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Operator
After today's remarks, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone 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, Market Intelligence, Investor, and Public Relations. Please go ahead.
Richard Kingston
Thank you, Jason. Good morning, everyone, and welcome to SEVA's first quarter 2024 earnings conference call. Joining me today on the call are Amir Panoush, Chief Executive Officer, and Yaniv Ariely, Chief Financial Officer of SEVA. Before handing over to Amir, I would 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 the results of SEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions. Forward-looking statements include statements about our market positioning, strategy and growth opportunities, market trends and dynamics, SEVA's ability to execute on backlogged deals in the second quarter and to reach total revenue target for the year, expectations regarding demand for and benefits of our technologies, and our expectations and financial goals and guidance regarding future performance. SIVA assumes no obligation to update any forward-looking statements or information which speak as of their respective dates. In addition, following the divestment of the intrinsics business, financial results from intrinsics were transitioned to a discontinued operation beginning in the third quarter of 2023, and all prior period financial results have been recast accordingly. We will also 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.ceva-ip.com. With that said, I'd like to turn the call over to Amir, who will review our business performance for the quarter, review the year, and provide some insight into our ongoing business. Amir?
Amir
Thank you, Richard. Good morning, everyone, and thank you for joining us today. SIVA delivered first quarter results that reflected solid royalty trends with good year-over-year growth, while licensing was lower than we anticipated. Some deals we expected to close in the first quarter were delayed. I continue to be very encouraged by our diversified licensing pipeline and stronger backlog. We closed a significant multi-million dollar deal with a strategic customer in the beginning of the second quarter and there is strong demand for our next generation IPs that are currently in development and are being licensed by early adopters who are looking to gain an advantage in the market. I will elaborate more on our expectations for our licensing business for the rest of the year shortly. First, looking at the licensing business we concluded in the quarter in more detail, we continue to expand our leadership in Smart Edge IP, completing 11 licensing deals across all of our key target markets, namely consumer, automotive, industrial, and infrastructure. These deals range from Bluetooth connectivity for wearables and IoT, 5G for RedCap and cellular V2X, Wi-Fi for access points, UWB for consumer devices, and audio for smartphones. Most significantly in the quarter, I'm very pleased to report that we signed deals for our next generation Bluetooth 6 and Wi-Fi 7 IPs. Design activity around our Wi-Fi 7 IP is experiencing strong traction with both new and established wireless players and represents a positive catalyst of our licensing activities in 2024 and beyond. In the quarter, we're concluding a Wi-Fi deal with a strategic customer who is already in mass production with a combo chip based on our Wi-Fi 6 and Bluetooth 5 IPs. This customer has managed to successfully compete with the largest incumbents in the wireless combo chip space for consumer, enterprise, and automotive, and is now beginning to design their next generation Wi-Fi 7 chips to gain further market traction for the board consumer devices that will require Wi-Fi 7 connectivity, including smartphone, tablets, laptops, wearables, and smart home devices. In terms of market size, ABI research forecast that Wi-Fi 7 chipset shipments will exceed 1.7 billion units annually by 2028. As we have stated previously, due to its technical complexity, our Wi-Fi 7 IP commands a higher license fee and royalty rate than previous generations of Wi-Fi, which in turn drives ASP growth and enable us to drive more value per customer. Moreover, the large market size entices new entrants to the Wi-Fi market, while the complexity of the technology possesses challenges to many of the existing wireless players to develop this technology internally. As the only IP company in the market today offering licensable Wi-Fi 7 technology and the ability to license it together with our Bluetooth and UWB technologies, we are in an excellent position to repeat our success in the Wi-Fi 6 market for Wi-Fi 7. In Bluetooth, we have added a new Bluetooth 6 customer in the quarter, who is a first-time customer for SIVA and a world leader in wireless audio. these customers decide to take advantage of our IP to accelerate their product development