Company Overview - Arteris, Inc. (AIP) shares increased by 12.2% to $10.6 in the last trading session, with a notable trading volume, contrasting with a 0.8% loss over the past four weeks [1] - The company is experiencing growth due to rising demand for commercial semiconductor system IP products, driven by the complexity of chiplet and SoC designs, the proliferation of AI applications, and outsourcing trends [1] Financial Expectations - Arteris is projected to report a quarterly loss of $0.11 per share, unchanged from the same quarter last year, with expected revenues of $16.4 million, reflecting a 12.6% increase year-over-year [2] - The consensus EPS estimate for Arteris has remained stable over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] Industry Context - Arteris operates within the Zacks Internet - Software industry, where another company, Paylocity (PCTY), saw a 2.2% increase in its stock price, closing at $190.36, with a 2.8% return over the past month [3] - Paylocity's consensus EPS estimate has increased by 1.8% to $1.38, although this represents a 6.8% decrease compared to the previous year, and it currently holds a Zacks Rank of 4 (Sell) [4]

Core Viewpoint - Arteris, Inc. is set to release its financial results for Q2 2025 on August 5, 2025, after market close, with a conference call scheduled for the same day to discuss these results [1]. Company Overview - Arteris, Inc. is a leading provider of system IP aimed at accelerating system-on-chip (SoC) development, focusing on enhancing product performance while reducing power consumption and time to market [3]. - The company's network-on-chip (NoC) interconnect IP and SoC integration automation technology are designed to improve SoC economics, allowing customers to innovate further [3]. Investor Relations - A live webcast of the conference call will be available on the Investor Relations section of Arteris' website, and a replay will be accessible approximately two hours after the call for 30 days [2]. - Interested parties can join the conference call by dialing the provided toll-free and international numbers [1].

FlexNoC 5 network-on-chip interconnect IP from Arteris licensed by Whalechip, providing connectivity and enabling superior performance, area, and power for custom ASIC WHALECHIP Co., Ltd. is a fabless semiconductor and system solutions provider dedicated to technological innovation. They specialize in the development of HPC ASICs and processors and deliver HPC computing system-level solutions. Learn more at www.whalechip.com. © 2004-2025 Arteris, Inc. All rights reserved worldwide. Arteris, Arteris IP, the ...

Accelerating The Creation Of Semiconductors Corporate Overview Charlie Janac CEO Nick Hawkins CFO November 2024 1 © 2024 Arteris, Inc. Disclaimer This presentation and the accompanying oral presentation have been prepared by Arteris, Inc. ("Arteris IP" 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 IP or any officer, director, employ ...

Core Insights - Arteris, Inc. has been awarded the "AI Engineering Innovation Award" for its FlexGen technology, which enhances system-on-chip (SoC) design for AI applications [1][4] - FlexGen automates the creation of network-on-chip (NoC) interconnects, addressing the complexities of AI-centric semiconductor designs [2][4] - Early adopters of FlexGen have reported significant productivity gains, including a 10x improvement in productivity, a 30% reduction in wire length, and a 10% reduction in latency compared to traditional methods [3] Company Overview - Arteris specializes in system IP for accelerating SoC development, focusing on enhancing performance, reducing power consumption, and speeding up time to market [6] - The company aims to simplify NoC design for chip designers, regardless of their prior experience, by automating critical aspects of NoC creation [4][6] - The AI Breakthrough Awards program received over 5,000 nominations in 2025, highlighting the competitive landscape and innovation within the AI sector [4]

