CEVA's Q1 2025: Navigating Contradictions in AI, Smartphones, and Market Dynamics

AI and NPU market opportunities, impact of tariffs on smartphone market, smartphone market dynamics and ASP impact, Wi-Fi market growth expectations, impact of macroeconomic concerns on customer behavior are the key contradictions discussed in CEVA's latest 2025Q1 earnings call.



Revenue Performance and Guidance:
- CEVA, Inc. reported total revenue of $24.2 million for Q1 2025, up 10% year-over-year.
- The company initially guided for high-single-digit growth over 2024 but later adjusted to a low-single-digit range due to lower-than-expected royalty revenue and macroeconomic uncertainties.

Royalties and Shipments:
- Royalty revenue fell short of expectations, declining 14% to $9.2 million, largely due to softer low-cost smartphone shipments and slower product ramps.
- Shipped units by CEVA licensees increased to 420 million units, up 13% year-over-year, with particularly strong growth in Bluetooth, Cellular IoT, and Wi-Fi shipments.

Wi-Fi and AI Technologies Growth:
- Wi-Fi royalties grew by 183% year-over-year, driven by a 12% increase in unit shipments, particularly in Wi-Fi 6, which commands a higher royalty ASP.
- The company secured multiple deals for its high-performance NeuPro-M Edge AI NPU, including a significant win in the automotive sector for ADAS solutions.

Market Leadership and Product Innovation:
- CEVA strengthened its market leadership in connectivity with multiple strategic agreements for Wi-Fi 7 and Wi-Fi 6 IP, reinforcing its position as a key technology partner.
- The company continues to diversify its customer base in edge AI, with notable deals in sensing and AI inference, including a professional headset agreement with a leading PC OEM.