for the next generation of Bluetooth audio. Although the Bluetooth 6.0 standard is not yet ratified, we are among a small number of leaders and the sole IP licensing company that has the expertise and skills to develop next-generation wireless technologies ahead of the market and ahead of the standard itself. We have successfully achieved this for a number of generations of both Bluetooth and Wi-Fi standards, and have built an unrivaled position as the industry leader and trusted partner for wireless IP over many years. We have more than 100 customers and billions of devices shipped. Finally, on licensing, in relationship to the licensing pipeline for the remainder of the year and our ability to extract more revenue per deal, I would like to share a few thoughts and data points. SIVA is one of the few select companies that have the technical capabilities talent, and unique know-how to develop wireless sensing and edge AI IP to the level required by most demanding customers. I firmly believe that we can command higher licensing fee and royalties for our leading edge products, and many of our ongoing customer discussions reinforce this belief. While a few deals that we had anticipated closing in the first quarter were delayed to later quarters, those deals remain in our sales pipeline and some have already been signed since the first quarter. Our value proposition around the three major smart edge use cases, Connect, Sense, and Infer, is clear and well understood by our customers and partners. In addition, we have already closed a meaningful multi-million dollar deal in the second quarter with a strategic customer for next generation IP that we are currently developing. I will update you more on this deal in the next earning call. but wanted to share that this deal reinforces our strategy to extract higher value for our technology due to our unrivaled technical leadership and the ROI gains that can be achieved when partnering with us. We believe this, in turn, will serve to increase shareholder value through higher revenues, margins, and profits over time. We are laser-focused on this value-add strategy, leveraging our strong board portfolio SmartEdge IP offerings. Turning now to royalties, we are pleased with our start of the year with a robust quarter, showing an impressive 33% revenue growth year-over-year and just a 14% seasonal sequential decline compared to a 28% sequential decline a year ago. We saw shipments volume up 25% year-over-year, an increase in every end market we serve, as restocking continued across the board IoT markets. Smartphone units, while up year over year, were done quite sharply from the fourth quarter, a similar trend to what we saw last year. Also, the infrastructure market remains soft, reflecting low capex for 5G networks globally. From conversation with our customers, we expect smartphones to improve in the second quarter and throughout the year. Overall, the first quarter shipments increase our confidence, that we are well positioned to grow our royalty business in 2024, augmented during the year by new customer ramps deploying our portfolio of wireless IPs for consumer and industrial devices, and our embedded application software for special audio in the headphones and sensor fusion software for intelligence robots. Now, some commentary regarding developments in the quarter. In the first quarter, we also invested further in cementing our market leadership, expanding our product offering, and strengthening our ecosystem. We announced a new UWB wireless IP for consumer devices, one that builds on our success in UWB solution for automotive, and which we already licensed successfully to a customer this quarter. UWB is primed for takeoff in the consumer market. as the majority of smart phone OEM are now integrating this technology into their latest devices, which is a precursor to mass market deployment in endpoint devices. ABI research forecasts that the global market of UWB-enabled device shipments will grow at a compound annual growth rate of 14% over the next five years, from 435 million units in 2023 to nearly 1.3 billion units by 2028. we are ideally positioned to leverage this market opportunity as it develops, already having a mature IP available for licensing and the ability to license it integrated with our Bluetooth Low Energy IP. In terms of our ecosystem, we announced a new partnership with ARM targeting 5G advanced infrastructure and non-terrestrial networks, NTN, aimed at lowering the barriers to entry for developing products targeting these two large markets. NTN, or satellite communication, is a hotbed of innovation these days, and together with ARM, we can deliver the processing power required by satellite companies and new entrants to bring 5G advanced networks to orbit, enabling the promise of global broadband connectivity and a host of new use cases on Earth that can leverage truly ubiquitous connectivity. We continue