CEVA Announces Third Quarter Results - A Record 30 Million Units Shipped In The Third Quarter Reflects Strong End Markets Growth

SAN JOSE, Calif - October 26, 2004 - 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 third quarter of 2004, ended September
30, 2004.

Total revenue for the third quarter 2004 was $9.7 million, a slight
increase from the $9.6 million reported in the second quarter 2004 and a
4% increase compared to $9.3 million in the third quarter 2003. Third
quarter licensing revenue of $6.9 million was similar to the 2004 second
quarter and increased 7% from $6.5 million in the third quarter 2003.
Third quarter 2004 royalty revenue was $1.6 million, up 24% from $1.3
million reported in the second quarter 2004 and a 33% rise from the $1.2
million in the third quarter 2003.

Strong Unit Royalty Growth

Shipped units by licensees increased 30% to 30.5 million in the third
quarter 2004 compared to 23 million shipped in the second quarter 2004 and
a 110% increase from 14.5 million units shipped in the third quarter

Increasing Profitability

Third quarter gross margin was 88% compared with 85% in the 2004 second
quarter and 85% in the third quarter 2003. Third quarter net income
increased 13% to $560,000, or $0.03 per share compared with second quarter
2004 net income of $494,000, or $0.027 per share. The Company recorded a
net loss of $1.1 million, or $0.063 net loss per share in the third
quarter 2003.

Solid Balance Sheet

The Company generated $0.5 million of operating cash flow during the
quarter. At September 30, 2004, cash equivalents and marketable securities
were $57.8 million.

"CEVA's strong end-market growth drivers - wireless and consumer
multimedia - resulted in a record 30 million units shipped in the third
quarter with CEVA technology embedded as our licensees continue to thrive
in the DSP industry," said Chet Silvestri, President and CEO of CEVA.
"Although it is traditionally our weakest quarter, CEVA's revenue, gross
margin and net income all recorded sequential improvements. Furthermore,
our strong cash position gives us the flexibility to pursue internal and
external growth initiatives to further extend our position as the leading
licensor of DSP technology."

During the third quarter, CEVA completed six new licensing agreements
including another licensee for CEVA-X and good adoption of CEVA's
Serial-ATA solutions. In addition, a major Japanese wireless player was
the first to license CEVA's Mobile Media solution following the launch of
the technology in the quarter.

Additionally, further industry endorsement for CEVA technologies was
underscored in the third quarter with the announcements that Atmel adopted
CEVA for storage solutions, Zoran for DVD systems, Japan Radio Consortium
for radio solutions, and Nemerix for location solutions.

"Notwithstanding the more moderate growth expectations for the
semiconductor sector, our product portfolio of cores, solutions and
services positions us well to continue our momentum of revenue and profit
growth," continued Chet Silvestri.

CEVA Conference Call

On October 27, 2004, CEVA management will conduct a conference call at
10:30 a.m. EST/15.30 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
+44-20-7019-0810, 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 866-851-5345 for US domestic callers and
+44-20-7108-6343 for international callers from two hours after the end of
the call until 6:00 p.m. (ET) on November 3, 2004. 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 29KB)

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.


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, and continued momentum of revenue and profit
growth, 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.