Parthus Technologies plc Announce Results for the Third Quarter and Nine Months Ended September 30, 2001

October 17, 2001

Dublin, Ireland - October 17, 2001 - Parthus Technologies plc
(LSE: PRH; Nasdaq: PRTH) today announced its financial results for the
third quarter and for the nine months ended September 30, 2001.

Licensing and royalty revenue grew 83% year-on-year to $8.2
million, up 15% sequentially from $7.2 million
Five licensing agreements were signed including three with new
customers to Parthus
NavStream3000, an enhanced GPS silicon IP and software
platform, was launched
A licensing agreement was announced with Motorola for the
joint-development of power-management products
Total revenue increased 22% year-on-year to $10.5 million, up
3% from $10.2 million in the second quarter
Total gross margin grew three percent to 73%, positively
impacted by the changing revenue mix
Pro forma* basic and diluted net losses per share amounted to
$0.0056 per ordinary share or $0.056 per ADS

Licensing and royalty revenue grew 95% year-on-year to $21.3
million
20 licensing and royalty agreements were signed
Total revenue increased 35% year-on-year to $30.4 million
The total number of licensing and royalty agreements is now 69
The customer base has grown to over 40 key accounts world-wide
Pro forma* basic and diluted net losses per share amounted to
$0.016 per ordinary share or $0.163 per ADS *

Pro forma results exclude amortization of intangibles, an in process
R&D charge and non-cash stock compensation expense.

Commenting today, Brian Long, Chief Executive Officer, said:

"We are pleased to have delivered another solid performance
particularly with such difficult market conditions in the electronics
industry. Most significantly, the leading indicator for our business,
licensing and royalty revenues, increased 83% year-on-year and 15%
sequentially to $8.2 million. This performance is ahead of expectations
and validates the resilience of our IP licensing business model. We have
the financial strength, with cash on hand of $127 million and a low cash
requirement, to continue to build upon our technology portfolio and
customer relationships."

Commenting today, Kevin Fielding, President, said:

"Customer demand for our technology remains firm, demonstrated by our
ability to continue to sign license deals: five new licensing agreements
signed this quarter, including a new top-ten wireless semiconductor
partner, as yet undisclosed. Today we announced a licensing and royalty
agreement with Motorola for the joint development of power management IC
products, a core technology critical for next generation wireless
handsets. Also in the third quarter, we launched the NavStream3000
location platform, which represents a significant breakthrough in
delivering highly accurate GPS location positioning in the most
challenging environments. "

Commenting today, Elaine Coughlan, Chief Financial Officer, said:

"In the third quarter gross margins grew a further three percent to
73%, the pro forma net loss declined to $3.25 million and the pro forma
net loss per share is significantly better than expected at $0.0056. We
believe these metrics are strong indicators of our progress towards a
return to profitability and we believe we are on track to achieve
breakeven in mid-2002. We took proactive action in the quarter on our
underlying cost structure as market conditions deteriorated further in the
global economy. In the fourth quarter we expect higher margin licensing
revenue to continue to grow and despite the severe slowdown we expect
modest sequential growth in our overall revenues. "

Licensing Today the company announced a licensing and royalty
agreement with Motorola (NYSE: MOT) and the joint development of power
management technology and a series of power management integrated circuits
(ICs). The power requirement of next generation wireless handsets places
demands that current battery technology cannot meet. Therefore one of the
core requirements for the success of these devices is for highly advanced
power management integrated circuits and techniques. The first deployment
by Motorola is an advanced power management IC that improves power
management performance for wireless devices whilst simultaneously reducing
cost of deployment by integrating all power management functions on a
single chip. The deployment is targeted at high volume wireless products,
which will use power management circuits from Motorola Semiconductor
division and is the first release from the power management R&D team
at Parthus. A joint technical release with Motorola will be announced in
due course.

In the third quarter the company signed five licensing agreements,
three with new customers and announced three licensing deals. The customer
base now exceeds 40 key accounts including six of the Top 10 wireless
semiconductor companies worldwide. In September Parthus announced that the
company had signed a licensing agreement with Sun Microsystems for the
joint development and deployment of Java™ technologies targeting wireless
devices based on the Parthus MachStream™ platform. This initiative is
designed to allow major electronics developers and manufacturers to
deliver Java technology-based multimedia wireless devices with "PC-like"
levels of performance and extended battery life. In August a licensing and
royalty agreement for the BlueStream™ Bluetooth platform was announced
with Aralion, a large Asian ASIC vendor. Also in August the company
announced that SigmaTel, a provider of system-level, mixed-signal
integrated circuit solutions for the audio and wireless infrared markets
had licensed the MediaStream™ platform. SigmaTel will target its
single-chip audio integrated circuit at the portable audio (including MP3
players, cell phones, PDAs and digital cameras) and home entertainment
markets.

Partnering In October Parthus and Wipro Technologies, a leading
provider of semiconductor and system-level design services for the
embedded systems market, jointly announced an IP Partner Program between
the two companies. Wipro has design services engagements with some of the
world's leading wireless OEM and semiconductor companies, including Nokia,
Ericsson and Intel. Through this program, Wipro becomes the first selected
partner certified to implement and integrate the full portfolio of Parthus
platforms. This partnership agreement expands the channel for the Parthus
portfolio of mobile Internet technologies and gives Parthus licensees
access to Wipro's leading system-on-chip (SOC) design resources.

