Ceva Inc (CEVA) Q2 2026 Earnings Call Transcript

Good day, and welcome to the SEVA, Inc. second quarter, 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star than 1 on your telephone keypad, and to withdraw your question, please press star than 2. 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 SEVA's second quarter 2026 earnings conference call. Joining me today are Amir Panoush, Chief Executive Officer, and Yaniv Arielli, Chief Financial Officer. Before handing the call over to Amir, I'd like to remind everyone 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 our results to differ materially from those expressed or implied by such statements. We will also discuss certain non-GAAP financial measures which we believe provide investors with additional insight into our core operating performance. Reconciliations between our GAAP and non-GAAP results are included in the earnings release issued this morning and available on the Investors Relations section of our website. With that, I'll turn the call over to Amir. Amir?

Thank you, Richard, and good morning, everyone. We delivered another strong quarter with revenue increasing 13% year-over-year to $29 million, fueled by licensing and related revenue growing 21% to its highest level in three years. the quarter also benefited from a sequential recovery in royalty revenue driven by continuing momentum across wireless connectivity ramping automotive ai programs and market share gains in smartphones during the quarter we signed 10 licensing agreements including two with first time customers and two directly with oem more important than the number of agreements is the quality of those agreements. Increasingly, customers are adapting broader platforms and deeper collaboration that transcends both our near-term licensing business and our long-term royalty opportunities. I would like to focus today on two themes that we believe highlight an important shift in the semiconductor industry and explain why SIVA and our technologies are increasingly well positioned for long-term growth the first is the continuing migration of intelligence from the cloud to the smart edge this is a trend we have discussed for several years and one that is increasingly driving demands for our higher performance connectivity sensing and AI technology during the quarter we announced that we believe is one of the most strategically significant AI licensing agreement in Siva's history. A leading global AI and computing platform company selected our new PoM NPUIP for its next generation custom AI silicon. This agreement is significant for several reasons. First, it represents a new category of AI customers for Siva. Historically, our AI licensing activity has primarily been with semiconductor companies and device OEM. This customer develops both the hardware platform and the operating system, allowing us to collaborate at a much deeper level by optimizing not only the NPU hardware but also the AI software stack for its models, applications and workloads. The expertise we gain through this engagement extends well beyond a single customer program. Co-optimizing AI hardware and software at the platform level will strengthen both our hardware and software roadmaps and further enhance our AI offering for future customers. More broadly, we believe these agreements reflect an important industry trend where companies with some of the world's large engineering organizations are increasingly choosing to leverage proven AI IP rather than developing every component internally. For these companies, the question is no longer whether they have the engineering capability to build an NPU, but whether they're doing so represents the best use of their engineering resources. By licensing production proven IP, they can focus their investments on the hardware, software, and AI experiences to differentiate their platforms while reducing development risk and accelerating time to market. The second trend we are seeing is customers increasingly adopting border platform solutions rather than individual IP blocks. Two agreements from the quarter illustrate this well. A high-volume U.S. semiconductor company choose to adapt the complete chip build on our Wi-Fi 6 and Bluetooth