Good morning, welcome to the CEVA, Inc. third quarter 2020 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Richard Kingston, Vice President of Market Intelligence and Investor Relations. Please go ahead.
Thank you, Brandon. Good morning, everyone, and welcome to CEVA's third quarter 2020 earnings conference call. I'm joined today by Gideon Wertheizer, Chief Executive Officer, and Yaniv Arieli, Chief Financial Officer at CEVA. Gideon will cover the business aspects and highlights from the third quarter and provide general qualitative data. Yaniv will cover the financial results for the third quarter and also provide qualitative data for the fourth quarter and full year 2020. I would start with the forward-looking statements. Please note that today's discussion 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.
Forward-looking statements include guidance and qualitative data for the fourth quarter and full year 2020, optimism about 5G base station RAN deployments in China, relationship with ZTE, and opportunities presented by our sensing and connectivity technologies. Optimism about the continued momentum in base station and IoT royalties, market traction associated with a low-end smartphone, and production schedule associated with our ADAS agreement. For information on the factors that could cause a difference in our results, please refer to our filings with the Securities and Exchange Commission. These include the scope and the duration of the pandemic, the extent and length of the restrictions associated with the pandemic and the impact on customers, consumer demand, and the global economy generally.
The ability of CEVA's IP for smarter connected devices 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 new products incorporating our technology to achieve market acceptance, the speed and extent of the expansion of the 5G and IoT markets, our ability to execute more non-handset based on license agreements, the effect of intense industry competition and consolidation, and global chip market trends. 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. Good morning, everyone, and thank you for joining us today. CEVA delivered a very strong quarter, highlighted by record royalties from our base stations and IoT product category and licensing agreements with major players in key industries. Before we expand on our third quarter result, I would like to acknowledge the tireless effort of our talented employees around the world that continue to deal with the challenges COVID-19 present. Through their hard work, we are successfully growing our business, keeping the commitment to our customers, and maintaining the fast pace of innovation and new technology development. Thank you all. Total revenue for the third quarter was $25 million, up 6% year-over-year. Our licensing business continues to be solid at $12.4 million for the quarter, up 10% year-over-year. Royalty revenue was $12.5 million, up 3% on a year-over-year basis.
We concluded 13 new agreements during the quarter, of which five were for connectivity and eight were for smart sensing. Six of those agreements were with first-time customers. Target applications of our new licensing agreements include strategic design win for ADAS with one of the largest automotive semiconductor players, which I will expand later on the call. Other target application for our customers this quarter include digital imaging, two wireless stereo earbuds, smart TV, and digital conferencing systems for home use, a growing space as more people are switching to work from home permanently and are upgrading their home office setups. On royalty revenue, we had a strong quarter, driven by record shipments for our base station IoT product category, formerly referred to non-handset products.
Royalty revenue from this category grew 86% sequentially and 105% year-over-year to reach a record of $7.9 million. We have benefited from expedited 5G RAN deployment in China, which I will touch on later in the call, and from series of product launches and shipments enabled by our Bluetooth, Wi-Fi, and sensor fusion technologies. In our handset baseband category, we saw a strong recovery from our China-based customers targeting low-tier 4G smartphones and feature phones for India and other developing economies. Royalties from premium tier smartphone decline on a year-over-year basis as new 5G smartphone series launched last month uses modem from another supplier that does not incorporate our technologies. With that said, our technology remain incorporated in the low-cost smartphone of this customer launched earlier in the year, which continues to have a strong market traction around the world.
Let me take the next few minutes to elaborate on two key developments in the quarter. The first is monumental agreement in the automotive ADAS space, and the second is the underlying drivers that deliver a step up in 5G RAN royalties. The digital transformation in automotive industry, of which ADAS is a key driver, has led to dramatic increase in the usage of software and AI to analyze data collected by the cameras and RADAR sensors surrounding the car. Furthermore, amidst the push by players such as NVIDIA and Mobileye toward their own closed and vertically integrated solutions, automotive Tier 1 and OEMs are seeking for an open high-performance technology where they can take advantage of their in-house excellence while not being locked into a certain vendor.
Against this backdrop, our powerful DSPs, AI technologies, and our collaborative business model set a comprehensive foundation that enable OEMs to become supplier-agnostic and translate their innovation into a competitive edge. In this regard, the unique proposition of our leading-edge sensor DSP, along with our CDNN-AI compiler technology, were instrumental in obtaining a new comprehensive agreement we signed in the quarter with a major semiconductor player in the automotive space. This agreement is based on a project our customer won with a very large automotive manufacturer in Japan for an ADAS solution for new L2+ and L3 cars, which are projected to start production by 2025. On 5G RAN, the transition from non-standalone to standalone mode of 5G new radio is already underway, in particular in China. According to government data, Chinese operators have already deployed 480,000 5G base station as of the first half of the year.