to gain market share in wireless connectivity with an unrivaled portfolio of wireless IP, spanning the most common startups like Bluetooth, Wi-Fi, and 5G, through to emerging startups like UWB and Matter. Connectivity is no longer considered a feature for electronic devices. Moreover, it's a very foundation of innovation that allows AI to be deployed and accessed by edge devices. Without connectivity, there is no AI. We're incredibly part of our central role in the industry, enabling the connectivity in more than 1 billion devices annually, that allows them to interact with AI and improve our daily lives. On sensing and inference, we continue to experience strong demand for our software and hardware products targeting these use cases. Our generative AI NPU scalable IP portfolio with market-leading performance is undergoing intense evaluation with a number of customers that we have identified as strategic design partners for this technology, and we will update you as this deal comes to fruition. Our embedded application software, particularly around spatial audio, is also experiencing significant traction, and we reach an important milestone in this quarter. We have the first headset integrating our wheel space spatial audio and head tracking software going on sale to the public. The Nirvana Utopia headphones from India's number one wearables and hearable OEM boat also features our Bluetooth and audio AIDSP, making this product a perfect illustration of our connect, sense, and infer strategy, where we can provide multiple IPs to a single product and work directly with the OEM to bring the product to market. Overall, we are very excited about our product lineup targeting smart edge devices. Our dialogue with customers is very open, and we understand the recurring pain points that our customers share with us when discussing their smart edge roadmaps. With AI set to transform every industry and technology, Semiconductors and OEMs need to define their strategies, not just to deal with the inference workload, but also how to connect their devices and enable them with the ability to use sensors for voice, sounds, vision, and motion. Without these three use cases being addressed in every smart edge device, from smart MCUs all the way to autonomous vehicle and 6G virtual RAN equipment, companies will not be able to compete in the smart edge era. We are ideally positioned to fill the knowledge and R&D gaps at companies that lack the ability to excel in all of these areas. Our portfolio of IP for Connect, Sense, and Infra use cases is highly synergetic with a broad range of semi and OEM customers across multiple industries, including the high-volume MCU players, where we already have significant traction for our connectivity IPs, and the TWS and wireless headphone markets, where we estimate our Bluetooth customers to have between 45% and 50% market share today, excluding Apple products. We intend to fully exploit our leadership in wireless connectivity to offer additional IP for Sense and Infer as the use cases for smart edge devices grow, driving larger licensing deals and higher royalty fees per unit. In summary, we have begun 2024 with royalty-bearing shipments up across all the end markets we serve, and we have a solid pipeline of new customers set to reach production as the year progresses.
Matter
In licensing, the first quarters were challenged with a few licenses. Pardon me, ladies and gentlemen.
Operator
It appears we have lost the connection to our speaker. Stand by while we reconnect.
Matter
We thank you for your patience. Thank you. Thank you. Thank you.
Operator
Ladies and gentlemen, we have reconnected with the speakers. You may proceed.
Yannick
Did Amir finish his prepared remarks before we got disconnected?
Richard Kingston
No, I think the best thing to do is just repeat the summary paragraph.
Yannick
Okay. Okay.
Amir
Thanks, Richard. Thanks. In summary, we have begun 2024 with royalty-bearing shipments up across all the end markets we serve. and we have a solid pipeline of new customers set to reach production as the year progresses. In licensing, the first quarter was challenged with a few licensing agreements delayed until later in the year. But overall, the quality of licensing deals signed and the overall demand for our next-generation IPs is very encouraging. We have the portfolio of technologies that meet some of the critical pain points of semiconductors and OEMs, for their smart edge roadmaps, and I'm confident that we can meet our total revenue targets for the year, and we have built a healthy backlog which reinforces my belief on this. Overall, I remain very positive that 2024 will be a growth year for SIVA and will set up us to reach our longer-term revenue, margin, and profitability targets. I look forward to meeting with many of you at conferences and roadshows during the fall term. Now I will turn the call over to Yannick for the financials.
