA) related to Intrinsix acquisition |  | 180 | 42 | 180 |
| **Total non-GAAP Operating Income**  | $5336 | $7240 | $22259 | $22733 |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Year ended** | **Year ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** |
| **GAAP Gross Profit** | $27527 | $28134 | $107596 | $105879 |
| **GAAP Gross Margin** | 82% | 83% | 80% | 86% |
| Additional NRE revenues associated with the purchase price allocation (PPA) related to Intrinsix acquisition |  | 180 | 42 | 180 |
| Equity-based compensation expense included in cost of revenues | 385 | 309 | 1461 | 818 |
| Amortization and Impairment of intangible assets related to acquisition of Intrinsix and investments in NB-IoT and Immervision technologies | 395 | 996 | 3949 | 1550 |
| **Total Non-GAAP Gross profit** | 28307 | 29619 | 113048 | 108427 |
| **Non-GAAP Gross Margin** | 85% | 87% | 84% | 88% |

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**CEVA, INC. AND ITS SUBSIDIARIES**

CONDENSED CONSOLIDATED BALANCE SHEETS

*(U.S. Dollars in thousands)*

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021(\*)** |
|  | **Unaudited** | **Unaudited** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| Cash and cash equivalents | $21285 | $33153 |
| Marketable securities and short-term bank deposits | 118194 | 121708 |
| Trade receivables, net | 12320 | 14644 |
| Unbilled receivables | 18953 | 12805 |
| Prepaid expenses and other current assets | 6896 | 6670 |
| Total current assets | 177648 | 188980 |
| Long-term assets: |  |  |
| Bank deposits | 8205 |  |
| Severance pay fund | 8475 | 10175 |
| Deferred tax assets, net | 8576 | 15850 |
| Property and equipment, net | 7099 | 6765 |
| Operating lease right-of-use assets | 10283 | 8827 |
| Investment in marketable equity securities | 408 | 2919 |
| Goodwill | 74777 | 74777 |
| Intangible assets, net | 6680 | 14607 |
| Other long-term assets | 6291 | 5759 |
| Total assets | $308442 | $328659 |
| **LIABILITIES AND STOCKHOLDERS**' **EQUITY** |  |  |
| Current liabilities: |  |  |
| Trade payables | $1995 | $1464 |
| Deferred revenues | 3168 | 8661 |
| Accrued expenses and other payables | 22586 | 21621 |
| Taxes payable | 2547 | 420 |
| Operating lease liabilities | 2982 | 3274 |
| Total current liabilities | 33278 | 35440 |
| Long-term liabilities: |  |  |
| Accrued severance pay | 9064 | 10551 |
| Operating lease liabilities | 6703 | 5130 |
| Other accrued liabilities | 526 | 806 |
| Total liabilities | 49571 | 51927 |
| Stockholders' equity: |  |  |
| Common stock | 23 | 23 |
| Additional paid in-capital | 242841 | 235386 |
| Treasury stock | (9904) | (13790) |
| Accumulated other comprehensive income (loss) | (6249) | (372) |
| Retained earnings | 32160 | 55485 |
| Total stockholders' equity | 258871 | 276732 |
| Total liabilities and stockholders' equity | $308442 | $328659 |

---

(\*) Derived from audited financial statements

## Exhibit 99.2

**Exhibit 99.2**

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| CEVA, Inc. Q4 & FY 2022 Financial Results Conference Call - Prepared Remarks:: Feb 15, 2023 | ![smlogo.jpg](smlogo.jpg) |

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**CEVA, INC.**

**Fourth Quarter and Full Year 2022 Financial Results Conference Call**

**Prepared Remarks of Amir Panush, Chief Executive Officer and** <br> **Yaniv Arieli, Chief Financial Officer** 

**February 15, 2023**

**8:30 A.M. Eastern**

**<u>Richard</u>**

Good morning everyone and welcome to CEVA's fourth quarter and full year 2022 earnings conference call. Joining me today are Amir Panush, Chief Executive Officer, and Yaniv Arieli, Chief Financial Officer of CEVA. This is Amir's first earnings conference call with CEVA and I wish him all the best in his role as CEO.

