Arteris Announces Financial Results for the Third Quarter 2023 and Fourth Quarter and Full Year 2023 Guidance

CAMPBELL, Calif., Nov. 07, 2023 -- Arteris, Inc. (Nasdaq: AIP), a leading provider of system IP which accelerates system-on-chip (SoC) creation, today announced financial results for the third quarter ended September 30, 2023 as well as fourth quarter and full year 2023 guidance.

"Customer demand remained healthy in the third quarter, with Annual Contract Value plus Trailing-Twelve-Month Royalties of $57.3 million, up 8% year-over-year,” said K. Charles Janac, President and CEO of Arteris. “With the majority of the top 10 semiconductor companies now at least initially engaged with Arteris, the industry’s transition to commercial System IP products is gaining momentum. Many of these vendors have historically used internal System IP solutions, however as the complexities of SoCs continues to increase, including the incorporation of AI capabilities into future designs, the value of Arteris’ commercial offerings is becoming readily apparent," concluded Janac.

Third Quarter 2023 Financial Highlights:

• Annual Contract Value (ACV) and Trailing-twelve-month (TTM) variable royalties of $57.3 million, up 8% year-over-year
• Revenue of $13.3 million, up 5% year-over-year
• Remaining performance obligation (RPO) of $62.5 million
• Operating loss of $8.5 million or 63.7% of revenue
• Non-GAAP operating loss of $4.5 million or 34.3% of revenue, compared to a loss of $4.2 million in the year-ago period
• Net loss of $8.2 million or $0.23 per share
• Non-GAAP net loss of $4.2 million or $0.12 per share
• Non-GAAP free cash flow of $(3.1) million or (23.7)% of revenue

Third Quarter 2023 Business Highlights:

• Secured another major Active Customer, ranked as a top 10 global fabless semiconductor company;
• Continued strong design activity with 22 confirmed designs starts in the quarter, including 12 that enable AI technologies;
• Closed deals with three of the top 10 global technology companies, including one licensing FlexNoC 5;
• NeuReality deployed Arteris interconnect in its Inference Server’s NR1 SoC, targeting generative AI, Large Language Models, and other AI workloads;
• AlChip selected Arteris interconnect for its ASIC Design Services targeting AI and Automotive SoCs;
• Fraunhofer IESE and Arteris have partnered to ensure interoperability between Arteris interconnect and Fraunhofer’s DRAM subsystem design space exploration framework, supporting customers’ highly differentiated and performance-optimized SoCs;
• Closed nine deals of FlexNoC 5 since its release in the second quarter of 2023, numerous prospects and evaluations pending; and
• Arteris innovation was recognized within the International Business Awards for “Technical Innovation of the Year” for Physically Aware NoCs and was also a recipient of the Autotech Breakthrough’s “Autonomous Vehicle Technology of the Year” award, for innovation used in ADAS systems, combining AI and Automotive needs in its system IP technology.

Fourth Quarter and Full Year 2023 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.

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, free cash flow and free cash flow margin are Non-GAAP financial measures. Additional information on Arteris’ 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. 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, active customers, confirmed design starts and RPO are included below under the heading “Other Business Metrics.”

Financial Tables

To read financial tables, click here

Conference Call

Arteris will host a conference call today, November 7, 2023, to review its third quarter 2023 financial results and discuss its financial outlook.

A live webcast will also be available in the Investor Relations section of Arteris’ 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 leading provider of system IP for the acceleration of system-on-chip (SoC) development across today’s electronic systems. Arteris network-on-chip (NoC) interconnect IP and SoC integration automation technology enable higher product performance with lower power consumption and faster time to market, delivering better SoC economics so its customers can focus on dreaming up what comes next. Learn more at arteris.com.

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