Arteris Announces Financial Results for the First Quarter 2024 and Second Quarter and Full Year 2024 Guidance

CAMPBELL, Calif., May 02, 2024 -- Arteris, Inc. (Nasdaq: AIP), a leading provider of system IP which accelerates system-on-chip (SoC) creation, today announced financial results for the first quarter ended March 31, 2024 and provided second quarter and full year 2024 guidance.

“We’re encouraged by our solid start to 2024, with positive free cash flow in the first quarter, and Annual Contract Value and Trailing-Twelve-Month Variable Royalties of $58.2 million, driven by robust licensing activity across all of our verticals including Enterprise Computing and Automotive deals,” said K. Charles Janac, President and CEO of Arteris. “Nearly half of our license deals this quarter facilitated AI/ML design starts, showcasing the significance of AI for our clients. In addition, we secured five major deals with top 30 global technology firms, underscoring Arteris' continued influence as a leading commercial system IP vendor in the semiconductor industry,” concluded Janac.

First Quarter 2024 Financial Highlights:

• Revenue of $12.9 million
• Annual Contract Value (ACV) and trailing-twelve-months (TTM) variable royalties of $58.2 million, up 6% year-over-year
• Remaining performance obligation (RPO) of $74.7 million, up 30% year-over-year, growing to the highest level we have ever reported
• Operating loss of $9.1 million
• Non-GAAP operating loss of $5.3 million, compared to a Non-GAAP operating loss of $5.6 million in the year ago period
• Net loss of $9.4 million or $0.25 per share
• Non-GAAP net loss of $5.6 million or $0.15 per share
• Non-GAAP free cash flow of positive $0.3 million or 2.2% of revenue

First Quarter 2024 Business Highlights:

• Another quarter of robust design activity, with confirmed design starts in Enterprise Computing and Automotive, followed by Communications, Industrial applications and Consumer Electronics;
• Expanded Arteris’ foothold with large customers, winning five significant license deals among top 30 global technology companies;
• Announced Rebellions has licensed FlexNoC interconnect IP for its next-generation Neural Processing Unit aimed at Generative AI;
• Released the latest version of its cache coherent interconnect solution, Ncore 3.6, which supports any processor IP that connect to Ncore supported protocols, flexible configurations, and is ISO 26262 functional safety certified;
• Delivered on Arteris’ previously announced automotive partnership with Arm, enabling the next generation of automotive electronics, through optimization and pre-validation of Arteris’ Ncore network-on-chip IP to work with and support various Armv9 processor IP;
• At the 2024 Automotive Computing Conference, Mercedes Benz presented its vision for standardization for automotive computing hardware, partnering with Arteris to pioneer a reference for addressing a full range of autonomous driving applications; and
• Continued adoption of FlexNoC 5 by customers, with several more evaluations and prospective customers in the pipeline.

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.

Second Quarter and Full Year 2024 Guidance:

(in millions)

	Q2 2024	FY 2024
ACV + TTM royalties	$58.0 - $62.0	$62.0 - $68.0
Revenue	$13.2 - $14.2	$54.5 - $57.5
Non-GAAP operating loss	$4.5 - $6.5	$19.4 - $23.4
Free cash flow	$(1.4) - $1.6	$(2.4) - $2.6

The guidance provided above are forward-looking statements and reflects Arteris' 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.

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.”

Conference Call

Arteris will host a conference call today on May 2, 2024 to review its first quarter 2024 financial results and to discuss its financial outlook.

	Time:	4:30PM ET
	United States/Canada Toll Free:	1-888-886-7786
	International Toll:	1-416-764-8658

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 Arteris' website approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.

About Arteris

Arteris is a leading provider of system IP for the acceleration of system-on-chip (SoC) development across today’s electronic systems. Arteris network-on-chip (NoC) interconnect IP and SoC integration automation technology enable higher product performance with lower power consumption and faster time to market, delivering better SoC economics so its customers can focus on dreaming up what comes next. Learn more at arteris.com.