# Ceva Inc: Form 10-Q for the period ended Mar 31, 2026

- Company: [Ceva Inc](/companies/ceva.md) (CIK 1173489)
- Form: 10-Q
- Filed: 2026-05-11
- Accepted by EDGAR: May 11, 2026, 16:12 ET
- Period: 2026-03-31
- Accession: 0001437749-26-016119
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1173489/000143774926016119/ceva20260331_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1173489/000143774926016119/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-01-01 to 2026-03-31 | $27.0m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2026-01-01 to 2026-03-31 | $3.7m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2026-01-01 to 2026-03-31 | $23.3m | us-gaap:GrossProfit |
| Research and development | 3 months, 2026-01-01 to 2026-03-31 | $19.8m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2026-01-01 to 2026-03-31 | −$5.1m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2026-01-01 to 2026-03-31 | $1.3m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-01-01 to 2026-03-31 | −$4.5m | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2026-01-01 to 2026-03-31 | −$0.16 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 3 months, 2026-01-01 to 2026-03-31 | −$4.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2026-01-01 to 2026-03-31 | $2.3m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2026-03-31 | $21.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-03-31 | $280.9m | us-gaap:AssetsCurrent |
| Total assets | at 2026-03-31 | $388.2m | us-gaap:Assets |
| Current liabilities | at 2026-03-31 | $27.4m | us-gaap:LiabilitiesCurrent |
| Shareholders' equity | at 2026-03-31 | $338.2m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 43,428 characters.

*You should read the following discussion together with the unaudited financial statements and related notes appearing elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties. Any or all of our forward-looking statements in this Quarterly Report may turn out to be wrong. These forward-looking statements can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Factors which could cause actual results to differ materially include those set forth in Part II—Item 1A—“Risk Factors” in this Quarterly Report and Part I—Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 as well as those discussed elsewhere in this Quarterly Report. See “Forward-Looking Statements.”*

*The financial information presented in this Quarterly Report includes the results of Ceva, Inc. and its subsidiaries.*

### BUSINESS OVERVIEW

We enable Physical AI, the artificial intelligence embedded in billions of devices that connect, sense and infer data in the real world. We view Physical AI as the natural evolution of Edge AI. While Edge AI refers to running AI workloads locally on devices rather than in the cloud, Physical AI extends this concept further: it unifies connectivity, sensing and inference layers into a single fabric that allows devices not only to process data at the edge, but also to interact intelligently with their physical environment and the cloud. We believe Ceva is uniquely positioned as the only company with leadership in innovative silicon and software IP solutions across all three layers – connect, sense and infer.

In the first quarter of 2026, we continued to execute on our Physical AI strategy, generating revenues of $27.0 million, up 11% year-over-year, including licensing and related revenues of $17.8 million, our strongest licensing quarter in three years, reflecting strong customer engagement and pipeline momentum.

According to IPnest, we commanded 68% of the wireless connectivity IP market in 2024. Since 2003, more than 20 billion devices have shipped with Ceva IP, including approximately 2.1 billion in 2025. Our technologies power the connectivity, perception and intelligence in today’s most advanced smart edge products across consumer IoT, automotive, industrial and infrastructure, and mobile and PC markets. Based on market research, we believe these sectors will represent a $170 billion total addressable market for Physical AI and Edge AI by 2030.

Our portfolio spans:

- **Connectivity layer** (wireless transport): Bluetooth, Wi‑Fi, Ultra‑Wideband (UWB), cellular internet-of-things (IoT), and 5G‑Advanced IP platforms that form the backbone of ubiquitous, secure, and high‑performance communication.
- **Sensing layer** (software and DSPs): Sensor fusion processors, RealSpace spatial audio, MotionEngine software, and general‑purpose digital signal processors (DSPs) that transform raw sensor data into actionable intelligence.
- **Inference layer** (NPUs and AI DSPs): The NeuPro family of neural processing units (NPUs), from NeuPro‑Nano for embedded AI to NeuPro‑M for generative AI, supported by a unified toolchain and software stack for simple model deployment, and the SensPro family of AI DSPs for high‑performance signal and AI workloads.

