Core Insights - Arteris has announced that Black Sesame Technologies has licensed its Ncore 3 and FlexNoC 5 network-on-chip interconnect IPs to enhance data movement and performance for advanced automotive SoCs [1][2] Company Overview - Arteris is a leading provider of system IP for semiconductor creation, focusing on high-performance and power-efficient silicon [4] - Black Sesame Technologies specializes in automotive-grade computing SoCs and intelligent vehicle solutions, offering full-stack autonomous driving capabilities [5] Technology and Product Features - The Ncore 3 IP provides advanced cache coherence, while FlexNoC 5 offers physical awareness to optimize place-and-route efficiency and minimize wire congestion [2][3] - The combination of Ncore and FlexNoC delivers a coherent and flexible connectivity fabric essential for complex automotive SoC designs, improving data movement efficiency and reducing time-to-market [3] Partnership and Collaboration - Black Sesame Technologies has been collaborating with Arteris since 2019, utilizing earlier versions of FlexNoC in previous SoC designs, which has established Arteris as a trusted partner [3] - The licensing of Ncore 3 and FlexNoC 5 is aimed at achieving greater performance and accelerating time to market for autonomous driving solutions [3]

Core Insights - The article discusses potential investment opportunities in AIP, highlighting a possible long position that may be initiated within the next 72 hours [1]. Group 1 - The analyst expresses a personal opinion on AIP and indicates no current stock or derivative positions in the mentioned companies [1]. - There is an emphasis on the independence of the analyst's views, which may not reflect the opinions of Seeking Alpha as a whole [2]. - The article does not provide specific investment recommendations or advice tailored to individual investors [2].

Core Insights - Arteris, Inc. has announced that Blaize has adopted its FlexNoC 5 interconnect IP to enhance the performance and scalability of the Blaize AI Platform, which is designed for hybrid AI deployment models across edge and cloud infrastructure [1][3] - The integration of Arteris' technology allows Blaize to optimize performance and efficiency, enabling scalable, real-time inference across hybrid edge infrastructure [3] Company Overview - Arteris is a global leader in system IP for semiconductors, focusing on high-performance and power-efficient silicon creation, with its NoC interconnect IP and SoC integration automation software utilized by top semiconductor companies [4] - Blaize offers a full-stack programmable processor architecture and low-code/no-code software platform for AI processing solutions, emphasizing real-time insights and decision-making capabilities with low power consumption and high efficiency [5] Technology Impact - The FlexNoC 5 interconnect IP from Arteris is designed to optimize on-chip communication, enhancing performance, power efficiency, and area optimization for AI applications [3] - Blaize aims to overcome existing trade-offs in edge systems regarding inference performance, power, and cost efficiency by leveraging Arteris' technology [2]

Core Insights - Arteris, Inc. reported a quarterly loss of $0.09 per share, better than the Zacks Consensus Estimate of a loss of $0.11, representing an earnings surprise of +18.18% [1] - The company posted revenues of $17.41 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 2.40% and showing a year-over-year increase from $14.71 million [2] - Arteris shares have increased approximately 28.5% year-to-date, outperforming the S&P 500's gain of 16.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.09 on revenues of $18.1 million, and for the current fiscal year, it is -$0.40 on revenues of $68.13 million [7] - The estimate revisions trend for Arteris was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which Arteris belongs, is currently ranked in the top 32% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, Samsara Inc., is expected to report quarterly earnings of $0.12 per share, reflecting a year-over-year change of +71.4% with revenues projected at $399.44 million, up 24.1% from the previous year [9]

