Good day, and welcome to the CEVA Inc. Fourth Quarter and Full Year 2021 Earnings Conference Call. Please note, today's event is being recorded. I'd now like to turn the conference over to Richard Kingston, Vice President, Market Intelligence, Investor and Public Relations. Please go ahead, sir.

Thank you, Rocco. Good morning, everyone, and welcome to CEVA's fourth quarter and full year 2021 earnings conference call. I'm joined today by Gideon Wertheizer, Chief Executive Officer; and Yaniv Arieli, Chief Financial Officer of CEVA. Gideon will cover the business aspects and highlights from the fourth quarter and provide general qualitative data. Yaniv will then cover the financial results for the fourth quarter and full year 2021 and also provide guidance for the first quarter and full year 2022. I will start with the forward-looking statements. Please note that today’s discussion contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions. Forward-looking statements include statements regarding demand for and benefits of our technologies; expectations regarding market dynamics, changes in the semiconductor industry, and our plans to capitalize on the foregoing; beliefs regarding benefits and impacts of the Intrinsix acquisition, including expansion into the aerospace and defense market and ability to offer integrated IP solutions and enriched security and assurance products; expectations and financial guidance regarding future performance, including growth in licenses, revenues and customer agreements and qualitative data for 2022; and objectives regarding sustainability. For information on the factors that could cause a difference in our results, please refer to our filings with the Securities and Exchange Commission. These include: the scope and duration of the pandemic; the extent and length of the restrictions associated with the pandemic and the impact on customers, consumer demand and the global economy generally; the ability of CEVA’s IPs for smarter, connected devices to continue to be strong growth drivers for us; our success in penetrating new markets and maintaining our position in existing markets; the ability of new products incorporating our technologies to achieve market acceptance; the speed and extent of the expansion of the 5G and IoT markets; our ability to execute more base station & IoT license agreements; the effect of intense industry competition and consolidation; global chip market trends, including supply chain issues as a result of COVID-19 and other factors; and our ability to successfully integrate Intrinsix into our business. CEVA assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. With that said, I'd now like to hand the call over to Gideon.