**Forward Looking Statements and Non-GAAP Financial Measures**

I would like to remind you that today's discussion contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions. Forward-looking statements include statements regarding market trends and dynamics, including projected declines in the global semiconductor industry in 2023 and the long-term demand opportunity for our technology; our market position, strategy and growth drivers, including with respect to licensing and royalties, Wi-Fi, 5G and software; demand for and benefits of our technologies; expectations and financial guidance regarding future performance, including our belief in our long-term royalty growth prospects; guidance for 2023; and our plans for hosting an investor event in the second half of the year. For information on the factors that could cause a difference in our results, please refer to our filings with the Securities and Exchange Commission. These include: the scope and duration of the pandemic, including continued restrictions in China; the extent and length of the restrictions associated with the pandemic and the impact on customers, consumer demand and the global economy generally; the ability of CEVA's IPs for smarter, connected devices to continue to be strong growth drivers for us; our success in penetrating new markets and maintaining our market position in existing markets; the ability of new products incorporating our technologies to achieve market acceptance; the speed and extent of the expansion of the 5G and IoT markets; our ability to execute more base station & IoT license agreements; the effect of intense industry competition and consolidation; global chip market trends; and our ability to successfully integrate Intrinsix into our business. CEVA assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

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| CEVA, Inc. Q4 & FY 2022 Financial Results Conference Call - Prepared Remarks:: Feb 15, 2023 | ![smlogo.jpg](smlogo.jpg) |

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In addition, we will be discussing certain non-GAAP financial measures which we believe provide a more meaningful analysis of the our core operating results and comparison of quarterly results. A reconciliation of non-GAAP financial measures is included in the earnings release we issued this morning and in the SEC filings section of our investors relations website at investors.ceva-dsp.com.

With that said, I'd like to turn the call over to Amir who will review our business performance for the quarter and provide some insight into our ongoing business. Amir;

**<u>Amir</u>**

Thank you, Richard. Welcome everyone and thank you for joining us today. I want to start this call by sharing how excited I am to be part of CEVA, and to lead this incredibly talented organization through its next stage of growth. Although I have only been with the company for a little over 6 weeks now, I have been highly impressed with three important factors:

First, the people. This team is passionate about their work and the success of the company, fostering a great corporate culture of collaboration and drive.

Second, a world-class portfolio of innovative, wireless connectivity and smart sensing IPs.

There is no greater indicator of the success of CEVA to date than to realize that more than 50 CEVA-powered devices were sold EVERY SECOND in 2022 and reaching a record 1.7 billion devices over the course of the year.

Third, I believe the market opportunity for CEVA's technology has never been greater. The markets that we serve, including Wireless IoT, 5G and Edge AI are some of the fastest growing in the semiconductor industry.

We are conducting a review of each of our product lines to ensure that we are investing our resources in the areas with the highest potential for growth. Once I have this in place, I look forward to sharing the details of it with you at an investor event, which is planned to take place in the second half of the year.

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| CEVA, Inc. Q4 & FY 2022 Financial Results Conference Call - Prepared Remarks:: Feb 15, 2023 | ![smlogo.jpg](smlogo.jpg) |

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Turning to our performance for the fourth quarter. We reported another solid quarter despite the weak economic backdrop, with continued strong momentum in our licensing business and resilience in our royalties. We signed 22 licensing agreements in the quarter, with notable strength in 5G, where we signed 3 agreements, and Wi-Fi 6 with four agreements. We also signed a strategic deal for our Ultra-wideband IP with a global leader in automotive semiconductors for their digital car key initiative. Other customer agreements signed in the quarter target AI for in-memory computing, smart audio, connectivity for smartphones, TWS earbuds, wearables, sensor fusion software for set-top-box remotes and more. Royalty revenue was down compared to last year reflecting the broad macro/consumer weakness and elevated inventory levels.