Low Energy IP, originally developed in partnership with another SIVA customer, rather than licensing the underlying IP blocks individually. The decision reflects the same preference for production-proven, complete solution over developing internally or licensing component IP. Separately, another U.S. customer expanded the relationship that began with a single basement component by adapting our complete basement processing subsystem. As semiconductor development becomes increasingly complex, customers are recognizing that leveraging proven subsystem IP can significantly reduce engineering efforts and execution risks, all while accelerating time to market, enabling them to concentrate their internal resources on the technologies that most differentiate their products. These are different customers and different technologies, but they demonstrate the same underlining trends. Companies are increasingly choosing production-proven hardware, software, and system expertise delivered as a complete platform rather than assembling individual IP products themselves. For SIVA, this extends both the scope and value of our engagement. Border platform adoption increases our content per design, deepens our integration into customer products, and creates larger, longer-term customer relationships and increases the royalty opportunity associated with each customer platform as those products enter production these successful outcomes also validate the strategy we have been executing over the past several years we have invested in expanding our diverse portfolio beyond individual ip blocks to more complex hardware and software platforms across connectivity sensing and ai as customers look to accelerate development while reducing execution risk, we believe this positioned SIVA to capture a greater share of silicon content in future design. Beyond these strategic engagements, activity remains broad-based across our business. In addition to the AI and platform wins I just discussed, we signed multiple follow-on agreements with existing customers alongside our new customer engagement demonstrating our ability to both expand long-term relationships and consistently win new business across connectivity we secured customer engagement spanning the united states europe china and the border asia pacific region reinforcing the global demand for our technology we also expanded our sensing portfolio with the launch of our microsoft certified real space elevate embedded application software extending our special audio technology into the PC gaming market for the first time. Taking together these achievements reinforce the strength of our Connect, Sense and Infer offering to enable physical AI use cases. While AI is creating exciting new opportunities for SIVA, connectivity remains the foundation of physical AI and continues to be the entry point for many of our customers' relationships. Increasingly, those relationships expand over time as customers adopt additional technologies across our portfolio. Now, turning to royalties. We are beginning to see the benefits of the border customer engagement we have been building over the past several years translate into an increasingly diversified royalty business royalty revenues increase both sequentially and year-over-year supported by continuous trends across our wireless connectivity portfolio the growing contribution from automotive ai deployment and share gains in smartphones wireless connectivity remain particularly strong with healthy year-over-year growth in both wi-fi and bluetooth shipments while cellular iot shipments reach another quarterly record. In automotive, customer programs continue to ramp, reflecting increasing AI content in next-generation vehicles. The quarter demonstrates the continued evolution of SIVA business and the continued market leadership of our IP. We are expanding the breadth of our licensing engagement, increasing the value of every customer relationship through broader platform adoption and building a more diversified royalty engine. Together these trends reinforce our confidence in both our near-term outlook and our long-term growth opportunity. With that I'll turn the call over to Yaniv to review our financial results.

