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| Statement |
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| So, really, across our diversified product portfolio, very good engagement with customers with a good significant number of deals |
| One example of that is also the acquisition that we did last year of VisiSonics for 3D special audio software capabilities and very quickly, we'll be able to convert it into licensing agreements and royalty bearing with the customer, which overall has been very synergistic on the OpEx side and with that, bringing a very good profitability moving forward to our business |
| As well as I would say, overall, our customer base in the consumer and industrial IoT on average are doing quite well, and we expect that to be a good tailwind and a strong for us to go the royalty moving forward |
| Finally, I want to sincerely wish you and your families a successful and peaceful 2024 |
| What was very interesting for us this quarter around that US was stronger than usual for us and a very, very strategic deal with an MCU player that we mentioned earlier in Amir's prepared remark, and that was a positive change for our Q4 revenue mix |
| We also had a good quarter in licensing for our hardware and software IPs for sensing and inference, with six deals signed, highlighted by a licensing deal with one of our major automotive customers to integrate our AI software compiler into their ADAS chips |
| In licensing, while the total licensing revenue recognized in the quarter was lower than usual, the interest in our diversified portfolio and potential new customer opportunities remains solid |
| We saw good progress on a number of fronts, including a strategic license deal with a US-based MCU leader for our Wi-Fi 6 IP and a licensing deal with one of our major automotive customers to integrate our AI software compiler into their ADAS chips |
| In royalties, we saw a return to year-over-year growth for the first time since Q3 2022, with a rebound in mobile and across consumer IoT and industrial IoT, where we have a large and diversified customer base |
| Quarterly gross margins came slightly better as expected on GAAP and in-line with non-GAAP basis |
| Specifically, for Q4, we are actually very encouraged with the number of deals that we signed, 17 deals in the quarter |
| Overall in licensing, we signed 17 deals in the quarter, 11 of which were for our IPs enabling connect use cases, where we continue to leverage our broad portfolio of long and short range wireless IPs to build our leadership position and market share in connectivity for smart edge devices |
| The consumer IoT and industrial IoT markets are large, diversified, and present us with a solid platform for long-term growth |
| One is continuous improvement and growth in our topline, where the guidance we just gave for this year and from that on the long-term model that we gave in the Analyst Day |
| On royalties, we expect our connectivity products to continue to show strength in 2024, with royalty revenues related to our Bluetooth, Wi-Fi, and cellular IoT business lines to grow |
| Cellular IoT shipments were a quarterly record high with 45 million units, up 82% year-over-year |
| On top of what Yaniv said, so if we look at royalty going to 2024, there are several things that we are very encouraged by and we see as a potential growth in 2024 versus last year |
| Following the recent in-depth strategic review to really understand our strengths and technology leadership, we have positioned CEVA as the trusted partner for semiconductor companies and OEMs who need our IP to enable three fundamental use cases for smart edge devices; the abilities to connect, sense and infer data, more reliably and efficiently |
| I am proud of how we have and continue to manage through the challenges in the markets we serve and significantly improve our profitability and earnings power through our focus on operating efficiency |
| This will enable and generate significant earnings power, operating leverage, and net income growth |
| We believe it can create for us a nice growth trajectory moving forward |
| And Wi-Fi continues to be one of the strongest royalty contributor in both licensing and royalties |
| Overall, looking across our corporate, product, customer, and end markets milestones in 2023, I am extremely proud of what we have achieved and am excited about what's ahead for 2024 and beyond |
| In consumer IoT, and the broad Industrial IoT markets, demonstrating our diversified offering and customer base, we recorded our best quarter of the year, with notable strength for our connectivity customers |
| This was our third consecutive quarter of royalty growth, as we built momentum throughout the year |
| More significantly, this was the first quarter to surpass $12 million in royalties since Q4 2021, and serves as a strong proof point for our royalty business potential going forward |
| In terms of royalty contribution highlights, cellular IoT royalty revenues were an all-time record high, up 47% year-over-year, audio AI DSP royalty revenues were up 111% year-over-year and Wi-Fi royalty revenues were up 40% year-over-year |
| Cellular IoT and audio AI DSP shipments both experienced strong growth in 2023, up 64% and 56%, respectively from 2022 |
| On the positive side and in line with the strength of our connectivity products, royalty revenues related to our Bluetooth, Wi-Fi, and cellular IoT business lines combined to grow 5% year-over-year, mainly due to higher royalty rate contribution from our new Wi-Fi 6 customers |
| Looking ahead to 2024, we are excited by the royalty growth potential of our Wi-Fi 6 royalties, the continued momentum in our Bluetooth and cellular IoT customer base across consumer and industrial markets, and the expected initial ramp of automotive ADAS royalties in the second half of the year |
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| Annual mobile modem shipments were down 13% year-over-year to 286 million units, reflecting the soft smartphone market in 2023, particularly in the first part of the year |
| Annual consumer IoT-related shipments were 1.25 billion units, down just 4% year-over-year |
| Wi-Fi shipments were 31 million units, down 17% year-over-year |
| There still remains, however, some short-term challenging conditions in the industrial and automotive end markets, which are not expected to clear until the second half of the year, and possible inventory buildup that will need be worked down in the first part of the year |
| Licensing and related revenue was $57.6 million, down 23% |
| GAAP operating loss for the fourth quarter was $2.8 million, down from a GAAP operating profit of $1 million in the same quarter a year ago |
| First, if we take a step back and look at 2023 overall, definitely, that was a year that started with lots of inventory corrections that our customers need to go to that so-called more pressure on the business overall |
| So, overall, I would say, if we look at the different market segments, automotive and industrial are a little bit weaker in the first half, and we expect inventory correction and overall interest to go back in second half |
| And the base station market, we've suffered not just CEVA, but overall was very muted and lower in 2023, just because 5G didn't bring for the cellular networks, any key or star use case that will -- that happened with deployment or increased deployment |
| Specifically for the first quarter of 2024, with typical seasonality in shipments of consumer IoT and mobile products, post the holiday season, we expect overall revenue to be 2% to 6% lower sequentially, and with a different mix of licensing and royalty revenues than from the quarter we just reported |
| Smartphones have their seasonality trends and known headwinds |
| The units were down year-over-year because it was a transition year also to Wi-Fi 6, which is a newer technology and the new generation |
| The decline is mainly attributable to mobile and 5G RAN-related royalties, which combined to be down 22% year-over-year |
| That's a market that probably in 2024 as far as what we see today is not going to recover significantly, maybe more towards the second half and then probably more in 2025, which is the overall mix |
| Our DSO for the fourth quarter of last year continue to be lower than the norm at 32 days, similar to our prior quarter |
| For the full year 2023, we reported total revenue of $97.4 million, 19% lower than 2022, primarily due to a return to a more normal licensing environment following a couple of years in which we were able to capitalize on a surge in design activity, driven by exceptional consumer end market demand, resulting from post-COVID spending and the shift to work-from-home |
| As for the year, our total unit shipped were 1.6 billion units in 2023, down slightly from 1.7 billion in 2022, which estimates -- which equates to approximately 50 CEVA-powered devices sold every second in 2023 |
| Our model showed incremental growth on an overall quarter-by-quarter as the year progresses with Q1 being the lowest because of the seasonality of the modem and consumer devices in royalties |
| And that's probably going to be muted also in 2024 |
| Yet to be seen how 2024 looks like on an annual basis, it's difficult to forecast |
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