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, enabling higher value per design, deeper customer engagement and greater long-term royalty potential.

For more than three decades, we have been a trusted partner to hundreds of leading semiconductor and original equipment manufacturer (OEM) companies, serving not only our largest target growth markets but also a wide variety of other applications, including 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, intelligent, secure and connected devices that connect, sense and infer – the three critical pillars of the rapidly evolving era of AI‑enabled smart edge technology.

We license our portfolio of wireless communications 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.

We believe our portfolio of technologies comprised of connectivity, sensing and inference – the three foundational layers of Physical AI – positions Ceva at the center of the most important megatrends shaping the semiconductor industry, including 5G expansion, generative and embedded AI, industrial automation and vehicle electrification. Demand across these areas continues to drive strong interest in our IP portfolio, both in established markets and in new, emerging use cases.

In the first quarter of 2026, we signed 14 IP licensing agreements that underscore our momentum across connect, sense and infer. These included multiple multi-technology engagements, reflecting increasing customer adoption of more integrated solutions. In connectivity, we secured our first licensing agreement for a full Bluetooth 7 integrated solution, including modem, software and RF, with a leading U.S.-based analog semiconductor company, marking a key milestone in our strategy to deliver system-level wireless platforms. We also signed Wi-Fi 7 and Wi-Fi 6/Bluetooth combo engagements, along with additional Bluetooth and Wi-Fi agreements across consumer and industrial markets. In cellular, we introduced our PentaG-NTN 5G Advanced modem platform, extending our cellular portfolio into satellite communications, and expanded a customer engagement into a more integrated baseband processing solution, increasing both the scope and long-term value of the relationship. In AI, we signed multiple licensing agreements across automotive and surveillance applications, reflecting growing demand for embedded AI and edge inference solutions.

AI-related licensing represented more than 20% of total licensing and related revenues in the quarter, highlighting the accelerating adoption of edge AI across multiple end markets.

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

- **Connectivity layer – Foundation for billions of devices:** Our broad Bluetooth, Wi‑Fi, UWB, and cellular IoT IP platforms address the high‑volume IoT, industrial, consumer, and smart home markets. ABI Research projects more than 16.5 billion devices annually by 2029. With leadership in Wi‑Fi 6 and Wi‑Fi 7 IP, and record Wi‑Fi 6 shipments in 2025, we believe we are positioned to capture higher royalty revenues as customers transition to newer standards.
- **Connectivity layer – 5G everywhere:** Our PentaG2 platform and DSPs for 5G mobile broadband, 5G RedCap and 5G Advanced, including our PentaG-NTN solution for satellite communications, provide one of the industry’s most comprehensive baseband IP solutions, enabling fixed wireless access, satellite communications, robotics, automotive and industrial applications.
- **Connectivity layer – Infrastructure intelligence:** Our PentaG RAN platform, including the Ceva‑XC22 multi‑thread DSP, extends our leadership into 5G RAN and 5G Advanced for data centers and infrastructure, enabling scalable, customizable solutions for next‑generation networks.
- **Sensing layer – Consumer audio and spatial intelligence:** High‑volume consumer audio markets such as TWS earbuds, AR/VR headsets, and wearables represent incremental growth opportunities for our Bluetooth, Audio AI DSPs, NPUs and RealSpace Spatial Audio & Head Tracking software. Recent design wins with Nothing and other consumer brands highlight growing adoption.
- **Sensing layer – Software intelligence at scale:** Our MotionEngine software, already shipped in more than 500 million devices, enhances MEMS‑based inertial and environmental sensors across robotics, smartphones, laptops, TWS earbuds, and more. Combined with our SensPro DSPs and NeuPro NPUs, we believe this positions Ceva as a one‑stop shop for sensor processing and AI‑driven user experiences.
- **Inference layer – Generative and classic AI at the edge:** Our NeuPro‑M AI NPU family delivers efficient, high‑performance architectures for generative and classic AI across devices from gateways and notebooks to AR/VR and smartphones. Recent agreements include Microchip’s portfolio license win for our NeuPro-M and NeuPro-Nano family of NPUs.
- **Inference layer – Embedded AI and TinyML:** Our NeuPro‑Nano NPUs bring cost‑ and power‑efficient AI to microcontrollers and systems-on-chips (SoCs), enabling artificial IoT (AIoT) devices for sound, vision, vibration, and health monitoring. ABI Research projects that by 2030, over 50% of TinyML shipments will be powered by dedicated embedded AI hardware such as NeuPro‑Nano.
- **Inference layer – AI DSPs for perception and sensor intelligence:** Our SensPro2 AI DSP family addresses demand for efficient, high‑performance AI signal processing across sensor‑rich applications, from smartphones and drones to automotive ADAS and industrial IoT.