For the full year, we delivered record total revenue of $134.6 million, an increase of 10%, driven by strong licensing demand throughout the year across our extensive IP portfolio. Revenue from licensing, NRE and related for 2022 reached $89.3 million, an increase of 23% year-over-year, the fourth sequential year of growth. We signed 76 new licensing and NRE agreements, up from 73 last year. Licensing is a precursor for royalty revenue and this record licensing year further reinforces our belief that the royalty revenue opportunity for CEVA continues to expand. I will elaborate shortly on what I believe the drivers for CEVA's business will be in 2023 and the royalty opportunity ahead.

In terms of full year royalties, our annual royalty revenues were down 9% year-over-year to $45.4 million, with the largest decline was in our handset baseband royalties, which were down 24% year-over-year, primarily due the continued ramp down by a customer of ours who was replaced by a competitor for 5G chips at a large U.S.-based handset OEM. To a lesser extent, smartphone sales in emerging markets, a stronghold for our China-based customer, were impacted by the global slowdown. Moving to our base station and IoT category, despite the weak global consumer demand in the second half of the year, we still managed to achieve record royalty revenues generated by a record 1.4 billion devices. Bluetooth royalties grew 11% year-over-year, generated from a record 1 billion unit shipments. Base station RAN royalties also grew, up 14% year-over-year, while lower shipments and royalties from PCs, robot vacuum cleaners, cameras and other consumer related technologies, affected many of our customers. Overall, I'm encouraged by the strength and potential of our royalty business and believe that our diversified customer base and end markets ensure that CEVA is on a positive trajectory with promising long-term royalty growth prospects.

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| CEVA, Inc. Q4 & FY 2022 Financial Results Conference Call - Prepared Remarks:: Feb 15, 2023 | ![smlogo.jpg](smlogo.jpg) |

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In terms of future growth drivers, I would like to highlight three important areas where CEVA has an excellent opportunity in licensing and royalties, Wi-Fi, 5G and software.

● The first is Wi-Fi.

● Wi-Fi is one of the fastest growing connectivity standards and the most in-demand technology for IoT. The Wi-Fi 6 standard was architected with low power IoT in mind, enabling even battery-powered devices to remain working for up to years at a time. This coupled with higher throughput at lower power and increased robustness has brought unprecedented demand for Wi-Fi for many end markets and use cases. Accordingly, the overall Wi-Fi for IoT TAM is expected to exceed 4.4 billion units annually by 2024, according to ABI Research and continue to grow at a CAGR of 9% through 2027.

CEVA is the industry's dominant Wi-Fi 6 IP provider, with more than 30 licensees to date. Wi-Fi expertise today is a scarcity, with few companies possessing the majority of the knowhow. We are one of the few with this expertise and through our licensing model, we are successfully lowering the entry barriers for companies to develop Wi-Fi 6 chips. Moreover, the royalty opportunity for Wi-Fi 6 is still ahead of us - many of our customers are expected to come to market in 2023 and 2024 with their Wi-Fi 6 chipsets. And in licensing, we have already started to sign up Wi-Fi 7 lead customers, for what will soon become another Wi-Fi upgrade cycle.

● The second area is 5G.

● While 5G has been deployed in developed markets in the last few years, the main use case up until now has been in smartphones. However, the scalable throughput, low power and low latency of 5G means the technology is applicable in a much broader set of end markets and use cases. There is a lack of expertise in cellular, and at CEVA we have this in-house, built over decades. We already have licensed our 5G DSPs and platforms to many companies for 5G macro base stations, Open RAN, Active Antennas, Fixed Wireless Access, 5G-V2X and 5G RedCap for cellular IoT. The most recent Ericsson Mobility Report highlights Fixed Wireless Access and cellular IoT as two areas with tremendous growth opportunities in the coming years.