This represents about a third of the global RAN market. CEVA is a prime beneficiary of this upgrade cycle in China through our strategic relationship with ZTE. China Mobile, China Telecom, and China Unicom have engaged ZTE in large scale for these deployments. As a result, its market share climbed to 30% within those operators. In comparison to 4G, 5G present higher content and a larger addressable market for us, resulting from the use of active antenna units, AAU, in the base station radio units. Deployment of active antenna settings provide operator with substantial increase in network capacity, data rate, higher energy efficiency, and overall lower cost of ownership. The latest advancement in active antenna technology require massive DSP computing for algorithms such as massive MIMO and beamforming, which can optimally served by our advanced CEVA-XC12 and CEVA-XC16 DSP.
We are therefore presented with additional content and higher volume opportunity in addition to our proposition for baseband processing. Royalties from active antenna has already made noticeable contribution to our third quarter royalty reports. To summarize, our third quarter performance demonstrated the continued meaningful progress we are making across our businesses. Our technologies for sensing and connectivity are fundamental to any intelligence device and will lead the transformation in 5G networks and automotive space. We are managing our business for the long haul and confident in our growth strategy. Yet we remain determined and focused to drive efficiency and prudency to cope with the ongoing uncertainty COVID-19 possess. Finally, I'd like to thank again our customer partner and CEVA hard-working employees. Your health and safety continue to be our first priority. With that said, let me hand over the call over to Yaniv for financials and guidance.
Thank you, Gideon. I'll start by reviewing the results of our operations for the third quarter of 2020. Revenue for the third quarter was up 6% to $25 million as compared to $23.5 million for the same quarter last year. It is the highest third quarter revenue we ever recorded. The revenue breakdown is as follows. Licensing and related revenue was approximately $12.4 million, reflecting 50% of total revenue, 10% higher than $11.3 million in the third quarter of 2019. Royalty revenue was $12.5 million, representing 50% of our total revenue, 3% higher than $12.2 million from the same quarter last year. Royalty revenue from our base station and IoT product line in the quarter reached a new record high of $7.9 million, up 86% sequentially and 105% on a year-over-year basis.
Quarterly gross margin was 90% on GAAP basis and 91% on non-GAAP basis, both significantly better than what we projected. Non-GAAP quarterly gross margin excluded approximately $0.2 million of equity-based compensation expense and $0.2 million for the impact of amortization of acquired intangibles. Our total GAAP operating expenses for the third quarter was at the upper range of our guidance at $22.5 million. OpEx also included aggregated equity-based compensation expense of approximately $3.4 million and $0.6 million for the amortization of acquired intangibles. Our total OpEx for the quarter excluding these two items were $18.5 million, slightly above second quarter level and also at the upper range of our guidance. Note, the third quarter 2020 financials include a $1 million tax expense due to withholding tax, which cannot be utilized in future years.
Our third quarter 2019 financials included a $1 million tax benefit as a result of a successful conclusion of a tax audit. U.S. GAAP net loss for the quarter was $0.7 million, and diluted loss per share was $0.03 for the third quarter of this year, as compared to net income of $0.8 million and diluted net earnings per share of $0.03 for the third quarter of 2019. Non-GAAP net income and diluted EPS for the third quarter was $3.6 million and $0.16 respectively. Our non-GAAP net income and diluted EPS for 2019 were $5.1 million and $0.22 respectively. The related data. Shipped units by CEVA licensing during the third quarter of 2020 were 349 million units, up 51% sequentially and 20% up from the third quarter of 2019.
Of the 349 million units shipped, 149 million or 43% were for handset baseband shipped, reflecting a sequential increase of 50% from 99 million units of handset baseband shipped during the second quarter of this year, and a 12% decrease from 169 million units shipped a year ago. Our base station and IoT product shipments were a record 200 million units for the quarter, up 52% sequentially and 63% up year-over-year. As a reminder, we have categorized all our non-handset baseband chips under the umbrella of base station and IoT category since the beginning of this year. As for the balance sheet items, as of the end of September, CEVA's cash equivalent balances, marketable securities, and bank deposits were $153 million. We did not repurchase any shares during the quarter. We have approximately 500,000 shares available for repurchase.