As a result of our focus on silicon and software IP solutions spanning the connectivity, sensing and inference layers of Physical AI, we believe Ceva is well positioned for sustained, long‑term growth in both shipments and royalty revenues. Our diversified royalty streams reflect a broad range of advanced semiconductor packages (ASPs) – from high‑volume Bluetooth and Wi‑Fi connectivity platforms that power billions of consumer devices to higher‑value inference engines and AI DSPs such as NeuPro and SensPro, as well as infrastructure‑class platforms like PentaG-RAN. We believe this mix provides both scale and resilience, enabling us to capture growth across consumer, automotive, industrial and infrastructure markets while reinforcing our role as the enabler of Physical AI.

### CURRENT TRENDS

We believe the long-term trend of digital transformation is evolving into a new era defined by Physical AI – the next phase of Edge AI – where intelligence is embedded directly into the devices that connect, sense and interact with the real world. Our ubiquitous IP portfolio and collaborative licensing model position us to capture secular growth across consumer IoT, automotive, industrial and infrastructure, and mobile and PC markets.

Our customers are increasingly adopting our roadmap as they seek to integrate connectivity, sensing and intelligence into their devices. The first quarter of 2026 provided further evidence of this trend, with 14 licensing agreements, including multiple multi-technology engagements across connectivity and AI, 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 consumer IoT, industrial and AI-driven applications. In the first quarter of 2026, Ceva-powered device shipments reached 458 million units, up 9% year-over-year. Wi-Fi shipments reached a record level, driven by strong adoption of Wi-Fi 6 across a broad range of devices, while cellular IoT shipments grew 38% year-over-year, reflecting continued expansion across connected applications.

We are also seeing early contributions from AI-driven royalties, highlighted by our first mass-volume automotive AI deployment and a ramping AI SoC for surveillance, marking the initial phase of what we expect to become a meaningful long-term growth driver.

In the first quarter, royalty performance was impacted by typical seasonal softness in mobile, combined with near-term effects from memory availability constraints and channel inventory in lower-tier smartphone segments. We view these dynamics as largely timing-related and expect improvement as the year progresses.

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., as reflected in our increasingly diversified geographic revenue mix in recent years. 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, 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.

Given these evolving dynamics, as well as our lower-than-anticipated revenues for the first quarter of 2025, in May 2025 we adopted a more cautious outlook and lowered our revenue guidance for fiscal year 2025 from high-single-digit growth to low-single-digit growth over 2024 annual revenues. We finished fiscal year 2025 with total revenues of $109.6 million, which was in line with this more cautious approach. Licensing was a relative strength during the year, while royalty revenues were affected by end-market consumer demand dynamics, including the impact of memory pricing and supply constraints on the low-end smartphone market. We anticipate that these factors may continue to impact consumer demand and our royalty revenue growth expectations into 2026. With that said, we’ve increased our overall 2026 revenue growth guidance to be at the higher end of 8%-12% year-over-year.

### Instability in the Middle East

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, in 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 between the United States, Israel and Iran, and between Israel and Hezbollah, 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 upheld or that permanent ceasefires will be reached, and the situation in Israel and the region remains highly volatile. 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.

### RESULTS OF OPERATIONS

#### Total Revenues

Total revenues were $27.0 million for the first quarter of 2026, representing an increase of 11% as compared to the corresponding period in 2025. The increase in total revenues for the first quarter of 2026 was due to higher licensing and related revenues, as further described below.

