CEVA 10-K & 10-Q changes, risk factors and insider trading

The markets for semiconductors in general, and for the products in which our technology is incorporated in particular, are highly competitive. Aggressive competition could result in substantial declines in the prices that we are able to charge for our IP or the loss of design wins to competitors. Many of our competitors are striving to increase their share of the NPU, signal processing IP and wireless connectivity markets and are reducing their licensing and royalty fees to attract customers. The rapid pace of technological change, including as a result of the proliferation of AI and high demand for AI-related products and services, can create opportunities for our competitors and harm our competitiveness in the market if our products do not evolve or we are unable to effectively keep up with such changes. The following industry players and factors may have a significant impact on our competitiveness:

The semiconductor intellectual property (SIP) industry is a relatively small and emerging industry. Our future growth will depend on the level of market acceptance of our third-party licensable IP model, the variety of IP offerings available on the market, and a shift in customer preference away from in-house development of proprietary signal processing IP or AI IPs towards licensing open signal processing IP cores and platforms.platforms and AI IPs. Furthermore, the third-party licensable IP model is highly dependent on the market adoption of new services and products with standards that continue to advance, such as ubiquitous connectivity, and the increased use of advanced audio, voice, vision and motion sensing in conjunction with AI in the consumer, industrial, infrastructure, automotive, mobile and PC markets in which we participate. Such market adoption is important because the increased cost associated with ownership and maintenance of the more complex architectures needed for the advanced services and products may motivate companies to license third-party IP rather than design them in-house.

The markets for our IP solutions are characterized by rapidly changing technology, emerging markets and new and developing end-user needs, requiring significant expenditures for research and development. We expect that the market for our products will continually evolve and will be subject to rapid technological change. For example, new products and disruptive technologies are being developed, and companies with which we compete have implemented AI strategies for products and service offerings. We cannot assure you that we will be able to introduce systems and solutions that reflect prevailing industry standards on a timely basis, meet the specific technical requirements of our end-users, or avoid significant losses due to rapid decreases in market prices of our products, the failure of which could seriously harm our business. Further, we cannot assure you that the markets we chose to invest in will continue to be significant sources of revenue in the future. For example, while in May 2023, we acquired VisiSonics’ spatial audio business to bolster our position in wearables, we may not realize the benefits from this acquisition. In January 2024, we acquired an RF design group in Greece,Greece as part of our Ceva-Waves Links new product offering for BTBluetooth &and WiFiWi-Fi radio technologies. TheWe firstexpect productto webegin launchedcommercial outlicensing of this groupproduct was announcedline in January2026, 2025 at the CES trade show, but we are yet unsure ofalthough its commercial success.success cannot be assured.

We operate within the semiconductor industry, which experiences significant fluctuations in sales and profitability. Downturns in the semiconductor industry are characterized by diminished product demand, excess customer inventories, accelerated erosion of prices and excess production capacity.capacity, like recent memory price increases and supply constraints. The semiconductor industry may be negatively impacted by factors such as decreased consumer spending, macroeconomic uncertainty and slow or negative economic growth. Each of these factors could decrease consumer spending and business investment in technologies and products that contain semiconductors. We have previously experienced a reduction in revenue and operating losses during downturns in the semiconductor industry, and current macroeconomic factors affecting customer demand have been aggravated by certain factors such as high interest rates and geopolitical instability. During such downturns, we typically experience new design start push outs, greater pricing pressure and shifts in product and customer mix, which can adversely affect our gross margin and net income. Furthermore, any future upturn in the semiconductor industry could result in increased competition for market share in the growing signal processing IP and wireless connectivity markets. The semiconductor industry is also affected by seasonal shifts in demand, and as a result, we may experience short-term fluctuation in our results of operations from one period to the next. We are unable to predict the timing, duration or severity of any current or future downturns in the semiconductor industry.

We have also been subject to industry-wide supply constraints and inflationary price pressures, which have resulted in long lead times for new designs and supply chain disruptions for selling integrated circuits containing our technologies. For example, the semiconductor industry faced significant global supply chain disruptions as a result of the COVID-19 pandemic, both as a consequence of increased demand for devices enabling wireless connectivity and remote environments and supply constraints arising from the imposition of government restrictions on staffing and facility operations, and has more recently experienced disruptions and uncertainty due to cross-border tariffs. Further, the high interest rate environment, macroeconomic trends and geopolitical concerns, including ongoing conflict between Russia and Ukraine, unrest in the Middle East, and economic slowdown in China, and increase memory chip pricing and short supply, among other things, can negatively impact general consumer and IoT demand, chill the market for new technology investments and adversely affect our revenues. To the extent the impact of such disruptive events and adverse economic trends continue or worsen, we anticipate having greater difficulty obtaining, or waiting longer to obtain, certain equipment, supplies and other materials necessary for performance of the services we provide to our customers, leading to volatility or declines in the semiconductor industry which could cause substantial fluctuations or declines in our revenues and results of operations.

Each of the above factors is difficult to forecast and could harm our business, financial condition and results of operations. Also, we license our technology to OEMs and semiconductor companies for incorporation into their end products for consumer, mobile and industrial products. The royalties we generate are reported by our customers.

Our royalty revenues are affected by seasonal buying patterns of consumer products sold by OEMs, partially by our direct customers and partially by semiconductor customers that incorporate our technology into their end products and the market acceptance of such end products. The first quarter in any given year is usually a sequentially down quarter for us in relation to royalty revenues as this period represents lower post-holiday fourth quarter consumer and mobile product shipments. However, the magnitude of this first quarter decrease varies annually and has been impacted by global economic conditions, market share changes, exiting or refocusing of market sectors by our customers and the timing of introduction of new and existing mobile devices powered by Ceva technology sold in any given quarter compared to the prior quarter. While the high interest rate environment and macroeconomic concerns related to slowdowns experienced in 2023 and 2024 have largely abated, these conditions continue in certain areas,areas. Along with new factors such as U.S.-China trade tensions, the limitation of EDA usage in early 2025, and memory chip price increases and supply shortages in the later part of 2025 and continuing into 2026, they distort more traditional seasonality trends.

