CEVA Announces Record Fourth Quarter Revenue and Earnings

SAN JOSE, Calif. - February 02, 2005 - CEVA Inc. (NASDAQ: CEVA;
LSE: CVA), the leading licensor of digital signal processor (DSP) cores
and communications solutions to the semiconductor industry, today
announced financial results for the fourth quarter and year ended December
31, 2004. Concurrently, a presentation on CEVA's 2004 performance,
including 2005 guidance, is available on the Company's web site at

2004 Fourth Quarter
Total revenue for the 2004 fourth quarter
was $10.0 million, compared to $9.7 million reported in the third quarter
2004 and $9.6M in the year ago quarter. Fourth quarter licensing revenue
was $6.7 million compared to $6.9 million in the third quarter 2004. A
record seven license deals completed in the quarter, including two CEVA-X
agreements, has resulted in a significantly increased order backlog.
Fourth quarter 2004 royalty revenue was $2.0 million (20% of total
revenue), representing an increase of 31% from $1.6 million reported in
the third quarter 2004. Shipped units by licensees increased to a record
33 million in the fourth quarter 2004 compared to 31 million shipped in
the third quarter 2004, and an 88% increase from 17.5 million units
shipped in the fourth quarter 2003.

Commenting on the Fourth Quarter, Chet Silvestri, Chairman and CEO
of CEVA said:

"I am pleased to report that we completed 2004 with
our best ever quarterly performance for CEVA. In the fourth quarter CEVA
grew revenues, earnings, and royalties while exiting the year with a
substantially increased order backlog year-over-year. Another highlight of
the quarter was that our licensing partners shipped a record 33 million
units, up 88% over the fourth quarter 2003."

Fourth quarter gross margin was 90% compared with 88% in the prior
quarter and 85% in the 2003 fourth quarter. Fourth quarter net income
increased 17% to $653,000, or $0.03 per share compared with third quarter
2004 net income of $560,000, or $0.03 per share. The Company reported a
net loss of $9.6 million, or $0.53 net loss per share in the year ago
fourth quarter. The Company generated $1.9 million in cash during the 2004
fourth quarter.

The Company completed seven license agreements during the fourth
quarter including major multi-use agreements for CEVA-X DSP and SATA
technologies serving the wireless and consumer multimedia markets. In the
quarter, the Company launched CEVA Mobile-Media, a complete
system-solution targeting the portable multimedia market; launched the
CEVAnet third party developer partner program with over 30 independent
developers; and announced licensing agreements with Atmel (targeting
storage solutions), Zoran (targeting home multimedia solutions),
Spreadtrum (targeting Chinese 3G solutions); and Sharp (targeting portable
multimedia solutions).

Full-Year 2004 Review: Total revenue for 2004 was $38.5 million,
compared to $36.8 million reported in 2003. Excluding hard IP and certain
other non-strategic IP revenues that CEVA exited from in 2003, CEVA's
continuing operations achieved strong double digit growth in 2004. With a
total of 24 license agreements in the year, 2004 licensing revenue was
$27.1 million, compared to $25.7 million reported in 2003. 2004 royalty
revenue was $6.0 million, compared to $4.1 million reported in 2003.
Shipped units by licensees increased 94% to 106 million in 2004 compared
to 55 million shipped in 2003.

"In 2004, we achieved our objectives of revenue growth and
profitability. Our DSP business enjoyed robust demand in the year which we
expect to sustain into 2005. Year-over-year units shipped by our licensees
have nearly doubled to a record 106 million units in 2004. Our focused
cost management has resulted in a profit throughout 2004 and cash
generation for the year," added Silvestri.

2004 gross margin was 87% compared with 84% in 2003. Operating expenses
for 2004 were $31.3 million, a decrease of 26% over $42.5 million recorded
in 2003, principally as a result of $12 million restructuring and
impairment charges in 2003. 2004 net income was $2.1 million or $0.11 per
share, compared to a net loss of $12.0 million or $0.66 loss per share in

The Company completed a total of 24 licenses in 2004. Major
contributors for licensing activity were new technologies launched and
deployed in the year including CEVA-X1620 DSP core (total of five
licensees), CEVA Xpert-Teak DSP (total of five licensees) , and CEVA SATA
serial connect (total of four licensees) technologies. In 2004, CEVA
announced licensing agreements with industry leaders in wireless and
consumer multimedia markets including Atmel, Eonex, Kawasaki, Oki, JRC,
National Semiconductor, Renesas, Samsung, Sharp, Spreadtrum, Tower, UMC
and Zoran.

Solid Balance Sheet
As a result of generating cash during
the year, the Company's cash balances and marketable securities were $59.6
million at December 31, 2004. In addition, DSOs improved significantly in
the fourth quarter 2004.

2005 Guidance
Building upon the success of its DSP
technology and solutions, the Company is anticipating that revenue will
grow strongly in 2005 and be in the range of $44 million to $46 million.
The Company estimates that gross margin will be in the range of 88% to 90%
and total operating expenses between $36 million and $37 million. The
Company is expecting full year 2005 net income to be in the region of $3.5
million to $4.5 million.

"We anticipate that 2005 will be a year of continued growth for CEVA.
We enter 2005 with a significantly increased order backlog, healthy sales
pipeline and the expectation of continued growth in royalty unit
shipments," concluded Silvestri, Chairman.

