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]