We derive a significant amount of revenues from a limited number of customers. Sales to UNISOC (formerly Spreadtrum Communications, Inc.), accounted for 15%, 13%15% and 16%15% of our total revenues for 2024, 20232025 and 2022,2024, respectively. With respect to our royalty revenues in particular, a small number of customers ship substantial volumes of products and thus pay outsized royalty revenues, with two royalty paying customers each representing 10% or more of our total royalty revenues for 2025, and collectively representing 39% of our total royalty revenues for 2025. Two royalty paying customers each representing 10% or more of our total royalty revenues for 2024, and collectively representing 46% of our total royalty revenues for 2024. Two royalty paying customers each represented 10% or more of our total royalty revenues for 2023, and collectively represented 45% of our total royalty revenues for 2023. Two royalty paying customers each represented 10% or more of our total royalty revenues for 2022, and collectively represented 46% of our total royalty revenues for 2022. We expect that a significant portion of our future revenues will continue to be generated by a limited number of customers. The loss of any significant royalty paying customer could adversely affect our near-term future operating results. Furthermore, consolidation among our customers may negatively affect our revenue source, increase our existing customers’ negotiation leverage and make us further dependent on a limited number of customers. Moreover, the discontinuation of product lines or market sectors that incorporate our technology by our significant customers or a change in direction of their business and our inability to adapt our technology to their new business needs could have material negative implications for our future royalty revenues.

Our business is dependent on IP licensing and related revenues, which may vary from period to period.

Royalty payments to us under existing and future license agreements could be lower than currently anticipated for a variety of reasons. Average selling prices for semiconductor products generally decrease over time during the lifespan of a product. In addition, there isare increasing downward pricing pressures in the semiconductor industry on end products incorporating our technology. As a result, notwithstanding the existence of a license agreement, our customers may demand that royalty rates for our products be lower than our historic royalty rates. We have in the past and may be pressured in the future to renegotiate existing license agreements with our customers. In addition, certain of our license agreements provide that royalty rates may decrease in connection with the sale of larger quantities of products incorporating our technology. Furthermore, our competitors may lower the royalty rates for their comparable products to win market share which may force us to lower our royalty rates as well. As a consequence of the above referenced factors, as well as unforeseen factors in the future, the royalty rates we receive for use of our technology could decrease, thereby decreasing future anticipated revenues and cash flow. Royalty revenues were approximately 44%, 41%42% and 38%44% of our total revenues for 2024, 20232025 and 2022,2024, respectively. Therefore, a significant decrease in our royalty revenues could materially adversely affect our operating results.

Furthermore, royalty rates may be negatively affected by macroeconomic trends or changes in products mix, and consolidation among our customers may increase the negotiation leverage of our existing customers. Moreover, changes in products mix such as an increase in lower royalty bearing products shipped in high volumes, like Bluetooth-based and cellular IoT products, in lieu of higher royalty bearing products like embedded application software could lower our royalty revenues. While we anticipate that integrating different IPs, such as Bluetooth and Wi-Fi, into combo solutions would enable us to charge higher royalties and increase licensing fees, any failure to successfully deliver such integrated combo solutions to customers could have a material adverse effect on our business, financial condition and results of operations.

Approximately 81%82% of our total revenues for 2024,2025 90%and 81% for 2023 and 88% for 20222024 were derived from customers located outside of the United States. Revenues from customers located in the Asia Pacific (APAC) region account for a substantial portion of these revenues, with significant concentration of revenues in China, which accounted for 49%, 59%62% and 63%49% of total revenues for 2024, 20232025 and 20222024, respectively. We expect that international customers generally, and sales to the APAC region and China in particular, will continue to account for a significant portion of our revenues for the foreseeable future. While we anticipate that we can expand our customer base and revenues in Europe and the U.S., the present concentration of revenues from a single country significantly increases our risk profile, and the occurrence of any negative international political, economic or geographic events, including any financial crisis, trade restrictions or disputes or other major event causing business disruption in China, such as the heightening of tensions between China and Taiwan, the broader APAC region and other international jurisdictions, or increased pressure within China on using domestic over foreign technology, could result in significant revenue shortfalls. These shortfalls could cause our business, financial condition and results of operations to be harmed. Some of the risks of doing business internationally include:

Tensions between the U.S. and China have been escalating sincein 2018,recent years, and a number of factors may exacerbate these tensions in the future, including the change in the U.S. administration this year.future. In addition, Russian military activities in Ukraine have resulted in increased sanctions and export controls against Russia and Belarus, and could also increase China/Taiwan political tensions and a worsening of U.S./China trade and other relations. Trade tensions between the U.S. and China and other geopolitical instabilities have resulted, and could in the future result, in significant tariff increases, sanctions against specified entities, and the broadening of restrictions and license requirements for specified transfers and uses of products. For example, the ongoing geopolitical and economic uncertainty between the U.S. and China, the unknown impact of current and future U.S. and Chinese trade regulations and other geopolitical risks with respect to China and Taiwan, may cause further disruptions in the semiconductor industry and its supply chain, decreased demand from customers for the ultimate products using our IP solutions, or other disruptions which may, directly or indirectly, materially harm our business, financial condition and results of operations.

One of our principal research and development facilities is located in Israel, and most of our executive officers and some of our directors are residents of Israel. Although substantially all of our sales currently are made to customers outside of Israel, we are nonetheless directly influenced by the political, economic and military conditions affecting Israel, including Israel’s war with Hamas that began on October 7, 2023 or the subsequent war in the north with Hezbollah in Lebanon and the attacks from Iran and Yeman.Yemen. For example,Although certain ceasefire agreements have been reached with Hamas and Lebanon (with respect to Hezbollah), and some Iranian proxies have declared a halt to their attacks, there is no assurance that these agreements will be upheld. In October 2025, a ceasefire agreement was reached between Israel and Hamas, leading to a cessation of direct conflict between these parties. However, the situation remains volatile, with the potential for renewed escalation, particularly with escalated tensions between the U.S., Iran and Israel. While there are currently attempts for diplomatic solution, there can be no assurance that such solution will be reached and that there will not be further escalations to the situation. The intensity and duration of these conflicts, as well as their economic implications for the Company and Israel’s economy, remain difficult to predict. Certain of our employees are currently obligated to perform annual reserve duty in the Israel Defense Forces and are subject to being called to active military duty at any time. ItSuch isemployees possiblemay thatbe absent for an extended period of time. As a result, our operations couldmay be disrupted ifby thissuch situationabsences, continueswhich fordisruption amay significantmaterially periodand adversely affect our business and results of time or further deteriorates, including if hostilities expand from other fronts, which could harm our business.operations.

Terrorist attacks, acts of war or military actions and/or other civil unrest may adversely affect the territories in which we operate,operate and our business, financial condition and operating results.

Our research and development expenses willmay increase relativeif to past periods due to our receiving fewerthe grants we currently receive from the Israeli government andare thereduced EU.or withheld.