Technology Since the end of the third quarter Parthus has
announced the launch of NavStream 3000, a GPS silicon IP and software
platform that delivers greatly enhanced indoor and outdoor positioning
accuracy across a range of devices, including mobile phones and
automobiles. The significant breakthrough is the rapid ability of this
platform to determine location in practically any environment. In
extensive trials NavStream3000 obtained position fixes in homes, office
and industrial buildings, exceeding FCC e911 requirements for speed and
accuracy. The platform has already been licensed to a number of leading
industry players and Parthus anticipates that it will be of significant
interest to the industry in the medium term.

Organization During the third quarter, the integration of
Chicory Systems, acquired during the second quarter, was successfully
completed in all key business areas. Headcount remained relatively stable
at 428 employees, compared with 429 at the end of June 2001. Low levels of
attrition were offset by recruitment in software development.

Income Statement Total revenue for the third quarter amounted to
$10.5 million, a 22% year-on-year increase, and a 3% increase on the
second quarter 2001 revenue of $10.2 million. IP licensing and royalty
revenue grew to $8.2 million, up 83% from $4.5 million in the third
quarter of 2000 and up 15% from $7.2 million in the second quarter of this
year. Royalty revenue increased to $134,000, up 168% year-on-year but was
down approximately 4% compared with the prior quarter. These revenues
represent approximately 1% of total revenue in both the second and third
quarter of this year. The planned decrease in IP creation continued and
revenue from this business stream amounted to $1.3 million in the third
quarter, down 58% year-on-year and 34% from the second quarter 2001. Hard
IP revenue continued to reflect the general slowdown in current product
volumes in the semiconductor industry and declined 14% to $961,000 from
$1.1 million in the second quarter.

Gross margins grew to 73%, up three percent over the second quarter and
a 14 percent increase year-on-year. The gross margin improvement reflects
the continued shift in the revenue mix to higher margin IP licensing and
royalty revenue, which accounted for 79% of total revenue in the third
quarter.This compares with 52% of total revenue in the third quarter 2000
and 70% in the second quarter 2001. Parthus is ahead of plan with gross
margin improvement, signaling the company's ongoing commitment to a return
to profitability.

The company took pre-emptive cost management action during the quarter
including reducing discretionary spending where possible and a pay and
bonus freeze throughout the company. This ensured that financial resources
were focused on key operating areas. Research and development investment
grew 8% sequentially to $7.8 million. The second quarter acquisition of
Chicory Systems accounted for the majority of this increase. Sales and
marketing expenditure overall decreased by 9% to $2.6 million in the third
quarter. The increase in sales expense was more than offset as the
benefits of the earlier expenditure in branding and product launches
flowed through to a reduction in discretionary marketing costs in those
areas. General and administration costs decreased 4% to $1.7 million, due
to ongoing vigilance and strict cost management.

Both amortization of intangibles and non-cash stock compensation
increased as a direct result of the full quarterly impact of the second
quarter acquisitions. In the third quarter, amortization of intangibles
increased to $3.7 million from $1.3 million and non-cash stock
compensation expense amounted to $525,000, up from $420,000 in the second
quarter. As indicated in the second quarter results announcement, Parthus
incurred a once-off non-cash charge of $10.9 million relating to in
process R&D in connection with the acquisition of Chicory Systems. At
the date of acquisition Chicory had incurred costs associated with the
development of technology. Under U.S. GAAP this is classified as in
process R&D and when acquired in a transaction is treated as a cost
and expensed upon final allocation of the purchase price. Amortization of
intangibles, in process R&D and non-cash stock compensation expense
are included in operating expenses.

Interest income declined to $1.3 million in the third quarter from $1.7
million in the second quarter. This reflects lower cash balances and the
lower interest rate environment.

The pro forma net loss for the third quarter amounted to $3.25 million,
representing a loss of $0.0056 per ordinary share or $0.056 per ADS. This
compares with a pro forma net loss in the second quarter 2001 of $3.3
million, representing a loss of $0.0061 per ordinary share or $0.061 per
ADS. Pro forma results exclude amortization of intangibles, in process
R&D and non-cash stock compensation expense.The net loss for the third
quarter was $18.4 million, representing a loss of $0.0318 per ordinary
share or $0.318 per ADS.