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| CEVA, Inc. Q4 & FY 2022 Financial Results Conference Call - Prepared Remarks:: Feb 15, 2023 | ![smlogo.jpg](smlogo.jpg) |

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In addition, much of the world's 5G network coverage has yet to be built out, and soon we will see the 5G-Advanced rollout beginning in mature 5G markets. In the next few years I believe CEVA has the opportunity to license our 5G IP even more broadly, being capable of helping any company who wishes to develop a product to capitalize on the market opportunity brought about by 5G.

● The third is software.

● Over the past number of years, CEVA has increasingly been investing in the development of software IP, in order to move up the value chain and to further differentiate our solutions. Our software portfolio today includes some highly-sought after technologies including spatial audio, AI-based environmental noise cancelation, voice recognition, and IMU-based activity detection. Our strategy is to license these software IPs directly to OEMs and ODMs for their end products, rather than to the semiconductor chipmakers. This is where we can unlock the true value of the software and generate incremental royalties for CEVA with higher ASPs. We already have strong presence in the smart TV, PC and robot vacuum cleaner markets with our sensor fusion software and will continue to invest and look for strategic market opportunities to drive strong growth in our software business.

So, in summary, CEVA delivered a good year against a tough macroeconomic backdrop. We reached record revenues, driven by strong licensing demand for our products. We signed a record number of deals in the year and shipped in a record number of devices. My thanks to my predecessor Gideon and the entire CEVA team worldwide for their great contribution in 2022. I would also like to thank our partners, suppliers and to our shareholders for their confidence and support.

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| CEVA, Inc. Q4 & FY 2022 Financial Results Conference Call - Prepared Remarks:: Feb 15, 2023 | ![smlogo.jpg](smlogo.jpg) |

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As I look ahead into 2023, I see many opportunities ahead for the company. I have full confidence in, and believe, that we have the people, the technology and the processes in place to drive CEVA forward and be even more successful. Our comprehensive IP portfolio is in high demand and we will continue to develop outstanding products that our customers rely upon us for. Once myself and the team solidify and define what our future strategy will be, I look forward to taking you through this later in the year.

As for our expectations for 2023, according to the Semiconductor Industry Association, the global semiconductor industry is projected to decline by 4% in 2023. Also, many public semiconductor companies that reported earnings in the last two weeks have taken a muted view on 2023, particularly with regards to the first half of the year. We also see these trends, but I want to reinforce my belief that CEVA's long term growth potential remains strong, as the continued digitalization of all things electric will continue to drive long term demand for semiconductors.

Finally, I want to sincerely wish you and your families a successful and joyful 2023. I look forward to meeting many of you at conferences and non-deal roadshows throughout the year.

Now I will turn the call over to Yaniv for the financials.

**<u>Yaniv</u>**

Thank you, Amir. Welcome on board. We're glad to have you here. I'll now start by reviewing the results of our operations for the fourth quarter of 2022.

Revenue for the fourth quarter were slightly down 2% to $33.4 million, as compared to $34.1 million for the same quarter last year. The revenue breakdown is as follows:<br>

Licensing, NRE and related revenue was $22.5 million, reflecting 67% of total revenues, up 5% from $21.3 million for the fourth quarter of 2021.<br>

Royalty revenue was $10.9 million, reflecting 33% of total revenues, down 14% from $12.7 million for the same quarter last year.<br>

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| CEVA, Inc. Q4 & FY 2022 Financial Results Conference Call - Prepared Remarks:: Feb 15, 2023 | ![smlogo.jpg](smlogo.jpg) |

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- Quarterly gross margins came in better than expected on GAAP and non-GAAP basis. Gross margin was 82% on a GAAP basis and 85% on a non-GAAP basis compared to our 80% and 82% guidance on GAAP and non-GAAP, respectively. Non-GAAP quarterly gross margin excluded approximately: (a) equity-based compensation expenses of $0.4 million and (b) amortization of acquired intangibles $0.4 million.