We currently receive research grants mainly from programs of the IIAIIA. andSince to some extent from the EU. In 2023 and 2024,2023, such grants decreased significantly as compared to 2022 and previous years due to changes in the criteria adopted by the IIA regarding larger and better funded corporations, in light of the high interest rate environment and difficulties for smaller companies to raise money, and we expect to receive fewer grants from the IIA in the future relative to past periods as well. We recorded aggregate research grants of $1,407,000,$1.41 $1,668,000million and $4,850,000$1.41 million in 2024, 20232025 and 2022,2024, respectively. To remain eligible for the grants we have received, we must meet certain development conditions and comply with periodic reporting obligations. Although we have met such conditions in the past, should we fail to meet such conditions in the future our research grants may be repayable, reduced or withheld. The repayment or reduction of such research grants may increase our research and development expenses which in turn may reduce our operating income. Also, the timing of such payments from the IIA may vary from year to year and quarter to quarter, and we have no control on the timing of such payments.

Our product development efforts require us to incur substantial research and development expenses. Our research and development expenses were approximately $71.6 million, $72.7$74.8 million and $70.3$71.6 million for 2024, 20232025 and 2022,2024, respectively. We may not be able to achieve an acceptable return, if any, on our research and development efforts.

We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, “IT Systems”). We own and manage some of these IT Systems but also rely on third parties for a range of IT Systems and related products and services. We and certain of our third-party vendors store and process sensitive data, including IP, proprietary business information and information about individuals such as our customercustomers and employees (collectively, “Confidential Information”). Despite our security measures, our IT Systems may be vulnerable to attacks by hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), or breachedbreaches due to employee error, malfeasance or other disruptions that could result in unauthorized access to, disclosure or loss of sensitive data. Because the techniques used to obtain unauthorized access to networks, or to sabotage systems, change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.

We are subject to income taxes in the United States and various foreign jurisdictions. In addition to our significant operations in Israel,Israel and France, we have operations in Ireland, France, the United Kingdom, Serbia, China, Japan and starting from January 2024, in Greece. Significant judgment is required in determining our worldwide provision for income taxes and other tax liabilities. In the ordinary course of a global business, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain. Due to the potential for changes to tax laws and regulations or changes to the interpretation thereof, the ambiguity of tax laws and regulations, the subjectivity of factual interpretations, the complexity of our intercompany arrangements, uncertainties regarding the geographic mix of earnings in any particular period, the potential decision or need to transfer cash or other assets from one jurisdiction to another, potential for tax authorities to challenge the manner in which our subsidiaries’ profits are currently recognized, and other factors, our estimates of effective tax rate and income tax assets and liabilities can be incorrect, we could lose the ability to use certain deferred tax assets, we could incur significant additional taxes in connection with a specific transaction, our overall tax expenses could increase, and our business, cash flow, financial condition and results of operations could be materially adversely affected. The impact of the factors referenced in this paragraph may also be substantially different from period-to-period.

For example, a substantial portion of our taxable income historically has been generated in Israel,our assubsidiaries welloutside asthe France starting in 2020.U.S. Although oursome Israeliof andthese Irishnon-U.S. subsidiaries historically, and starting in 2022 our French subsidiary,historically are taxed at rates lower than the U.S. tax rates, the tax rates in these jurisdictions could nevertheless result in a substantial increase as a result of withholding tax expenses with respect to which we are unable to obtain a refund from the relevant tax authorities. If our Israeli, French and Irishnon-U.S. subsidiaries were to no longer qualify for these lower tax rates or if the applicable tax laws were rescinded or changed, our operating results could be materially adversely affected. A mix of our revenues in each of these locations may change the mix of our taxable income, and as a result, our overall tax rate may increase, as we encountered in 2021, specifically due to higher taxes in France, or in the third quarter of 2022, due to our recording a $15.6 million expense as a result of a valuation allowance for certain deferred tax assets in Israel.increase.

U.S. tax regulations are also implicated by our international operations. For example, certain of our taxes may be “double taxed” in both foreign jurisdictions and the U.S., including with respect to our taxes on our Irish and Israeli interest income. While we have elected to account for global intangible low-taxed income (GILTI) as a current-period expense when incurred, legislation and clarifying guidance are expected to continue to be issued by the U.S. Treasury Department and various states in future periods, which could have a material adverse impact on the value of our U.S. deferred tax assets, result in significant changes to currently computed income tax liabilities for past and current tax periods, and increase our future U.S. tax expense. We could also incur significant additional tax expenses as a result of moving off-shore cash to our U.S. entity. Out of total cash, cash equivalents, bank deposits and marketable securities of $163.6$222.0 million at year end 2024,2025, $135.1$120.6 million was held by our foreign subsidiaries, with only $28.5$101.4 million held in the U.S., which could make capital expenditures to expand operations in the U.S., or ourby conducting strategic transactions in the U.S., more expensive. In addition, beginning in our fiscal year 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures in the year incurred, requiring amortization in accordance with Internal Revenue Code (IRC) Section 174. On July 25, 2025, a change in tax law occurred that now allows for the full deduction of domestic research and development expenditures in the year incurred, but still requires the amortization of the same costs incurred in foreign jurisdictions. If this requirement is not repealed or otherwise modified, it will potentially materially increase our effective tax rate and reduce our operating cash flows in future years.

The IsraeliFrench and FrenchGreece tax benefits that we currently receive and the government programs in which we participate require us to meet certain conditions and may be terminated or reduced in the future, which could increase our tax expenses.

Our French subsidiary is entitled to a tax benefit of 10% applied to specific revenues under the French IP Box regime. The French IP Box regime applies to net income derived from the licensing, sublicensing or sale of several IP rights such as patents and copyrighted software, including royalty revenues. This elective regime requires a direct link between the income benefiting from the preferential treatment and the research and development expenditures incurred and contributing to that income. Qualifying income may be taxed at a favorable 10% CIT rate (plus social surtax, hence 10.3% in total). This French IP Box regime was enacted into the French tax law as of January 1, 2019, and the final version of the Official guidance of the French tax authorities (FTA) was published on April 22, 2020. Since the French IP Box regime was enacted recently, there is little to no French case law on this subject at this time and French companies do not yet have any feedback on the ongoing tax audits and on the FTA’s tendency in this matter. Different interpretations of the French law by the French tax authorities regarding the French IP Box regime may impose higher tax rates on our French operations and our overall tax expenses could increase.