Yannick
Thank you, Amir. I'm sorry about this. I will now start with the review of the results of our operations for the first quarter of 2024. Revenue for the first quarter was $22.1 million as compared to $26.3 million for the same quarter last year. The revenue breakdown is as follows. Licensing and related revenue was $11.4 million reflecting 52% of our total revenue as compared to 18.2 million for the same quarter last year. Growth to revenue was $10.7 million, reflecting 48% of our total revenue as compared to $8 million for the same quarter last year. This represented an impressive 33% revenue growth year over year and just a 14% seasonal growth decline compared to a 28% seasonal decline a year ago. Gross margin was 89% on GAAP and 90% on non-GAAP basis, compared to 87% and 88% on GAAP and non-GAAP basis, respectively, a year ago. Total GAAP operating expenses for the first quarter were $24.5 million at the lower end of our range. Little long-gap operating expenses for the first quarter, excluding equity-based compensation expenses, amortization of intangibles and deal costs, were $20.7 million below the mid-range of our guidance due to specific cost monitoring and cost and controls, as we've talked about in prior earnings calls. Gap operating loss for the first quarter of 2024 was $5 million compared to gap operating loss of $2.6 million for the same period in 2023. Gap and non-gap taxes were $1.7 million above our estimates due to the geographies of deals signed. Gap not lost for the first quarter of 2024 was $5.4 million in diluted loss per share was $0.23 as compared to net loss of $2.7 million and diluted loss per share of $0.12 for the same quarter last year. Non-GAAP net loss and diluted loss per share for the first quarter of 24 were $1.3 million and $0.05 respectively as compared to net income of $1.2 million and diluted income per share of $0.05 reported for the same quarter last year. With respect to other related data, shipped units by SEVA's licensees during the first quarter of 24 were 371 million units, up 25% from the first quarter 23 reported shipments. The 371 million unit shipped, 61 million units, or 16%, were for mobile handset modems. 283 million units, were for consumer IoT products, up from 250 million units for the first quarter of last year. 27 million units were for IIoT products, up from 18 million for the first year of 23. Bluetooth shipments were $202 million for the quarter, up 6% year over year. Cellular IoT shipments were 36 million units, up 24% year-over-year. Wi-Fi shipments were 31 million units, up 50% year-over-year. As the mayor mentioned earlier, shipments were up year-over-year across all RM markets. In total, the royalty revenues, excluding mobile handset modems, was the highest quarter since third quarter of 2022, suppressing $8 million. As for the balance sheet items, as of March 31st, 2024, SIVA's cash, cash equivalent balances, marketable securities, and bank deposits were approximately $159 million. In the first quarter of 24, we purchased approximately 57,000 shares for approximately $1.3 million. As of today, around 643,000 shares are available for repurchase under the repurchase program has expanded back in November of last year. Our DSOs for the first quarter was at 58 days, back to its normal levels, and higher than the prior quarter's 32 days. During the quarter, we used $7.3 million cash from operation activities. Ongoing depreciation and amortization was $1 million, and the purchase of fixed assets was $0.9 million. At the end of the first quarter, our headcount was 433 people, of whom 356 are engineers. Now for the guidance of the second quarter of 2024. Damir stated earlier, we've signed a number of deals at the start of the second quarter and also have good visibility into the second quarter potential deal flow for a wide range of technologies and markets. On royalties, we expect year-over-year growth in the second quarter and are monitoring the timing of new product in production from our customers. All in all, we forecast sequential growth in overall revenues for the second quarter of 6% to 16%, primarily from licenses. Gross margin is expected to be similar to the first quarter, approximately 88% on GAAP-based and 90% on non-GAAP-based, excluding an aggregate of $0.2 million of equity-based compensation expenses and $0.1 million of amortization of acquired intangibles. GAAP OPEX for the second quarter is expected to be in the range of $24.5 to $25.5 million. slightly higher than the first quarter and in line with our annual plans. Over anticipated total operating expense for the second quarter, $3.8 million is expected to be attributed to equity-based compensation expenses and half a million dollars for the amortization of the acquired intangibles. Our non-GAAP OPEX is expected to be at the same level as the first quarter. in the range of $20.2 to $21.2 million. We'll continue to monitor our expenses closely and look for ways to further improve our operating efficiency. That interest income is expected to be approximately $1.3 million. Taxes for the quarter are expected to be approximately $1.7 million, and the share count for the second quarter is expected to be around 25 million shares. Jason, you could open the Q&A session, please.
Operator
Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. This time, we'll pause momentarily to assemble our roster. And our first question comes from Matt Ramsey from TD Cowan. Please go ahead.
Matt Ramsey
Thank you very much, everybody. Good afternoon, good morning. I have a few questions. I guess as the first one on licensing, guys, it's totally normal for deals to sort of flip around across quarterly boundaries. But I know you mentioned in the script there are some deals that you might have expected to sign that got pushed a little bit. But it didn't sound super clear to me whether all of those things that slipped out of Q1 were just kind of across the quarterly boundary and going to get done in Q2, or if they might have been slipped a little bit longer than that. And if it's the latter, maybe you could just kind of talk about what's going on in the environment that might be delaying a few of the deals longer than would be typical. Thanks.
Amir
Yeah, thank you, Matt. I would say first, some of the deals, as we also mentioned in the previous remarks, is that we already signed in Q2, and then we expect also some of the other deals to still sign in Q2, which is, but also there are some deals that got delayed more towards the next quarter after that. As part of the overall evaluation, that takes longer in some cases, especially for the more complicated systems. that our customers need to evaluate sometimes all the way into the hardware capabilities of their own system.