Core Insights - Arteris, Inc. has launched Magillem Packaging, a software product aimed at simplifying and accelerating the chip design process for advanced applications such as AI data centers and edge devices [1][2] Company Overview - Arteris is a leader in system IP for semiconductors, focusing on enhancing the creation of high-performance and power-efficient silicon [6] - The company provides network-on-chip (NoC) interconnect IP and SoC integration automation software, utilized by top semiconductor and technology firms to improve performance and reduce costs [6] Product Features - Magillem Packaging automates the assembly and reuse of existing technology, addressing the complexities of modern chip design, which includes a growing number of silicon IP blocks and tighter timelines [2][3] - The software is based on the IEEE 1685 (IP-XACT) standard, ensuring compatibility with industry tools and silicon IP, which helps in reducing errors and delays during the design process [3][7] - It allows IP teams to package and prepare hundreds or thousands of components for integration into chiplets or SoCs, enhancing productivity and speeding up technology delivery [3] Industry Impact - The introduction of Magillem Packaging is expected to address integration challenges in semiconductor design, driven by the increasing complexity of chip designs and the rapid growth of chiplets [3] - Companies like Andes Technology and MIPS have recognized the value of Magillem Packaging in optimizing IP packaging and integration, which aligns with the industry's need for faster and more reliable SoC development [5]

Core Viewpoint - Arteris, Inc. is expanding its multi-die solution to meet the increasing computational demands of AI, transitioning from traditional monolithic die designs to chiplet-based architectures, which are essential for high-performance computing and automotive applications [2][8]. Industry Impact - The semiconductor industry is experiencing a shift towards multi-die systems as Moore's Law slows down, necessitating architectural innovation to enhance performance and efficiency, particularly for AI workloads [2][8]. - Arteris' technology reduces design time for chiplets and SoCs, optimizing power, performance, and area bottlenecks through key Network-on-Chip (NoC) IP technology [3][8]. Technological Capabilities - The expanded multi-die solution supports the Universal Chiplet Interconnect Express (UCIe) specification and various protocols, ensuring robust ecosystem compatibility [4][5]. - Key capabilities include non-coherent FlexNoC IP, cache-coherent Ncore NoC IP, and optimized automation for SoC assembly and integration, which collectively enhance the development process and reduce risks [6][7]. Strategic Collaborations - Arteris is collaborating with major players in the silicon value chain, including Arm, Cadence, Renesas, and Synopsys, to enable next-generation AI and automotive platforms [6][7]. - These partnerships aim to accelerate the journey to chiplet-based systems, optimize performance metrics, and ensure seamless interoperability across multi-die designs [7]. Market Relevance - The expanded multi-die solution is crucial for semiconductor firms to compress development cycles, scale modular architectures, and deliver differentiated AI performance, aligning with evolving industry demands [8].

Financial Data and Key Metrics Changes - The company has seen a shift in revenue concentration from China, dropping from 50% in 2019 to around 30% by early 2023, and currently closer to high teens percentage [66][70]. - The average selling prices (ASPs) are expected to reach around $1 million by 2026, driven by increasing design complexity and the adoption of more system IP [79]. Business Line Data and Key Metrics Changes - The FlexNOC product family is transitioning from FlexNOC 4 to FlexNOC 5, with a 30% list price increase for FlexNOC 5 over FlexNOC 4, and another 30% increase for FlexGen, which adds automation features [81][82]. - The company has approximately $90 million in remaining performance obligations, indicating a backlog of revenue to be recognized in the future [83]. Market Data and Key Metrics Changes - The company is experiencing growth in various geographical markets, particularly in the US, Japan, and Korea, which are offsetting declines in China [70][75]. - The automotive sector is highlighted as a significant area of growth, with Chinese EVs performing well in the market [75]. Company Strategy and Development Direction - The company is focusing on the shift from insourcing to outsourcing in the semiconductor design space, with expectations that commercial solutions will grow from 25% to potentially 75% over the next decade [22][24]. - The introduction of FlexGen aims to address industry challenges such as the lack of skilled engineers and high costs associated with chip design [29]. Management's Comments on Operating Environment and Future Outlook - Management acknowledges the ongoing trade tensions between the US and China but notes that there is no direct impact on the company's IP at the moment [62][64]. - The company sees AI and machine learning as integral to future growth, with half of customer design starts now related to these technologies [46]. Other Important Information - The company is exploring the incorporation of AI in system IP design, focusing on analytics and verification processes [48][50]. - Cybersecurity is a significant concern, with the company taking advanced measures to protect sensitive information [60]. Q&A Session Summary Question: How much of your top line is driven from China customers? - The company's revenue from China has decreased from 50% in 2019 to around 30% in early 2023, and is now in the high teens percentage range [66][70]. Question: What is the average deal size and pricing trends? - The average selling prices are expected to grow, with projections of reaching around $1 million by 2026 due to increasing complexity in designs [79].