A significant portion of our business is conducted outside the United States. Although most of our revenues are transacted in U.S. dollars, we may be exposed to currency exchange fluctuations in the future as business practices evolve and we are forced to transact business in local currencies. Moreover, the majority of our expenses are denominated in foreign currencies, mainly New Israeli Shekel (“NIS”) and the Euro, which subjects us to the risks of foreign currency fluctuations. Our primary expenses paid in currencies other than the U.S. dollar are employee salaries. Increases in the volatility of the exchange rates of currencies other than the U.S. dollar versus the U.S. dollar could have an adverse effect on the expenses and liabilities that we incur in currencies other than the U.S. dollar when remeasured into U.S. dollars for financial reporting purposes. We have instituted a foreign cash flow hedging program to minimize the effects of currency fluctuations. However, hedging transactions may not successfully mitigate losses caused by currency fluctuations, and our hedging positions may be partial or may not exist at all in the future. We also review our monthly expected non-U.S. dollar denominated expenditure and look to hold equivalent non-U.S. dollar cash balances to mitigate currency fluctuations. However, in some cases, we expect to continue to experience the effect of exchange rate currency fluctuations on an annual and quarterly basis. For example, ourthe EUROstrengthening cash balances increase significantly on a quarterly basis beyond our EURO liabilities fromof the CréditNIS Impôt Recherche (CIR), which is generally refunded every three years. This has resulted in a foreign exchange loss of $1.01 million (due toand the devaluation of our Euro cash balances asagainst the U.S. dollar strengthened significantly during this period as compared toin the Euro),recent apast has created foreign exchange gainheadwinds across the industry, causing our U.S. dollar value of $0.69our millionNIS and aEuro denominated operating and financial expenses to increase, including payroll and other local operating costs, as well as foreign exchange gain of $0.07 million for 2024, 2023loss, and 2022,could respectively.materially adversely affect our operating results.

Royalty reporting by our licensees may be inaccurate or understated.understated or not sent on a timely basis.

We generate licensing revenue primarily from original equipment manufacturers and semiconductor companies who license our technologies and incorporate those technologies into their products. Our license agreements generally obligate our licensees to pay us a specified royalty for every product they ship that incorporates our technologies, and we rely on our licensees to report their shipments accurately. However, our licensees may not report their shipments on a timely basis, and it is inherently difficult to independently determine whether our licensees are reporting shipments accurately, particularly with respect to software incorporating our technologies because unauthorized copies of such software can be made relatively easily. A third party may disagree with our interpretation of the terms of a license agreement or, as a result of an audit, a third party could challenge the accuracy of our calculation. We are regularly involved in discussions with third party technology licensees regarding license terms. Most of our license agreements permit us to audit our licensees’ records, and we routinely exercise these rights, typically by using an independent third party auditor. For example, in 2024, an OEM customer paid a catch-up royalty amount after being audited and determined to have underreported with respect to a product line which the customer failed to note incorporated our software technology. Such audits are generally expensive, time-consuming, and potentially detrimental to our ongoing business relationships with our licensees. In the past, some licensees have understated or failed to report the number of products incorporating our technologies that they shipped, and we have not been able to collect and recognize revenue to which we were entitled. We expect that we will continue to experience understatement and non-reporting of royalties by our licensees. We have been able to obtain certain recovery payments from licensees (either in the form of back payments or settlements), and such recoveries have become a recurring element of our business; however, we are unable to predict with certainty the revenue that we may recover in the future or our ability to continue to obtain such recoveries at all.

We hold significant goodwill on our balance sheet related to a number of strategic transactions over the years, including, for example, with respect to Parthus Technologies plc, our RivieraWaves business, Hillcrest and Spatial Audio assets, and, most recently, a design team in Greece. Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations. Under accountingU.S. principles generally accepted in the United States of America,GAAP, we assess potential impairment of our goodwill and intangible assets at least annually, as well as on an interim basis to the extent that factors or indicators become apparent that could reduce the fair value of any of our businesses below book value. Impairment may result from significant changes in the manner of use of the acquired asset, negative industry or economic trends and significant underperformance relative to historic or projected operating results. For example, in the third quarter of 2022, we recorded $3.6 million of impairment of intangible assets with respect to Immervision technology acquired in August 2019, as we decided to cease the development of this product line. If we determine that our goodwill and intangible assets have become impaired, we may incur impairment charges, which could negatively impact our operating results.

For more than three decades, we have been a trusted partner to hundreds of leading semiconductor and original equipment manufacturer (OEM) companiescompanies, servicingserving not justonly our largest target growth and incumbent markets,markets but also a wide variety of other end markets and applications, including smart-home,smart home, surveillance, robotics and medical. Our transformative semiconductor IP and embedded software offerings are incorporated by customers into application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs) to enable power-efficient,power‑efficient, intelligent, secure and connected devices that connect, sense,sense and infer -– the three critical pillars of the rapidly evolving era of AI-enabledAI‑enabled smart edge.edge technology.

We believe the following key elements represent significant growth drivers for Ceva as the companyleader in silicon and software IP enabling Physical AI, spanning the three foundational layers of connectivity, sensing and inference:

Our operations in Israel remain largely unaffected by the war between Israel and Hamas that began on October 7, 2023 and escalated to conflicts with LebanonLebanon, Hezbollah and Hezbollah,Iran. andDespite the evolving geopolitical situation, we continue to drive our business and support our customers globally. However, a portion of our employees in Israel have been or are called to active reserve duty and additional employees may be called in the future, if needed. TheWe Company hashave executed itsour business continuity plan with respect to those employees. It is possible that some of our operations in the region may be disrupted if this continues for a significant period of time or if the situation further deteriorates. Although certain ceasefire agreements have been reached with Hamas and Lebanon (with respect to Hezbollah), and some Iranian proxies have declared a halt to their attacks, there is no assurance that these agreements will be upheld. In October 2025, a ceasefire agreement was reached between Israel and Hamas, leading to a cessation of direct conflict between these parties. However, the situation remains volatile, with the potential for renewed escalation, particularly with escalated tensions between the U.S., Iran and Israel. While there are currently attempts for diplomatic solution, there can be no assurance that such solution will be reached and that there will not be further escalations to the situation. The intensity and duration of these conflicts, as well as their economic implications for the Company and Israel’s economy, remain difficult to predict. For more information, please refer to the risk factor titled “Our operations in Israel may be adversely affected by instability in the Middle East region” in Part I—Item 1A—“Risk Factors” of this annual report.

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND ASSUMPTIONS

The following is a description of principal activities from which we generate revenue. Revenues are recognized when control of the promised goods or services areis transferred to the customers in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

We generate our revenues from (1) licensing intellectual properties,property, which in certain circumstances are modified for customer-specific requirements, (2) royalty revenues and (3) other revenues, which include revenues from support, professional services, training and sale of development systems and chips. We license our IP to semiconductor companies throughout the world. These semiconductor companies then manufacture, market and sell custom-designed chipsets to OEMs of a variety of consumer electronics products. We also license our technologyIP directly to OEMs, which are considered end users.

We account for our IP license revenues and related services, which provide our customers with rights to use our IP, in accordance with ASC 606, "Revenue from Contracts with Customers" (ASC "606"). A license may be perpetual or time limited in its application. In accordance with ASC 606, we recognize revenue from IP license at the point in time of delivery when the customerIP obtainslicense controlis ofmade available to the IP,customer, as the IP license is functional without professional services, updates and technical support. We have concluded that our IP licenses are distinct as the customer can benefit from the licenses on their own.

