Ceva, Inc. (NASDAQ:CEVA) shares fell 3.32% in pre-market trading on Monday despite the semiconductor intellectual property company reporting second-quarter earnings and revenue above Wall Street expectations.
Adjusted earnings reached $0.08 per share, slightly ahead of the analyst consensus estimate of $0.07.
Revenue came in at $29.0 million, exceeding expectations of $28.14 million and increasing 13% compared with the same period last year.
Licensing revenue reaches three-year high
Ceva’s quarterly growth was led by a strong performance from its licensing business.
Licensing and related revenue increased 21% year-on-year to $18.2 million, representing the company’s highest quarterly level in three years.
Royalty revenue was more stable, rising 1% from the prior-year period to $10.8 million. On a sequential basis, however, royalty revenue increased 17%.
Trailing 12-month licensing and related revenue reached $69.6 million, an increase of 13%, providing further evidence of strengthening momentum across Ceva’s intellectual property portfolio.
Ceva signs ten IP licensing agreements
The company secured ten intellectual property licensing agreements during the second quarter, including two contracts with new customers.
Two of the agreements were also signed directly with original equipment manufacturers, expanding Ceva’s relationships further into the end markets using its technology.
One of the quarter’s notable contract wins involved a leading global artificial intelligence and computing platform company selecting Ceva’s NeuPro-M neural processing unit intellectual property for use in next-generation custom AI silicon.
“We delivered another strong quarter, with revenue increasing 13% year over year, fueled by licensing and related revenue growing 21% to its highest level in three years,” said Amir Panush, Chief Executive Officer of Ceva.
Adjusted profitability improves sharply
Ceva also delivered a significant improvement in adjusted operating profitability during the quarter.
Adjusted operating income increased to $3.1 million, representing an operating margin of 11%. That compared with adjusted operating income of $0.8 million and a margin of just 3% in the second quarter of 2025.
Adjusted net income rose to $2.3 million from $1.8 million in the corresponding period last year.
On a GAAP basis, Ceva remained loss-making, although its deficit narrowed. The company reported a net loss of $2.9 million, equivalent to $0.10 per share, compared with a loss of $3.7 million, or $0.15 per share, a year earlier.
GAAP gross margin also improved to 87% from 86%.
Ceva maintains sizeable cash position
Ceva ended the second quarter with approximately $220.7 million in cash, cash equivalents, marketable securities and short-term deposits, leaving the company with substantial liquidity to support continued investment in its technology portfolio.
Despite the earnings and revenue beat, accelerating licensing growth and improved adjusted margins, Ceva (NASDAQ:CEVA) shares moved lower before Monday’s opening bell.
The decline suggests investors were looking beyond the headline quarterly beat, even as the company reported its strongest licensing revenue in three years and continued to expand its exposure to next-generation artificial intelligence semiconductor applications.