Thank you Amir. Good morning everyone. I'll now review our financial results for the second quarter. Revenue for the second quarter increased 13% year-over-year and 7% sequentially to $29 million, reflecting another exceptionally strong licensing quarter and continued improvement in our royalty business. Our trailing 12-month licensing and related revenue increased 13% to around $70 million. The revenue breakdown is as follows. Licensing and related revenue increased 21% year over year to $18.2 million, reflecting 63% of our total revenue and our strongest licensing quarters in three years. Importantly, the strength of the quarter reflects the broader platform engagements Amir described earlier which not only increase licensing and related revenues today but also expand the future royalty opportunity associated with those customer programs royalty revenue was 10.8 million dollars reflecting 37 percent of our total revenue compared with 10.7 million for the prior year period, and up 17% sequentially. Reflecting continued strength across wireless connectivity and automotive AI, and share gains in smartphones. Gross margin was 87% on GAAP bases and 88% on non-GAAP bases, in line with our guidance. GAAP operating expenses were $27.5 million below the low end of our guidance range. Non-GAAP operating expenses, excluding equity-based compensation expenses, amortization of acquired intangibles, and acquisition-related costs were $22.3 million at the low end of our guidance. GAAP operating loss improved to $2.1 million compared to $4.5 million in the second quarter of last year. Non-GAAP operating income increased to $3.1 million compared to $0.8 million in the prior year, while non-GAAP operating margins expanded to 11% up from 3% a year ago. Both These measures also improved significantly on a sequential basis, demonstrating continued operating leverage. Net financial income was $1 million compared to $2.1 million in the second quarter of 2025 and below our guidance of $1.7 million, primarily due to foreign exchange effects related to our Israeli Shekel-dominated lease obligations. Income tax expenses approximately $1.8 million, slightly above the guidance, reflecting the geographic mix of licensing and royalty revenues recognized during the quarter. Gap net loss was $2.9 million, or 10 cents diluted share, compared with gap net loss of 3.7 million or 15 cents per share in the second quarter of 2025 non-GAAP net income increased 28 percent year over year to 2.3 million while non-GAAP diluted earnings per share increased to eight cents compared to seven cents in the prior year period on a sequential basis both non-GAAP and net income and diluted earnings per share doubled. With respect to other related data, during the quarter, customers shipped 567 million SIVA-powered device, an increase of 16% compared to the second quarter of 2025. Of those shipments, 61 million units, or 11% of the total, were mobile handset modem shipments compared with 55 million units in the prior year period reflecting improving smartphone royalties driven by stronger market share in entry 11 smartphones together with continued expansion in the premier tier. Consumer IoT increased to 487 million units compared to 409 million units a year ago. Industrial IOT shiftments were 19 million units compared to 24 million units in the prior year. Despite the lower unit volume, industrial royalty revenues increased 7% year-over-year reflecting a richer mix of higher value products including automotive AI and wireless infrastructure. Looking at our connectivity technologies, these shipment metrics continue to demonstrate the breadth and diversification of our royalty based across multiple end markets. Bluetooth shipments decreased 16% year-over-year to 295 million units. Seller IoT shipments reached another coordinate record of 68 million units, up 3% year-over-year. Wi-Fi shipments increased 28% year-over-year to 80 million units. As for the balance sheet items, we ended the quarter with approximately $221 million in cash, cash equivalents, marketable securities, and cash deposits, providing significantly financial flexibility to support continued investment in our technology road map, while maintaining a disciplined approach to capital allocation, including selective strategic M&A opportunities. Days sales outstanding were 70 days. During the quarter, we generated $5.8 million of cash from operating activities. depreciation and amortization expenses were 0.8 million dollars where capital expenditure totaled 0.6 million dollars at the end of the quarter we employed 406 people including 327 engineers reflecting our continued investment in innovation while maintaining discipline expense management. Turning to the outlook, we delivered a strong first half of 2026, supported by strong licensing execution, improving royalty trends, and meaningful expansion in non-GAAP profitability. Just as importantly, the quality of the customer engagement we secured during the first half provides a strong foundation for future growth across both licensing and royals. Reflecting our first half performance and current visibility, we are raising our full-year revenue outlook. We now expect 2026 revenue to increase between 13% and 15% over 2025, compared with our previous expectation of 12 percent growth that we shared at the end of the first quarter. We continue to expect the second half to be stronger than the first consistent with our normal seasonal profile while recognizing that memory pricing dynamics and broader supply constraints remain main important industry variables. On the expenses, we maintain our previous guidance. Total non-operating cost of revenues and operating expenses are still expected to increase by approximately 8% on an annual basis over 2025, as we continue to invest in our roadmap while carefully managing cost mitigation foreign exchange hedges. As a result of a stronger revenue growth together with discipline expense management, we now expect non-GAAP operating income to increase approximately 70% year-over-year, while non-GAAP net income is expected to increase approximately 50 50 both above our previous expectation third quarter guidance revenue is expected to be in the range of 30.5 million to 34 and a half million dollars gross margin is expected to be approximately 87% of gap bases and 88% on non-GAAP bases, excluding approximately $0.2 million of equity-based compensation expenses and $0.1 million of amortization of the acquired intangibles. Gap operating expenses are expected to be between $28.2 and $29.2 million, including being approximately $5.4 million of equity-based compensation expense and $0.1 million for amortization of acquired intangibles and $0.1 million for acquisition-related costs. Non-GAAP operating expenses are expected to be similar to the second quarter level between $22.5 to $23.5 million. dollars. Net financial income is expected to be approximately two million dollars. Income tax expense is expected to be approximately one point nine million dollars. And weighted average diluted share count is expected to be approximately twenty eight point two million shares on GAAP basis and thirty million shares on non-GAAP basis. Rocco, we are ready to take the questions now.

