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]