CEVA Inc (NASDAQ: CEVA) shares surged 6.50% in pre-market trading on Monday following the release of its third-quarter financial results that exceeded analyst expectations. The semiconductor company's strong performance was primarily driven by robust growth in AI processor licensing and record wireless IoT shipments.

For the third quarter of 2025, CEVA reported revenue of $28.4 million, slightly beating the analyst consensus estimate of $28.2 million. This represents a 4.33% increase compared to the same period last year. The company's adjusted earnings per share came in at $0.11, surpassing the expected $0.10 and demonstrating CEVA's focus on profitability improvement despite a 21.43% decrease from the previous year.

A key highlight of CEVA's quarterly results was the significant contribution of AI processor licensing, which accounted for about one-third of the company's licensing revenue. This milestone underscores CEVA's growing presence in the artificial intelligence sector. Additionally, the company reported record wireless IoT device shipments, with new highs in Wi-Fi 6 and cellular IoT, reinforcing its leadership in wireless IP. CEVA also announced strategic agreements, including a NeuPro NPU portfolio license with Microchip, further solidifying its market position. The impressive adjusted gross margin of 89% reflects the company's efficient operations and strong product mix. As CEVA continues to focus on disciplined expense management and profitability improvement, investors appear optimistic about the company's future prospects in the competitive semiconductor industry.