Arteris shares have lost about 22.8% since the beginning of the year versus the S&P 500's decline of -0.6%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. There are no easy answers to this key question, but one reliable measure that can help investors address this is ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $16,500,000, up 28% year over year, exceeding guidance [17] - Annual contract value (ACV) plus royalties reached $66,800,000, a 15% increase year over year, marking a record high [17] - Remaining performance obligations (RPO) were $88,900,000, representing a 19% year over year increase, also a new high for the company [17] - Non-GAAP gross profit was $15,300,000 with a gross margin of 92% [17] - Non-GAAP operating loss was $3,200,000, a 40% improvement compared to the prior year [20] - Free cash flow was positive at $2,700,000 for the quarter, benefiting from early customer payments [21] Business Line Data and Key Metrics Changes - The company achieved several key design wins, including major contracts from top global technology companies and automotive OEMs [8][9] - Adoption of technology in advanced semiconductor companies continues to grow, with significant projects in AI and automotive sectors [9][10] - The FlexGen product, an AI-driven smart NOC IP technology, is being evaluated by over 20 customers, with expectations for revenue generation in the second half of the year [10] Market Data and Key Metrics Changes - The automotive sector remains robust, with ongoing design projects for future vehicles, including electric and autonomous driving technologies [12][13] - The company is seeing increased outsourcing of silicon system IP needs as customers seek efficiency and cost reduction [15][22] - The global economic uncertainty has not led to deal cancellations but may impact royalty revenues due to customer confidence [14][22] Company Strategy and Development Direction - The company is focusing on innovation and expanding ecosystem collaborations, including joining the Intel Foundry Accelerator Program [12] - The strategy includes enhancing customer support and product development through new engineering centers and partnerships [13] - The company aims to remain a neutral player in the system IP market, capitalizing on the trend of outsourcing due to increasing design complexity [42][73] Management's Comments on Operating Environment and Future Outlook - Management acknowledges economic uncertainty but maintains that licensing activity remains robust [30][32] - The company has not adjusted its overall FY 2025 revenue guidance, citing strong customer demand despite potential short-term headwinds [22][26] - There is optimism regarding the deal pipeline and customer interest in outsourcing system IP products [26][73] Other Important Information - The company received multiple awards for innovation, highlighting its technological advancements and market recognition [11] - The opening of a new engineering and customer support center in Krakow, Poland, aims to enhance product development and customer service [13] Q&A Session Summary Question: Changes in customer behavior due to tariffs and trade environment - Management noted some replanning of projects in China but observed an increased willingness to outsource system IP to commercial vendors [29][30] Question: Expectations for FlexGen revenue and traction - Management reported positive feedback from customers evaluating FlexGen, anticipating substantial bookings and revenue in the second half of the year [35][36] Question: Accelerated decision timelines by customers - Management indicated that while design cycles are being accelerated, licensing activity remains steady without significant changes in decision-making timelines [41][42] Question: Interest from joining the Intel Foundry Alliance - Management expects increased business opportunities from joining the alliance, particularly with Intel's commitment to commercial solutions [46] Question: Market size for system IP - Management estimated the system IP market to be between $1 billion and $1.2 billion, with significant growth potential as more companies outsource [59][60] Question: Underlying technological changes prompting outsourcing - Management highlighted the increasing complexity of designs, particularly with AI and chiplets, driving the need for commercial IP solutions [62][63]