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Arteris Announces Financial Results for the Second Quarter and Estimated Third Quarter and Updated Full Year 2025 Guidance

CAMPBELL, Calif., Aug. 05, 2025 (GLOBE NEWSWIRE) -- Arteris, Inc. (Nasdaq: AIP), a leading provider of semiconductor system IP for accelerating system-on-chip (SoC) creation, today announced financial results for the second quarter ended June听30, 2025 and provided estimated third quarter and updated full year 2025 guidance.

鈥淚n the second quarter of 2025, we achieved record Annual Contract Value plus royalties of $69.1 million and exited the quarter with $99.3 million in Remaining Performance Obligations, with the latter representing a year-over-year increase of 28%,鈥� said K. Charles Janac, President and CEO of Arteris. 鈥淟ooking ahead, we remain confident in Arteris鈥� long-term growth opportunity, supported by our strong product portfolio and pipeline, deepening relationships with leading electronics companies, and continued customer innovation across high-growth markets including AI, autonomous driving, advanced communications, and industrial and consumer applications.鈥�

Second Quarter 2025 Financial Highlights:

• Revenue of $16.5 million, up 13% year-over-year
• Annual Contract Value (ACV) plus royalties of $69.1 million, up 15% year-over-year, growing to the highest level we have ever reported
• Remaining performance obligation (RPO) of $99.3 million, up 28% year-over-year, growing to the highest level we have ever reported
• Operating loss of $8.2 million, compared to an operating loss of $7.4 million听in the second quarter of 2024
• Non-GAAP operating loss of $3.5 million, flat compared to a Non-GAAP operating loss of $3.5 million in the second quarter of 2024
• Net loss of $9.1 million or $0.22 per share
• Non-GAAP net loss of $4.4 million or $0.11 per share
  

Second Quarter 2025 Business Highlights:

• AMD licensed FlexGen smart network-on-chip IP to provide high-performance data transport for its chiplets powering AI, targeting a broad array of products;
• Announced a key customer AI win, Whalechip, that is licensing FlexNoC 5 for its high-performance AI computing at the data center;
• Expanded Arteris' multi-die solution, broadening the support for the Universal Chiplet Interconnect Express (UCIe), extended support for Arm AMBA protocols, collaborating with Synopsys and Cadence for chiplet interface, and supporting RISC-V ecosystems with partners such as Andes, SiFive, and Tenstorrent;
• Announced Magillem Packaging, a new software product designed to automate IP packaging, thereby simplifying and accelerating chiplet and SoC assembly; and
• Arteris was recognized in the 8th annual AI Breakthrough Awards, with FlexGen winning the 鈥淎I Engineering Innovation Award鈥�.
  

Non-GAAP gross profit, Non-GAAP gross margin, Non-GAAP operating loss, Non-GAAP operating loss margin, Non-GAAP net loss, Non-GAAP net loss per share, and free cash flow are Non-GAAP financial measures. Additional information on Arteris鈥� historic reported results, including a reconciliation of these Non-GAAP financial measures to their most comparable GAAP measures, is included in the financial tables below.

Estimated Third Quarter and Updated Full Year 2025 Guidance:

The guidance provided above are forward-looking statements and reflects Arteris' expectations as of today's date. Actual results may differ materially. Refer to the section titled "Forward-Looking Statements" below for information on the factors, among others, that could cause our actual results to differ materially from these forward-looking statements.

A reconciliation of Non-GAAP guidance measures reported above to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future, although it is important to note that these factors could be material to Arteris' results computed in accordance with GAAP.

Definitions of the other business metrics used in this press release including ACV, confirmed design starts and RPO are included below under the heading 鈥淥ther Business Metrics.鈥�

Conference Call

Arteris will host a conference call on August听5, 2025 to review its second quarter 2025 financial results and to discuss its financial outlook.

A live webcast will also be available in the Investor Relations section of Arteris鈥� website at: https://ir.arteris.com/events-and-presentations

A replay of the webcast will be available in the Investor Relations section of Arteris' website approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.

About Arteris

Arteris is a global leader in system IP used in semiconductors to accelerate the creation of high-performance, power-efficient silicon. Arteris network-on-chip (NoC) interconnect IP and system-on-chip (SoC) integration automation software are used by the world's top semiconductor and technology companies to improve overall performance, engineering productivity, reduce risk, lower costs, and bring complex designs to market faster. Learn more at arteris.com.

漏 2004-2025 Arteris, Inc. All rights reserved worldwide. Arteris, Arteris IP, the Arteris IP logo, and the other Arteris marks found at https://www.arteris.com/trademarks are trademarks or registered trademarks of Arteris, Inc. or its subsidiaries. All other trademarks are the property of their respective owners.

