CEVA INC Commitments Disclosure
NOTE 16: COMMITMENTS AND CONTINGENCIES
a. The Company is involved in several legal proceedings and claims that have arisen in the ordinary course of business and remain unresolved. As of December 31, 2025, the outcome of these matters was anticipated to be more likely than not. Consequently, the Company has recorded a provision amounting to approximately $300 on the consolidated balance sheet.
b. As of December 31, 2025, the Company and its subsidiaries had several non-cancelable operating leases, primarily for facilities and equipment. These leases generally contain renewal options and require the Company and its subsidiaries to pay all executory costs such as maintenance and insurance. In addition, the Company has several fixed service agreements with sub-contractors.
As of December 31, 2025, future purchase obligations and minimum rental commitments for leasehold properties and operating leases with non-cancelable terms are as follows:
|
Minimum rental for leasehold properties |
Commitments for other lease obligations |
Other purchase |
Total |
|||||||||||||
|
2026 |
$ | 785 | $ | 3,814 | $ | 4,529 | $ | 9,128 | ||||||||
|
2027 |
811 | 3,784 | — | 4,595 | ||||||||||||
|
2028 |
747 | 3,603 | — | 4,350 | ||||||||||||
|
2029 |
706 | — | — | 706 | ||||||||||||
|
2030 |
706 | — | — | 706 | ||||||||||||
|
2031 and thereafter |
3,253 | — | — | 3,253 | ||||||||||||
|
Total |
$ | 7,008 | $ | 11,201 | $ | 4,529 | $ | 22,738 | ||||||||
c. Royalties:
The Company participated in programs sponsored by the Israeli government for the support of research and development activities. Through December 31, 2025, the Company had obtained grants from the IIA for certain of the Company’s research and development projects. The Company is obligated to pay royalties to the IIA, amounting to 3%-3.5% of the sales of the products and other related revenues (based on the dollar) generated from such projects, up to 100% of the grants received. Royalty payment obligations also bear interest at the LIBOR rate. The obligation to pay these royalties is contingent on actual sales of the products and in the absence of such sales, no payment is required.
Royalty expenses relating to the IIA grants included in cost of revenues for the years ended December 31, 2023, 2024 and 2025 amounted to $1,010, $1,580 and $525, respectively. As of December 31, 2025, the aggregate contingent liability to the IIA (including interest) amounted to $28,464.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Mar 7, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Mar 4, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 10, 2017 | |
| 2015 | Mar 11, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.