Matt Ramsey
Got it. So it sounds like nothing atypical or different in the environment, just kind of normal course of business type stuff. Is that fair?
Amir
That's fair. I would say that the one thing that we highlight more specifically for this quarter was the strategic deal with a customer that we already have, a multi-million dollar deal. as we expected to close in this quarter in Q1. And the evaluation of the technology, the agreements on both the technology and the commercial agreements was all set within the quarter, but the process signature of the customer took longer than anticipated, and this deal was already closed. Because of the timing and the magnitude of the deal, we mentioned that specifically.
Matt Ramsey
Got it. Thanks for all that. I guess for me, on to some maybe more important technology questions. I wanted to ask about sort of two emerging technologies that you guys seem to be investing in a lot and are well-positioned for. The first one is Wi-Fi 7, and the second one is UWB. So on Wi-Fi 7, maybe you could give us a little bit more on expected pace of adoption of the technology and what the... both the licensing and royalty economics look like for your company relative to Wi-Fi 6. And UWB, I'd be sort of interested in hearing about what the breadth of different relationships and I guess what the pipeline looks like for UWB deals, both breadth and timing, because these are both Sort of exciting new technologies. I'm kind of interested to hear where you guys are in the progression on each one. Thank you.
Amir
Yeah, definitely. Actually, I'll start with the Wi-Fi and take even a step back before Wi-Fi 7. Even with Wi-Fi 6 in terms of royalty overall, we are still early in the cycle of our customers transitioning from Wi-Fi 4 to Wi-Fi 6 in the high volume. And so we expect it to be a very good tailwind as we go through the rest of the year on the royalty side. In terms of licensing, definitely we are extremely encouraged to see some of our existing customers as well as new customers licensing Wi-Fi 7. This is specifically, as you mentioned, as we signed this quarter, was about a customer that's already licensed in the past Wi-Fi 6 and Bluetooth from us. Extremely encouraging to see the trust that we have in the marketplace and the performance that we achieve to our customer that they repeat and come back to us. In a tradition of Wi-Fi 7, in terms of licensing and development of those technologies is really right now ramping up quite nicely through 2024. It started as an access point. Now we see more also on the client side. It is high-performance, high-throughput type of technology, so the propagation starts more from the high end and then over time will propagate lower in terms of the different tiers of the market. But also for us, the transition from Wi-Fi 4 to Wi-Fi 6 and Wi-Fi 7, it's a great tailwind in terms of the average deal size as well as the average royalty that we get per device. Because we really provide more value, more sophistication, and time to market advantage to our customers. So although this is a very strong trend, and we're encouraged to see also the Wi-Fi volume increase very nicely year over year this quarter. Going to the UWB questions, definitely Qualcomm announcements and coming to market with the UWB combo with data technology for the mobile devices. This is a very important precursor for the UWB to penetrate beyond automotive into the consumer. Most of the previous deals that we talked about were in the automotive. Now this quarter we have a very nice deal in the consumer space. And we definitely see the Qualcomm announcement, the penetration into mobile phones, and overall the understanding of more of the use cases of UWB and FIRA 2.0 certification body also really ratifying their solution and putting a very good tailwind for the demand in the marketplace. Having said that, overall I would say UWB technology penetration rate is going to be on average smaller or lower than what you typically see with the more incumbent Bluetooth for Wi-Fi technologies out there. The other piece, of course, for UWB, a lot of demand for UWB with Bluetooth technology and in the more high-end devices, even with Wi-Fi as combo. So again, we are well-positioned to take advantage of that trend.
Matt Ramsey
Thank you for all the details, Amir. I'll jump back in the queue. Thanks, guys.
Yannick
Thank you.
Operator
The next question comes from Kevin Cassidy from Rosenblatt Securities. Please go ahead.
Kevin Cassidy
Yeah, thanks for taking my question. Just as you're writing more licenses, I'm coming up with agreements with licenses that include more technology, as you mentioned, the strategies to sell sensing connectivity and the processing technology. Is that considered one license now, or just is there going to be a change as the value of the license goes up and there'll be fewer numbers when you report each quarter, or are they still going to be considered separate licenses but just in one design?