Yes, sir. We will now begin the question and answer session. To ask a question, you may press star than 1 on your telephone keypad. If you're using a speakerphone, we ask you to please pick up your handset before pressing the keys. To withdraw your question, please press star than 2. And today's first question comes from Kevin Cassidy at Rosenblatt Securities. Please go ahead.

Yeah, thanks for taking my question. and congratulations on the strong results. You had mentioned about a large company bringing their wireless design in-house rather than buying someone else. Is that a trend you're seeing longer term? Or maybe you could talk about the trend you're seeing for more integration of technologies vertically within your customers.

Yeah, definitely, Kevin. Good morning and thanks. Yeah, definitely we see this as a trend. It's part of our strategy, as I mentioned also. the previous call, was to really come with a complete offering of IP, including the radio And what we see, some of the customers are basically looking for a complete thank you offering that they can so-called integrate into their complete portfolio, and taking that very quickly in terms of time to market and proven technology and solutions. So definitely we see some of those OEM and semiconductors companies looking to get the solution from us.

Okay, and what does that mean for SIVA? I mean, a little more stickiness to your IP, you know, if you're selling more to one customer, or I guess just less OPEX involved. You know, I guess this is a positive trend for SIVA? Yeah, Kevin, thanks for the question.

Yeah, that's definitely a very positive trend. It's actually brings three additional values for ours. One, on the agreement itself, the licensing agreement, what we see both the licensing in terms of the deal size as well as the future royalty is meaningfully higher than just selling the components IP. But also on top of that, it's really the stickiness with the customers and that helps the customers to reduce their own engineering effort and relying more on SIVA capabilities which then they drive a stronger stickiness moving forward and as well as really it helps significantly in the discussion of the mix versus buy it's harder for large companies to rely on SIVA technology if we provide only partial solution or just part of the components IP the more we offering the complete solution it's easier for them and drive more the decision towards buying ip from silver rather than doing that internally so overall this is a very very

positive trend and fits very well to our strategy of how we drive our engineering activities and overall innovation in it kevin and i maybe would add one more thing that in in the wireless markets there are new trends that come every couple of years every year to two years and depends on the technology itself and new standards and new features so by being able to provide those we also have recurring revenues of new licensing deals for every one of these enhancements going forward so it's a very strong sticking this mechanism also because of the nature of those wireless connectivity that get opposite upgraded and updated all the time and we're able obviously thing to do that.

Okay, great. Congratulations again. Thank you.

Thank you. And our next question today comes from Suji DeSilva at Roth Capital. Please go ahead.

Hi, Amir. Congratulations on the progress here. Amir, you talked at length about how you're engaging deeper with the customers, maybe a hardware-software integration, perhaps more sort of product development effort. Is this going to result in more custom IP blocks or more standard products and will it affect kind of how we should think about royalty rate for you guys? Is that the right framework to think about these kind of engagements?

Yeah, so definitely overall within our, thanks for the question, Fuji, overall within our mix of licensing agreements we do see more, I would call it, custom solutions offering and demand from the market and that's again, that goes along very nicely with the trends of how we're investing in our resources and what we see as a potential in the market. Going back to your point on royalty, it's actually where we see significant potential increase of those royalty as the royalty per unit that we can extract by providing the custom offering and the complete offering is meaningfully higher than a component IP. For example, we talked about a very strategic new AI deal that we've just signed with one of the top large OEMs out there that have both operating system capabilities and hardware and software. That level of integration and customization drives significantly much higher royalty per unit that we will get versus our typical NP offering.

Okay, Amir. That's great. Thanks. And then my other question is on the edge AI market and the trend toward edge AI in the cloud. There's a lot of kind of chip and IP sort of opportunities there from various parts. I'm wondering if there are any particular end applications that are initially good opportunities for you as you see traction in the edge AI market or where we should think about your best near-term efforts opportunities are.

So we definitely see that in the high-end compute edge markets, whether it's, you know, the PC, the mobile, those type of application. We also see it right now entrenched very, very deeply in the automotive for either system. And what we will see more is into robotics, humanized, this is right now coming also into play.

Okay. Thank you, Mir. Thank you, Suji.