Most of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Stand-alone selling prices of IP licenses are typically estimated using the residual approach, since the selling price is uncertain. Stand-alone selling prices of services are typically estimated based on observable transactions when these services are sold on a standalone basis. Standalone selling prices of significant customization of our IP to customer-specific specifications and professional services are typically estimated based on expected cost plus normal profit margin approach.

Revenues from contracts that involve significant customization of our IP to customer-specific specifications are considered as one performance obligation satisfied over-time. Revenue related to these projects is recognized over time, usually based on a percentage that incurred labor effort to date bears to total projected labor effort. IncurredThe Company believes that incurred effort represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. When total cost estimates for these types of arrangements exceed revenues in a fixed-price arrangement, the estimated losses are recognized immediately. Significant judgment is required when estimating total labor effort and progress to completion on these arrangements.

Contracts with customers generally contain an agreement to provide for training and post contract support, which consists of telephone or e-mailremote support, correction of errors (bug fixing) and unspecified updates and upgrades. Fees for post contract support, which takes place after delivery to the customer, are specified in the contract and are generally mandatory for the first year. After the mandatory period, the customer may extend the support agreement on similar terms, usually on an annual basis. We consider the post contract support performance obligation as a distinct performance obligation that is satisfied over time, and as such, we recognize revenue for post contract support on a straight-line basis over the period for which technical support is contractually agreed to be provided to the licensee (typically 12 months, since the services have a consistent continuous pattern of transfer to the customers). Revenues from the sale of development systems and chips are recognized when control of the promised goods or services are transferred to the customers.

When contracts involve a significant financing component, we adjust the promised amount of consideration for the effects of the time value of money if the timing of payments agreed to by the parties to the contract (either explicitly or implicitly) provide the customer with a significant benefit of financing, unless the financing period is under one year and only after the products or services were provided, as we elected to use the practical expedient under ASC 606. Revenue is recognized net of any indirect taxes collected from customers which are subsequently remitted to governmental entities.

We capitalize sales commission as costs of obtaining a contract when they are incremental and, if they are expected to be recovered, amortized in a manner consistent with the pattern of transfer of the good or service to which the asset relates. Sales commissions for the renewal of a contract are considered commensurate with the sales commissions paid for the acquisition of the initial contract. If the expected amortization period is one year or less, the commission fee is expensed when incurred.

We account for equity-based compensation in accordance with FASB ASC No. 718, “Stock Compensation” which requires the recognition of compensation expenses based on estimated fair values for all equity-based awards made to employees and non-employee directors. Equity-based compensation primarily includes restricted stock unitunits (RSUs), as well as options, stock appreciation right (SAR), performance-based stock units (PSUs) and employee stock purchase plan awards.

We use the straight-line recognition method for awards subject to graded vesting based only on a service condition and the accelerated method for awards that are subject to performance or market conditions. The fair value of each RSU and PSU (excluding PSUs based on market condition awards) is the market value as determined by the closing price of the common stock on the grant date. We estimate the fair value of PSU based on market condition awards on the date of grant using the Monte Carlo simulation model. We estimate the fair value of stock option awards on the date of grant using the Black & ScholesBlack-Scholes model.

For each reporting period, we evaluate whether declines in fair value below the amortized cost are due to expected credit losses, as well as our ability and intention to hold the investment until a forecasted recovery occurs, in accordance with ASC 326.occurs. Allowance for credit losses on available for sale debt securities are recognized as a charge in financial income on the consolidated statements of income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss). For the years ended December 31, 2024, 20232025 and 2022,2024, credit losses were immaterial.

For the years ended December 31, 20242025 and 2023,2024, allowance for credit losses amounted to $2,626$288 and $288,$2,626, respectively. The increasedecrease in the credit loss allowance as of December 31, 20242025 is due to a specific credit loss provisionwrite-off recorded during the year ended December 31, 20242025 for a customer that has experienced financial difficulties.

Accounting Standards Recently Adopted by the Company

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40), Disaggregation of Income Statement Expenses, which expandsrequires disclosure of disaggregated information about certain expense captions presented in the Consolidated Statements of Operations as well as disclosure about selling expense. The guidance will be effective for annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. In addition, it provides new segment disclosure requirements for entities with a single reportable segment. We adopted this guidance for the annual periodperiods beginning January 1, 2024.2027 and interim periods beginning January 1, 2028, with early adoption permitted. It could be applied either prospectively or retrospectively. We are currently evaluating the impact on our financial statement disclosures.

We derive a significant amount of revenues from a limited number of customers. Sales to UNISOC represented 15%, 13%15% and 16%15% of our total revenues for 2024, 20232025 and 2022,2024, respectively. Generally, the identity of our other customers representing 10% or more of our total revenues varies from period to period, especially with respect to our licensing customers as we generate licensing revenues generally from new customers on a quarterly basis. With respect to our royalty revenues, two royalty paying customers each represented 10% or more of our total royalty revenues for 2024,2025, and collectively represented 46%39% of our total royalty revenues for 2024.2025. Two royalty paying customers each represented 10% or more of our total royalty revenues for 2023, and collectively represented 45% of our total royalty revenues for 2023. Two royalty paying customers each represented 10% or more of our total royalty revenues for 2022,2024, and collectively represented 46% of our total royalty revenues for 2022.2024. We expect that a significant portion of our future revenues will continue to be generated by a limited number of customers. The concentration of our customers is explainable in part by consolidation in the semiconductor industry. The loss of any significant customer could adversely affect our near-term future operating results.

Licensing and related revenue was $60.0$63.6 million, representing a 4%6% increase in 20242025 as compared to 2023.2024. We signed 4354 licensing agreements across ourdiversified extensivesmart IP portfolio, down from 53 last year; 11 of those deals were with OEMs who are integrating our IP into their end products. In terms of endedge markets, 21including of the deals target33 consumer, 19for10 IIoT,industrial, with7 theautomotive, remainder3 targetingPC, mobile,and including1 twoinfrastructure with our anchor mobile customers that signed long-term agreements in the fourth quarter.agreement. Twelve of the customers licensed multiple technologiesCeva fromtechnologies, our portfolio, demonstratingunderscoring the synergistic strengthsstrength of our strategy to offer a broad portfolio ofspanning IPconnectivity, around connect, sensesensing and infer.inference.

In the firstsecond quarter of 2026, we continued to execute on our Physical AI strategy, generating revenues of $27.0$29.0 million, up 11%13% year-over-year,year-over-year. including licensingLicensing and related revenues ofwere $17.8$18.2 million, up 21% year-over-year and representing our strongest quarterly licensing quarterperformance in more than three years,years. Royalty revenues were $10.8 million, up 17% sequentially, reflecting strongimproving customersmartphone engagementroyalties, continued strength in wireless connectivity and pipelinethe momentum.ongoing ramp of automotive AI programs.