Our five largest customers accounted for 44% 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 quarter of 2026, as compared to one customer that accounted for 24% of our total revenues for the first quarter 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, two royalty paying customers represented 10% or more of our total royalty revenues for the first quarter of 2026 and collectively represented 22% of our total royalty revenues for the first quarter of 2026. Two royalty paying customers represented 10% or more of our total royalty revenues for the first quarter of 2025 and collectively represented 30% of our total royalty revenues for the first quarter of 2025. 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 following table sets forth use cases for the Ceva technology portfolio as percentages of our total revenues for each of the periods set forth below:

|  | First Quarter 2026 | First Quarter 2025 |
| --- | ---: | ---: |
| Connect (baseband for handset and other devices, Bluetooth, Wi-Fi and NB-IoT) | 73% | 84% |
| Sense & Infer (sensor fusion, audio, sound, imaging, vision and AI) | 27% | 16% |

#### Licensing and Related Revenues

Licensing and related revenues was $17.8 million for the first quarter of 2026, representing an increase of 18% as compared to the corresponding period in 2025. In licensing, our expanding portfolio, combined with our strategy to deliver more integrated, system-level solutions, is enabling us to increase our value per customer. This quarter, we secured our first licensing win for a complete Bluetooth High Data Throughput, or HDT, solution, a foundational capability for the upcoming Bluetooth 7 standard. We licensed this full solution, including modem, software and RF, to a leading U.S.-based analog semiconductor company. We also signed multiple AI‑related licensing agreements, including an NPU deal for surveillance and an AI tools engagement with a global automotive OEM. AI represented more than 20% of our licensing and related revenues in the quarter. Our AI licensing pipeline remains strong, with multiple evaluations and advanced negotiations underway across a broad range of end markets.

During the quarter, 14 IP licensing agreements were signed, including two with OEMs. We secured a Wi-Fi 7 design targeting consumer IoT, a Wi-Fi 6 / Bluetooth combo engagement with a leading edge-AI SoC platform company, and multiple additional Bluetooth and Wi-Fi wins across our connectivity portfolio, as well as securing a new customer win with a major U.S.-based MCU provider licensing our next-generation UWB platform.

Across these wins, a clear pattern is emerging. The Bluetooth, NTN and UWB engagements we highlighted this quarter are all with existing customers who have expanded their use of Ceva IP over the past two years. More broadly, customers are increasingly adopting more integrated, system-level solutions from Ceva, expanding our value per design, while strengthening long-term royalty and margin potential.

Licensing and related revenues accounted for 66% of our total revenues for the first quarter of 2026, as compared to 62% for the comparable period of 2025.

#### Royalty Revenues

Royalty revenues were $9.2 million for the first quarter of both 2026 and 2025. Royalty revenues accounted for 34% of our total revenues for the first quarter of 2026, as compared to 38% for the comparable period of 2025. We continue to see encouraging momentum across our diversified smart edge markets, with growth in IoT, industrial and AI-driven applications. Wi-Fi shipments reached an all-time high in the quarter at 91 million units, up 158% year-over-year, driven by record Wi-Fi 6 volumes, highlighting the continued expansion of this market as customers ramp deployments across a broad range of devices. We are seeing a similar dynamic in Bluetooth, with ongoing adoption of Bluetooth 6 across multiple end markets. Cellular IoT was also strong, coming in at 66 million units, up 38% year-over-year, reflecting broad-based demand across connected devices. More broadly, Wi-Fi and Bluetooth continue to be durable, multi-year growth drivers. AI-driven royalties also continued to grow, highlighted by our first mass-volume automotive AI deployment at Toyota and a ramping AI SoC for surveillance, representing early signs of the long-term contribution we expect from edge AI across multiple end markets. Against these tailwinds, first quarter royalties were impacted by typical seasonal softness in mobile, combined with near-term effects from memory availability constraints and channel inventory in the lower-tier segments. We view these mobile dynamics as largely timing-related and expect improvement as the year progresses, supported by inventory normalization and typical seasonality, along with stronger high-end smartphone demand in the second half.