2004 Customer Adoption Highlights

  • CEVA Licenses Xpert-Teak DSP Platform To Sharp For Portable
    Multimedia Devices

  • Spreadtrum Launches World's First Chinese 3G Chipset Powered By
    CEVA-Teak DSP

  • CEVA Launches CEVAnet Partner Program To Extend DSP Offerings And
    Deliver Complete Solutions

  • Zoran Licenses And Deploys CEVA-TeakLite DSP Core To Power DVD
    Chipset Solution

  • Atmel Licenses Industry-Leading CEVA-X DSP And System Platform To
    Power Next-Generation High Performance Storage Applications

  • NemeriX Licenses CEVA GPS 4000 IP And Announces Assisted GPS Chipset
    Targeting Mobile Phone Market

  • Japan Radio Co. Licenses CEVA-Teak DSP Core For Baseband Radio

  • CEVA Speeds Customer's Time To Silicon With The Launch Of CEVA

  • CEVA Confirmed As World's Leading Licensor Of DSP Intellectual

  • Renesas Technology Licenses CEVA's Xpert-Blue Platform And Achieves
    Bluetooth 1.2 Certification

  • CEVA Announces Foundry Program Partnership With Tower Semiconductor
  • CEVA Licenses CEVA-X DSP Architecture to Korea's EoNex to Power 3G
    Wireless Solutions

  • Samsung Licenses CEVA's Newest Generation CEVA-X DSP Core
  • Oki Electric Licenses and Deploys CEVA DSP Core to Power Digital
    Audio MP3 Consumer Chip Solution

  • CEVA Licenses Xpert-Teak DSP Platform To National Semiconductor
  • Kawasaki Microelectronics Partners with CEVA to Add Fully Compliant
    1.5Gbps Serial ATA

  • CEVA Launches Foundry Program With UMC

2004 CEVA Technology Highlights

  • CEVA Shatters Performance Record for Licensable DSP Core With CEVA-X
  • CEVA Launches Mobile-Media - The First Fully Programmable Solution
    For Mobile-Multimedia Applications

  • CEVA Launches CEVA-XS System On Chip Platforms For Wireless And
    Consumer Multimedia Markets

  • CEVA Announces Launch Of Lowest-Power SGMII IP For Gigabit Ethernet
    Interfaces In Enterprise And Carrier Data Communications Systems

  • CEVA's GPS Solution Utilizes Proven DSP Technology to Lower Cost and
    Improve Battery Life of Global Positioning-Enabled Mobile Devices

  • CEVA Demonstrates Interoperability of Breakthrough Sub 80mW Serial
    ATA IP Solution

  • CEVA Launches Xpert-Media - A Complete, Licensable and Scalable
    Video and Audio Media Processing Platform

  • CEVA Announces Launch and Licensing of Xpert-Blue Bluetooth
    Communications IP

CEVA Conference Call
On February 2, 2005, CEVA management
will conduct a conference call at 11:00 a.m. EST/16.00 p.m. London time,
to discuss the operating performance for the quarter. To participate in
the conference call, US domestic callers can dial 877-951-7311 and
international callers can dial +44-207-019-0810, access code "CEVA."

The conference call will also be available live via the Internet by
accessing the CEVA web site at ceva-dsp.com. Please go to the web site
at least fifteen minutes prior to the call to register, download and
install any necessary audio software.

For those who cannot access the live broadcast, a replay will be
available by dialing 877-274-0697 for US domestic callers and
+44-207-970-8265 for international callers from two hours after the end of
the call until 11:59 p.m. (ET) on February 9, 2005. The replay will also
be available at CEVA's web site ceva-dsp.com.


Condensed Consolidated Statements Of Operations &
Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Operations & Condensed
Consolidated Balance Sheets are available for download here
(pdf )

About CEVA, Inc.

Headquartered in San Jose, Calif., CEVA is the leading licensor of digital signal processor (DSP) cores, multimedia, GPS and storage platforms to the semiconductor industry. CEVA licenses a family of programmable DSP cores, associated SoC system platforms and a portfolio of application platforms including multimedia, audio, Voice over Packet (VoP), GPS location, Bluetooth, Serial Attached SCSI and Serial ATA (SATA). In 2005 CEVA's IP was shipped in over 115 million devices. CEVA was created through the merger of the DSP licensing division of DSP Group and Parthus Technologies. For more information, visit ceva-dsp.com.

A PDF copy of this press release is also available here

Forward-Looking Statements

This press release contains forward-looking statements
that involve risks and uncertainties, as well as assumptions that if they
ever materialize or prove incorrect, could cause the results of CEVA to
differ materially from those expressed or implied by such forward-looking
statements and assumptions. All statements other than statements of
historical fact are statements that could be deemed forward-looking
statements. The forward looking statements in this press release include
statements concerning CEVA pursuing internal and external growth
initiatives, market growth, continued momentum of revenue and profit
growth, revenue, gross margins, total operating expenses and net income
estimates for 2005, and extending its position as the number one licensor
of DSP solutions for the semiconductor industry. The risks, uncertainties
and assumptions referred to above include macroeconomic and geopolitical
trends and events; intense competition within our industry; the industries
in which we license our technology have experienced a challenging period
of slow growth; that the market for the sale of our technology may not
develop as expected; that we rely significantly on revenue derived from a
limited number of licensees; the possible loss of key employees and/or
senior management; the challenges of managing a geographically dispersed
operation and other risks that are described from time to time in the
Company's Securities and Exchange Commission reports, including but not
limited to the Annual Report on Form 10-K for the fiscal year ended
December 31, 2003, and reports filed after the Form 10-K. CEVA assumes no
obligation to update any forward-looking statements or information, which
speak as of their respective dates.