Thank you, Richard. Good morning, everyone and thank you for joining us today. The fourth quarter and the fiscal year 2021 was extremely intense and exceptionally successful. As the digital transformation drives industries to become connected and intelligent, our ubiquitous technology and collaborative business model present a significant and secular growth prospect. Our record financial results for 2021 and the 2022 guidance that Yaniv will shortly outline bodes well with these dynamics. For the fourth quarter, we delivered record revenue of $34.1 million, the third consecutive quarter of record high revenue, up 22% compared to the fourth quarter of 2020. The licensing environment continues to be robust at $21.3 million on the back of 20 new license agreements and four first-time customers. The fourth quarter licensing engagements highlight the transformation in our value proposition from licensing of standardized IP cores toward licensing of comprehensive IP platforms which leads to higher upfront license revenues and larger royalty opportunities. In this context, we executed a number of sizable agreements this quarter, among which are agreements with a Japanese OEM for the nationwide deployment of 5G fixed wireless access in Japan, a lead OEM customer for the next generation Wi‑Fi 7, and a Tier 1 semiconductor company for an AI-based Advanced Driver Assistance Systems, ADAS project. We also executed the first Integrated IP Solutions agreement, where we couple IP licensing with Intrinsix chip design for a comprehensive platform for a smart motor control product for a large U.S. semiconductor vendor. Royalty revenue for the quarter came in ahead of our expectation at $12.7 million. Our diverse Base Station and IoT product category continues to expand, up 21% in royalty revenue versus the respective quarter last year. Our technologies being deployed in wearables, PCs, smart TVs, robot vacuum cleaners, surveillance cameras and in plenty of other IoT devices are key drivers for that growth. On 5G RAN, a key customer of ours released for field testing new 5G RAN products enabled by our latest and most advanced DSP, the XC16. Compared to the fourth quarter of 2020, royalty revenue was down 21%, as a large U.S.-based handset OEM moved to 5G, for which it uses chips from a competitor, which we alluded to on prior calls. For the full year 2021, our total non-GAAP revenue grew 22% to a record of $122.9 million, driven by a step up in our licensing, NRE and related revenue. Revenue from this part of our business had a record performance of $73 million, up 39% compared to last year, with 73 agreements, up from 55 last year. These achievements in licensing are key for our business growth, as signing up licensees is the precursor for royalty revenue, which in turn scale our operating leverage and earnings per share. Our consistent and relentless efforts to grow and diversify our licensees is already apparent in the royalty revenue out of the Base Station & IoT segment, that grew by 29% year-over-year to a record of $28.6 million and 69% in units and approaching 1.3 billion units. Overall, royalty revenue was a record high $49.9 million of which strong growth in royalty revenue out of the Base Station & IoT category more than offset the decline in the handset category. To grow further our licensee base and strengthen our value proposition in these engagements, we completed the strategic acquisition of Intrinsix during the year. Intrinsix brings in a new customer base in the lucrative aerospace and defense markets and enables us to offer integrated IP solutions where we offer a combination of IP licensing with SoC design for an optimal performance outcome and a larger revenue share with our customers. Let me at this stage walk you through the thought process we went through to determine our focused go-to-market strategy. The ongoing turmoil in chip supply has made evident the foundational role the semiconductor industry has in technology innovation and the overall economy. According to Deloitte, in 2020, global semiconductor sales rose 6.6% to $440 billion even as global GDP shrank 3.5%. And for the next decade, the semi space is expected to show 50% faster growth than global GDP. Furthermore, geopolitical tensions and the criticality of chip supply to national security drive governments to spend and incentivize investment in the semi space, as can be seen by the anticipated U.S. Senate bill for $52 billion investment in semiconductor technologies, and the Chinese government’s announcement of $150 billion investment in the semi space over the next 10 years. This explosive demand for chips drives OEMs and IT companies to internalize their chip needs and to engage directly with foundries and IP companies. Also, the Chinese government’s ambitions to be self-sufficient in the semiconductor space encourages local investors and technologists to form new chip companies to drive the fast-growing electric car, industrial, and consumer products industries. Against this backdrop, CEVA’s broad IP portfolio and capabilities to expedite and streamline customer chip developments has opened new and sizable customer opportunities. Let me add more color on how we plan to capitalize on these tectonic changes. Wireless. Wireless technologies, including cellular, Wi‑Fi, Bluetooth and UWB have been a key strength for CEVA. Over the years, we have been able to focus on the right end markets and to build a very large customer base. We have earned a strong reputation, which enables us to engage with and sign-up top customers to drive next generations and new trends in wireless. Strategically, we will pivot on two main wireless trends. First, the proliferation of 5G in broadband and massive IoT. The recent Ericsson Mobility report projects 5.5 billion cellular connections by 2027 that are not handsets, up from 1.9 billion connections in 2021. Cellular IoT applies to broad markets, among which are fixed wireless access devices, automotive, industrial, laptops and more. Cellular IoT is fundamental to enable smart transportation, smart grid, robotics, and remote health care. CEVA offers to OEMs and semiconductor companies targeting cellular IoT two highly integrated IP platforms, the PentaG for Mobile Broadband IoT, and DragonFly for massive IoT. We believe that by capitalizing on these two technologies and the upcoming new generations, we are well positioned to