Good morning, and welcome to the CEVA, Inc. Q1 2013 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today’s presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Richard Kingston. Mr. Kingston please go ahead.

Thank you, and good morning, everyone. Welcome to CEVA’s First Quarter 2013 Earnings Conference Call. I’m joined today by Gideon Wertheizer, Chief Executive Officer of CEVA; and Yaniv Arieli, Chief Financial Officer of CEVA. Gideon will cover the business aspects and the highlights on the quarter. Yaniv will then cover the financial results for the first quarter of 2013 and supply guidance for the second quarter. I will start with the forward-looking statements. Today’s conference call 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 CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions. These forward-looking statements include financial guidance for the second quarter of 2013, market data from Analysis and Strategy Analytics incorporated herein, optimism about our business outlook and growth opportunities including with respect to the CEVA XE family of products in the 3G, LTE and mobile infrastructure spaces and CEVA’s strong foot hold in the 2G space. The risks, uncertainties and assumptions include the ability of the CEVA DSP cores and other technologies to continue to be strong growth drivers for us. Our success in penetrating new markets and maintaining our market position in existing markets, the ability of products incorporating our technologies to achieve market acceptance, the effect of intense industry competition and consolidation, global chip market trend, the possibility that markets for our technologies may not develop as expected or that products incorporating our technologies do not achieve market acceptance, our ability to timely and successfully develop and introduce new technologies, and general market conditions and other risks relating to our business including, but not limited to those that are described from time to time in our SEC filings. CEVA assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. With that said, I would now like to turn the call over to Gideon.

Thank you, Richard, and welcome, everyone. With the revenue for the first quarter was $1231 million around 20% compared to the first quarter of 2012. Our financial results for the first quarter of the year came back at the lower end of our guidance rate. Royalty revenue did not meet our expectation while licensing and related revenue were slightly lower than we focused it primarily due to recognizing partial revenue from an important licensing deal which I will elaborate on shortly. During the first quarter, we concluded eight new license agreements. Five of the agreement were for CEVA DSP cores, platform and software. Two were for SATA/SAS technology and one for Bluetooth technology. Geographically one of the license agreement was in the U.S., five were in Asia including Japan, and two were in Europe. Key DSP technology agreement signed during the quarter were with new customer operating in growing market that will currently come to help CEVA in reach its market reach beyond handsets. A long reach of mobile infrastructure, advanced Wi-Fi access points, and broadband satellite communications. During our fourth quarter conference call, we reported that larger companies with whom we have had no prior business relationship of discussing results exclaimers over long term engagements to use our DSPs. We are very pleased to announce that we concluded one of these agreements during the first quarter. A customer is a main jump player in the mobile infrastructure markets and has signed a comprehensive and strategic agreement to deploy our CEVA-XC4000 DSP architecture for its next generation product. These agreements will present a key strategic milestone and then fill in the technology customer portfolio with the our CEVA-XC DSP in a market that is widely acknowledged to have high barriers to enter. These strategic multi-customer link has broader context as…

Thank you Richard. I’ll start by reviewing the results of our operations for the first quarter 2013. Revenue for the first quarter was $12.1 million at the middle end of our guidance and it’s declined compared to last year. The revenue breakdown is as follow. Licensing and related revenue was $5 million reflecting 42% on our total revenue, 6% higher sequentially and down 16% on a yearly basis. Related revenue was $7.1 million reflecting 58% of our total revenue down 14% sequentially and 22% lower on a yearly basis. Our gross margins was 87% on U.S. GAAP basis and 88% on non-GAAP basis. The non-GAAP quarterly gross margin exclude approximately $69,000 of equity-based compensation expenses. Gross margins were low have been forecasted due to higher third party cost associated with a view executed during the quarter as well as higher allocation of cost for R&D for design work associated with the strategic lead as Gideon reflected earlier. Total operating expenses for the quarter were $9.2 million had been lower and below guidance which will include an aggregate equity based compensation expense of approximately 1.2 million. Total operating expense for the first quarter excluding equity based compensation expenses were $8 million reflecting the lower end of our guidance. These lower expenses are again due to cost of allocating from R&D to cost of goods for the design work. U.S. GAAP net income for the quarter decreased 65% to $1.7 million and fully diluted net income per share decreased 60% to $0.08. This compares to $4.9 million and $0.20, respectively for the first quarter of 2012. On a non-GAAP basis, net income decreased 51% to $2.9 million as compared to the same period for the prior year. Our non-GAAP fully diluted net income per share decreased 46% to $0.13 per share as…