The five largest royalty-paying customers accounted for 47% of our total royalty revenues for the first quarter of 2026, as compared to 50% for the comparable period of 2025.

#### Geographic Revenue Analysis

*(in millions, except percentages)*

|  | First Quarter 2026 |  | First Quarter 2025 |  |
| --- | ---: | ---: | ---: | ---: |
| United States | $7.4 | 27% | $3.6 | 15% |
| Europe and Middle East | $1.0 | 4% | $1.5 | 6% |
| Asia Pacific (1) | $18.6 | 69% | $19.1 | 79% |
| (1) China | $15.3 | 56% | $16.1 | 66% |

Due to the nature of our license agreements and the associated potential large individual contract amounts, the geographic split of revenues, both in absolute dollars and percentage terms, generally varies from quarter to quarter.

#### Cost of Revenues

Cost of revenues was $3.7 million for the first quarter of 2026, as compared to $3.5 million for the comparable period of 2025. Cost of revenues accounted for 14% of our total revenues in the first quarter of both 2026 and 2025. The slight increase for the first quarter 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 first quarter of both 2026 and 2025 was a non-cash equity-based compensation expense of $0.2 million.

#### Gross Margin

Gross margin for the first quarter of 2026 was 86%, unchanged from 86% for the comparable period of 2025. The increase in gross margin in absolute dollars for the first quarter of 2026 mainly reflected higher licensing and related revenues, as set forth above.

#### Operating Expenses

Total operating expenses were $28.4 million for the first quarter of 2026, as compared to $25.1 million for the comparable period of 2025. The net increase for the first 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, and higher non-cash equity-based compensation expenses.

#### Research and Development Expenses, Net

Total research and development expenses, net were $19.8 million for the first quarter of 2026, as compared to $17.6 million for the comparable period of 2025. The increase for the first 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, higher facilities expenses associated with research and development activities and higher non-cash equity-based compensation expenses. Included in research and development expenses for the first quarter of 2026 were non-cash equity-based compensation expenses of $2.9 million, as compared to $2.5 million for the comparable period of 2025. Research and development expenses as a percentage of our total revenues were 73% for the first quarter of both 2026 and 2025.

The number of research and development personnel was 318 at March 31, 2026, as compared to 325 at March 31, 2025.

#### Sales and Marketing Expenses

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

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

#### General and Administrative Expenses

Our general and administrative expenses were $4.7 million for the first quarter of 2026, as compared to $3.9 million for the comparable period of 2025. The increase for the first quarter 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 first quarter of 2026 were non-cash equity-based compensation expenses of $1.6 million, as compared to $1.1 million for the comparable period of 2025. General and administrative expenses as a percentage of our total revenues were 17% for the first quarter of 2026, as compared to 16% for the comparable period of 2025.

The number of general and administrative personnel was 52 at March 31, 2026, as compared to 47 at March 31, 2025.

#### Amortization of Intangible Assets

Our amortization charges were $0.1 million for the first quarter of both 2026 and 2025. The amortization charges for both periods were incurred in connection with the amortization of intangible assets associated with the acquisitions of the Hillcrest Labs and VisiSonics business.

#### Financial Income, Net (in millions)

|  | First Quarter 2026 | First Quarter 2025 |
| --- | ---: | ---: |
| **Financial income, net** | $1.9 | $2.1 |
| **of which:** |  |  |
| Interest income and gains and losses from marketable securities, net | $2.1 | $1.5 |
| Foreign exchange gain (loss) | $(0.2) | $0.6 |

Financial income, net, consists of interest earned on investments, gains and losses from sale of marketable securities, accretion (amortization) of discounts (premiums) on marketable securities and foreign exchange movements.

The increase in interest income and gains and losses from marketable securities, net, during the first quarter 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).

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 million for the first quarter of 2026, as compared to a foreign exchange gain of $0.6 million for the comparable period of 2025.

#### Remeasurement of Marketable Equity Securities

We recorded a gain of $0.1 million for the first quarter of 2026, as compared to a loss of $0.1 million for the comparable period 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.