address the whole market needs and to enable new entrants to penetrate this huge space. Second is the Wi‑Fi upgrade cycle. The Wi‑Fi market is huge and growing. ABI Research forecasts 5.5 billion Wi‑Fi devices by 2026, up from 3.5 billion in 2021. The rollout of the latest standard Wi‑Fi 6, and recently 6E, is underway and expected to see more shipments than any prior standards as it extends beyond smartphones, PCs and tablets, to smart home, industrial, cars, AR and VR and many more markets. The complexity encompassed in new Wi‑Fi designs, along with new connected devices that require Wi‑Fi IP integration, is driving strong momentum in our overall annual licensing & NRE business, which was up 39% in 2021 versus 2020. Our R&D investment will focus on the next generation, Wi‑Fi 7, which is expected to be in the market by 2024. As mentioned earlier, in the fourth quarter, we signed a lead customer Wi‑Fi 7 agreement with one of the largest OEMs in China which seeks to decouple its dependencies on the chip incumbents that currently dominate the advanced Wi‑Fi chipset market. Edge AI. Edge AI emerges from growing need to hand over AI processing from cloud to smart devices such as smartphones, cars, robots, or 5G base stations to gain faster response and higher security. Per a recent ABI Research forecast, edge AI is a fast-growing market, expecting to surpass 1.3 billion units by 2026. CEVA has targeted the edge AI market from early on. We already have good penetration with Edge AI in Automotive ADAS market where we are closely working with industry leaders including both semiconductors and OEMs, and in the surveillance and consumer markets. To further capitalize on our strength, we unveiled last month our new generation AI processor, the NeuPro‑M. NeuPro‑M delivers a significant performance leap compared to its predecessor, NeuPro‑S, and for the first time introduces new concepts in AI architecture design, security integration and chiplet scalability. Its heterogeneous, multiprocessor architecture offers performance ranging from 20 Tera Operations per Second or TOPS to 1,200 TOPS. Its use extends beyond video to a whole new range of AI usages such as Natural Language Processing, 5G network optimization, Level 4 and 5 fully autonomous cars, industrial machines and more. For the first time, NeuPro‑M enables chiplet scalability for which our Intrinsix team can offer a turnkey design for heterogeneous SoCs. Wearable and Hearables. The onset of COVID‑19 has increased the demand for wearable and wireless headsets and catalyzed innovation in these spaces. Wireless headsets are looking for high quality sound with smart and dynamic noise suppression. Smartwatches are disrupting the traditional watch market and are evolving into health and activity monitoring devices. Research firm Yole Développement forecasts that shipments of TWS earbuds, hearing aids, smartwatches and smart speakers will surpass 1.3 billion units by 2026. CEVA already has a strong position in the wearables and hearables space, with dozens of active customers. We are in a unique position to standardize wireless audio processing IP with our latest Bluebud platform. Last month, we enriched the Bluebud value proposition with the launch of Bluebud HD, a suite of pre-configured software for high quality audio, voice conversations and contextual awareness. Bluebud HD lowers the cost of entry for many semiconductors and OEMs that lack the scarce expertise in wireless audio, which CEVA masters. China. Our revenue out of China grew 30% this year versus last year. Unit shipments by our Chinese customers grew 38% versus 2020. We are the de-facto standard in wireless communication used by all the major players, among which are ZTE, Unisoc, Bestechnic, Beken, ASR Micro and others, which overall constitute more than 75 active customers. ZTE, our key customer in 5G base station RAN, is set to substantially grow network footprint in China, as can be seen by its recently securing 31% of the recent China Mobile procurement bid for 5G 700 MHz networks, and 34% of the 5G standalone construction for China Telecom and China Unicom. We are uncovering sizable opportunities in automotive, robotics and mobile where leading OEMs are internalizing chip design. Our most advanced technologies and our brand recognition sets us up for further growth in China. Next before my closing remarks, I want to update you on our objectives and commitments toward future sustainability. Companies around the world have provided sustainability plans for decreasing their carbon footprint over the next decade. At our end, being an IP company, our direct carbon footprint is minimal, with activities primarily by R&D engineers and no manufacturing facilities. However, we intend to take advantage of our expertise in wireless, AI and low power designs to help our customers achieve their own sustainability goals. As I stated above, we are focusing on Wireless IoT where our technologies can add resiliency and run-time analytics to optimize energy and water utilization and to expedite the shift to renewable energy. We will also work with our base station RAN customers on next generation DSP technologies that will serve their objective of lower heat dissipation and energy consumption. We will continue to periodically consult with our investors on their perspectives on sustainability. So, in summary, CEVA is uniquely positioned to capitalize on the semiconductor momentum and market transformation toward digitization, AI and connectivity. Our customer pipeline at the end of the year is historically high. We believe our key customers are keenly receptive to our product roadmap and priorities and willing to expand the scope of engagements with us. We expect 2022 to be an exciting year with growing momentum in revenue, EPS and customer engagements. We are determined to continue to develop standout products and consistently grow our customer base and licensing engagements to scale our business. Finally, I would like to take this opportunity to thank all of our employees for their hard work and dedication, innovation and fantastic execution. I would like to extend my thanks to our partners, suppliers and to our shareholders for their confidence and support. We wish you all a healthy, happy and prosperous year and please stay safe. With that said, I’ll now turn the call over to Yaniv, who will outline our financials and guidance.