Thank you. We will now begin the question and answer session. (Operator Instructions) The first question comes from Gary Mobley from Benchmark. Gary Mobley – Benchmark: Good morning gentlemen. Good afternoon I guess in your case. I was hoping dug a little bit deeper into your long term agreement with a cellular infrastructure provider for the CEVA XC first I am wondering why that would not help elevate your license revenue for the June quarter above the normal range and then I guess more importantly what is the long term implications for the adoption of XE-5S OEM and is it primarily for ASIC type development work for the OEM, does it have broader applications, which would include the FEGA suppliers and any other merchant supplier for this particular market?

It is a very-very positive financial facility, we have been into market. Overall, this deal is recognized over the next couple of quarters that involved the primarily percentage completion of RNVP to adopt the future stock for the XE. If we would have the recognized it all up we would above the high end of our guidance. This is going to be just overtime, we do not need exactly what the pace of the work would be, we believe it should end at the end of the year. So, it gives us some leverage and some buffer, but we do not exactly the pace. So, it’s out there, it is in a sort of the backlog for the next couple of floors and we will see how it does; although we do not want to take a specific dollar amount because it is elongated R&D progress at the end of the quarter. Gary, let me take this strategic implication, what is important to note above this deal, that these specific customers are not the customer and indeed is a big customer. It is also an influence meaning but I believe that any company whether it is a semiconductor OEMs that claim to be new comer who is coming into these market through the small scale (inaudible) phone factors in the mobile infrastructure. We know that you know that these influence were using CEVA in a very big way. So, I think that is important to notice and that it the reason that we agreed to basically take the CEVA XC and extended further based on customer requirement. It is noting in ASIC project, but we are taking the XC and we are changing. Gary Mobley – Benchmark: Okay, last question I have related to the growth rate per unit, we saw another decline in the quarter, I think that might mark about 7 or 8 sequential decreases in the growth rate per unit for specifically the March quarter was the decrease driver by a lower mix of consumer, electronics, or Nintendo related relative units and then as you can just may be breakout the trans and cellular did you see any increase in growth rate per unit on the cellular side given an increasing mix of 3G related units.

Yes, so overall, you are right of your answer to the question, the mix this of course is really associated to the consumer stuff; although it is about 10% of our volume base peak for the consumer is a much higher and the main reason on the overall price to me in the consumer side. You mentioned one of the products to the gaming consult or other some legacy products like VVG, set-top box that will just a weaker in Q in the Christmas season in the Q4 and this is relatively reported today. So, that explains the overall mix. On the handset side, you are absolutely correct that the 3G is progressing well with higher ASPs and I am not sure if it is mentioned but this is the fourth sequential quarter that we see increase in a volume of 3G and that also improves with overall ASP trial. Gary Mobley – Benchmark: Thanks guys.

Thank you.

Thank you and the next question comes from Neil from William Blair. Neil – William Blair: Hi guys, I had a couple of questions can you give us some sort of the breakdown between 2G and 3G on volumes, what you are experiencing right now?

So, I believe that we have about 72% 2G in edge and about 28% 3G and LTE. So, as we seen the last couple of scores are gradually growing from the 20-80 to now it’s 72-28. Neil – William Blair: So, when you look at the guidance and you are talking about 3G going up after seeing 3G coming down in the fourth quarter. Is that both TD-SCDMA and you know UMTS or is it one versus the other.

Sure, for the guidance? Neil – William Blair: Yes for the guidance do you expect all flavors of 3G to grow?