And our next question today comes from Natalia Winkler with UBS. Please go ahead.

Hi. Thank you so much for taking my question. I had two. So one is on the smartphone. You mentioned improving share of the entry smartphone as well as premium. Could you please speak a bit more? What are you seeing there and maybe what's kind of helpful from the standpoint of share gains on the entry level smartphone for you guys?

Yeah. Thanks for the question. So related to the entry point customer or the lower to your customers in the head of mobile market definitely we've seen a very meaningful recovery and the royalty between q2 and q1 so this quarter we've seen very nice recovery and and we're also seeing that they are basically gaining market share against their competition so overall we see this is a very positive momentum as we go into the second half of the year and definitely the the other large u.s oem the expectation is that we go more with their internal modem that should provide for us also a market gain share as we move into the second hub i'll add some more color uh unisoc our chinese customer and the low cost smartphone first is you is moving

gradually more and more to 5g from being the leader volume wise in in the 4g and the prior generation that means also higher asps for us and if you google and look around you'll see that they have won a few dozen of different design wins recently in the last quarter with good brands local and chinese brands including vivo xiaomi which in the past got used their media ticket to more extensively so these are nice design wins as long as this continues both market share gains for them and volume expansion with the

higher 5G share in that market going to Unistock that will also benefit the SIVA and this is an important high volume market for us as well understood thank you that's very helpful and then the second question I had was you know now that ARC has been acquired by a global founders are you guys seeing sort of any additional momentum in your licensing business maybe for the NPU licensing business with that transition yeah definitely we see it as a tailwind for our business moving forward especially for our npu and new point for the client and where the competition will be more favorable for us and because we really focus on on that ip as a complete platform while over there it will be done differently so that's a good point We will definitely see there is a tailwind and helping us compete better in the U.S. and the Western world we are in view, which assigns one of those very strategic deals this quarter as part of this momentum.

Awesome.

Thank you.

Okay. I have a couple of questions that have just come in over email. First one is from Joseph Cardoso at JPM, JPMorgan. he wants to follow up on the entry-level smartphone momentum and maybe tie that back to the risks we are hearing at the low end portion of the market given the component cost inflation. How are you thinking about the risks there and are you starting to see any signs of risk there or generally across the portfolio on that front?

Yeah, I think we've talked about this in the past that the low-end smartphones in a sense need much less memory and the more high-end devices which are higher price these days and there's to supply and to high demand so we haven't seen at least in the last couple of quarters a significant issues the around that there's still part of the constraint in the market but to a less degree than that the higher end thousand dollar phones type so it's still a play in the industry no doubt it hurts the margins in the supply but for the time being if we look sequentially from Q1 to Q2 you've seen a tremendous increase in volume part of it is seasonal and that means that our customer was able to address that and supply the demand that they plan to at least for us we saw significant increase both in volume and dollars yeah maybe I'll add to that yeah overall with the trends that we've seen from Q1 to Q2 with the typical functionality and our customers actually gaining a new

sockets we expect good seasonality expansion in the second half as well having said that definitely the the memory shortage has an impact on the wireless headset industry and it's hard to quantify exactly how this will make an impact in the second half but overall we expect a continue expansion to the functionality of our customers volume as we go to the second half.

Great, thanks. Another question here from Josh Buchalter at TD Cowan. And Josh asks, can you provide more context on how new Pro is being used by new custom silicon engagement? Any details on the functionality that chip and timeline to materiality? Yeah, great question.

