CEVA, Inc.

Good day and welcome to the SEVA Inc. Fourth Quarter and Full Year 2022 Earnings Conference Call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing star then 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 today's event is being recorded. I would now like to turn the conference over to Richard Kingston, Vice President of Market Intelligence and Investor Relations. Please go ahead, sir.

Thanks, Rocco. Good morning, everyone, and welcome to SEVA's fourth quarter and full year 2022 earnings conference call. Joining me today are Amir Panoush, Chief Executive Officer, and Yaniv Ariyeli, Chief Financial Officer of SEVA. This is Amir's first earnings conference call with SEVA, and I wish him all the best in his role as CEO. Before we start, I'd just like to take you through some forward-looking statements and non-GAAP financial measures. I'd like to remind you 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 market trends and dynamics, including projected declines in the global semiconductor industry in 2023 and the long-term demand opportunity for our technology. Our market position, strategy and growth drivers, including with respect to licensing and royalties, Wi-Fi, 5G and software. Demand for and benefits of our technologies. Expectations and financial guidance regarding future performance, including our belief in the long-term royalty growth prospects. guidance for 2023 and our plans to host an investor event in the second half of the year. 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 the 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 technology 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 and our ability to successfully integrate intrinsics into our business. EVE assumes no obligation to update any forward-looking statements or information which speak as of their respective dates. In addition, we will be discussing certain non-GAAP financial measures which we believe provide a more meaningful analysis of our core operating results and comparison of quarterly results. A reconciliation of non-GAAP financial measures is included in the earnings release we issued this morning and in the SEC filing section of our investor relations website at investors.siva-dsp.com. With that said, I'd like to turn the call over to Amir, who will review our business performance for the quarter and provide some insight into our ongoing business. Amir?

