A lot of what CE Image does is complex and processor intensive. For this reason, CE Image caches the manipulated images, and will only recreate them when needed.
Images that are created by the plugin are cached. The plugin will check to see if the source image has changed (the same goes for the watermark images, and remote images, depending on your configuration), and only recreates the image if it needs to. This saves a ton of processing on the server side, and makes the plugin quick.
A few different parameters/variables create results that are not cached by the plugin, namely: ascii_art, average_color, and top_colors. If you are using any of the three aforementioned parameters or Amazon S3 integration, it is strongly recommended that you employ ExpressionEngine®’s native tag caching — which consists of adding the
cache="yes" refresh="360" parameters to the plugin tag — as it will cache all the results.
In fact, you will most likely notice speed improvements by employing tag caching in addition to the plugin’s built-in caching mechanism, even if you are not using any of the three parameters mentioned above. It is hereby officially recommended that you use native tag caching with the plugin (unless of course, you are using a more robust third-party caching solution like CE Cache).