Yannick
A good question, Kevin. We count them separately. They use different technologies in order to keep pace of Wi-Fi, Bluetooth, and a UWB, we will cut them as multiple deals if they are indeed planned to be combined in a single product. On the product itself, the agreement is one agreement that includes whatever type of technologies the customer would like to license and partner with us for. Of course, if it's integrated in a single chip, the royalty will be applied on the entire chip price either as a percentage of the chip or cents per chip. And we'll take into account that usually those chips are higher priced. ASPs would be higher. Our take of that, whether it's cents or percentage, would be higher because of the knowledge and the expertise and the advantage we're bringing to the table by combining multiple technologies.
Amir
And to add on, Yannick, thanks. Basically, Kevin, what we announced as the SIVA wavelengths where we provide added value of those combined technologies if our customers need that support and would like to license that. Overall, I would say, as we look historically into our deals in connectivities, as we propagate into the more advanced releases of the technology from Bluetooth 4.0 to all the way now in the future 6.0, adding Wi-Fi and going for Wi-Fi 6 and 7, then the combination, We really see on average that the deal size is growing as well as the potential variety that comes with it.
Kevin Cassidy
Okay, thanks for those details. And just in general, China has been a big market for you. And have the U.S. sanctions, is it getting worse for you? Or are there fewer new designs starting in China? Maybe just give us the landscape of what's happening in China.
Amir
First of all, regulation, actually, we haven't seen any material change or any meaningful change this quarter, or broadly quite recently. So no impact at all in terms of any change. I would say still China is an important market for us in terms of lots of innovation in the semiconductor industry and overall for all the different types of technologies. We're actually encouraged to see that this quarter, I would say overall, The market condition in China, I think, has stabilized, and there is a very good innovation and demand for technology. I think from the royalty report that we provided, on average, our customer base are doing quite well in the market. So this is also a very positive indication for us as we will continue through the year.
Yannick
Kevin, I'll add to that. This is the first time in many years that we've seen sequential, lavish revenue for many of our Chinese customers in IoT space, reporting from Q4 to Q1, not a down quarter like it usually was, but really a flat or even a stronger quarter in some cases. So it was very encouraging.
Matter
Okay, great. Thank you. Thank you.
Operator
Again, if you have a question, please press star, then 1. Our next question comes from Chris Reimer from Barclays. Please go ahead.
Chris Reimer
Hi. Thanks for taking my questions. Can you talk just a little bit about the path to achieving the year-end guide? I believe you were projecting 4% to 8% top-line growth back in 4Q. If you could just give kind of remind us how sequentially that should take place. And then on the partnership side, if you could talk about the kind of exposure you have with your partnerships, especially with the boat and what kind of products are working with you there.
Yannick
Hi Grace. I will start with the first part and Amir will take over for the second. So we did guide, in the beginning of the year, a 4% to 8% top line growth. We did talk about the flattish non-GAP OPEX and gave a range of $93 to $96 million for the year. We're not changing those two numbers today. We also said at the beginning of the year that the second half will be stronger than the first year. So with all that said, nothing has really changed our plan. Yes, we talked about the deal being delayed, a few deals being delayed. We also mentioned that some of those deals were signed in Q2, so maybe it's just some shift between those two corners. But the way we're seeing it with a pretty strong Q1, much stronger than historical seasonality trends, and growth in all the different product volumes on a year-over-year basis, which is also something quite remarkable. We haven't seen that for a long time. We're feeling well with the rest of the year. Licensing royalties, each one of them have different trends, and deals can, from time to time, get delayed. But our plans are not changing, not from the expense point of view, of trying to manage this carefully. The guidance for second quarter is exactly the same, 90% gross margins and non-GAAP and the same range of expenses on OPEX. And with more revenue flowing in, we should have the leverage to reach our targets. That's the way we see it today. Obviously, things could change, but this is what we are focused on achieving for 2024. Mm-hmm.
Amir
And as for the partnership with Boat, so Boat is the number one Indian hearable, wearable OEM in the marketplace, and we believe they are number two to Apple worldwide. We have a very, very good partnership with them, working with them directly as an OEM. We offer them basically a combination of the silicon that they're using, that within there, there is the IP, our connectivity IP, as well as the DSPA IIP. And on top of that, we provide them a software IP to run 3D special audio for hearable and wearable devices. And they've just launched the first product using all these three technologies combined in their device that I shared in my remarks. And we will see that keep penetrating across the product line.