- Total GAAP operating expenses for the fourth quarter was above the high-end of our guidance at $29.1 million due to (a) $1.3 million associated with retirement expenses of executives, (b) impairment cost of $0.3 million associated with the closing of an office, (c) lower allocation of Intrinsix's NRE costs from R&D into cost of revenue and (d) higher compensation-related expenses.

- Total non-GAAP operating expenses for the fourth quarter, excluding equity-based compensation expenses, retirement expenses, amortization of intangibles, impairment, and holdback expenses, were $23.0 million, also above the higher-end of our guidance, due to the same reasons I just explained.

- GAAP operating loss for the fourth quarter was $1.6 million, down from a GAAP operating profit of $1.6 million in the same quarter a year ago. GAAP quarterly operating profit included: (a) equity-based compensation expenses of $4.1 million, (b) the impact of the amortization of acquired intangibles of $0.9 million associated with the acquisition of the Intrinsix and Hillcrest Labs businesses (c) $0.3 million of costs associated with the Intrinsix acquisition (d) impairment cost of $0.3 million associated with the closing of an office and (e) $1.3 million associated with retirement expenses of executives. Non-GAAP operating profit was $5.3 million, lower than fourth quarter 2021 of $7.2 million. For the year, GAAP operating loss for 2022 was $5.4 million, as compared to a GAAP operating income of $3.5 million reported for 2021. Non-GAAP operating profit was slightly down by 2% year over year to $22.3 million from $22.7 million, illustrating the resilience and leverage in this turmoil market environment.

- GAAP tax benefit of $1.7 million, mainly associated with adjustment as a result of implementing the U.S. tax reform rule 174, and non-GAAP tax expense was $1.7 million, representing 24% of pretax non-GAAP income.

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| CEVA, Inc. Q4 & FY 2022 Financial Results Conference Call - Prepared Remarks:: Feb 15, 2023 | ![smlogo.jpg](smlogo.jpg) |

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- U.S. GAAP net income for the quarter was $1.9 million and diluted EPS was 8 cents for the fourth quarter of 2022, as compared to net income of $3.9 million and diluted EPS of 17 cents for the fourth quarter of 2021.

**<u>With respect to other related data</u>**

Shipped units by CEVA licensees during the fourth quarter of 2022 were 375 million units, down 10% from the fourth quarter 2021 reported shipments.

Of the 375 million units reported, 67 million units, or 18%, were for handset baseband chips.<br>

Our base station and IoT product shipments were 308 million units, up 10% sequentially but down 8% year over year.<br>

Bluetooth shipments were 220 million units in the quarter, up 10% sequentially, and cellular IoT units were up 75% sequentially, to 25 million units. Wi-Fi shipments were up 5% sequentially, to 37 million units.<br>

**<u>As for the year</u>**

● Our total shipments increased 3.5% year-over-year to 1.7 billion units, an all-time record high.

● Annual shipments of handsets were down 14% year-over-year to 328 million devices. The decline is attributable to the socket loss of a customer at a key OEM who was replaced by Qualcomm for 5G modem chipsets, and overall weak smartphone demand globally in the second half of the year.

● Our base station and IoT product royalty revenue continued to grow and reached a new record level of $29.2 million, up from $28.6 million in 2021 and $22 million in 2020. In terms of units, base station and IoT product unit shipments were up 8% year-over-year to almost 1.4 billion units.

● Despite the macro events and economic turmoil, our non-GAAP net income for 2022 increased 23% to $18.8 million from $15.3 million reported for 2021.

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| CEVA, Inc. Q4 & FY 2022 Financial Results Conference Call - Prepared Remarks:: Feb 15, 2023 | ![smlogo.jpg](smlogo.jpg) |

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**<u>As for the balance sheet items</u>**

At the end of the year our cash and cash equivalent balances, marketable securities and bank deposits were approximately $148 million.<br>

In 2022 we repurchased approximately 219,000 shares for approximately $6.8 million. As of today, around 280,000 shares are available for repurchase.<br>

- Our DSO for the fourth quarter of 2022 continue to be lower than the norm at 34 days, slightly up from prior quarter's 31 days.