Together, these layers make Ceva, with our unified AI fabric, an essential enabler of Physical AI that breaks down barriers to entry and accelerates time‑to‑market for our customers. We are increasingly delivering more integrated, system-level solutions, enablingrather higherthan valueindividual IP blocks. This approach enables customers to accelerate development, reduce engineering risk and focus internal resources on system-level differentiation, while increasing Ceva’s content per design,platform, deeperdeepening customer engagementrelationships and greaterstrengthening long-term royalty potential.

We license our portfolio of wireless communicationscommunications, sensing and scalable Edge AI IP to our customers, breaking down barriers to entry and enabling them to bring new cutting-edge products to market faster, more reliably, efficiently and economically.

Our customers are increasingly adopting our roadmap as they seek to integrate connectivity, sensing and intelligence into their devices. The firstsecond quarter of 2026 provided further evidence of this trend, with 1410 licensing agreements, including multipletwo multi-technologyfirst-time engagementscustomers and two OEMs. The quarter was highlighted by one of the most strategically significant AI licensing agreements in our history with a leading global AI and computing platform company, together with continued customer adoption of broader hardware and software platform solutions across our connectivity and AI,portfolio, reinforcing demand for our connect, sense and infer portfolio.

On royalties, we continue to see encouraging momentum across our diversified smart edge markets, with growth in consumerwireless IoT,connectivity, industrialautomotive AI and AI-drivenimproving applications.smartphone royalties. In the firstsecond quarter of 2026, Ceva-powered device shipments reached 458567 million units, up 9%16% year-over-year. Bluetooth shipments increased 16% year-over-year to 295 million units, Wi-Fi shipments grew 28% year-over-year to 80 million units and cellular IoT shipments reached a new record level, driven by strong adoption of Wi-Fi68 6million acrossunits, aup broad3% range of devices, while cellular IoT shipments grew 38% year-over-year, reflecting continued expansion across connected applications.year-over-year.

We are also seeing earlycontinued contributions from AI-driven royalties, highlighted by ourthe firstongoing mass-volumeramp of automotive AI deploymentprograms and a ramping AI SoC for surveillance, marking the initial phase of what we expect to become a meaningful long-term growth driver.

In addition, we expect to complement our strong presence in the Asia-Pacific region by further expanding our customer base and revenues in Europe and the U.S.,U.S. asDuring reflectedthe quarter, we signed licensing agreements with customers in the U.S., China, and across Asia-Pacific, further reinforcing our increasinglyglobal diversified geographic revenue mix in recent years.reach. This balance strengthens our resilience and underscores Ceva’s role as a leader in silicon and software IP enabling Physical AI across global markets.

However, the global economy continued to be impacted by macroeconomic conditions, including a volatile interest rate environment, foreign currency exchange rate fluctuations, ongoing inflation, memory pricing increases and shortage impacting consumer demand and manufacturing, world conflicts and uncertainty, like the Middle East conflict and higher fuel and oil prices, as well as changes in legislation and regulations, including enacted and proposed tariffs and other trade policies, which introduced additional uncertainty. In periods of perceived or actual unfavorable economic conditions, our customers or potential customers may delay or re-evaluate their decisions to initiate projects, which could result in a delay or cessation of engagements with us and lower licensing revenues. In addition, weaker consumer demand may result in lower royalty revenues as our customers ship fewer units, and supply chain dynamics and component pricing may also impact end-market demand.

Our operations in Israel remain largely unaffected by the war between Israel and Hamas that began on October 7, 2023 and escalated to conflicts with Lebanon, Hezbollah and Iran. Most recently, inIn February 2026, the United States and Israel launched joint combat operations in Iran to which Iran and Hezbollah responded with ballistic missile and drone attacks on Israel as well as other countries and U.S. military bases in the region. While temporary ceasefires betweenAlthough the United States, IsraelStates and Iran,Iran have announced ceasefire and betweende-escalation Israelarrangements from time to time, including a memorandum of understanding entered into on June 17, 2026 that contemplates the termination of military operations on multiple fronts, hostilities have resumed and Hezbollah,may were reached in April 2026 and remain in effect as of the date hereof, there can be no assurance that the temporary ceasefire agreements will be upheldcontinue or that permanent ceasefires will be reached, and the situation in Israel and the region remains highly volatile.escalate. Despite the evolving geopolitical situation, we continue to drive our business and support our customers globally. However, a portion of our employees in Israel have been or are called to active reserve duty, and additional employees may be called in the future, if needed. We have executed our business continuity plan with respect to those employees. It is possible that some of our operations in the region may be disrupted if this continues for a significant period of time or if the situation further deteriorates. The intensity and duration of these conflicts, as well as their economic implications for the Company and Israel’s economy, remain difficult to predict. For more information, please refer to the risk factor titled “Our operations in Israel may be adversely affected by instability in the Middle East region” in Part I—Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Total revenues were $27.0$29.0 million and $56.1 million for the second quarter and first quarterhalf of 2026, respectively, representing an increase of 11%13% and 12%, as compared to the corresponding periodperiods in 2025. The increase in total revenues for both the second quarter and first quarterhalf of 2026 was due to higher licensing and related revenues, as further described below.

Our five largest customers accounted for 44%55% and 39% of our total revenues for the second quarter and first half of 2026, respectively, as compared to 42% for both of the comparable periods in 2025. Two customers accounted for 21% and 11% of our total revenues for the second quarter of 2026, as compared to two customers that each accounted for 11% of our total revenues for the second quarter of 2025. One customer accounted for 13% of our total revenues for the first quarter of 2026, as compared to 56% for the comparable period in 2025. Two customers accounted for 24% of our total revenues for the first quarterhalf of 2026, as compared to one customer that accounted for 24%17% of our total revenues for the first quarterhalf of 2025. Generally, the identity of our customers representing 10% or more of our total revenues varies from period to period, especially with respect to our IP licensing customers as we generate licensing revenues generally from new customers on a quarterly basis. With respect to our royalty revenues, twoone royalty paying customerscustomer represented 10% or more of our total royalty revenues for both the second quarter and first quarterhalf of 2026 and collectively represented 22%25% and 18% of our total royalty revenues for the firstsecond quarter and first half of 2026.2026, respectively. Two royalty paying customers represented 10% or more of our total royalty revenues for both the second quarter and first quarterhalf of 2025 and collectively represented 30%38% and 34% of our total royalty revenues for the firstsecond quarter and first half of 2025.2025, respectively. We expect that a significant portion of our future revenues will continue to be generated by a limited number of customers. The concentration of our customers is explainable, in part, by consolidation in the semiconductor industry.