Thank you, Gideon. I’ll start by further reviewing our results of operations for the fourth quarter of 2021. Revenue for the fourth quarter was a record high at $34.1 million, up 21% compared to $28.1 million for the same quarter last year, our third sequential all-time high. Non-GAAP revenue was $34.2 million, up 22% year-over-year, $0.2 million higher due to purchase price allocation adjustment associated with our Intrinsix acquisition. The revenue breakdown is as follows: licensing, NRE and related revenue was $21.3 million, reflecting 63% of our total revenue, up 78% as compared to the fourth quarter of 2020 and just slightly below our third quarter record high. Royalty revenue was $12.7 million, reflecting 37% of our total revenue, down 21% from $16.1 million for the same quarter last year, but up 13% sequentially. Base Station & IoT royalty revenue contributed $7.8 million in the quarter, up 21% year-over-year, including all-time record high contribution from our sensor fusion product line and continued growth and strength across our Base Station and IoT product lines overall. Gross margin were 83% on GAAP basis and 87% on non-GAAP basis, both higher than projected due to lower allocation of Intrinsix’s NRE costs from R&D into the cost of goods sold line. Non-GAAP quarterly gross margin excluded approximately $0.3 million of equity-based compensation expenses and $1 million of amortization of other assets associated with the Intrinsix acquisition and Immervision investment. Total operating expenses for the fourth quarter was $26.6 million, over the high-end of our guidance, due to lower allocation of Intrinsix’s NRE costs from R&D into the cost of revenue per our prior quarter’s guidance. Such shifts between the two expense line items may happen from time to time and are tied to the actual chip design work performed in the quarter. OpEx also included an aggregate equity-based compensation expenses of approximately $3.2 million, amortization of acquired intangibles $1 million, and $0.3 million of Intrinsix related deal costs. Total operating expenses for the fourth quarter, excluding equity-based compensation, amortization of intangibles and deal costs were $22.4 million, over the high-end of our guidance, due to the same reasons I just stated for GAAP. GAAP other income included a $1.5 million revaluation, net of taxes, of our investment in Cipia, formerly called Eyesight Technologies, a leading provider of in-cabin sensing solutions in the automotive industry, that recently went public on the Tel‑Aviv Stock Exchange. We will adjust our investment quarterly, based on the market valuation of their shares. GAAP net income for the quarter was $3.9 million, and diluted income per share was $0.17, compared to net income of $0.6 million and $0.03 for the fourth quarter of 2020. Our non-GAAP operating income increased 8% to $7.2 million from $6.7 million for the same quarter last year. Our non-GAAP net income and diluted EPS for the fourth quarter was $5.3 million and $0.22, respectively, significantly higher than our internal estimates. Net income and diluted EPS for the fourth quarter of 2020 were $4.7 million and $0.20, respectively. Other related data. Shipped units by CEVA licensees during the fourth quarter were 416 million units, down 5% sequentially and down 14% from the fourth quarter of 2020 reported shipments. Of the 416 million shipped, 83 million units, or 20%, were for handset baseband chips, reflecting a sequential increase of 148% from 33 million units of handset baseband shipped during the third quarter of 2021 and a 62% decrease from 149 million units shipped the year ago. Our Base Station and IoT product shipments were 333 million in the quarter, down 18% sequentially and up 25% year-over-year. Of note, sensor fusion was a record 21.8 million units in the quarter, with cellular IoT, Bluetooth and Wi‑Fi also delivering strong contributions. As for the year. Our total shipments increased 24% year-over-year to over 1.6 billion units, an all-time record high and which equates to approximately 52 CEVA-powered devices sold every second in 2021. Annual shipments of handsets were down 33% year-over-year to 383 million devices. This decline is attributable to the loss of a socket at a key OEM who was replaced by Qualcomm for 5G modem chipsets, and lower shipments of overall 2G feature phones in emerging markets last year. Our Base Station and IoT product royalty revenue continued to grow and reached a new record level of $28.6 million, up from $22.3 million in 2020 and $13 million in 2019. In terms of units, Base Station and IoT product units shipped were up 69% year-over-year to almost 1.3 billion devices. Our non-GAAP operating income for 2021 increased 43% to $22.7 million from $15.9 million reported for 2020. Overall, excluding our Intrinsix business, we grew our revenues 14% year-over-year, with the non-GAAP licensing business growing 22% to almost 64 million units. With the Intrinsix business, we are now fully onboarded