CEVA, Inc.

Good day, and welcome to the SEVA Incorporated First Quarter 2022 Earnings Conference Call. All participants will be in a 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, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Richard Kingston, Vice President of Market Intelligence, Investor and Public Relations. Please go ahead.

Thank you, Betsy, and good morning, everyone. Welcome to SEVA's first quarter 2022 earnings conference call. I'm joined today by Gideon Wertheiser, Chief Executive Officer, and Yaniv Ariely, Chief Financial Officer of SEVA. Gideon will cover the business aspects and the highlights from the first quarter and provide general qualitative data. Jenny will then cover the financial results for the first quarter and also provide guidance for the second quarter and full year 2022. I'll 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 SEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions. Forward-looking statements include statements regarding our market position and strategy, including efforts with respect to 5G and edge AI innovation, demand for and benefits of our technologies, expectations regarding market dynamics, and expectations and financial guidance regarding future performance, including for the full year and the second quarter of 2022. For information on the factors that could cause a difference in our results, please refer to our filings with the Security and Exchange Commission. These include the scope and duration of the pandemic, including continued restrictions in China, 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 SEVA's IPs for smarter connected devices to continue to be strong growth drivers for us, our success in penetrating new markets and maintaining our market 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 and 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 intrinsics into our business. SIVA assumes no obligation to update any forward-looking statements or information which speak as of their respective dates. With that said, I'll now hand the call over to Gideon.

Thank you, Rachel. Good morning, everyone, and thank you for joining us today. We delivered a strong start for 2022 with a record high revenue of $34.4 million, up 35% on a year-over-year basis, driven by better-than-expected smartphone shipment and strong licensing executions. The licensing and the NRE environments continue to be strong, delivering $22.4 million in quarterly revenue, up 56% year-over-year with 14 new agreements, of which three were with first-time customers. We continue to bolster our relationship with key customers, sign comprehensive agreements for a new generation of new DSPs, Civa XCDSP technology with a top-tier base station OEM and with a lead customer for our new Pro-M Edge AI platform targeting the brief automotive market in China. We continue to experience strong demand for our wireless and Edge AI platform technologies by customers targeting a broad range of markets and applications, among which are smartphones, smartphones, PC, ADAS, 5G IoT, and low-Earth orbit LEO satellite communications. Wealthy revenue came in at $12 million, up 9% year-over-year, with a record of 531 million SIVA-powered shipments, up 56% versus last year. In the smartphone space, we experienced better-than-expected shipment as a key customer of ours, is gaining share with top-tier OEMs. Royalties from base station and IoT product category were impacted by our customers' ability to ship product to OEMs or DM in China, resulting from the lockdown there and due to supply chain constraint that our 5G base station-run customers are facing. Despite these headwinds, the base station and IoT category was up 24 percent in revenue versus the respective quarter last year. Let me take the next few minutes to add more perspective on our market position and strategy. Wireless connectivity is vital to drive IoT proliferation. It is a fast-growing market that is focused to reach to 15 billion units annually by 2026. In the last few years, SIVA has emerged as a prime wireless IP vendor, with the position and market dominance as ARM LTD is for CPU IP. Our indisputable ability to offer comprehensive wireless solutions for the most advanced and complex wireless protocols for 5G, Wi-Fi, Bluetooth, and UWB lowers the entry barriers, for a growing numbers of OEMs and semiconductor companies to incorporate wireless technologies for the sizable markets of smartphone, smart home, wearable and hearables, automotive, metaverse, industrial and more. Underpinned by this powerful foundation we have built, we are intensifying our 5G innovation and looking to realize the full potential of 5G new radio in enabling new industries and attributes such as broadband satellite communications, side link to support pedestrian safety for direct cellular connection of smartphone and wearables to vehicles, red cap to enable energy constraints, medical wearables and industrial IoT and more. recent Mobile World Congress event, we announced the PentaG2, our second generation 5G basement processor platform IP. PentaG2 is a comprehensive 5G architecture that integrates multiple SIVA DSPs, highly efficient hardware and AI coprocessor, along with the associated software. PentaG2 streamlines the complexity of developing and integrating 5G modem into the new class of 5G cellular IoT devices across its two main segments, broadband IoT and massive IoT. An additional 5G space where we are looking to catalyze demand is 5G radio access network or RAN. The latest generation of 5G base stations architecture are virtualized with disaggregation of the run workloads between the distributed unit or DU and the regular unit or the RU. Both are highly demanding and accustomed to DSP processing and effectively more than doubles SIVA addressable market versus traditional LTE base station architecture. As I noted earlier, we have concluded in the first quarter a sizable and strategic agreement with top-tier OEM for a new class of DSP architecture that we will announce in the coming months. This new DSP architecture will set the stage for the proliferation of virtualized run and open run and will be our underlying technology for our next generations cellular solutions. We also made noteworthy progress in the past quarter in the edge AI space. In our prior earning call, we outlined our AI strategy, which focuses on AI at the edge, a fast-growing market forecasted by ABI research to surpass 1.3 billion units by 2026. To capitalize on this sizable opportunity, we unveiled a new edge AI processor architecture, the new POEM, with scalable performance, starting from 20 Tera operations per second, or TOPs, and going up to 1,200 TOPs. New POEM addresses the AI requirement of broad markets and applications, among which are smartphone, autonomous car, mixed reality, 5G, and more. noted earlier, we signed a lead customer license agreement with a semiconductor that targets the ADAS and the intelligent cockpit market in China. It is our first entry to the vibrant automotive market in China that leads the transformation of cars in the form of software-defined architectures and electrification. In summary, SIVA continued to execute well in the first quarter with a strong performance and financials, even in the face of challenging macro events. We have the vision, the market reach, and the execution capability to monetize our technology innovation. While the lockdown in China has impacted our customers there, the end market demand for our product continues to show strength which position us to continue to outperform through 2022. With that said, let me hand over the call to Yaniv for the financials.