Parthus delivered a strong performance for the first nine months of
2001, particularly in light of the severe decline in the semiconductor
industry. Solid progress continued in key areas:

IP licensing and royalty revenue was 70% of total revenue, on
track for the medium term target of 80%
Gross margins grew to 69%, well ahead of the internal
timetable for generating gross margins of 70% by 2002
The quarterly operating net loss leveled-off as operating
leverage and cost management flowed through
The customer base is over 40 key accounts, including six of
the Top 10 wireless semiconductor companies
The company has signed a total of 69 licensing and royalty
agreements to date

Income statement Total revenue for the nine months ended
September 30, 2001 amounted to $30.4 million, up $7.8 million or 35% from
$22.6 million for the same period last year. IP licensing and royalty
revenue grew 95% to $21.3 million, up $10.3 million over the first nine
months of 2000. Licensing and royalty revenue accounted for 70% of total
revenue, up from 48% for the same period in 2000. Royalty revenue of
$416,000 was recognized in the nine months and this compares with $50,000
for the corresponding period last year. IP creation declined to $5.6
million, down from $9.8 million for the first nine months of 2000 in line
with the continuing planned shift away from lower margin contract design
work. Hard IP revenue grew from $1.9 million for the nine months ended
September 30, 2000 to $3.6 million for the nine months ended September 30,
2001.

Total gross margin increased from 57% for the first nine months of 2000
to 69% for the same period this year.

Research and development investment grew from $12.6 million to $20.9
million in the first nine months of this year, as Parthus continued its
investment, internally and by acquisition, in developing and licensing a
strong portfolio of technology platforms. Sales and marketing grew $1.8
million to $8.1 million in the first nine months of this year, from $6.3
million for the first nine months of 2000. General and administration
expenses increased $1.9 million to $5.4 million for the first nine months
of 2001, up from $3.5 million for the same period last year. Amortization
of intangibles grew to $5.4 million, up $4.7 million, reflecting the
higher level of acquisition activity this year. Non-cash stock
compensation expense amounted to $1.3 million, a decrease of $3.8 million
from $5.1 million for the first nine months of last year. The charges in
2000 relate primarily to the amortization of a non-cash charge resulting
from variable stock options that were granted to some of the company's
executives. Parthus incurred a once-off charge of $10.9 million in the
third quarter 2001 relating to in process R&D in connection with the
acquisition of Chicory Systems in the second quarter of 2001. There was no
comparable 2000 charge.

Interest income increased $2 million, from $3.1 million for the first
nine months of 2000 to $5.1 million for the same period this year. This
reflects the higher cash balances held in 2001.

The pro forma net loss for the nine months ended September 30, 2001
amounted to $9 million, representing a loss of $0.016 per ordinary share
or $0.163 per ADS. This compares with a pro forma net loss in the first
nine months of 2000 of $7.4 million, representing a loss of $0.016 per
ordinary share or $0.163 per ADS. Pro forma results exclude amortization
of intangibles, in process R&D and non-cash stock compensation
expense. The net loss for the nine months ended September 30, 2001 was
$26.6 million, representing a loss of $0.048 per ordinary share or $0.481
per ADS. This compares with $13.2 million, representing a loss of $0.029
per ordinary share or $0.291 per ADS, for the first nine months of 2000.

At September 30, 2001 total assets amounted to $214.2 million, compared
with total assets of $233.4 million at June 30, 2001. The change reflects
the decrease in intangible assets arising from the in process R&D
charge, quarterly movements in working capital and a modest decrease in
cash on hand.

Cash and cash equivalents amounted to $127.1 million at September 30,
2001 compared with $129.0 million at June 30, 2001. Cash outflow at the
operating level at $1.2 million remains within the company's target range
of $2 million cash flow per quarter.

Deferred revenue decreased $1.1 million to $7.1 million reflecting the
timing of invoicing associated with licensing activity in the last three
weeks of the quarter. Intangible assets amounted to $71.5 million at
September 30, 2001 compared with $85.7 million at June 30, 2001. The
decrease of $14.2 million in the third quarter reflects the final
allocation of the purchase price on the acquisition of Chicory Systems,
which resulted in a once-off in process R&D charge of $10.9 million.

Accounts receivable amounted to $4.5 million at the end of the third
quarter compared with $5.6 million at the end second quarter. Debtors'
days outstanding decreased to 37 days from 49 days in the second quarter
due to strong cash collections within the quarter.

Despite the current background of uncertainty and the steep down cycle
in the semiconductor industry, Parthus expects licensing revenue to
continue to grow reflecting strong demand for the company's products. The
company expects a modest sequential increase in fourth quarter revenue
overall. Parthus continues to expect to achieve breakeven in mid-2002.

###

This press release may contain "forward looking
statements" which are subject to certain risks and uncertainties that
could cause actual results to differ materially from those stated. Any
statements that are not statements of historical fact (including, without
limitation, statements to the effect that the company or its management
"believes," "expects," "anticipates," "plans" and similar expressions)
should be considered forward-looking statements. Important factors that
could cause actual results to differ from those indicated by such
forward-looking statements include uncertainties relating to the
acceptance of semiconductor intellectual property offerings, expansion of
the company's business, and quarterly variations in results. These factors
and other uncertainties are discussed in our 2000 Annual Report on Form
20-F, which was filed with the U.S. Securities and Exchange Commission on
June 26, 2001. Forward-looking statements represent estimates as of today,
and should not be relied upon as representing the company's estimates as
of any subsequent date. Although the company may elect to update
forward-looking statements in the future, the company disclaims any
responsibility to do so.

For further information About
ParthusCeva, Inc..

A PDF copy of this press release is also available
here.