#### Income Tax Expense

Our income tax expenses was $1.3 million for the first quarter of 2026, as compared to $1.0 million for the comparable period of 2025. The increase for the first quarter of 2026 primarily reflected higher withholding tax expenses.

We are subject to income and other taxes in the United States and in numerous foreign jurisdictions. Our domestic and foreign tax liabilities are dependent on the jurisdictions in which profits are determined to be earned and taxed. Additionally, the amount of taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we operate. A number of factors influence our effective tax rate, including changes in tax laws and treaties as well as the interpretation of existing laws and rules. Federal, state, and local governments and administrative bodies within the United States, and other foreign jurisdictions have implemented, or are considering, a variety of broad tax, trade, and other regulatory reforms that may impact us. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. Key corporate tax provisions of OBBBA include the restoration of 100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to Section 163(j) interest limitations, modification of several international tax provisions, and expanded Section 162(m) aggregation requirements. In accordance with ASC 740, we have recognized the effects of the new tax law in the period of enactment. The OBBBA did not have a material impact on our financial position.

We have significant operations in Israel and France, and a substantial portion of our taxable income is generated in these jurisdictions, as well as potentially in the U.S. due to Global Intangible Low-Taxed Income and the requirement to capitalize research and development expenditures under IRC Section 174 over 15 years if sourced internationally. Although certain of our non-U.S. subsidiaries are taxed at rates substantially lower than U.S. tax rates, our overall tax rate 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.

Our Irish subsidiary qualified for a 12.5% tax rate on its trade. Interest income generated by our Irish subsidiary is taxed at a rate of 25%.

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). Income not eligible for a tax benefit under the French IP Box regime is taxed at a regular rate of 25%.

Our Israeli subsidiary has previously benefited from various Israeli tax incentives, including reduced corporate tax rates and, in some instances, exemptions on undistributed profits. These tax-exempt profits are permanently reinvested as management has determined that the Israeli subsidiary does not currently intend to distribute dividends. Therefore, deferred taxes have not been provided for such tax-exempt income. We intend to continue to reinvest these profits and do not currently foresee a need to distribute dividends out of such tax-exempt income.

#### Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

We believe that the assumptions and estimates associated with revenue recognition, equity-based compensation and credit losses have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.

See our Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of additional critical accounting policies and estimates. There have been no changes in our critical accounting policies as compared to those previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2025.

### LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2026, we had approximately $21.4 million in cash and cash equivalents, $5.1 million in bank deposits, and $189.2 million in marketable securities, totaling $215.7 million, as compared to $222.0 million at December 31, 2025. The decrease for the first three 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 million, $114.4 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 require additional funds for strategic transactions in the United States, 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 three months of 2026, we invested $27.6 million of cash in bank deposits and marketable securities with maturities up to 50 months from the balance sheet date. In addition, during the same period, marketable securities were redeemed for cash amounting to $14.1 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 three 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 months ended March 31, 2026.

Bank deposits are classified as short-term bank deposits and long-term bank deposits. Short-term bank deposits are deposits with maturities of more than three months but no longer than one year from the balance sheet date, whereas long-term bank deposits are deposits with maturities of more than one year as of the balance sheet date. Bank deposits are presented at their cost, including accrued interest, and purchases and sales are considered part of cash flows from investing activities.

#### Operating Activities

Net cash used in operating activities for the first three months of 2026 was $4.9 million and consisted of net loss of $4.5 million, adjustments for non-cash items of $6.6 million, and changes in operating assets and liabilities of $7.0 million. Adjustments for non-cash items primarily consisted of $0.9 million of depreciation and amortization of intangible assets, $5.4 million of equity-based compensation expenses, and $0.5 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 million (mainly as a result of payments of a yearly design tool subscription and $1.4 million of unbilled receivables classified as “other long-term assets” in the interim condensed consolidated balance sheets), as well as a decrease in accrued expenses and other payables of $0.9 million and a decrease in accrued payroll and related benefits of $0.8 million (mainly due to partial yearly bonus payments), partially offset by an increase in operating lease liabilities of $0.7 million.