Investor Contacts:
Arteris
Nick Hawkins
Chief Financial Officer
[email protected]

Sapphire Investor Relations, LLC
Erica Mannion and Michael Funari
+1 617 542 6180
[email protected]

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including but not limited to, statements regarding our long-term growth opportunity and future financial and operating performance, including our GAAP and Non-GAAP estimated third quarter and updated full year 2025 guidance. The words such as "may," "will," "could," "expect," "approximately," "believe," "estimate," "future," "guidance," "outlook," and similar words or expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements contained herein are based on our historical performance and our current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent our expectations as of the date of this press release. Subsequent events may cause these expectations to change, and we disclaim any obligation to update the forward-looking statements in the future, except as required by law. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from our current expectations. Important factors that could cause actual results to differ materially from those anticipated in our forward-looking statements include, but are not limited to, the significant competition we face from larger companies and third-party providers; our history of net losses; whether semiconductor companies in the automotive market, enterprise computing market, communications market, consumer electronics market, and industrial markets incorporate our solutions into their end products and the growth and economic stability of these end markets; our ability to attract new customers and the extent to which our customers renew their subscriptions for our solutions; the ability of our customers鈥� end products achieving market acceptance or growth; our ability to sustain or grow our licensing revenue; our ability, and the cost, to successfully execute on research and development efforts; the occurrence of product errors or defects in our solutions; if we fail to offer high-quality support; the occurrence of macro-economic conditions that adversely impact us, our customers and their end product markets including, but not limited to, the imposition of tariffs in markets where we operate; the effects of geopolitical conflicts, such as the military conflict between Russia and Ukraine as well as the ongoing conflict in the Middle East; the range of regulatory, operational, financial and political risks we are exposed to as a result of our dependence on international customers and operations; our ability to protect our proprietary technology and inventions through patents and other IP rights; whether we are subject to any liabilities or fines as a result of government regulation, including import, export and economic sanctions laws and regulations; the occurrence of a disruption in our networks or a security breach; risks associated with doing business in China, including as a result of changes to trade relations between the United States and China; and the other factors described under the heading 鈥淩isk Factors鈥� in our Quarterly Report on Form 10-Q for the quarter ended June听30, 2025 to be filed with the Securities and Exchange Commission (SEC) on August听5, 2025. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances. Our results for the quarter ended June听30, 2025 are not necessarily indicative of our operating results for any future periods.

Non-GAAP Financial Measures

To supplement our financial results, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core performance. These non-GAAP measures, which may be different than similarly-titled measures used by other companies, are presented to enhance investors鈥� overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We define "Non-GAAP gross profit" and "Non-GAAP gross margin" as GAAP gross profit and GAAP gross margin, respectively, adjusted for stock-based compensation expense included in cost of revenue and amortization of acquired intangible assets included in cost of revenue. We define 鈥淣on-GAAP loss from operations鈥� as our GAAP loss from operations adjusted to exclude stock-based compensation expense and amortization of acquired intangible assets. We define 鈥淣on-GAAP net loss鈥� as our net loss adjusted to exclude stock-based compensation and amortization of acquired intangible assets.

We define 鈥淣on-GAAP net loss per share attributable to common stockholders, basic and diluted鈥�, as our Non-GAAP net loss divided by our GAAP weighted-average number of shares outstanding for the period on a basic or diluted basis, respectively. Management uses this non-GAAP measure to evaluate the performance of our business on a comparable basis from period to period.

The above items are excluded from our Non-GAAP gross profit, Non-GAAP loss from operations and Non-GAAP net loss because these items are non-cash in nature, or are not indicative of our core operating performance, and render comparisons with prior periods and competitors less meaningful. We believe Non-GAAP gross profit, Non-GAAP loss from operations and Non-GAAP net loss provide useful supplemental information to investors and others in understanding and evaluating our results of operations, as well as provide a useful measure for period-to-period comparisons of our business performance.

We define free cash flow as net cash provided by operating activities less cash used for purchases of property and equipment. We believe that free cash flow is a useful indicator of liquidity that provides information to management and investors, even if negative, about the amount of cash used in our operations other than that used for investments in property and equipment.

Other Business Metrics

Annual Contract Value (ACV) 鈥� we define Annual Contract Value for an individual customer agreement as the total fixed fees under the agreement divided by the number of years in the agreement term. Our total ACV is the aggregate ACVs for all our customers as measured at a given point in time. Total fixed fees includes licensing, support and maintenance and other fixed fees under IP licensing or software licensing agreements but excludes variable revenue derived from licensing agreements with customers, particularly royalties. We define ACV plus royalties as ACV plus the trailing-twelve-months variable royalties and other revenue.

Confirmed Design Starts 鈥� we define Confirmed Design Starts as when customers confirm their commencement of new semiconductor designs using our interconnect IP and notify us. Confirmed Design Starts is a metric management uses to assess the activity level of our customers in terms of the number of new semiconductor designs that are started using our interconnect IP in a given period. We believe that the number of Confirmed Design Starts is an important indicator of the growth of our business and future royalty revenue trends.

Remaining Performance Obligations (RPO) 鈥� we define Remaining Performance Obligations as the amount of contracted future revenue that has not yet been recognized, including deferred revenue, billed and unbilled cancelable and non-cancelable contracted amounts.

(1) Represents the amortization expenses of our intangible assets attributable to our acquisitions.
(2) Our GAAP tax provision is primarily related to foreign withholding taxes and income tax in profitable foreign jurisdictions. We maintain a full valuation allowance against our deferred tax assets in the US. Accordingly, there is no significant tax impact associated with these Non-GAAP adjustments.
(3) Reflects the aggregate adjustments made to reconcile Non-GAAP net loss to our net loss as noted in the above table, divided by the GAAP diluted weighted average number of shares of the relevant period.

Free Cash Flow