Financial Data and Key Metrics Changes - In Q3 2025, total revenue was $17.4 million, up 5% sequentially and 18% year-over-year, exceeding guidance [17] - Annual contract value plus royalties reached $74.9 million, a 24% year-over-year increase, marking a new record [18] - Remaining performance obligations were $104.7 million, representing a 34% year-over-year increase, surpassing the $100 million milestone for the first time [18] - Non-GAAP gross profit was $15.9 million, with a gross margin of 91% [18] - Non-GAAP operating loss was $3.5 million, in line with guidance [19] - GAAP net loss was $9 million, or diluted net loss per share of $0.21 [20] Business Line Data and Key Metrics Changes - AI applications accounted for over half of licensing dollars in Q3, indicating strong product adoption across multiple vertical markets [6] - FlexGen was deployed by multiple new customers, including in the automotive sector, highlighting its growing adoption [8][9] - The company saw increased adoption of chiplets for high-end automotive applications, with two of the top five EV automotive OEMs expanding their use of Arteris technology [11] Market Data and Key Metrics Changes - The semiconductor industry is shifting from traditional monolithic chips to chiplets for multi-die SoC architectures, particularly driven by AI workloads [10] - The company is experiencing a growing demand for advanced boundary nodes, particularly in the 5nm, 3nm, and 2nm processes [9] Company Strategy and Development Direction - The company aims to enhance its product portfolio and expand collaborations with major technology firms, as evidenced by partnerships with Altera and AMD [6][8] - Arteris joined the UALink Consortium to support the scaling of data center solutions, indicating a strategic focus on AI workloads [13] - Continuous innovation is a priority, with recognition received for its technology, including awards for innovative technology [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong deal execution and the potential for accelerated interest from major customers [21] - The company anticipates that AI workloads will drive significant growth, with expectations that data center applications will represent 25%-35% of future business [47] Other Important Information - The company ended the quarter with $56.2 million in cash and no financial debt, indicating a strong balance sheet [20] - Free cash flow was positive at $2.5 million for the quarter, above guidance [20] Q&A Session Summary Question: Can you talk more about Altera? - Management indicated that there are further opportunities with Altera, as they continue to evolve and grow [24] Question: What led to AMD's increased usage of your product? - Management noted that AMD has multiple groups, and the expansion reflects their satisfaction with the initial collaboration [25] Question: How important is reliability and safety in your interconnects? - Management emphasized that reliability is crucial, as any issues can lead to significant delays and problems for customers [26] Question: What is the timing for licenses from the UALink Consortium? - Management stated that they are already involved in designs and following the consortium's protocol to support data center scale-up efforts [30] Question: What is the royalty growth expectation? - Management explained that there is typically a 3-6 year lag between design starts and mass production, but they are seeing early signs of royalty growth [34][36] Question: How many top tech companies are customers? - Management indicated that they have penetrated over 50% of the top 40 semiconductor and system electronics companies, with significant room for growth [39][40]