with the new opportunities outlined by Gideon earlier, and we are excited by the potential ahead of us. As for the balance sheet items. As of December 31, 2021, CEVA’s cash and cash equivalent balances, marketable securities and bank deposits were $155 million. We did not repurchase any shares during the year and have approximately 0.5 million shares available for repurchase. Our DSOs for the fourth quarter were 39 days, slightly lower than the prior quarter and below our norm level. During the quarter, we generated $11 million cash from operations; depreciation and amortizations were $2.3 million and purchase of fixed assets $0.7 million. On an annual basis, we generated $25.8 million from operations compared to $15.2 million a year ago. At the end of the year, our headcount was 476 people, of which 390 were engineers, slightly lower than the 485 people at the end of September. Now for the guidance. As Gideon explained, we expect 2022 to be another exciting year with strong growth expected in licensing and NRE revenues and in royalties from our Base Station & IoT category. Overall, we are forecasting total revenue to be in the range of $141.5 million to $145.5 million versus $122.9 million in 2021. Our licensing, NRE and related revenues business is expected to grow and expand as we benefit from multiple growth vectors where we excel, in particular 5G, Wi‑Fi 6 & 7, Edge AI, Wearables and Hearables. In addition to our new integrated IP solution offerings and expanded access to the lucrative aerospace & defense markets via Intrinsix present further compelling opportunities. In royalties, our Base Station & IoT product category continues to flourish and will have a noticeable contribution to royalties in 2022. Anticipate royalties from base station RAN, Bluetooth, Wi‑Fi and sensor fusion will be the main drivers and will outgrow their representative markets. Overall, we forecast another growth year in royalty revenues, where the strength of our Base Station & IoT royalty drivers will more than offset the anticipated decline in handset base station royalties as the remaining 4G smartphones from a Tier 1 OEM are phased out over the course of the year. On the expense side, we forecast just over $18 million in additional overall expenses in 2022 versus 2021, recorded both in COGS and OPEX, as we consolidate the Intrinsix business on a full year basis compared to only seven months in 2021 and from other R&D ongoing investments. Specifically, on COGS, we expect higher non-GAAP expenses of over $10 million due to the cost of NRE revenues from Intrinsix. OpEx, with a strong licensing execution in recent years and even stronger expectations for 2022, we will continue to support these new customers and reinforce our leadership with disciplined investments in R&D. Overall, non-GAAP OpEx increases will be approximately $8 million, part of it is also contributed to the consolidation of the Intrinsix business on a full year basis compared to only 7 months in 2021. Equity-based compensation is forecasted to be higher than 2021, around $16 million. This is due to special retention efforts targeting our employees, compared to the pre-COVID‑19 era and the recent competitive semiconductor industry in all worldwide R&D sites. Annual gross margins are forecasted to be in the region of 80% on a GAAP basis and 82% to 84% on a non-GAAP basis. Interest income is forecasted to be higher than 2021 due to the increased interest rate environment, and hopefully better FX effects than we experienced in 2021, approximately $0.4 million per quarter. Taxes are expected to be approximately 25% of pre-tax income on a non-GAAP basis. And share count for 2022 is expected to be approximately 24 million shares. Specifically for the first quarter of 2022, Gross margin is expected to be approximately 80% on a GAAP and 82% on a non-GAAP basis, excluding an aggregate of $0.3 million of equity-based compensation expenses and $0.5 million of amortization of other assets. OpEx for the first quarter of 2022 is forecasted to be lower than the fourth quarter on a GAAP basis and flattish on a non-GAAP basis. GAAP-based OpEx is expected to be in the range of $26.4 million to $27.4 million. Of our anticipated total operating expenses for the first quarter $3.2 million is expected to be attributable to equity-based compensation expense and $0.8 million for amortization. Excluding those items, non-GAAP OpEx for the first quarter is expected to be in the range of $20 million to $21 million. Net interest income is expected to be approximately $0.4 million. As was the trend in the first quarter of 2021, taxes in the first quarter of 2022 are expected to be higher than the norm, with strong pipeline and backlog revenue mix for our connectivity products originating in France, which has a higher corporate tax rate, and from utilization of withholding taxes in Israel. Last, share count for the first quarter is expected to be approximately 23.8 million shares. Rocco, you can now open the Q&A session.

