Arteris Announces Financial Results for the First Quarter 2023 and Estimated Second Quarter and Full Year 2023 Guidance

CAMPBELL, Calif., May 04, 2023 -- Arteris, Inc. (Arteris or Arteris IP), a leading provider of network-on-chip (NoC) interconnect and other intellectual property (IP) technology that manages the on-chip communications in system-on-chip (SoC) semiconductor devices, today announced financial results for the first quarter ended March 31, 2023 as well as estimated second quarter and full year 2023 guidance.

“We’re excited to report a solid start to the year, with Annual Contract Value plus Trailing-Twelve-Month Royalties of $54.8 million, up 20% year-over-year when adjusted to exclude HiSilicon and DJI and up 5% sequentially,” said K. Charles Janac, President and CEO of Arteris. “With the added focus on the broader automotive supply chain, including OEMs, and following last year’s Arm automotive partnership, we are pleased to report that in the year to date, Arteris secured four new OEM design wins, including three new car companies across the US, Europe and APAC. In addition to automotive, we continue to see strong demand from AI and Machine Learning applications which increasingly require network-on-chip IP and benefit from SoC integration automation. We believe Arteris is well positioned to continue to gain market share as the growing complexity of automotive, consumer electronics, and AI/ML applications, creates a need for third party commercial System IP,” concluded K. Charles Janac.

First Quarter 2023 Financial Highlights:

• Annual Contract Value (ACV) and Trailing-twelve-month (TTM) royalties of $54.8 million, up 4% year-over-year
• Revenue of $13.2 million, up 12% year-over-year
• Remaining performance obligation (RPO) of $57.3 million
• Operating loss of $8.8 million or 67% of revenue
• Non-GAAP operating loss of $5.6 million or 42.4% of revenue, compared to a loss of $4.2 million in the year-ago period
• Net loss of $9.0 million or $0.26 per share
• Non-GAAP net loss of $5.8 million or $0.17 per share
• Non-GAAP free cash flow of $(8.5) million or (65)% of revenue

First Quarter 2023 Business Highlights:

• 22 confirmed designs starts in the first quarter, highlighting sustained customer usage of Arteris technology;
• Added six Active Customers in the first quarter across key verticals, including in Enterprise & Computing, Consumer, and Automotive;
• Tenstorrent licensed Arteris IP for AI high-performance computing and datacenter RISC-V chiplets; and
• ASICLAND selected Arteris FlexNoC for automotive, AI enterprise and AI edge SoCs to facilitate faster time to market and reduce design time for ASICLAND’s customers across various industries.

Estimated Second Quarter and Full Year 2023 Guidance:

	Q2 2023	FY 2023
	(in millions, except %)
ACV + TTM royalties	$53.5 - $57.5	$60.4 - $65.4
Revenue	$13.0 - $14.0	$56.0 - $60.0
Non-GAAP operating loss (%)	37.0% - 57.0%	28.5% - 43.5%
Free cash flow (%)	(51.8)% - (26.8)%	(19.7)% - (9.7)%

The guidance provided above are forward-looking statements and reflect our expectations as of today's date. Actual results may differ materially. Refer to the section titled "Forward-Looking Statements" below for information on the factors, among others, that could cause our actual results to differ materially from these forward-looking statements.

Non-GAAP gross profit, Non-GAAP gross margin, Non-GAAP operating loss, Non-GAAP operating loss margin, Non-GAAP net loss, Non-GAAP net loss per share, free cash flow and free cash flow margin are Non-GAAP financial measures. Additional information on Arteris’ historic reported results, including a reconciliation of these Non-GAAP financial measures to their most comparable GAAP measures, is included in the financial tables below. A reconciliation of Non-GAAP guidance measures reported above to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future, although it is important to note that these factors could be material to Arteris' results computed in accordance with GAAP.

Definitions of the other business metrics used in this press release including ACV, active customers, confirmed design starts and RPO are included below under the heading “Other Business Metrics.”

Financial Tables

To read financial tables, click here

Conference Call

Arteris will host a conference call today on May 4, 2023 to review its first quarter 2023 financial results and to discuss its financial outlook.

Time:	4:30PM ET
United States/Canada Toll Free:	877-407-9208
International Toll:	1-201-493-6784
Conference ID:	13737399

A live webcast will also be available in the Investor Relations section of Arteris’ website at: https://ir.arteris.com/events-and-presentations

A replay of the webcast will be available in the Investor Relations section of the company’s web site approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.

About Arteris

Arteris IP (Nasdaq: AIP) provides system-on-chip (SoC) system IP consisting of network-on-chip (NoC) interconnect IP and IP deployment technology to accelerate system-on-chip (SoC) semiconductor development and integration for a wide range of applications from AI to automobiles, mobile phones, IoT, cameras, SSD controllers, and servers for customers such as Bosch, Mobileye, Samsung, Toshiba and NXP. Arteris IP products include the Ncore® cache coherent and FlexNoC® non-coherent interconnect IP, the CodaCache® standalone last level cache, and optional Resilience Package (ISO 26262 functional safety), FlexNoC AI Package, and PIANO® automated timing closure capabilities. Our IP deployment products provide intelligent automation that accelerates the development and increases the quality of SoC hardware designs and their associated software and firmware, verification and simulation platforms, and specifications and customer documentation. Customer results obtained by using Arteris IP products include lower power, higher performance, more efficient design reuse and faster SoC development, leading to lower development and production costs.