Licensing and related revenues accountedwere for$18.2 66%million ofand our$36.0 total revenuesmillion for the second quarter and first quarterhalf of 2026, respectively, representing an increase of 21% and 20% as compared to 62% for the comparablecorresponding periodperiods ofin 2025.

The five largest royalty-paying customers accounted for 47%54% and 51% of our total royalty revenues for the second quarter and first quarterhalf of 2026, respectively, as compared to 50%58% and 54% for the comparable periodperiods of 2025.

Cost of revenues was $3.7$3.6 million and $7.4 million for the second quarter and first quarterhalf of 2026, respectively, as compared to $3.5 million and $7.0 million for the comparable periodperiods of 2025. Cost of revenues accounted for 14%13% of our total revenues infor both the firstsecond quarter and first half of 2026, as compared to 14% for both 2026of andthe comparable periods of 2025. The slight increase for the first quarterhalf of 2026 primarily reflected higher payments to the Israeli Innovation Authority of the Ministry of Economy and Industry in Israel. Included in cost of revenues for the firstsecond quarter and first half of both 2026 and 2025 was a non-cash equity-based compensation expense of $0.2 million.million and $0.4 million, respectively, as compared to $0.2 million and $0.3 million for the comparable periods of 2025.

Gross margin for both the second quarter and first quarterhalf of 2026 was 86%,87%, unchangedas fromcompared to 86% for both of the comparable periodperiods of 2025. The increase in gross margin in percentage and absolute dollars for both the second quarter and first quarterhalf of 2026 mainly reflected higher licensing and related revenues, as set forth above.

Total operating expenses were $28.4$27.5 million and $55.8 million for the second quarter and first quarterhalf of 2026, respectively, as compared to $25.1$26.6 million and $51.8 million for the comparable periodperiods of 2025. The net increase for the second quarter of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS. The net increase for the first quarterhalf of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS, and higher non-cash equity-based compensation expenses.

Total research and development expenses, net were $19.8$19.3 million and $39.2 million for the second quarter and first quarterhalf of 2026, respectively, as compared to $17.6$18.8 million and $36.4 million for the comparable periodperiods of 2025. The increase for both the second quarter and first quarterhalf of 2026 principally reflected higher salaries and employee-related costs, mainly associated with higher currency exchange expenses as a result of the devaluation of the U.S. dollar against the NIS, higher facilities expenses associated with research and development activities and higher non-cash equity-based compensation expenses.NIS. Included in research and development expenses for the second quarter and first quarterhalf of 2026 were non-cash equity-based compensation expenses of $2.9$2.7 million and $5.5 million, respectively, as compared to $2.5$2.7 million and $5.1 million for the comparable periodperiods of 2025. Research and development expenses as a percentage of our total revenues were 73%67% and 70% for the firstsecond quarter and first half of 2026, respectively, as compared to 73% for both 2026of andthe comparable periods of 2025.

The number of research and development personnel was 318295 at MarchJune 31,30, 2026, as compared to 325323 at MarchJune 31,30, 2025.

Our sales and marketing expenses were $3.8$3.3 million and $7.0 million for the second quarter and first quarterhalf of 2026, respectively, as compared to $3.4$3.3 million and $6.8 million for the comparable periodperiods of 2025. The increase for the first quarterhalf of 2026 principally reflected higher commissionnon-cash equity-based compensation expenses and the cost of a global sales meeting held during the period (an event that did not take place in the first quarterhalf of 2025), partially offset by lower employee-related costs.. Included in sales and marketing expenses for the second quarter and first quarterhalf of 2026 were non-cash equity-based compensation expenses of $0.7 million and $1.4 million, as compared to $0.6 million and $1.2 million for the comparable periodperiods of 2025. Sales and marketing expenses as a percentage of our total revenues were 11% and 13% for the second quarter and first half of 2026, respectively, as compared to 13% and 14% for the firstcomparable quarterperiods of both 2026 and 2025.

The total number of sales and marketing personnel was 3028 at MarchJune 31,30, 2026, as compared to 34 at MarchJune 31,30, 2025.

Our general and administrative expenses were $4.7 million and $9.4 million for the second quarter and first quarterhalf of 2026, respectively, as compared to $3.9$4.4 million and $8.3 million for the comparable periodperiods of 2025. The increase for both the second quarter and first quarterhalf of 2026 primarily reflected higher salaries and employee-related costs and higher non-cash equity-based compensation expenses. Included in general and administrative expenses for the second quarter and first quarterhalf of 2026 were non-cash equity-based compensation expenses of $1.6 million and $3.2 million, as compared to $1.1$1.5 million and $2.6 million for the comparable periodperiods of 2025. General and administrative expenses as a percentage of our total revenues were 16% and 17% for the second quarter and first quarterhalf of 2026, respectively, as compared to 16%17% for both of the comparable periodperiods of 2025.

The number of general and administrative personnel was 5251 at MarchJune 31,30, 2026, as compared to 47 at MarchJune 31,30, 2025.

Our amortization charges were $0.1 million and $0.2 million for the firstsecond quarter and first half of both2026, 2026respectively, as compared to $0.2 million and $0.3 million for the comparable periods of 2025. The amortization charges for both periodsthe second quarter and first half of 2026 and 2025 were incurred in connection with the amortization of intangible assets associated with the acquisitions of the Hillcrest Labs and VisiSonics business.

The increase in interest income and gains and losses from marketable securities, net, during both the second quarter and first quarterhalf of 2026 principally reflected higher combined bank deposits and marketable securities balances held (mainly resulting from the follow‑on offering completed in the fourth quarter of 2025)., partially offset by lower yields.

We review our monthly expected major non-U.S. dollar denominated expenditures and look to hold equivalent non-U.S. dollar cash balances to mitigate currency fluctuations. However, our Euro cash balances have increased significantly on a quarterly basis beyond our Euro liabilities, mainly from applicable French research tax credits, which are generally refunded every three years. Separately, our NIS liabilities are significantly higher than our NIS‑denominated assets, mainly because of operating lease obligations. This has resulted in a foreign exchange loss of $0.2$1.0 million and $1.2 million for the second quarter and first quarterhalf of 2026, respectively, as compared to a foreign exchange gain of $0.6 million and $1.2 million for the comparable periodperiods of 2025.

We recorded a gain of $0.0 million and $0.1 million for the second quarter and first quarterhalf of 2026, respectively, as compared to a loss of $0.1$0.2 million and $0.3 million for the comparable periodperiods of 2025, related to remeasurement of marketable equity securities, which we hold at fair value. Over time, other income (expense), net, may be affected by market dynamics and other factors. Equity values generally change daily for marketable equity securities and upon the occurrence of observable price changes or upon impairment of marketable equity securities. In addition, volatility in the global economic climate and financial markets could result in a significant change in the value of our investments.