Chris Reimer
Got it. Okay. Thanks for that. That's it for me. Thank you, Chris.
Operator
Thanks, Chris. There are no more questions in the queue. This concludes our question and answer session.
Yannick
Jason, I think David is there.
Operator
Sorry about that. Yes. Next question comes from David O'Connor from BNP Paribas. Please go ahead.
David O'Connor
Awesome. Good morning. Thanks for squeezing me in, guys. Maybe just one or two follow-ups on my side. So, firstly, just the slattish revenues in China, customers Q4 to Q1, can you give us a bit more color? Was that due to kind of units or was it just more content? Is there something that was inventory replenishment in those end markets or just new products coming to the market at those higher ASPs that you talked about and they can follow up?
Yannick
Yeah, you know, usually the seasonality in IoT devices, mobile has been the case for many, many years. The Q1 is lower in volume and new phone introduction than the fourth quarter and the Christmas holiday season. What we saw this quarter with 25% unit growth year over year and sequentially some of our customers, which may be Chinese customers, but they're shipping on a worldwide basis, And Amir mentioned earlier in headsets, earbuds, we are probably 45 to 50% worldwide market share or technologies embedded in, excluding Apple. So in some of these devices and the overall IoT devices that were shipped, we saw flattish units. We didn't see a decline, and that's probably from inventory build-out and filling the channels. with a pretty strong start for the year. Does that answer your question?
David O'Connor
Yeah, that's very helpful. And then maybe just one on the kind of higher value deals that you're signing and licensing and higher royalty rates. Can you give us any kind of framework how to think about those kind of higher royalty rates versus your kind of classic rates? And also the licensing deal, can you help as well kind of give us just a sense of kind of what, um, how big they are versus your classic kind of licensing deals. Um, I know every deal is different, but just kind of how to think about that from a kind of numbers perspective. That'd be helpful. Thanks guys.
Yannick
Yeah, not, not sure we could help that much. I mean, when we talk about multimillion dollar deals, these are bigger deals and larger deals in volume than we had in the past. So it could be few million dollars for a specific deal. It depends on the technology and the market segment. Maybe historically in the past, those were a few hundred thousand for a single use, up to a million. And today, it depends on that technology and how many technologies we integrate into an agreement. It could be much higher numbers than that. Maybe that's a little bit of the flavor. And the same goes with ASP. The percentages, if it's multiple technologies, are higher than just the standalone Bluetooth deal that we licensed five years ago. I think that's what we're referring to, that the more content we add to these agreements, multiple technologies, newer technologies that come into play, and that's true across the newer Wi-Fi, Bluetooth, UWB, as well as the AI, and then software packages that we have, an offering that we have today, we are able to charge higher percentages of the chip price at the end of the day or higher chips, higher cents per chip.
Amir
Maybe that's very helpful. Thank you. Yep. Just to compliment on Yaniv's comments regarding the royalty in China. Generally speaking, this quarter, we are really encouraged, actually, with our customers worldwide and as well as in China in terms of their volume shipments. and and part of that is the tailwinds that we discussed last year where what where we see basically wi-fi penetrating more and more we see the combination of the different technologies the higher asp with those a different product mix that goes to market as well as more and more new customers that are ramping either bluetooth or wi-fi and in the future or uwb technologies as well as the the northern iot or 5g for red cap so All in all, for this quarter, which typically is in consumer market seasonally lower than Q4, we have seen really great year-over-year growth, as well as on a quarter-over-quarter basis, a very strong demand for our customer base.
Matter
Awesome. Thanks, guys. Thank you.
Operator
This concludes our question and answer session. I would like to turn the conference back over to Richard Kingston for any closing remarks.
Richard Kingston
Great. Thank you all 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 form 8K and accessible through the investor section of our website. With regards to upcoming events, we will be participating in the following conferences. Oppenheimer 25th Annual Israeli Conference, May 26th in Tel Aviv. Cowen 52nd Annual TMT Conference, May 29th in New York. The Mizuho Technology Conference, June 12th in New York. And Rosenblatt's 4th Annual Virtual Tech Summit, 2024, June 13th. That will be held virtually. 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.
Operator
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Disclaimer