Financial Performance - For the three months ended September 30, 2025, Arteris generated revenue of $17.4 million, with a net loss of $9.0 million and a net loss per share of $0.21[87] - Total revenue for the three months ended September 30, 2025, was $17.4 million, an increase of 18% compared to $14.7 million for the same period in 2024[120] - Revenue for the nine months ended September 30, 2025 increased by 19% to $50.4 million, compared to $42.2 million for the same period in 2024[134] - 59.6% of revenue for the nine months ended September 30, 2025, was derived from international sales, with 24.4% specifically from customers in China[95] Growth Indicators - As of September 30, 2025, the Annual Contract Value (ACV) was $69.4 million, up from $56.4 million in 2024, and the total ACV plus royalties was $74.9 million, compared to $60.5 million in 2024[99] - During the three months ended September 30, 2025, Arteris had 23 Confirmed Design Starts, an increase from 14 in the same period of 2024, indicating growth in customer activity[100] - Remaining Performance Obligations (RPO) amounted to $104.7 million as of September 30, 2025, compared to $78.4 million in 2024, reflecting a significant increase in contracted future revenue[102] Expenses and Costs - Total operating expenses increased by $3.2 million, or 15%, to $24.4 million for the three months ended September 30, 2025[124] - Cost of revenue rose by $0.3 million, or 21%, to $1.8 million, driven by higher employee-related expenses due to increased headcount of application engineers[123] - Research and development (R&D) expenses increased by $0.7 million, or 6%, to $12.6 million, attributed to higher employee-related costs and stock-based compensation[125] - Sales and marketing (S&M) expenses surged by $1.9 million, or 38%, to $6.9 million, mainly due to increased headcount and stock-based compensation[126] - General and administrative (G&A) expenses rose by $0.6 million, or 13%, to $4.9 million, primarily from higher employee-related costs and professional fees[127] Cash Flow and Investments - Net cash provided by operating activities was $3.6 million for the nine months ended September 30, 2025, compared to $1.9 million for the same period in 2024[147] - As of September 30, 2025, the company had $39.0 million in cash and cash equivalents and short-term investments[145] - Net cash provided by investing activities for the nine months ended September 30, 2024 was $2.9 million, primarily from proceeds of available-for-sale securities and certificate of deposit[152] - Net cash provided by financing activities for the nine months ended September 30, 2025 was $1.3 million, mainly from proceeds of stock options and employee stock purchase plan[153] Market and Industry Trends - The company’s growth is driven by increasing complexity in System-on-Chip (SoC) designs, particularly in sectors like automotive and AI, which has positively impacted financial performance[85] - The semiconductor industry is characterized by cyclical trends, which can lead to fluctuations in customer demand and revenue for Arteris[97] - The company anticipates that the demand for its interconnect IP solutions will continue to grow, particularly in the automotive market, which is crucial for revenue stability[90] Strategic Initiatives - Arteris is exploring growth opportunities through potential acquisitions to enhance its market position and product offerings[94] - The company expects R&D expenses to continue increasing in absolute terms in the short to medium term but decrease as a percentage of revenue with new product launches[111] Other Financial Metrics - Interest expense for the three months ended September 30, 2025 was $49,000, a decrease of 11% from $55,000 in the same period of 2024[128] - Other income (expense), net decreased by 18% to $636,000 for the three months ended September 30, 2025, compared to $775,000 for the same period in 2024[129] - Loss from equity method investment was $484,000 for the three months ended September 30, 2025, down 17% from $580,000 in the same period of 2024[130] Tax and Accounting - Provision for income taxes increased by 19% to $1.5 million for the nine months ended September 30, 2025, compared to $1.3 million for the same period in 2024[143] - The company has no off-balance sheet financing arrangements or relationships with unconsolidated entities during the periods presented[155] - There have been no material changes to critical accounting estimates compared to those described in the 2024 Form 10-K[157] - The company is an emerging growth company under the JOBS Act, allowing it to delay the adoption of certain accounting standards[159] - The financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates due to the extended transition period[159] - Quantitative and qualitative disclosures about market risk are not required for the company as a smaller reporting company[160]

1 © 2025 Arteris, Inc. November 4, 2025 Disclaimer This presentation and the accompanying oral presentation have been prepared by Arteris, Inc. ("Arteris" or "the "Company") for informational purposes only and not for any other purpose. Nothing contained in this presentation is, or should be construed as, a recommendation, promise or representation by the presenter or Arteris or any officer, director, employee, agent or advisor of Arteris. This presentation does not purport to be all-inclusive or to contain ...