Our DSO for the third quarter was 57 days, higher than the second quarter level, but lower than the first quarter level. During the quarter, we used $4.3 million of cash from operations. Our depreciation and amortization was $1.4 million, and the purchase of fixed assets was $1.2 million, higher than the norm due to larger investment in hardware, computer servers, and in engineering development software. At the end of the third quarter, our headcount was 398 people, of which 331 were engineers, slightly down from a total of 401 people, at the end of June. Now for the guidance. As demonstrated by our financial results for 2020 thus far, CEVA's product and customer diversity enable us to migrate the disruption that COVID-19 presented. Amidst continued economic uncertainty, we expect our 2020 total revenues to increase over 9% year-over-year to a record annual high of $95 million.
We believe the momentum we saw in the third quarter in base station and IoT royalties will extend into the fourth quarter. In licensing, the demand for our connectivity and sensing technologies remained high. We are relentlessly working to translate these opportunities into licensing revenue. Specifically for the fourth quarter, gross margin is expected to be approximately 88% on GAAP and 89% on non-GAAP basis, excluding an aggregate $0.2 million for both equity-based compensation expenses and the same amount for amortization of other assets. OpEx for the fourth quarter is forecast to be slightly lower than the last two quarters. GAAP-based OpEx is expected to be in the range of $21.9 million-$22.9 million. Of our anticipated OpEx for the third quarter, $3.5 million is expected to be attributed to equity-based compensation expense and $0.6 for amortization.
Our non-GAAP OpEx is expected to be in the range of $17.8 million-$18.8 million. Net interest income is expected to be approximately $700,000. Taxes for the fourth quarter are expected to be approximately $600,000 on both GAAP and non-GAAP. Last, share count for the fourth quarter is expected to be approximately 23.3 million shares. Brandon, you could now open the Q&A session.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Matt Ramsay with Cowen. Please go ahead.
Thank you very much. Good morning, good afternoon, everybody. I guess just a quick clarification, if you could. I think the line broke up a bit on my end when Gideon was talking about the specific revenue for the base station business in terms of royalties in the quarter, if you could re-clarify what that number was and maybe what it was year-over-year.
Then the question on that front is with Huawei being under scrutiny and potentially impaired in terms of getting their own silicon from their own silicon division, how are you guys thinking, Gideon, over the next 12, 18 months, what that might mean for your customers and the 5G base station business about their trajectory of filling in for some of those voids that Huawei might be leaving in the industry and how that might change how you're thinking about the potential over the next 18, 24 months for your business and royalties for base stations? Thank you.
Sure. Good morning. I'll start with the first question. No, I don't think there was any line break. We didn't mention specifically any numbers related to base station royalties in the third quarter. We did say, however, that our base station and IoT device, this is the bucket that we are now representing all the newer technologies and markets that CEVA has engaged in over the years, have reached an all-time record high of $7.9 million. To remind you, that same category for the first half of the year was also $7.9 million. Within one quarter, we have seen a tremendous growth in our newer market royalty contribution. A big portion of it was from 5G base station ramp-up by ZTE. We did mention that. Smart antennas and their market share growth into China specifically. The rest, it came across all the industries we're active in.
We came in at record high Bluetooth royalties, Wi-Fi royalties, sensor fusion royalties. A lot of different consumer-related devices and infrastructure for 5G helped us reach that record number for this quarter. Huawei, I'll refer to Gideon.
Yeah. Huawei, it's hard to answer how this shape up to do. Huawei was strong in the market, first of all, because they were superior in their technology, advanced than other, in specifically the active antenna that I refer in the prepared remarks. ZTE is the second company today that offer an active antenna in production. In this respect, they are gaining share in China specifically. How, on a global basis, the share of Huawei was played between Nokia, Ericsson, ZTE, Samsung. These are the names, that we do. It's hard to say at this stage.
Got it. Thanks, guys, for the detail there. My second question, Gideon, I understand that there may be some things you can disclose and some that you can't, but I wanted to follow up further on the new automotive design wins or agreements that you guys have gotten in place now with the Tier 1 chip supplier that you mentioned. If there's any additional detail that you give about number of chips per car, royalty potential per car, how broad that agreement might be in terms of auto units that it might be exposed to. Any additional details there would be super helpful, congratulations on that win. Thanks.