Net cash used in operating activities for the first three months of 2025 was $7.4 million and consisted of net loss of $3.3 million, adjustments for non-cash items of $4.4 million, and changes in operating assets and liabilities of $8.5 million. Adjustments for non-cash items primarily consisted of $0.9 million of depreciation and amortization of intangible assets, and $4.3 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 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 million (mainly as a result of payment of a yearly design tool subscription), as well as a decrease in deferred revenues of $0.6 million, a decrease in accrued expenses and other payables of $1.1 million, and a decrease in accrued payroll and related benefits of $0.8 million (mainly due to partial yearly bonus payments), partially offset by an increase in trade payables of $1.4 million.

Cash flows from operating activities may vary significantly from quarter to quarter depending on the timing of our receipts and payments. Our ongoing cash outflows from operating activities principally relate to payroll-related costs and obligations under our property leases and design tool licenses. Our primary sources of cash inflows are receipts from our accounts receivable, to some extent, funding from research and development government grants and French research tax credits, and interest earned from our cash, deposits and marketable securities. The timing of receipts of accounts receivable from customers is based upon the completion of agreed milestones or agreed dates as set out in the contracts.

#### Investing Activities

Net cash used in investing activities for the first three months of 2026 was $15.8 million, compared to $6.2 million of net cash provided by investing activities for the comparable period of 2025. We had a cash outflow of $24.6 million and a cash inflow of $14.1 million with respect to investments in marketable securities during the first three months of 2026, as compared to a cash outflow of $29.1 million and a cash inflow of $35.7 million with respect to investments in marketable securities during the first three months of 2025. For the first three months of 2026, we had an investment of $3.0 million in bank deposits. We had a cash outflow of $2.3 million and $0.3 million during the first three 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).

#### Financing Activities

Net cash provided by financing activities for the first three months of 2026 was $1.6 million, as compared to net cash provided by financing activities in the amount of $1.4 million for the comparable period of 2025. All of the cash inflows in both periods resulted from the exercise of stock‑based awards.

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 quarter of either 2026 or 2025. As of March 31, 2026, we had 684,486 shares available for repurchase.

We believe that our cash and cash equivalents, short-term bank deposits and marketable securities, along with cash from operations, will provide sufficient capital to fund our operations for at least the next 12 months. We cannot provide assurances, however, that the underlying assumed levels of revenues and expenses will prove to be accurate.

In addition, as part of our business strategy, we occasionally evaluate potential acquisitions of businesses, products and technologies and minority equity investments. Accordingly, a portion of our available cash may be used at any time for the acquisition of complementary products or businesses or minority equity investments. Such potential transactions may require substantial capital resources, which may require us to seek additional debt or equity financing. We cannot assure you that we will be able to successfully identify suitable acquisition or investment candidates, complete acquisitions or investments, integrate acquired businesses into our current operations, or expand into new markets. Furthermore, we cannot provide assurances that additional financing will be available to us in any required time frame and on commercially reasonable terms, if at all.

#### Contractual Obligations and Commitments

We believe that our contractual obligations and commitments have not changed materially from those included in our Annual Report on Form 10-K for the year ended December 31, 2025.

## Market risk

As filed, 6,196 characters.

A majority of our revenues and a portion of our expenses are transacted in U.S. dollars and our assets and liabilities together with our cash holdings are predominately denominated in U.S. dollars. However, the majority of our expenses are denominated in currencies other than the U.S. dollar, principally the NIS and the Euro. Increases in 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 when remeasured into U.S. dollars. We review our monthly expected 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 increase significantly on a quarterly basis beyond our Euro liabilities, mainly from French research tax benefits applicable to the CIR, which is 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 million for the first quarter of 2026, as compared to a foreign exchange gain of $0.6 million for the comparable period of 2025.