First, let me a little bit explain more really about the engagement and the utilization of our NPU IP. So first, as we go, for example, in this case, into more custom silicon offering, what we are doing with the customers, they have a very good deep access to our co-architecture of our IP. And then together, we basically go and define what additional special features capabilities and with that specific neural network will be run on our silicon and hardware IP. in a very very efficient way. So the Holy Grade here is one to be able to run special networks with special features and capabilities but not even less importantly to be able to run them in a very high efficient performance so called token per power, token per terms of latency, all those very important metrics for edge devices. And what these customers, with their ability of accessing the complete software stack including the operating system across all their product lines, helps for both of us together to optimize it even further. And so that's a big, big plus, both from how you can use our IP, which is very, very deeply configurable, as well as how we can work together on the complete hardware software operating system integration. Now, in terms of timing, this is an engagement that started typically within a few quarters. Our customers go to a tape out, and then from then with a few quarters between close to about one and a half years to two years, they go to production. Even though this is a custom offering, we expect it to go in terms of the timeline with any other kind of IP and product that we're offering in the domain, so we don't expect it to be any time longer because we are we very quickly we can configure the solutions and optimize it with this customer that's the very unique approach that we have with our IP and capabilities and what happens actually to win that socket with that large customers against a circle doing on their own thanks Amir we have another question here from Gary Mobley at Benchmark a stone X company and Gary asks when we talk to the US customer in the quarter

adding a baseband subsystem in addition to the DSP. Are we referring to RF in this case, or is it something else?

It's a complete, basically, sorry. Can you repeat the question? Just to make sure which.

Sure. Sorry.

The US customer that we said upgraded to the complete baseband subsystem in the quarter, was that, were we relating to RF in this scenario, or is it some other sort of uh function in the subsystem that they operated from just dsp okay thanks yeah this is related to a a when a wireless access subsystem with complete satellite configuration and this is a complete so-called modern technology but excluding the rf so it's the all market basement technology hardware and software complete offering complete subsystem while we are hardening that to the specific for the process now that the customer needs okay we have a question

here from Charles she at Needham he asks about the full year guidance for your guidance has now raised 13 to 15 percent can you provide more details on the growth of licensing and royalty relative to the company average growth yeah sure if we look at the first two quarters of last year the licensing and related revenue run rate was 15 ish 16 million dollars when you look at the first half of this year the first two core was 17.8 and now 18.2 so the eight ish 18 ish million dollars so there is no doubt from all what we explained today the the solution aspect of providing not just standalone ip but a full solution our customers whether it includes multiple technology wireless or other whether it includes rf and now it's part of their wireless offering or ai and sensing technologies this enabled us at least in the first part of the half of the year to increase significantly the licensing and related revenue level and we believe that these levels they can continue this is at least our plan this is part of our internal forecast and we don't break down licensing and royalties, but guys on a full revenue basis, but do have a strong pipeline for these types of deals, and do believe that we are and have achieved a step function with adding AI, which is a significant part of our revenue these days, about 20%. We've seen that last year. We've seen that in the first part of this year. This continues, and it doesn't replace anything. we could see that it is an increase to our overall licensing and related revenue. So that's on one hand. On the royalty front, the annual guidance, the higher-end annual guidance is also part of a seasonal shift with a stronger second half. If you look at the last three years, every second half of those last three years, volume-wise, We increased north of 30% year over year for the full second half. So we do believe that that seasonality will play in our favor with other aspects of new royalty payers like automotive that started only this year, the beginning of the year. And on top of that, the market share gains in smartphones that we mentioned and the combo Bluetooth Wi-Fi type of solution that are a better solution to our customers and higher ASPs to us. So all this in place puts us in a stronger, as Richard mentioned, 13 to 15 percent year-over-year growth and significant improvement in operating margins as we are keeping expenses tight and managing all these R&D investments with growth in the top line. We're looking at about 70% growth in non-GAAP operating margins, VRE, over year, and about 50% growth in net income year-over-year. And that's part of our guidance, enhanced guidance for the remainder of 2026.

Thanks, Dave. I have another question here. This is from Martin Yang at Oppenheimer. It's a two-part. First part is, do you see more platform companies in your pipeline? how big of an opportunity is that in the broader context of your business and maybe ask that answer that first and I'll do the second one after it.

