Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $1,339,000,000, with GAAP operating margin at 31.8% and non-GAAP operating margin at 47.6% [20] - GAAP EPS was $1.05, while non-GAAP EPS was $1.93 [20] - The company raised its full-year outlook to approximately 14% revenue growth and 18% EPS growth [6][19] Business Line Data and Key Metrics Changes - The IP business is tracking over 20% growth for the second consecutive year, driven by demand in AI, HPC, and chiplet architectures [23][26] - The core EDA business delivered strong results, with significant adoption of AI-driven design and verification solutions [12][19] - The System Design and Analysis (SDA) business saw growth due to innovative solutions and expanding customer adoption [15][17] Market Data and Key Metrics Changes - Backlog grew to over $7,000,000,000, indicating strong demand across all product categories [6][19] - China experienced a year-over-year growth of approximately 53%, with design activity returning to normal following regulatory changes [47][49] Company Strategy and Development Direction - The company is focused on capitalizing on the AI megatrend, positioning itself as a leader in EDA, IP, and system analysis [7][17] - Recent partnerships with major players like Samsung and TSMC aim to enhance AI infrastructure and support next-generation technologies [8][9] - The acquisition of Hexagon's T and E business is expected to strengthen the company's position in structural analysis and multi-body dynamics technologies [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing strength of the business and the potential for sustained growth in the AI era [6][17] - The company anticipates continued demand for its products, particularly in AI infrastructure and physical AI [34][44] - Management remains prudent in its outlook, considering potential regulatory changes and geopolitical factors [100][102] Other Important Information - The company plans to use at least 50% of its annual free cash flow for share repurchases [20] - Operating cash flow for Q3 was $311,000,000, with a cash balance of $2,753,000,000 at quarter-end [20] Q&A Session Summary Question: What is driving the growth in the IP business? - The IP business is performing well due to its focus on AI and HPC at advanced nodes, strong partnerships with foundries, and improved customer demand [23][26][29] Question: Are there still renewals expected in Q4? - There are ongoing renewals, and the strong demand for AI infrastructure is a primary driver of performance [32][34] Question: What is the outlook for China? - Design activity in China is strong, and the region is expected to grow year-over-year, contingent on geopolitical stability [47][49][100] Question: How is the company positioned in the system design market? - The company is optimistic about its SDA business, especially with recent acquisitions that enhance its capabilities in physical AI and multibody dynamics [53][60] Question: What are the expectations for hardware demand? - Demand for hardware remains strong, particularly in AI and HPC markets, with expectations for continued growth into 2026 [77][82] Question: How will the partnership between NVIDIA and Intel affect demand? - The partnership is expected to increase demand for EDA tools as the industry moves towards CPU and GPU integration [88][90]

Collaboration addresses growing rack-scale infrastructure demands with custom AI chiplet architecture connectivity solutionsSAN JOSE, Calif., Oct. 14, 2025 (GLOBE NEWSWIRE) -- Astera Labs, Inc. (Nasdaq: ALAB), a leader in semiconductor-based connectivity solutions for rack-scale AI infrastructure, today announced it has joined Arm® Total Design, a comprehensive ecosystem dedicated to accelerating and simplifying custom SoC development based on Arm Neoverse™ Compute Subsystems (CSS). This collaboration will ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $16.5 million, up 13% year over year, at the top end of guidance range [15] - Annual contract value (ACV) plus royalties reached $69.1 million, a 15% year-over-year increase, marking a record high for the company [16] - Remaining Performance Obligations (RPO) at the end of Q2 were $99.3 million, representing a 28% year-over-year increase, also a new high [16] - Non-GAAP gross profit for the quarter was $15 million, with a gross margin of 91% [16] - GAAP gross profit was $14.8 million, with a gross margin of 89% [16] - Non-GAAP operating loss for the quarter was $3.5 million, flat year over year [18] - GAAP operating loss for Q2 was $8.2 million, compared to a loss of $7.4 million in the prior year [18] - Non-GAAP net loss for the quarter was $4.4 million, or diluted net loss per share of $0.11 [19] - GAAP net loss for the quarter was $9.1 million, or diluted net loss per share of $0.22 [19] - Free cash flow was negative $2.8 million for Q2, approximately at the midpoint of guidance range [19] Business Line Data and Key Metrics Changes - Increased adoption of Arteris' technology in enterprise computing and automotive applications, driven by AI computing [8] - Over two dozen FlexGen installations at multiple customers, expected to contribute to revenue over time [9] - Expansion of multi-die solutions announced, supporting chiplet architectures and collaborations with major industry players [10][11] - Introduction of Magellan Packaging, a new software product aimed at automating IP packaging for silicon chiplets [12] Market Data and Key Metrics Changes - The semiconductor industry is shifting from traditional monolithic chips to multi-die or chiplet architectures, particularly driven by AI workloads [10] - Anticipation of a growing number of heterogeneous chiplet projects, with current estimates at about 30 projects out of 600 to 700 SoCs [44] Company Strategy and Development Direction - Focus on strategic investments in R&D and customer support to drive technology innovations and expand market reach [18] - Ongoing development of new silicon system IP technologies and strong relationships with leading electronics companies [12] - Monitoring global economic uncertainty while capitalizing on opportunities for customers to outsource system IP needs [12] Management's Comments on Operating Environment and Future Outlook - Management remains encouraged by strong deal execution, evidenced by a 28% year-over-year growth in RPO [21] - Despite foreign exchange fluctuations impacting operating expenses, the company sees promising signs of accelerated interest from major customers [21] - Guidance for Q3 2025 includes expected ACV plus royalties of $69.5 million to $72.5 million and revenue of $16.8 million to $17.2 million [20] Other Important Information - The company was recognized with the AI Engineering Innovation Award for FlexGen at the AI Breakthrough Awards [9] Q&A Session Summary Question: Details on AMD announcement and scope of partnership - AMD chose Arteris' FlexGen technology for various products, including AI data center chiplets, after extensive evaluation against competitors [26][27] Question: Impact of AMD's decision on internal teams and performance metrics - AMD will continue using its internal cash coherent fabric while augmenting it with Arteris technology for non-coherent applications [36] Question: Customer adoption of FlexGen and support for decision-making - There are over two dozen FlexGen installations, with expectations for sales to begin in the second half of the year [37] Question: Update on heterogeneous chiplet projects - Currently, about 30 heterogeneous chiplet projects are identified, with expectations for growth in the coming years [44]