CEVA (CEVA) risk factors, FY2024 10-K

Risks Related to Our Industry and Markets

1. 01The markets in which we operate are highly competitive, and as a result we could experience a loss of sales, lower prices and lower revenues
2. 02We depend on market acceptance of third-party semiconductor intellectual property
3. 08The markets in which we operate are highly competitive, and as a result we could experience a loss of sales, lower prices and lower revenues
4. 09we compete in the Spatial Audio and Motion Sensing software market with Waves, Dolby, and CyweeMotion and internal engineering teams at companies such as Apple
5. 10Because our IP solutions are components of end products, if semiconductor companies and electronic equipment manufacturers do not incorporate our solutions into their end products, or if the end products of our customers do not achieve market acceptance, we may not be able to generate adequate sales of our products
6. 11If we are unable to meet the changing needs of our end-users or address evolving market demands, our business may be harmed
7. 12Our operating results are affected by the highly cyclical nature of and general economic conditions in the semiconductor industry, including in connection with significant supply chain disruptions

Risks Related to Our Global Operating Business

1. 03Royalty and other payment rates could decrease for existing and future license agreements and other customer agreements, which could materially adversely affect our operating results
2. 04Our success will depend on our ability to successfully manage our geographically dispersed operations
3. 05Our research and development expenses will increase relative to past periods due to our receiving fewer grants from the Israeli government and the EU
4. 06Because our IP and related solutions are complex, the detection of errors in our products may be delayed, and if we deliver products with defects, our credibility will be harmed, the sales and market acceptance of our products may decrease and product liability claims may be made against us
5. 13Our quarterly operating results fluctuate from quarter to quarter due to a variety of factors, including our lengthy sales cycle, and may not be a meaningful indicator of future performance
6. 14reductions in demand for consumer and digital devices due to lockdowns or overall financial difficulties caused by future pandemic outbreaks or public health threats
7. 15We rely significantly on revenues derived from a limited number of customers who contribute to our royalty and license revenues
8. 16Our business is dependent on IP licensing and related revenues, which may vary period to period
9. 17Because we have significant international operations, with a significant concentration of revenues in China, we may be susceptible to political, economic and other conditions relating to our international operations that could increase our operating expenses and disrupt our revenues and business
10. 18changes in diplomatic and trade relationships
11. 19New tariffs, trade measures and other geopolitical risks and instability could adversely affect our consolidated results of operations, financial position and cash flows
12. 20Our operations in Israel may be adversely affected by instability in the Middle East region
13. 21Terrorist attacks, acts of war or military actions and/or other civil unrest may adversely affect the territories in which we operate, and our business, financial condition and operating results
14. 22We face a highly competitive employment market and depend on a limited number of key personnel who would be difficult to replace, and changes in our management and sales teams may adversely affect our operations
15. 23The sales cycle for our IP and related solutions is lengthy, and even approved projects may have structured payment terms, which makes forecasting of our customer orders and revenues difficult
16. 24We may seek to expand our business in ways that could result in diversion of resources and extra expenses
17. 25potential loss of key employees of acquired organizations
18. 26Our product development efforts are time-consuming and expensive and may not generate an acceptable return, if any
19. 27We may not be able to adequately protect our IP
20. 28Our business will suffer if we are sued for infringement of the IP rights of third parties or if we cannot obtain licenses to these rights on commercially acceptable terms
21. 29Cybersecurity threats or other security breaches could compromise sensitive information belonging to us or our customers and could harm our business and our reputation
22. 30Any actual or perceived failure to comply with new or existing laws, regulations and other requirements relating to the privacy, security and processing of Personal Information could adversely affect our business, results of operations, or financial condition

Risks Related to Finance, Accounting and Taxation

1. 07Changes in our tax rates or exposure to additional income tax liabilities or assessments could adversely impact our cash flow, financial condition and results of operations
2. 31Changes in our tax rates or exposure to additional income tax liabilities or assessments could adversely impact our cash flow, financial condition and results of operations
3. 32The Israeli and French tax benefits that we currently receive and the government programs in which we participate require us to meet certain conditions and may be terminated or reduced in the future, which could increase our tax expenses
4. 33We are exposed to fluctuations in currency exchange rates
5. 34Royalty reporting by our licensees may be inaccurate or understated
6. 35We are exposed to the credit and liquidity risk of our customers, and to credit exposure in weakened markets, which could result in material losses
7. 36If we determine that our goodwill and intangible assets have become impaired, we may incur impairment charges, which would negatively impact our operating results

Risks Related to Ownership of Our Common Stock

1. 37The anti-takeover provisions in our certificate of incorporation and bylaws could prevent or discourage a third party from acquiring us
2. 38Our stock price may be volatile so you may not be able to resell your shares of our common stock at or above the price you paid for them