Thank you, Richard. Welcome, everyone, and thank you for joining us today. I want to start this call by sharing how truly excited I am to be part of SIVA. and to lead this incredibly talented organization through its next stage of growth. Although I have only been with the company for a little over six weeks now, I have been highly impressed with three important factors. First, the people. The team is passionate about the work and the success of the company, fostering a great corporate culture of collaboration and drive. Second, a world-class portfolio of innovative wireless connectivity and smart sensing IPs. There is no greater indicator of the success of SIVA to date than to realize that more than 50 SIVA power devices were sold every second in 2022 and reaching a record 1.7 billion devices over the course of the year. Third, I believe the market opportunity for SIVA's technology has never been greater. The markets that we serve, including wireless IoT, 5G, and HAI, are some of the fastest growing in the semiconductor industry. We are conducting a review of each of our product lines to ensure that we are investing our resources in the areas with the highest potential for growth. Once I have this in place, I look forward to sharing the details of it with you at an investor event, which is planned to take place in the second half of the year. Turning to our performance for the fourth quarter, We reported another solid quarter despite the weak economic backdrop. We've continued strong momentum in our licensing business and resilience in our royalties. We signed 2020 licensing agreements in this quarter with notable strength in 5G, where we signed three agreements, and Wi-Fi 6 with four agreements. We also signed a strategic deal for our ultra-wideband IP with a global leader in automotive semiconductors for their digital car key initiatives. Other customers' agreements signed in the quarter target AI for in-memory computing, smart audio, connectivity for smartphones, TWS earbuds, wearables, sensor fusion software for set-to-box remotes, and more. Royalty revenue was done compared to last year, reflecting the broad market consumer weakness and elevated inventory levels. For the full year, we deliver record total revenue of $134.6 million, an increase of 10% driven by strong licensing demand throughout the year across our extensive IP portfolio. Revenue from licensing, NRE, and related for 2022 reached $89.3 million, an increase of 23% year over year, the fourth sequential year of growth. We signed 76 new licensing and NRE agreements, up from 73 last year. Licensing is a precursor for royalty revenue, and this record licensing year further reinforces our belief that the royalty revenue opportunity for SIVA continues to expand. I will elaborate shortly on what I believe the drivers for SIVA's business will be in 2023 and the royalty opportunity ahead. In terms of the full-year royalties, our annual royalty revenue were down 9% year-over-year to $45.4 million, with the largest decline was in our handsets, basements royalties, which were down 24% year-over-year, primarily due to the continued ramp down by a customer of ours who was replaced by a competitor for 5G chips at a large U.S.-based handset OEM. To a lesser extent, smartphone sales in emerging markets, a stronghold for our China-based customer, were impacted by the global slowdown. Moving to our base station and IoT category, despite the weak global consumer demand in the second half of the year, we still managed to achieve record royalty revenues generated by a record 1.4 billion devices. Bluetooth royalties grew 11% year-over-year, generated from a record 1 billion unit shipment. Base station rent royalties also grew up 14% year-over-year, while lower shipments and royalties from PCs, robot vacuum cleaners, cameras, and other consumer-related technologies affected many of our customers. Overall, I'm encouraged by the strength and the potential of our royalty business and believe that our diversified customer base and end market ensure that SIVA is on a positive trajectory with promising long-term royalty growth prospects. In terms of future growth drivers, I would like to highlight three important areas where SIVA has an excellent opportunity in licensing and royalties. Wi-Fi, 5G, and software. The first is Wi-Fi. Wi-Fi is one of the fastest-growing connectivity standards and the most in-demand technology for IoT. The Wi-Fi 6 standard was architected with low-power IoT in mind, enabling even battery-powered devices to remain working for up to years at a time. This coupled with higher throughput at lower power and increased robustness has brought unprecedented demand for Wi-Fi for many end markets and use cases. Accordingly, the overall Wi-Fi for IoT TAM is expected to exceed 4.4 billion units annually by 2024, according to ABI research, and continue to grow at a carrier of 9% through 2027. SIVA is the industry dominant Wi-Fi 6 IP provider, with more than 30 licenses to date. Wi-Fi expertise today is a scarcity. with few companies possessing the majority of the know-how. We are one of the few with this expertise, and through our licensing model, we are successfully lowering the entry barriers for companies to develop Wi-Fi 6 chips. Moreover, the royalty opportunity for Wi-Fi 6 is still ahead of us. Many of our customers are expected to come to market in 2023 and 2024 with their Wi-Fi 6 chipsets. And in licensing, we have already started to sign up Wi-Fi 7 lead customers for what will soon become another Wi-Fi upgrade cycle. The second area is 5G. While 5G has been deployed in developed markets in the last few years, the main use case up till now has been in smartphones. However, the scalable throughput, low power, and low latency of 5G means that the technology is applicable in a large border set of end markets and use cases. There is lack of expertise in cellular, and at SIVA, we have this in-house, built over decades. We already have licensed our 5G DSPs and platforms to many companies for 5G macro-based stations, open RAN, active antennas, fixed wireless access, 5G V2X, and 5G Red Cap for cellular IoT. The most recent Ericsson Mobility Report highlights fixed wireless access and cellular IoT as the two areas with tremendous growth opportunities in the coming years. In addition, much of the world's 5G network coverage has yet to be built out, and soon we will see the 5G advance roll out beginning in mature 5G markets. In the next few years, I believe SIVA has the opportunity to license our 5G IP even more broadly, being capable of helping any company who wishes to develop a product to capitalize on the market opportunity bought about by 5G. The third is software. Over the past number of years, SIVA has increasingly been investing in the development of software IP in order to move up the private chain and to further differentiate our solutions. Our software portfolio today includes some highly thought-after technologies, including special audio, AI-based environmental noise cancellation, voice recognition, and IMU-based activity detection. Our strategy is to license these software's IPs directly to OEMs and ODMs for their end products, rather than to the semiconductor chip makers. This is where we can unlock the true value of the software and generate incremental royalties for SIVA with higher ASPs. We already have strong presence in smart TV, PC, and robot vacuum cleaner markets with our sensor fusion software and will continue to invest and look for strategic market opportunities to drive strong growth in our software business. An excellent example of this strategy at work is from CES last month, where both India's leading wearables brand, ranked number one for wearables in India and number five for wearables worldwide, launched new premium spatial audio wireless headphones. These headphones are powered by a Bluetooth audio SOC featuring our Bluetooth 5 IP and our audio DSP. In addition, we also license our motion engine head tracking software directly to Bolt, which is used as part of the special audio solution. We believe that that special audio will become mainstream in the mid-high-end TWS market segment, which according to the Technosystem Research, TSR, will surpass 400 million pairs annually by 2025. We are currently running evaluation with many headset OEMs to demonstrate the capabilities of our special audio and other sound-related software packages with this market in mind. So in summary, SIVA delivered a good year against a tough microeconomic backdrop. We reached record revenues driven by strong licensing demands for our products. We signed a record number of deals in the year and shipped in a record number of devices. My thanks is to my predecessor, Gidon, and the entire SIVA team worldwide for the great contribution in 2022. I would also like to thank our partners, suppliers, and to our shareholders for their confidence and support. As I look ahead into 2023, I see many opportunities ahead for the company. I have full confidence in and believe that we have the people, the technology, and the processes in place to drive SIVA forward and be even more successful. Our comprehensive IP portfolio is in high demand, and we will continue to develop outstanding products that our customers rely upon us for. Once myself and the team solidify and define what our future strategy will be, I look forward to taking you through this later in the year. As for our expectation for 2023, according to the Semiconductor Industry Association, the global semiconductor industry is projected to decline by 4% in 2023. Also, many public semiconductor companies that reported earnings in the last two weeks have taken a muted view on 2023, particularly with regards to the first half of the year. We also see these trends, but I want to reinforce my belief that Siebel's long-term growth potential remains strong as the continued digitalization of all things electric will continue to drive long-term demand for semiconductors. Finally, I want to sincerely wish you and your families a successful and joyful 2023. I look forward to meeting many of you at conferences and non-deal world shows throughout the year. Now, I will turn the call over to Yaniv for the financials.