As of MarchJune 31,30, 2026, we had approximately $21.4$44.3 million in cash and cash equivalents, $5.1 million in bank deposits, and $189.2$171.3 million in marketable securities, totaling $215.7$220.7 million, as compared to $222.0 million at December 31, 2025. The decrease for the first threesix months of 2026 principally reflected cash used in operating activities and investments in leasehold and equipment for our new offices in Ra’anana, Israel, partially offset by cash proceeds from exercise of stock-based awards.

Out of total cash, cash equivalents, bank deposits and marketable securities of $215.7$220.7 million, $114.4$122.7 million was held by our foreign subsidiaries. Our intent is to reinvest earnings of our foreign subsidiaries, and our current operating plans do not demonstrate a need to repatriate foreign earnings to fund our U.S. operations. However, if we requireIf additional funds are required in the United States for strategic transactions or other corporate purposes, we would first seek to access such capital through alternative means, including tax-efficient transfers of funds that qualify for applicable exemptions, debt financing arrangements, or capital markets transactions, including potential follow-on equity offerings, similar to our follow-on public offering completed in theNovember United2025. States,However, if these alternatives are not available or are not sufficient, we may need to accrue and pay taxes to repatriate these funds. The determination of the amount of additional taxes related to the repatriation of these earnings is not practicable, as it may vary based on various factors such as the location of the cash and the effect of regulation in the various jurisdictions from which the cash would be repatriated.

During the first threesix months of 2026, we invested $27.6$52.0 million of cash in bank deposits and marketable securities with maturities up to 5047 months from the balance sheet date. In addition, during the same period, bank deposits and marketable securities were redeemed for cash amounting to $14.1$56.2 million. All our marketable securities are classified as available-for-sale. The purchase and sale or redemption of available-for-sale marketable securities are considered part of investing cash flow. Available-for-sale marketable securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of stockholders’ equity, net of taxes. Realized gains and losses on sales of investments, as determined on a specific identification basis, are included in the interim condensed consolidated statements of loss. The amount of credit losses recorded for the first threesix months of 2026 was immaterial. For more information about our marketable securities, see Note 4 to the interim condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026.

Net cash usedprovided inby operating activities for the first threesix months of 2026 was $4.9$0.9 million and consisted of net loss of $4.5$7.4 million, adjustments for non-cash items of $6.6$13.8 million, and changes in operating assets and liabilities of $7.0$5.5 million. Adjustments for non-cash items primarily consisted of $0.9$1.7 million of depreciation and amortization of intangible assets, $5.4$10.5 million of equity-based compensation expenses, and $0.5$1.9 million of unrealized foreign exchange loss. The decrease in operating assets and liabilities primarily consisted of an increase in prepaid expenses and other assets of $5.8$6.8 million (mainly as a result of paymentspayment of a yearly design tool subscriptionsubscription, an increase in French research tax benefits applicable to the CIR, advance tax payments, and $1.4a $2.4 million ofincrease in unbilled receivables classified as “other long-term assets” in the interim condensed consolidated balance sheets), as well as a decrease in trade payables of $0.9 million, a decrease in deferred revenues of $0.8 million, and a decrease in accrued expenses and other payables of $0.9$0.8 millionmillion, andpartially offset by a decrease in trade receivables, net, of $2.4 million, a decrease in operating lease right-of-use assets of $0.4 million, an increase in accrued payroll and related benefits of $0.8$0.6 millionmillion, (mainly due to partial yearly bonus payments), partially offset byand an increase in operating lease liabilities of $0.7$0.5 million.

Net cash used in operating activities for the first threesix months of 2025 was $7.4$6.2 million and consisted of net loss of $3.3$7.0 million, adjustments for non-cash items of $4.4$9.3 million, and changes in operating assets and liabilities of $8.5 million. Adjustments for non-cash items primarily consisted of $0.9$2.0 million of depreciation and amortization of intangible assets,assets and $4.3$9.2 million of equity-based compensation expenses, partially offset by $0.2 million of amortization of premiums on available-for-sale marketable securities and $0.6$1.7 million of unrealized foreign exchange gain. The decrease in operating assets and liabilities primarily consisted of an increase in trade receivables of $3.5 million, and an increase in prepaid expenses and other assets of $3.7$2.9 million (mainly as a result of payment of a yearly design tool subscription), asand wellan as a decreaseincrease in deferredFrench revenuesresearch oftax $0.6benefits million,applicable to the CIR which is generally refunded every three years), a decrease in accrued expenses and other payables of $1.1$1.4 million, and a decrease in accrued payroll and related benefits of $0.8$4.6 million (mainly dueas toa partialresult of yearly bonus payments), partially offset by ana increasedecrease in trade payablesreceivables of $1.4$0.9 million.

Net cash usedprovided inby investing activities for the first threesix months of 2026 was $15.8$1.3 million, compared to $6.2$20.8 million of net cash provided by investing activities for the comparable period of 2025. We had a cash outflow of $24.6$48.1 million and a cash inflow of $14.1$55.4 million with respect to investments in marketable securities during the first threesix months of 2026, as compared to a cash outflow of $29.1$30.8 million and a cash inflow of $35.7$49.8 million with respect to investments in marketable securities during the first threesix months of 2025. For the first threesix months of 2026, we had ana net investment of $3.0 million in bank deposits.deposits, as compared to an investment of $0.7 million in bank deposits for the comparable period of 2025. We had a cash outflow of $2.3$2.9 million and $0.3$1.0 million during the first threesix months of 2026 and 2025, respectively, from purchase of property and equipment (the 2026 outflow partially reflects investments in leasehold improvements and equipment for our new offices in Ra’anana, Israel). For the first six months of 2025, we had a cash inflow of $3.5 million in connection with the release of escrowed funds associated with the sale of Intrinsix.

Net cash provided by financing activities for the first threesix months of 2026 was $1.6 million, as compared to net cash providedused byin financing activities in the amount of $1.4$4.5 million for the comparable period of 2025. AllDuring the first six months of the2026, cashwe inflowsreceived in$1.6 both periods resultedmillion from the exercise of stock‑basedstock-based awards.awards, as compared to $1.6 million received for the comparable period of 2025. For the first six months of 2025, we had a cash outflow of $6.2 million from the purchase of treasury stock.

In August 2008, we announced that our board of directors approved a share repurchase program for up to one million shares of common stock, which was extended collectively by an additional 7,800,000 shares in 2010, 2013, 2014, 2018, 2020, 2023 and 2024. No shares of common stock were repurchased during the first quartersix months of either2026. 2026During orthe 2025.first six months ended June 30, 2025, we repurchased 300,000 shares of common stock at an average purchase price of $20.54 per share for an aggregate purchase price of $6.2 million. As of MarchJune 31,30, 2026, we had 684,486 shares available for repurchase.