The automotive is a strategic market that we do. Last quarter, we had a very large deal around the power of the car. Now we talk about ADAS. The only thing that I can say is what we said in the prepared remarks. First of all, it's a project, meaning it's a design win, and it's a one-way ticket, meaning we have to follow all the steps, and then start of production will be 2025. Number two, there is a sizable, large OEM in Japan that drive this project. The third one, it's a mid-range car that means volume and versus the premium car. These are the three components that for now we can share.
Got it. Thanks very much, guys. I'll jump back in the queue.
Sure thing.
Our next question comes from Tavy Rosner with Barclays. Please go ahead.
Hi, this is Peter Dovchi on for Tavy. Congratulations on the great quarter. First ask one of the previous questions in a little different way, since we'd really love some more detail on the base station traction. Could you maybe give us an idea of how many base station units were represented in that $7.9 million of royalties or even some sense of the ASPs there? As a follow-up, how do you see the runway in China in terms of the pace of the 5G rollouts and where they are in that deployment cycle?
Sure. We don't break out the numbers of specific customer, of how many shipped, but unfortunately, we do bundle it with the 200 million units that reached record high. Of course, base station is on the lower, on smaller quantities of those 200 million, but it's a significant contributor and a step up from what we had before, due to, as Gideon explained, both supplying the modem as well as the small antennas, which their volume could be much, much higher than our traditional modem-only type of socket. This could be a few tens of antennas per base station, that's the opportunity we have in the future. We can't, unfortunately, open up specific volumes for a specific customer. I hope that helped a bit.
That helps a bit. Thank you. As far as, do you see the pace of ZTE's rollout accelerating from here, and then how many quarters do you think that could be sustained?
The prospect for 5G, it's bigger than base station, because we speak about base station, and we refer to the big one, the macro base station. As time goes by and 5G, the technology itself becomes more mature, and that's something that in one year, two years, no more than this, you're going to see smaller scale base station, private base station. You think about manufacturing line of Toyota or Ford or whatever, and they can install their own 5G network, private network, where they can use for their robotics, with fast connection to the cloud where they do AI. We use the term transformation because the way to look on 5G is not just how many big base station you have and how many antenna hooked to it, which is also a new one.
That's something that there are lot of estimations apart to each other in a big way. We don't know exactly, but we talk about here in millions of smaller size base stations with antennas and all of them. We have the opportunity to have the content both for the basement and for the active antenna.
That's helpful. Thanks.
To add one more thing, where we talked about the opportunity with ZTE, it's an operator-driven business, per implementation of a city, of a place, of a network. We don't have ahead of time that visibility. It's always in the rears when we get the royalty report for a specific quarter, we know better what was installed in that specific quarter. Bear in mind that next year we're also looking to have another OEM start to deploy our solutions, which is Nokia. As soon as they get into production, it's not going to be only ZTE, but another base station. As Gideon said, on top of that, we have other aspects of 5G, customers in that space that hopefully should be ramping up as well, we have licensed our technology to them already. All this is in the pipeline in the coming years.
Great. Thank you for that.
Sure. Thank you.
As a reminder, if you would like to ask a question, please press star, then one. Our next question comes from Suji Des ilva with ROTH Capital. Please go ahead.
Hi, Gideon. Hi, Yaniv. Congratulations on progress here. Looking ahead to calendar year 2021, across the non-baseband, the 5G base station, the IoT connectivity, the sensors, can you talk about the strongest growth opportunities into calendar 2021? It seems like all three of those are doing well. I just want to know maybe rank order which ones would have the best opportunity for growth contribution looking out to calendar 2021.
Still early in the morning, so I didn't bring my glasses, so I don't see as far. If I look at only 2020, because of the site vision here, and remember 2020 when we started the year, and this was pre-corona, our target for base station IoT was to reach like a $20 million target, which was huge for us. You recall a few years ago, we were at $4 million. A year ago, last year, we were $13 million, and we talked about $20 million. $20 million is a 50% growth that you don't see in the semi space, in the consumer space, but this is something that we believe that we could reach.
With COVID and all the things that are around us these days, we are today much more confident of surpassing that quite nicely and even reaching closer to 60%-70% growth this year in 2021 because of the momentum on all these different markets. Finally, we're seeing these nice tractions, even better than what we started the year with. Hard to say, we didn't do our analysis for 2021 yet. It's still early. We'll do it as we always do in the first call of the year and try to give the more data and insights around that. For sure, if you look back three or four years where we were then and where we are today, with north of $20 million in all these new markets, it is working out extremely well for us in all the different fronts.
This is part of the growth that we are looking into the future.