Yeah, I believe so, when I tried the numbers, you know, in general, I mean we see this is a one chunk and the overall 3G growing, I am mean look of the number if. Yeah everything is going from Q4 to Q1 shipments, we see growth across all the 3G segments. Neil – William Blair: And finally stepping back, if I look at the big picture clearly, you know you are having some short term pluses or minuses offsetting each other, but if someone were to take a little longer term approach and look at perhaps the inflation point where you see the 3G volumes start dominating, your customer are really start shipping. Do you think, I mean, is it fair to say it is more like you know the fourth quarter this year or maybe second half of this year or do you think it is first half of next year?

I wouldn't go into these levels of deep but I explain you the trends and I think it is key to understand. You know, there is about 800 million 2G chips externship in CEVA and and these 2G chips are in the emerging market and this is going to switch to all eventually to 3G. It could be in the 3G space, it could be a wideband CDMA. So these 800 chips come on top of what we are always the shipping in 3G which is also sizable, so how these look like, how and which one will go to 3G, which one will go to the wideband CDMA, it is helpful for us to know you see right now there have been slight increase in 2G so still people are shipping 2G chips in sizable volume but it is matter of time to change to 3G. Neil – William Blair: All right. Thanks.

Thank you, and the next question comes, Tavy Rosner from Barclays.

Hey good morning. China mobile recently added significant 3G customers in the first quarter, why do you think CEVA markets carrier right now?

We do not know exactly all sell in off the world China mobile shipment because in China mobile, there are different segments and this is not accurately right. If you take for example, (inaudible) they actually, I mean the lowering size of 3G, they have 50%, but the way the many just said I think we discussed about sometime in the past China mobile has about 725 million subscribers and 114 are 3G customer so the potential for us and just go back to the a new question of Europe the potential for CEVA over the next couple of years, and 100 of millions of 3G unit in the domestic China.

Hi, thank you and just last one about for more going forward.

For now still have the plan, in place about 350,000 share, we still firstly to execute plan and then our board will determine what could be the next step.

Okay thanks.

Thank you.

And the next question come Vijay Rakesh from Sterne Agee.

Hi guys, just couple of question share under ASP, what your ASP is running, I mean all the royalty is running now on the 3G versus 2G site and how much bump up do you get as the mixed most to 3G.

Yeah, I do not think that change that much, you know, in the IP business like the (inaudible) it was felt quite of you deals on the various speed of the chip and so in some form say the 2G will discover between on the lower end or may be on the two cents or three cents that the higher segment of 3G could be four or five and then slightly above that when we look at these so I think we have at least the 2X type of ratio between the different standard and that we would like to prove for LTE when that kicks for in higher volume in the most significant volume next year.

Got it. And in order 3G is picking up here nicely, but un-seasonality how do you see that mix with the 3G, 2G and let’s say exit 2013.

That’s the big question if we see the trend going is now 3G, you see some decline in 2G, but it’s not stable that’s the question how fast is it going to be, but you see that activities from our customer you see that is going beyond Samsung you know some the Samsung is the only customer and then some Nokia we see them going to India they see them going to China to work is about White books manufacturer experts have made the general announcement that they are going to here CDMA chips the beginning of second half of the year. All these companies they take into some standard to switch to 3G will be very far.

Okay got it. Thanks.

Thank you.

And our next question comes from Matt Robison of Wunderlich Securities. Matt Robison – Wunderlich Securities: Hey, thanks for taking my questions and congrats on the quarter of internals that you have represented, first I like it to know we saw 30% sequential decline in series 40 for Nokia in the first quarter and you know how is Intel offsetting better help on your licensees in general offsetting that for you for the second quarter and that’s good and pretty big piece of the unit volume for your guys I think.

