Arteris, Inc. (AIP) Q2 2025 Earnings Call Transcript
Total Revenue $16.5 million, up 13% year-over-year. The increase was driven by strong deal execution and growing demand for system IP technology.
Annual Contract Value (ACV) plus Royalties $69.1 million, up 15% year-over-year. This growth reflects increased adoption of Arteris' technology, particularly in enterprise computing and automotive applications.
Remaining Performance Obligations (RPO) $99.3 million, representing a 28% year-over-year increase. This highlights the growing demand for Arteris' system IP technology.
Non-GAAP Gross Profit $15 million, representing a gross margin of 91%. This was driven by efficient cost management and strong revenue growth.
GAAP Gross Profit $14.8 million, representing a gross margin of 89%. This aligns closely with the non-GAAP gross profit, reflecting consistent financial performance.
Non-GAAP Operating Expense $18.6 million, 10% higher year-over-year. The increase was due to scaling investments in R&D and field application engineering teams.
GAAP Operating Expense $23 million, representing a 12% year-over-year increase. This was driven by strategic investments in new product development and customer support.
Non-GAAP Operating Loss $3.5 million, flat year-over-year. This reflects controlled spending and efficient operations.
GAAP Operating Loss $8.2 million, compared to a loss of $7.4 million in the prior year period. The increase was influenced by higher operating expenses.
Non-GAAP Net Loss $4.4 million or $0.11 per share. This was in line with guidance and reflects ongoing investments in growth initiatives.
GAAP Net Loss $9.1 million or $0.22 per share. This was higher than the prior year due to increased operating expenses.
Free Cash Flow Negative $2.8 million. This was approximately at the midpoint of guidance and reflects capital expenditures and operational investments.
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Arteris Grants 477,208 RSUs to 25 New Employees as Inducement Awards
- Employee Incentive Plan: Arteris has granted a total of 477,208 restricted stock units (RSUs) to 25 newly hired employees under its 2022 Employee Inducement Incentive Plan, aimed at attracting and retaining talent to enhance its competitiveness in the semiconductor industry.
- Compliance Assurance: The stock grants comply with Nasdaq Listing Rule 5635(c)(4), ensuring transparency and compliance in the company's incentive measures, thereby boosting investor confidence.
- Strategic HR Investment: This stock incentive not only attracts high-quality talent but also enhances employee engagement and motivation, driving the company's technological innovation and market expansion in the AI era.
- Technological Leadership: As a leading provider of semiconductor technology, Arteris is committed to accelerating the creation of high-performance, power-efficient silicon, further solidifying its market leadership in the modern AI era.
Arteris Acquires Cycuity to Enhance Semiconductor Security
- Acquisition Completed: Arteris, Inc. has finalized its acquisition of Cycuity, Inc., a leading provider of semiconductor cybersecurity technology, which will enhance Arteris's capabilities in semiconductor security to meet the growing market demand.
- Surging Market Demand: According to the U.S. National Institute of Standards and Technology (NIST), the number of new Common Vulnerabilities and Exposures (CVEs) in hardware has increased over 15 times in the past five years, highlighting the critical importance of semiconductor security, and Arteris's acquisition is a proactive response to this trend.
- Technological Integration Advantage: By combining Arteris's innovative system IP with Cycuity's hardware security technology, Arteris can offer more comprehensive products and solutions that help customers achieve secure on-chip data movement, thereby enhancing overall market competitiveness.
- Clear Strategic Positioning: This acquisition not only strengthens Arteris's product portfolio but also demonstrates the company's long-term commitment to semiconductor security, which is expected to drive further growth in the AI and edge device markets.
