Ceva (NASDAQ: CEVA) reported Q2 2026 revenue of $29.0 million, up 13% from $25.7 million a year earlier, while GAAP diluted loss per share narrowed to $0.10 from $0.15. Licensing and related revenue reached a three-year high, driving most of the top-line increase and helping non-GAAP operating margin rise to 11% from 3%, although the company remained unprofitable under GAAP.
Core earnings data
For the quarter ended June 30, 2026, licensing and related revenue increased by $3.2 million, accounting for approximately 95% of the total year-over-year revenue increase. Gross profit grew faster than operating expenses, producing operating leverage and narrowing the GAAP operating loss.
The improvement was less pronounced at the bottom line because net financial income fell to $1.0 million from $2.1 million and income tax expense rose to $1.8 million from $1.1 million.
| Metric | Q2 2026 | Q2 2025 | Year-over-year change |
|---|---|---|---|
| Revenue | $29.0 million | $25.7 million | +13% |
| GAAP gross profit / margin | $25.4 million / 87% | $22.1 million / 86% | Profit +15%; margin +1 pp |
| GAAP operating loss | $2.1 million | $4.5 million | Loss narrowed approximately 54% |
| GAAP net loss | $2.9 million | $3.7 million | Loss narrowed approximately 21% |
| GAAP diluted loss per share | $0.10 | $0.15 | Loss narrowed by $0.05 |
| Non-GAAP operating income / margin | $3.1 million / 11% | $0.8 million / 3% | Income approximately quadrupled; margin +8 pp |
| Non-GAAP net income | $2.3 million | $1.8 million | +28% |
| Non-GAAP diluted EPS | $0.08 | $0.07 | Increased by $0.01 |
Non-GAAP measures exclude items including equity-based compensation, acquisition-related amortization and costs, and the remeasurement of marketable equity securities.
Business and revenue performance
Licensing and related revenue rose 21% to $18.2 million, its highest level in three years. Ceva signed 10 licensing agreements during the quarter, including two with first-time customers and two directly with original equipment manufacturers.
AI demand was an important part of that momentum. A global AI and computing platform company selected Ceva’s NeuPro-M NPU intellectual property for next-generation custom AI silicon, expanding Ceva’s AI licensing activity into a platform customer that controls both its hardware and operating-system environment. Management said combining hardware IP, software and system-level expertise could increase Ceva’s content opportunity and support broader, longer-term customer relationships.
Connectivity also contributed to licensing activity. A high-volume U.S. semiconductor company added a third-party chip using Ceva’s Wi-Fi 6 and Bluetooth Low Energy IP, while another U.S. customer expanded from licensing an individual baseband component to a complete baseband processing subsystem.
Royalty revenue was $10.8 million, up only 1% year over year but 17% sequentially. Ceva attributed the sequential improvement to wireless connectivity shipments, continued automotive AI program ramps and improving smartphone royalties.
Licensing growth expanded operating leverage, but GAAP losses persisted
GAAP gross profit increased approximately 15%, while operating expenses rose about 3% to $27.5 million. That difference helped narrow the GAAP operating loss and lifted non-GAAP operating margin to 11% from 3%, demonstrating the operating leverage available when licensing revenue grows faster than the expense base.
However, the gap between GAAP and non-GAAP profitability remained substantial. Approximately $5.2 million of operating adjustments were primarily related to equity-based compensation, moving the reported result from a $2.1 million GAAP operating loss to $3.1 million of non-GAAP operating income. Investors therefore need to distinguish the improvement in adjusted operations from the company’s continuing GAAP loss.
Balance sheet and liquidity
At June 30, 2026, Ceva held $44.3 million in cash and cash equivalents and $176.4 million in marketable securities and short-term bank deposits. The combined $220.7 million was slightly below approximately $222.0 million at the end of 2025, while current assets of $283.2 million remained well above current liabilities of $28.0 million.
Recent insider transactions
The supplied transaction data includes two derivative-security exercises in June 2026 and two purchases in February. These transaction types are not directly comparable, and the reported activity alone does not establish insiders’ views about Ceva’s outlook.
| Date | Insider | Position | Transaction | Reported price | Reported value |
|---|---|---|---|---|---|
| June 9, 2026 | Peter McManamon | Director | Conversion or exercise of derivative security | $27.17 per share | $380,380 |
| June 9, 2026 | Louis Silver | Director | Conversion or exercise of derivative security | $27.17 per share | $353,210 |
| February 23, 2026 | Jaclyn Liu | Director | Purchase | $19.15 per share | $25,086 |
| February 20, 2026 | Yaniv Arieli | Chief Financial Officer | Purchase | $19.34 per share | $48,350 |
Risks investors should monitor
- Dependence on licensing timing: Licensing generated nearly all of the quarterly revenue increase. Because IP sales cycles can be lengthy, the timing and size of agreements may cause uneven quarterly results.
- Limited year-over-year royalty growth: Royalty revenue improved sequentially but increased only 1% from the prior-year quarter. Future progress depends on customer shipments, smartphone royalties and the continued ramp of automotive AI programs.
- Continuing GAAP losses: Ceva reported better adjusted profitability but still produced GAAP operating and net losses. Equity-based compensation remained the main reason for the gap between the two reporting measures.
- Pressure below operating income: Lower financial income and higher income tax expense limited the improvement in GAAP net loss despite stronger operating performance.
- Customer product adoption: Licensing wins do not automatically translate into immediate royalty revenue. The commercial performance and market acceptance of customer products using Ceva’s IP remain important to longer-term returns from these agreements.
Summary
Ceva’s Q2 2026 performance was led by licensing revenue reaching a three-year high, supported by AI and connectivity agreements. Faster gross-profit growth and controlled operating-expense growth materially improved non-GAAP operating profitability and narrowed the GAAP operating loss. The main issues to monitor are whether new licensing wins convert into sustained royalty growth and whether Ceva can continue reducing the gap between adjusted profitability and GAAP results.
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