Yeah, that’s honestly speaking for us also it’s surprising that the 2G should the segment Nokia not so much volume in the quarter and then 3G stream state that and even growing on yearly basis. So, it went to the white books place even now OEMs for 2G not even in China you have OEMs in India and the company is like spread long sale out there or picking share of them. Matt Robison – Wunderlich Securities: Intel‘s probably giving some business somewhere else right to offset that is well because they reported I think it was 4% sequential decline for that sector how much it was MAC but you would think that’s a pretty straight contrast what Nokia was doing?

You have the direct into some simple it’s complicated for us to know exactly where bills for and bill blended who are the supplier of for the known and how they shape up there it’s really hard to know but. I think you can get them to know that 2G is going to be still fled to be market growth and not this 800 million that they are roughly in the year this should somehow switch to 3G it’s just a matter of time it’s not questionable. Matt Robison – Wunderlich Securities: Yes, your licensees are picking up share elsewhere where Nokia is losing it I guess.

Yes, that’s been to be the case. Matt Robison – Wunderlich Securities: Why I guess the was the EDA license for the reason why prepaid went up so much?

Yes, correct that yeah. Matt Robison – Wunderlich Securities: Why don’t you just put it into CapEx?

No, we don’t capitalize it’s just on the quarterly basis in the life of the EDA agreement they will return. Now we’ve been to capital expenses. We don’t do any other expense. Matt Robison – Wunderlich Securities: I understand. I was just thinking of it as a tool. What was your CapEx in the quarter?

It’s $300,000 and depreciation of about 150. Matt Robison – Wunderlich Securities: Okay, now your deferred revenue went down I guess that and DSO went up pretty sharply. It will give you a background on that I presume that the big strategic deal you have had any milestones that you can able to input for which derived deferred revenue but you know may be you should explain not me?

Yeah, nothing like that critical more of the tiny each milestone we get paid as today a month after quarter end we are down roughly $5 million in year or so from $7 million something so. We don’t have any collection issue however it’s just the timing they are in the quarter end with some of growth that we have to do specifically this quarter. Matt Robison – Wunderlich Securities: So that was other words

Yes correct. Matt Robison – Wunderlich Securities: What about deferred revenue should we expect that come back of it?

No I think there is nothing special around that they could think of nothing special around that we believe. Matt Robison – Wunderlich Securities: Okay, Gideon that you mentioned couple of interesting applications beyond besides the infrastructure one the advanced WiFi access point in both in SAT were both of those in Asia?

No one was Europe the other one was in Asia. In Asia, there is an interesting development with satellite communication where few deals directly close on our deals or few in the pipeline. It’s not just for a preview for data it’s a pretty advance more than that. Matt Robison – Wunderlich Securities: Thank you all of them for answering question.

Thanks Matt.

Thank you and the next question Jessie (inaudible)

Hi guys thank you for taking my question and you have mentioned that (inaudible) wireless infrastructure come through and I want to ask you because elaborated why this reflect or may be 2G 2Q guidance or may be it comes through later quarters or how do you see that?

Yeah I think I have told you overall that this specific deal that we are allocating revenue where we did the development cycle should end up at the end of this year we believe sort of scattered on to the next 2 or 3 quarters and its part of our ongoing life (inaudible) so off course sooner we finished the design and the customer faced into the product line and start providing them with the chip will have royalty few year down the road but from the life is inside you said that you are comfortable reducing types of level by minimal range of life inferior and we try to give a little bit more color today and from newer market will have the traditional method that’s a fairly traditional baseband one but new market segment so we feel bit better from the life environment.

Thank you

Sure thank you

As no more questions at the present time, I would like to turn the call back over Mr. Kingston for any closing remarks.

Thanks very much. Thank you every one for joining us today and for your continuing interest and supporting CEVA. We will be attending the following upcoming conferences and I invite you to join us there on the 23rd of May we will be at the Barclay’s Telecom and media conference in New York, on the 30th of May we will be at Benchmark Company’s Fourth Annual One On One Conference in the (inaudible) and on the June 12th we will be at the William Blare and Company growth conference in Chicago. Thank you and good bye.

Thank you. This concludes today’s teleconference. You now disconnect your phone lines. Thank you for participating and have a nice day.