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 ...

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]

Core Insights - Arteris, Inc. reported strong financial results for Q1 2025, achieving record annual contract value plus royalties of $66.8 million, a 15% increase year-over-year, and positive free cash flow of $2.7 million [2][6]. Financial Highlights - Revenue for Q1 2025 was $16.5 million, representing a 28% increase year-over-year [6]. - Non-GAAP operating loss decreased to $3.2 million from $5.3 million in Q1 2024 [6]. - Net loss for the quarter was $8.1 million, or $0.20 per share, compared to a net loss of $9.4 million, or $0.25 per share, in Q1 2024 [6][16]. - Remaining performance obligations (RPO) reached $88.9 million, up 19% year-over-year [6]. Business Highlights - The company experienced strong demand across key verticals: enterprise computing, communications, and automotive semiconductors, driven by the adoption of chiplets and AI compute [2][6]. - Arteris expanded its customer base, adding another top global automotive OEM, bringing the total to 10 automotive OEMs [6]. - The company joined the Intel Foundry Accelerator program, enhancing its network of ecosystem partners [6]. - Arteris received three awards at the annual American Business Awards, including gold for Most Innovative Tech Company of the Year [6]. Guidance - For Q2 2025, Arteris expects annual contract value plus royalties to be between $66.0 million and $70.0 million, with revenue projected between $16.1 million and $16.5 million [7]. - Full-year 2025 guidance for annual contract value plus royalties is set at $71.0 million to $79.0 million, with revenue expected between $65.0 million and $71.0 million [7].

Core Insights - Arteris, Inc. has joined the Intel Foundry Accelerator Ecosystem Alliance Program, enhancing its collaboration with Intel Foundry to support the design of electronics using advanced semiconductor process technologies [1][2][3] - The partnership aims to optimize performance, power, and area (PPA) for complex system-on-chip (SoC) and chiplet designs, leveraging Arteris' network-on-chip (NoC) IP and SoC integration automation technologies [2][3] - This collaboration is expected to drive advancements in interoperability and the chiplet ecosystem, facilitating better integration and performance for mutual customers [1][3] Company Overview - Arteris is recognized as a leading provider of system IP that accelerates SoC development, focusing on enhancing product performance while reducing power consumption and time to market [4] - The company's NoC interconnect IP and automation technologies are designed to deliver improved SoC economics, allowing customers to innovate and develop new products [4]