During the fourth quarter, we generated $3.4 million cash from operating activities, on-going depreciation and amortization was $1.7 million, and purchase of fixed assets was $0.6 million.<br>

- At the end of the fourth quarter, our headcount was 485 people, of whom 403 were engineers. This is down from a total of 491 people at the end of the third quarter of 2022.

**<u>Now, turning to our outlook</u>**

As Amir discussed earlier, the smartphone and consumer electronics markets continue to suffer from soft demand and elevated inventories. Also, the technology sector is undergoing project expense adjustments and re-alignments. We expect this softness to continue into the first half of 2023 and anticipate that both our licensing and royalty revenues will be lower sequentially while picking up the pace in the second half of the year. Due to this uncertain economic outlook and reduced visibility across the industry, we will refrain from giving annual revenue guidance for 2023 at this time. We will revisit this topic and do our best to provide more information when visibility improves.

In general, our licensing, NRE and related revenues business continues to generate good customer traction across our diversified portfolio. In royalties, we believe the strength of our base station & IoT customers will see this category continue to grow in 2023, primarily in the back half of the year. Handset baseband royalties are anticipated to decline further in 2023, offsetting the growth in our base station and IoT royalties.

On the expense side, we implemented cost control measures and may extend those measures as we monitor the market. However, we also plan to continue and invest in our growth drivers and will update further on this topic, in our upcoming investor event planned for later this year. Overall we expect GAAP COGS expense for 2023 to increase by $0.5 million - $1.5 million and non-GAAP COGS expense for 2023 to increase by $2.5 million - $3.5 million. GAAP OPEX for 2023 is expected to decrease by $3 million - $4 million and non-GAAP OPEX for 2023 is expected to increase by $1 million to $2 million.

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| CEVA, Inc. Q4 & FY 2022 Financial Results Conference Call - Prepared Remarks:: Feb 15, 2023 | ![smlogo.jpg](smlogo.jpg) |

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Our non-GAAP tax rate for 2023 is expected to be just over 30%, due to utilization limitation of withholding taxes in our Israeli subsidiary.

**<u>Specifically for the first quarter of 2023</u>**

- Based on what we are seeing across the industry, the soft macro and consumer weakness is expected continue in the first half of 2023. For the first quarter, our expectations are in line with industry trends. We continue to monitor our licensing pipeline and our royalty business closely, so we can respond to the changing market dynamics.

- Gross margin is expected to be similar to the fourth quarter of last year, approximately 82% on a GAAP basis, and 85% on a non-GAAP basis, excluding an aggregate of $0.4 million of equity-based compensation expenses and $0.4 million amortization of acquired intangibles.

- OPEX for the first quarter of 2023 is expected to be lower than the fourth quarter of 2022, and in the range of $26.8 million to $27.8 million. Including an expected $3.6 million of equity-based compensation expenses, $0.3 million to the Intrinsix holdback related expenses, and $0.3 million for amortization of acquired intangibles. Non-GAAP OPEX is expected to be slightly higher than the fourth quarter of last year and in the range of $22.7 million – $23.7 million.

- Net interest income is expected to be approximately $0.7 million.

- Taxes for the first quarter are expected to be approximately 30% on non-GAAP basis.

- Share count for the first quarter of 2023 is expected to be 24.3 million shares.

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| CEVA, Inc. Q4 & FY 2022 Financial Results Conference Call - Prepared Remarks:: Feb 15, 2023 | ![smlogo.jpg](smlogo.jpg) |

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**Operator: You can now open the Q&A session**

**Wrap Up: Richard**

Thank you 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 Report on Form 8-K and accessible through the investor section of our website at https://investors.ceva-dsp.com.

With regards to upcoming events, we will be participating in the following conferences:

- Mobile World Congress, February 27<sup>nd</sup> in Barcelona, Spain

- 35th Annual Roth Conference. March 12-14, in Laguna Niguel, CA

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

**<u>Thank you and goodbye</u>**