Financial Performance - Revenue for Q3 2025 was $17.4 million, an increase of 18% year-over-year[6] - Annual Contract Value (ACV) plus royalties reached $74.9 million, up 24% year-over-year[6] - Remaining Performance Obligations (RPO) totaled $104.7 million, a 34% increase year-over-year[6] - Non-GAAP operating loss for Q3 2025 was $3.5 million, compared to a loss of $3.3 million in Q3 2024[6] - Net loss for Q3 2025 was $9.0 million, or $0.21 per share[6] - Non-GAAP free cash flow was positive at $2.5 million, representing 14% of revenue[6] - Estimated revenue for Q4 2025 is projected to be between $18.4 million and $18.8 million[7] - Full year 2025 revenue guidance is updated to between $68.8 million and $69.2 million[7] - Net loss for the nine months ended September 30, 2025, was $26,242 million, slightly higher than the $25,434 million loss in the same period of 2024[20] - Free cash flow for Q3 2025 was $2,471 million, compared to $1,093 million in Q3 2024, indicating a growth of 126%[32] - Net loss for Q3 2025 was $8,991 million, compared to a net loss of $7,687 million in Q3 2024, representing an increase in losses of 17%[30] - Non-GAAP net loss for the nine months ended September 30, 2025, was $11,826 million, down from $13,026 million in the same period of 2024, a decrease of 9%[30] Assets and Liabilities - Total assets increased to $107,737 million as of September 30, 2025, compared to $106,135 million on December 31, 2024, reflecting a growth of 1.51%[18] - Current liabilities rose to $66,772 million, up from $59,282 million, marking an increase of 12.56%[18] - Stockholders' deficit increased to $(11,449) million as of September 30, 2025, compared to $(1,188) million at the end of 2024, indicating a deterioration in equity position[18] Profitability Metrics - Gross profit for Q3 2025 was $15,642 million, up from $13,252 million in Q3 2024, representing a growth of 18%[30] - Non-GAAP gross profit for the nine months ended September 30, 2025, reached $46,223 million, compared to $38,594 million for the same period in 2024, an increase of 20%[30] - The company reported a gross margin of 90% for both Q3 2025 and Q3 2024, indicating stable profitability[30] Expenses - Research and development expenses for Q3 2025 were $12,648 million, compared to $11,923 million in Q3 2024, reflecting a rise of 6%[30] - Sales and marketing expenses increased to $6,850 million in Q3 2025 from $4,962 million in Q3 2024, marking a significant increase of 38%[30] - Non-GAAP research and development expenses for the nine months ended September 30, 2025, were $30,357 million, up from $27,645 million in 2024, an increase of 10%[30] Strategic Initiatives - Arteris expanded partnerships with companies like Altera and AMD, enhancing its product offerings[6] - The company joined the Ultra Accelerator Link Consortium (UALink) to support AI data movement in chiplets and SoCs[6] Performance Indicators - Annual Contract Value (ACV) metrics are used to assess the total fixed fees under customer agreements, indicating future revenue potential[26] - Confirmed Design Starts are tracked to evaluate customer activity in new semiconductor designs, serving as a growth indicator for future royalty revenues[27] - Remaining Performance Obligations (RPO) reached a significant level, representing contracted future revenue not yet recognized[28] - Non-GAAP net loss for the period provides a clearer view of operational performance, excluding stock-based compensation and amortization of acquired intangible assets[22] - The weighted-average shares used in computing net loss per share increased to 42,743,518 in Q3 2025 from 39,295,743 in Q3 2024, reflecting a growth of 6%[30]

Core Insights - Arteris, Inc. reported a record Annual Contract Value (ACV) plus royalties of $74.9 million for Q3 2025, representing a 24% increase year-over-year [2][7] - The company ended the quarter with Remaining Performance Obligations (RPO) of $104.7 million, up 34% year-over-year, marking the first time RPO exceeded $100 million in its history [2][7] - The CEO expressed confidence in long-term growth opportunities driven by expanding product portfolio and increasing demand in high-growth markets such as AI and autonomous driving [2] Financial Highlights - Revenue for Q3 2025 was $17.4 million, an 18% increase from Q3 2024 [7] - Non-GAAP operating loss for Q3 2025 was $3.5 million, compared to a loss of $3.3 million in Q3 2024 [7] - Net loss for Q3 2025 was $9.0 million, or $0.21 per share, compared to a net loss of $7.7 million, or $0.20 per share, in Q3 2024 [7][18] Business Highlights - Altera expanded its use of Arteris' IP products and licensed additional software products [7] - AMD ordered more licenses of Arteris technology following a previous multi-project license [7] - New customers in the automotive and industrial sectors were added, including Dream Chip and a leading automotive OEM [7] Guidance - For Q4 2025, Arteris expects ACV plus royalties to be between $74.0 million and $78.0 million [6] - Revenue guidance for FY 2025 is projected to be between $68.8 million and $69.2 million [6] - Non-GAAP operating loss for FY 2025 is estimated to be between $12.5 million and $13.5 million [6]

Core Insights - Arteris has licensed its comprehensive product portfolio to Altera for the development of next-generation FPGA and SoC FPGA solutions, enhancing design productivity, performance, and scalability across various applications [1][2][3] Company Overview - Arteris is a global leader in system IP for semiconductors, focusing on high-performance and power-efficient silicon creation, with its products used by top semiconductor and technology companies [4] Technology and Product Integration - The integration of Arteris' Ncore cache coherent interconnect IP, FlexGen smart NoC IP, and Magillem software will streamline assembly, optimize on-chip data movement, and accelerate the development of programmable architectures [2][3] - Arteris technology is essential for expediting the market introduction of innovative programmable solutions, allowing Altera to meet customer demands for power, performance, and scalability [3] Market Impact - The collaboration between Arteris and Altera is expected to enhance the efficiency of data movement and system-level automation, addressing coherent data processing needs for improved performance and reduced time-to-market [3]