Okay. Thanks, Yaniv. That was helpful. Then, perhaps a second question for Gideon. Automotive, congratulations on the win there for me as well. Can you talk about the key factors that are driving CEVA adoption versus competitive solutions? Are there any shifts in automotive architecture or trends going into the L2+ L3 that make the CEVA solution more favorable versus competitors? Thanks.
There is a high entry barrier to get into the automotive market in general. You need to have a pedigree, We are in this market developing relationships with OEM, not just semiconductor, for almost four years now. Specifically for L2+ and L3, just for people that don't really know what is L2+ or L3. L2+ is basically similar to autopilot that Tesla has today. It's a cautiously autonomous driving, Radars could be up to 16. You have to have a substantial performance capabilities because you have to fuse many sensors, many cameras, could be 12 cameras, and radars could be up to 16. You need to fuse them to get an holistic view of 360-degree. Our end game is in two forms. One is our DSP processing. This specific customer will take the bleeding edge DSP. We came out recently with a new DSP category.
It's not just next generation. We call it SensPro. The theme of SensPro is do sensor fusion, meaning combining the inputs from different sensors. That's one element. The other element is the AI portion. In the AI portion, the key entry, the key point there is the software. We came out early on, almost four years ago, with our compiler technology. We call it CDNN, CEVA Deep Neural Network. That was, in my opinion, instrumental to get the deal because the customer could see how you develop an inferencing software using our processor and other hardware that they have in the chip or in the system.
Okay. Thank you, Gideon. Thanks, guys.
Thank you, Suji.
Our next question comes from David O'Connor with Exane BNP Paribas. Please go ahead.
Great. Good morning. Thanks for taking my questions. Just a couple of follow-ons on my side. Maybe firstly, Gideon, on the ADAS win, can you tell us which geography this customer was in? Then the Japanese win at the OEM side, is that a platform win or is it just one car? That's my first question. I have one or two follow-ups. Thanks.
No, it's a platform. It's a Japanese OEM. That's the only thing that we can share at this point.
Okay. Got it. Understood. Maybe turning to the base station side. On the active antenna unit, how should we model that long term? Can that grow to as big as the base station baseband?
Basically, for any baseband, let's say chip or baseband, that is base station, you're going to have between three to 20 or even more antennas hooked together. Okay. The way to model it is, at the minimum, three times, it can go up to 10x the base station. Of course, it's different chips, so the price is also, and ASP is different between them. For now, not all of our customers or players in the industry have that capability. We talked earlier of Huawei and ZTE having that. Others will follow, and we have good chances of licensing these technologies to others, but it's not yet across all the industry. This is something that we have been among the first to have, and look at it as a nice, interesting growth opportunity in the near term, also in the licensing front.
That's helpful. Thank you. Maybe as a final one, can you talk a small bit on the licensing pipeline as we approach the end of the year, and you start to look into next year? What is the kind of status of that right now? Thanks.
Licensing is looking very solid. Let's say the hotspots there are 5G, all the different aspects of the base station. Yaniv said about new channels into this market, because the antenna portion is, because of the volume, attract many companies, by the way, from different angles. It could be optical transceiver companies that integrate DSP for this one. It could be a networking company, it could be antenna company. All of them will try to get a share in this very lucrative space. That's one hotspot. The other hotspot is Wi-Fi. All the different aspects due to the access point that people want to move to work from home, and IoT, different kind of IoT. Going forward, we have all the computer vision and AI. We have strong interest from all different people have start talking about AR now, augmented reality, mixed reality, to wireless.
That's going to huge market with pricing all over the place, starting from $20- $200. The good thing about CEVA is that we have those common denominators that allow us to cover all those aspects, and then whether it's a high volume or whether it's a high-value market, and that drives the licensing. It spread all over the place. You cannot really see with any consolidation. It's everything that relates to IoT, which is sensors or connectivity. That's what we offer.
One more thing I would add, that if you look at an annual basis, we're saying that this year we will pass $51 million in licensing for the very first time after being at $48 million last year, and before the $48 million, we were at the $30 million levels for a few years. Within a very short period of time, we jumped from $20 million to $30 million to $40 million, now to $50 million for the very first time, or more than $50 million in licensing. Those markets and those technologies that we went into really paid off. These R&D investments that we have put over the years, have really paid off to increase the licensing activity.
Very helpful. Thank you.
Thank you.
Our next question comes from Gus Richard with Northland. Please go ahead.
Yes, thanks for taking my question. Just on the ADAS win, is this just cameras and RADAR that you're doing sensor fusion for, or does it include LIDAR, RADAR, or sonar, or is that yet to be determined?