Today's first question comes from Suji DeSilva with ROTH Capital. Please go ahead.

Hi, Gideon. Hi, Yaniv. Congratulations on the results and the strong '22 guidance. If you could go into the revenue guidance that you provided, and talk about what you think the revenue license mix is? More generally, how should we think about the license model evolving here from what we see in the past?

Yes. What we are seeing is strong interest in Wi‑Fi and we mentioned Wi‑Fi 7. Wi‑Fi 6 is the mainstream one and we are starting to see customers looking for Wi‑Fi 7. It helps to find semiconductor companies that offer Wi‑Fi 7 and we are in a position to offer it. We mentioned in the call a very large agreement that will be in the more broadband IoT space; broadband IoT is outside of mobile. We are extremely optimistic about the AI market. We came out with a fantastic product, for which in the beginning of the quarter we signed a lead customer for AI, and also the anchor in our business is everything that relates to wearables and hearables. So, TWS headsets, gaming headsets, watches. When you look at the composition, those are the four large areas. On top of that, what Intrinsix brings is a solid, fairly large and very loyal customer base. And with them we are also offering to customers integrated IP solutions. Integrated IP solutions are sizable agreements. It's the IP plus the designs that Intrinsix can do and we are basically adopting it in the semiconductor world, called semi-custom with an IP version of the semi-custom, and the outcome is a large deal. So on the whole you see a step up in the licensing that is not because of M&A activity, but because of growing activities and interest from customers.

Okay. And then the license for '22, would you expect it to start becoming more lumpy given the use of Intrinsix to just understand that dynamic?

Licensing in general is lumpy. The idea is to have a large pipeline, and to try to see on a yearly basis how you're doing. So, I don't anticipate surprises — you know us for a while, we don't come out with big surprises in licensing. And I think the way we see it now is this will be the case in 2022. At the beginning of the year, we're looking at a very strong pipeline and backlog for the beginning of '22 with some deals that are already signed in the quarter. So at least the beginning looks quite robust.

Okay, great. Then one quick follow-up perhaps for Yaniv. The gross margin for 1Q you guided 82%. For the full year you guided 82% to 84%. What are the drivers of expanding gross margins for '22? Thanks.

Sure. A lot of it comes from royalties. Royalties are a high-margin part of our business and we see them ramping up toward the later part of the year with more base station activity and newer markets and newer players that should come into production in the second half of the year. That's one technical contributor. Licensing, as we said earlier, is more or less the same from a cost perspective. Sometimes one quarter could be stronger with a larger deal versus another, but there's nothing that dramatically changes the cost of that business. So technically, it's the royalty mix that sets the tone for the gross margin.

Okay. Thanks, Gideon. Thanks, Yaniv. Congratulations again on the progress.

Thanks.

Thank you.

And our next question today comes from Tavy Rosner with Barclays. Please go ahead.

This is Chris Reimer on for Tavy. Thank you for taking my questions. You mentioned some of the potential from the Intrinsix integration beginning — well, ramping up through next year. Can you just talk a little more about that, and what you're most excited about in terms of revenue drivers into next year?

So, I believe you asked about the integrated IP solutions. First of all, last year we signed the first agreement in this category of business. The idea is to come to the customer with the IP that we have, and provide not just standardized IP, but the whole platform for the customer. Many OEMs want to move quickly to market and may lack the experience building an SoC and embedding IP. So, we are building the business model where we do not just give you the IP, but we also do the whole design of your subsystem or chip. The benefit for us is that we get a larger share of the revenue that comes out of it, both in terms of license and services and potentially royalties.

So, what Gideon is saying is that we acquired Intrinsix about six months ago, and they were with us in the second half of the year. We were able to evolve some of their business models, and we also collect royalties for those services. So that was the first step, and it's already in design. We should be getting the royalties in the future. We want to take this to another level by adding much more of CEVA's technologies as part of Intrinsix offerings and doing this combination more broadly.

Okay, got it. And just looking into M&A, I don't know if it's on the table right now. But do you have anything maybe in the pipeline? Are you comfortable with where you are from a technology standpoint right now?

Well, I think we have made a lot of achievements. If you look at the licensing revenues over the last couple of years, that's the answer to the question of whether we have enough technology — the technologies are interesting and are growing in the markets in the semiconductor world today. Obviously, there are more technologies out there that we're focusing on, whether it's next generation or new things. So, we are not done with this work. We'll continue to invest in R&D and consider opportunities as they arise.

When you do licensing, it's just the first part — this should be followed with royalties. If you look over the last few years, we have been growing the consistency of our licensing, and then you see the royalties that come from this licensing, what we call the Base Station & IoT, which grew significantly year-over-year. We're talking about large unit growth and that is how the cycle works: you sign licenses and in a couple of years you see the royalties.