As a result of currency fluctuations and the remeasurement of non-U.S. dollar denominated expenditures to U.S. dollars for financial reporting purposes, we may experience fluctuations in our operating results on an annual and quarterly basis. To protect against the increase in value of forecasted foreign currency cash flow resulting from salaries paid in currencies other than the U.S. dollar during the year, we follow a foreign currency cash flow hedging program. We hedge portions of the anticipated payroll for our non-U.S. employees denominated in currencies other than the U.S. dollar for a period of one to twelve months with forward and option contracts. During the first quarter of 2026 and 2025, we recorded accumulated other comprehensive loss of $0.1 million and $0.4 million, respectively, from our forward and option contracts, net of taxes, with respect to anticipated payroll expenses for our non-U.S. employees. As of March 31, 2026, the amount of other comprehensive loss from our forward and option contracts, net of taxes, was $0.03 million, which will be recorded in the consolidated statements of income (loss) during the following three months. We recognized a net gain of $0.1 million for both the first quarter of 2026 and 2025 related to forward and options contracts. We note that hedging transactions may not successfully mitigate losses caused by currency fluctuations. We expect to continue to experience the effect of exchange rate and currency fluctuations on an annual and quarterly basis.

A hypothetical 10% weakening of the U.S. dollar against the NIS and the Euro would have resulted in an increase to our salary and employee related expenses, which are a large portion of our operating costs, of approximately $1.6 million for the first quarter of 2026. A hypothetical 10% strengthening of the U.S. dollar against the NIS and the Euro would have resulted in a decrease to our salary and employee related expenses of approximately $1.3 million for the first quarter of 2026.

The majority of our cash and cash equivalents are invested in high-grade certificates of deposits with major U.S., European and Israeli banks. Generally, cash and cash equivalents and bank deposits may be redeemed and therefore minimal credit risk exists with respect to them. Nonetheless, deposits with these banks exceed the Federal Deposit Insurance Corporation (FDIC) insurance limits or similar limits in foreign jurisdictions, to the extent such deposits are even insured in such foreign jurisdictions. While we monitor on a systematic basis the cash and cash equivalent balances in the operating accounts and adjust the balances as appropriate, these balances could be impacted if one or more of the financial institutions with which we deposit our funds fails or is subject to other adverse conditions in the financial or credit markets. To date, we have experienced no loss of principal or lack of access to our invested cash or cash equivalents; however, we can provide no assurance that access to our invested cash and cash equivalents will not be affected if the financial institutions that we hold our cash and cash equivalents fail.

We hold an investment portfolio consisting principally of corporate bonds. We have the ability to hold such investments until recovery of temporary declines in market value or maturity. As of March 31, 2026, the unrealized losses associated with our investments were $0.7 million. As we tend to hold such bonds with unrealized losses to recovery, the allowance for credit losses was not material during the first three months of 2026. However, we can provide no assurance that we will recover present declines in the market value of our investments.

Interest income and gains and losses from marketable securities, net, were $2.1 million for the first quarter of 2026, as compared to $1.5 million for the comparable period of 2025. The increase in interest income and gains and losses from marketable securities, net, during the first quarter 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).

We are exposed primarily to fluctuations in the level of U.S. interest rates. To the extent that interest rates rise, fixed interest investments may be adversely impacted, whereas a decline in interest rates may decrease the anticipated interest income for variable rate investments. We typically do not attempt to reduce or eliminate our market exposures on our investment securities because the majority of our investments are short term. We currently do not have any derivative instruments but may put them in place in the future. Fluctuations in interest rates within our investment portfolio have not had, and we do not currently anticipate such fluctuations will have, a material effect on our financial position on an annual or quarterly basis.

## Controls and procedures

As filed, 703 characters.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2026.

There has been no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

## Risk factors

As filed, 970 characters.

We have not identified any material changes to the Risk Factors previously disclosed in Part I—Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of those factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and stock price. You should carefully consider the risks and uncertainties described in our Annual Report filed on Form 10-K for the year ended December 31, 2025, together with all of the other information in this Quarterly Report on Form 10-Q, including in Part I—Item 2—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the condensed consolidated financial statements and related notes.

Filed May 11, 2026.
Source: SEC EDGAR, the filing index for accession 0001437749-26-016119. Last ingested by Listed: Oct 30, 2026, 11:28 ET. No prices; not investment advice.