It's all of the above, meaning it's all of those sensors that you mentioned, and it has to be, at least from our standpoint, yet to be determined what sensor they ended up. For sure, it will be RADAR and camera. These are the master. Whether they hook LIDAR there on top of it's to be determined.
Just to further clarification, there's a lot of vagary around L2+ and L3. Is this targeted towards hands-free highway or is it some other incremental improvement over L2?
Well, I hope people will not use it in cities. The idea is that you put it in autopilot mode. It drives by itself. You still have to hold your hands on the wheel and let it drive. I think it's a good, solid gap filler between here and when you go to level four, five. People, I should say, sleep in the car.
Got it. I understand. Thank you for that. Then on the base station, is your second base station customer contributing to royalty in the third quarter? If not, when do you expect that to really start to kick in?
No, we haven't seen yet that in production with our second customer. I believe we always reference to their earnings call and to their deployment of ReefShark, which is underway, and the modem piece from an RF perspective. The modem piece these days is done by Marvell, and they're talking about the end of the year being ready for production. It should be early next year in production, and as soon as we get more information from them, we will be happy to share. For now, in this year, it's not yet in the numbers.
Got it. Okay, thank you so much.
Thanks.
Our next question is a follow-up from Matt Ramsay with Cowen. Please go ahead.
Thank you guys for letting me jump back in. I think the conversation here has been really helpful on the longer-term drivers of the business. Yaniv, I wanted to ask a little bit about the fourth quarter guidance, if you could maybe walk us through the puts and takes a bit on revenue. It looks like it's going to be down a couple million dollars sequentially. Maybe if there's any help you could give on which piece of that decline might be licensing versus royalty, that would be helpful. On the royalty side, is the primary driver of it being down sequentially just the shift in modem procurement for Apple, or are there other things that we should consider? Thank you.
Sure. On the licensing front, as Gideon said, and we mentioned earlier, we're looking at a solid quarter overall. In order to reach that north of $50 million, we always said that anywhere between $11-ish to $12 million is something that we are comfortable with. When we were at the $40 million level, it was around the 10-ish. The next step function was a notch higher than that. I think the beginning of the year was stronger in that. We cannot really time the licensing activity. When we look at an annual basis, we're very happy with the results of this year. This is where the licensing should fall in, somewhere in order to reach that north of $51 million for the year, which was our initial plans. We have hit the nail on that, or planning at least. That's the plan.
On royalties, as we also realized over the years, especially this year, there are a lot of moving pieces. There are pieces of the timing of introduction of lower-cost phones, including by a lead U.S. handset that came out earlier this year unexpectedly. That helped us in the beginning of the year. There was this Q3 ramp-up with the base station side. There was, because of COVID, there was a lot of consumer devices that for home office, as Gideon also talked about earlier, that surprised the magnitude of those. TVs, that are not necessarily a strong quarter in the second or third quarter of the year. It's usually more of a Christmas type of quarter. This year was completely different.
Overall, we look at royalties after a very strong Q3 and with many good surprises and shifts there while looking at something similar for the next quarter. That's pretty much all we could say right now because it's hard to guess. We need to look at the hindsight and get the royalty report and then calculate the numbers. We're looking at something quite similar to where we are today. I think that helps. If you compare it to last year, we had a very strong Q4. It's sporadic after being in 2019, Q1, Q2 could see was in the $10 million, $11 million range, and then Q4 suddenly jumped.
This year, we started with that great momentum in the beginning of the year at that 11, 12-ish level is also something that we're very happy and feel comfortable. That's pretty much how we see next quarter looking like.
No, thank you, Yaniv, for all the additional detail. I really appreciate it. All the best, guys. Cheers.
Sure. Thank you.
This concludes our question and answer session. I would like to turn the conference back over to Richard Kingston for any closing remarks.
Thanks, Brandon. Thank you all for joining us today and for your continued interest in CEVA. As a reminder, the prepared remarks for this conference call are filed as an exhibit to the current report on Form 8-K and accessible through the investor section of our website. With regards to upcoming events, we will be participating in the following virtual conferences in Q4: the ROTH Technology Virtual Event on November 11th, Wells Fargo TMT Summit 2020 on December 1st and 2nd, Barclays Global Technology, Media, and Telecommunications Conference on December 9th and 10th, and the Oppenheimer 5G Summit on December 15th. For further information on these events and all events we will be participating in can be found on the investors section of our website. Thank you and goodbye.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.