Got it. All right. Thank you very much. That's it for me.

Thank you.

And our next question today comes from Matt Ramsay with Cowen and Company. Please go ahead.

Yes, hi there. This is Ethan Petazni on for Matt Ramsey here. Congrats on the great quarter. I wanted to drill into the full year '22 guide a little bit more. Could you discuss where you see most of the upside coming from? If you could parse the origins of that growth between handsets and 5G. You guys gave some positive commentary out of some signals in China — is that Intrinsix or a mix between those sorts of things? Thank you.

So, when you look at licensing, we expect growth in licensing because we have the product, we have the customer base, we have the market position — and that creates the next cycle of royalties. In terms of royalties, Base Station & IoT is a solid growth area. We have many customers in the pipeline and a lot of products that will be volume-driven. In 5G base station RAN, last year China was somewhat tentative in capex, but recent procurement results show larger wins and momentum in China, and the XC16 DSP field testing gives us indication of renewed deployment. That points to increased expenditure in China beyond the initial rollouts. In mobile, we believe 2022 will be the bottom for royalties related to that large OEM that moved to a competitor for 5G, and other customers are likely to ship more than in 2021. We also have customers shipping connectivity chips using our Wi‑Fi and Bluetooth IP; one is already shipping and another is in design, which will materialize later in the year or early next year. So overall, Base Station & IoT growing, cellular a bit of a mixed bag, but other customers should offset declines from that large handset OEM.

Okay, great. Very helpful. And then as a follow-up, while not generating a ton of royalty revenue currently, we've seen some progress in auto. You called out a sizable AI ADAS agreement in the prepared remarks. Could you expand a little bit more on auto given accelerating trends?

Beyond 5G and Wi‑Fi, ADAS is a growing market. We see very interesting OEMs and Tier 1 suppliers talking to us about chips they want to make and discussing our AI, in particular the new generation NeuPro‑M. This is a longer product cycle: first you license, then you design, and royalties typically come later. So royalties from those automotive wins are more of a 2025‑2026 timeframe. Thank you.

And our next question today comes from Martin Yang with Oppenheimer. Please go ahead.

Hi. Thank you for taking my question. My first question is on your 2023 outlook. So embedded in the guidance is roughly mid‑teens growth. How do you expect Intrinsix to grow compared to the other parts of the business?

We disclosed Intrinsix for this year because it was new and it was only included for seven months in 2021, so we wanted to quantify its contribution. Going forward, Intrinsix is part of CEVA and we see the combined IP and services offering to semiconductors and OEMs as richer content. It's not just pure IP licensing; the integrated services and design options open up larger deals and new customers that don't have bandwidth to design their own chips. These are larger, potentially higher-value opportunities and they expand addressable market for CEVA. We do not plan to break out Intrinsix as a separate segment going forward. From time to time we may provide qualitative data on design wins or particular segments, like we did for Base Station & IoT, but generally Intrinsix will be integrated into CEVA's reporting and strategy.

IPs and integrated solutions add another dimension to our business. With Intrinsix we can offer chip design services combined with our IP, which strengthens the overall CEVA story and positions us for larger deals with ongoing royalty potential.

My next question is about any potential impact you see in the first calendar half from supply chain shortages that may affect your outlook for royalty revenues?

We've been living with COVID-related supply chain issues for about two years now. Overall, we have seen minimal effect on our business, with some impact in low-cost feature phones and certain customers that guided lower last year due to supply or design shifts. The more notable impacts were in feature phones in emerging markets, and perhaps a modest effect in base station timing. But we have not seen a material or systemic impact on our royalties to date, and we hope 2022 clears faster than last year.

Got it. Thank you very much.

Thank you, Martin.

And ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Richard Kingston for closing remarks.

Great, thank you. Thank you everybody for joining us today and for your continued interest in CEVA. As a reminder, the prepared remarks for this conference call are filed as an exhibit to the current report on Form 8‑K and accessible through the Investor Section of our website. With regards to upcoming events, we will be participating in the following conferences: the Susquehanna Virtual Technology Conference, March 3rd and 4th; and the 34th Annual ROTH Conference, March 13 to 15 in Dana Point, California. Further information on these events and all events we will be participating in can be found on the Investors Section of our website. Thank you and goodbye.

Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.