Arteris(US:AIP)2025-11-04 22:06Financial 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]