Yeah overall as I mentioned previously we definitely see this is a growing trend both in terms of the market needs our customer needs as well as what we can offer with our complete portfolio of IP and I cannot break down specifically what portion will be solution was more confident IP but the important the important thing is that this really helps us to drive a continuous increase in our licensing and we've seen it through the first half of the year that has been stronger than what so-called are originally what we expected as well as the actual results and that helps us to drive also a or to guide the second half to be stronger than what we discussed just last quarter so overall this is a very positive trend this will help us to drive more licensing but the exact portion of each can fluctuate between quarter to quarter and not something that specifically I can sort of point to.

Okay, and the second part from Martin relates to Bluetooth HDT. It asks, does a HDT class design win carry a materially higher royalty per unit than your current Bluetooth designs? And when does the HDT royalties start contributing?

Yeah, so first, yeah, the HDT is much improved technology both from throughput that it supports as well as the new use cases that can support. So definitely that helps us to drive higher royalty per unit versus the legacy Bluetooth 6.0. Even more so, with this technology, we are also now offering a complete solution with our RFIP supporting HDT. And the combination of it to increase even further the royalty per unit that we can get for those sockets so overall we will see it as a positive trend and volume ramp will start towards the end of this year and the significant ramp of course will go through 27, 28 and the customer action that we have announced with they are basically right now ramping that product in the marketplace so very soon we will start seeing royalties for that platform.

Thank you and I've got a question just we can briefly briefly address it it's multiple analysts have asked about this but I'll relate this one to Charles Shee at Needham asking about for the second half of the year are we assuming normal seasonality for mobile handsets in the second half of the year and at the same time are we assuming a significant market share gain at a premium tier mobile vendor in the second half of the year so those two kind of tied in together yeah overall we're assuming the seasonality as we typically have seen for our current so-called mobile customers and with the caveat that of course we take into account that the

memory allocation challenges that the mobile market is going through and on top of that definitely we're expecting the game share with our US customers as they continue to use more their internal money so both are in place.

Great thanks And then just one last question here, I'll come back to Joe Cardoso at JP Morgan. He asked about Wi-Fi units. They declined sequentially in the quarter, following a few quarters in a row of sequential expansion. Just curious if you could dive into the drivers of the volatility in the quarter and how you're thinking about the trajectory for Wi-Fi going forward.

Yeah, actually, I wouldn't look at one specific quarter, so-called, on a sequential level. over year over year we continue to see very significant growth of any of our technology including Wi-Fi wireless connectivity and it's more related to our customer mix and when they ramp their own specific product so some of those high volume can actually start in Q3 and Q4 so I would expect our Wi-Fi shipping to continue to grow very nicely year over year through the rest of the year as well.

Okay, great. Thanks. Yeah, I think that's all we'll take for now. Amir, do you want to go to the CEO closing remarks, please? Yeah, thanks, Richard.

In closing, this quarter reinforces our confidence in the direction of the business and the strength of our IP. We are seeing increasing demand for our technologies across AI, connectivity and sensing, strong adaptions of border hardware and software platforms, and continues the diversification of our royalty base. At the same time, our licensing momentum is translating into improving profitability and gives us confidence in raising our outlook for the year. The opportunity ahead of us continues to expand as intelligence moves to the edge and more companies develop custom silicon to differentiate their products. With our Connect, Sense and Infer portfolio, we believe Siva is uniquely positioned to enable that transition. Just as importantly, we are seeing customers engage with us at the broader platform level, increasing both the strategic value of our relationship and our long-term royalty opportunity. The momentum we've built in the first half of the year gives us confidence heading into the second half. Richard, back to you.

Thanks, Amir, and thanks, everybody, for keeping your patience with us there. As a reminder, the prepared remarks for this conference call are accessible through the investors section of our website. and with regards to upcoming investor events we will be attending here are some of the conferences the Rosenblatt six annual Technology Summit part two August 17 and 18 being held virtually the seventh annual Needham virtual semiconductor and semi cap conference August 19th and 20th being held virtually the steeple 2026 tech executive summit August 24th and 25th in Deer Valley, Utah, Jeffrey Semiconductor IT Hardware and Communication Technology Conference August 25th and 26th in Chicago, and Benchmark StoneX's TMT Conference September the 10th in New York, New York. 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.