CAMPBELL, Calif., Nov. 04, 2025 (GLOBE NEWSWIRE) -- Arteris, Inc. (Nasdaq: AIP), a leading provider of semiconductor system IP for accelerating system-on-chip (SoC) creation, today announced financial results for the third quarter ended September 30, 2025 and provided estimated fourth quarter and updated full year 2025 guidance.
"In the third quarter of 2025, we achieved another record with Annual Contract Value plus royalties of $74.9 million, up 24% year-over-year. In addition, we exited the quarter with $104.7 million in Remaining Performance Obligations, up 34% year-over-year and exceeding $100.0 million for the first time in our history," said K. Charles Janac, President and CEO of Arteris. "Looking ahead, we remain confident in Arteris' long-term growth opportunity, driven by our growing product portfolio, expanding partnerships and increasing customer demand across high-growth markets such as AI, autonomous driving, and advanced communications. As AI adoption accelerates and system complexity grows with the rise of chiplet-based, multi-die SoC architectures, we believe Arteris' deep expertise and proven technology uniquely position us to capture these transformative opportunities," concluded Janac.
Third Quarter 2025 Financial Highlights:
-- Revenue of $17.4 million, up 18% year-over-year -- Annual Contract Value $(ACV)$ plus royalties of $74.9 million, up 24% year-over-year -- Remaining performance obligation (RPO) of $104.7 million, up 34% year-over-year -- Operating loss of $8.7 million, compared to an operating loss of $7.9 million in the third quarter of 2024 -- Non-GAAP operating loss of $3.5 million, compared to a Non-GAAP operating loss of $3.3 million in the third quarter of 2024 -- Net loss of $9.0 million or $0.21 per share -- Non-GAAP net loss of $3.8 million or $0.09 per share -- Non-GAAP free cash flow of positive $2.5 million or 14% of revenue
Third Quarter 2025 Business Highlights:
-- Altera expanded its use and licenses of Arteris existing IP products and
licensed Magillem integration automation software products, as well as
FlexGen Smart NoC IP for its end-to-end programmable solutions;
-- AMD ordered additional licenses of Arteris technology in the third
quarter, following its multi-project license of FlexGen in the second
quarter;
-- Added automotive and industrial FlexGen customers, with Dream Chip and a
leading automotive OEM taking licenses, and NanoXplore using FlexGen
Smart NoC IP for its aerospace SoC designs;
-- 2V Systems licensed Ncore and FlexNoC interconnect for development of a
high bandwidth, low latency IO Hub chiplet;
-- Expanded our collaboration with the Alibaba Damo Academy, with the goal
of better integration and optimized performance for their CPU cores and
our mutual customers; and
-- Joined the Ultra Accelerator Link Consortium (UALink), serving a key role
in AI data movement in chiplets and SoCs.
Non-GAAP gross profit, Non-GAAP gross margin, Non-GAAP operating loss, Non-GAAP net loss, Non-GAAP net loss per share, and free cash flow 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.
Estimated Fourth Quarter and Updated Full Year 2025 Guidance:
Q4 2025 FY 2025
------------- -------------
(in millions)
ACV + royalties $74.0 - $78.0 $74.0 - $78.0
Revenue $18.4 - $18.8 $68.8 - $69.2
Non-GAAP operating loss $2.3 - $3.3 $12.5 - $13.5
Free cash flow $0.2 - $3.2 $2.5 - $5.5
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, confirmed design starts and RPO are included below under the heading "Other Business Metrics."
Conference Call
Arteris will host a conference call on November 4, 2025 to review its third quarter 2025 financial results and to discuss its financial outlook.
Time: 4:30PM ET United States/Canada Toll Free: 1-800-717-1738 International Toll: 1-646-307-1865
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 global leader in system IP used in semiconductors to accelerate the creation of high-performance, power-efficient silicon. Arteris network-on-chip (NoC) interconnect IP and system-on-chip (SoC) integration automation software are used by the world's top semiconductor and technology companies to improve overall performance, engineering productivity, reduce risk, lower costs, and bring complex designs to market faster. Learn more at arteris.com.
(c) 2004-2025 Arteris, Inc. All rights reserved worldwide. Arteris, Arteris IP, the Arteris IP logo, and the other Arteris marks found at https://www.arteris.com/trademarks are trademarks or registered trademarks of Arteris, Inc. or its subsidiaries. All other trademarks are the property of their respective owners.
Investor Contacts:
Arteris
Nick Hawkins
Chief Financial Officer
IR@arteris.com
Sapphire Investor Relations, LLC
Erica Mannion and Michael Funari
+1 617 542 6180
IR@arteris.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including but not limited to, statements regarding our long-term growth opportunity and future financial and operating performance, including our GAAP and Non-GAAP estimated fourth quarter and updated full year 2025 guidance. The words such as "may," "will," "could," "expect," "approximately," "believe," "estimate," "future," "guidance," "outlook," and similar words or expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements contained herein are based on our historical performance and our current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent our expectations as of the date of this press release. Subsequent events may cause these expectations to change, and we disclaim any obligation to update the forward-looking statements in the future, except as required by law. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from our current expectations. Important factors that could cause actual results to differ materially from those anticipated in our forward-looking statements include, but are not limited to, the significant competition we face from larger companies and third-party providers; our history of net losses; whether semiconductor companies in the automotive market, enterprise computing market, communications market, consumer electronics market, and industrial markets incorporate our solutions into their end products and the growth and economic stability of these end markets; our ability to attract new customers and the extent to which our customers renew their subscriptions for our solutions; the ability of our customers' end products achieving market acceptance or growth; our ability to sustain or grow our licensing revenue; our ability, and the cost, to successfully execute on research and development efforts; the occurrence of product errors or defects in our solutions; if we fail to offer high-quality support; the occurrence of macro-economic conditions that adversely impact us, our customers and their end product markets including, but not limited to, the imposition of tariffs in markets where we operate; the effects of geopolitical conflicts, such as the military conflict between Russia and Ukraine as well as the ongoing conflict in the Middle East; the range of regulatory, operational, financial and political risks we are exposed to as a result of our dependence on international customers and operations; our ability to protect our proprietary technology and inventions through patents and other IP rights; whether we are subject to any liabilities or fines as a result of government regulation, including import, export and economic sanctions laws and regulations; the occurrence of a disruption in our networks or a security breach; risks associated with doing business in China, including as a result of changes to trade relations between the United States and China; and the other factors described under the heading "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 to be filed with the Securities and Exchange Commission (SEC) on November 4, 2025. All forward-looking statements reflect our beliefs and
assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances. Our results for the quarter ended September 30, 2025 are not necessarily indicative of our operating results for any future periods.
Arteris, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- ----------------------------
2025 2024 2025 2024
---------- ----------
Revenue
Licensing,
support and
maintenance $ 15,896 $ 13,507 $ 46,319 $ 38,799
Variable
royalties and
other 1,512 1,206 4,123 3,436
---------- ---------- ---------- ----------
Total revenue 17,408 14,713 50,442 42,235
Cost of revenue 1,766 1,461 5,034 4,387
---------- ---------- ---------- ----------
Gross profit 15,642 13,252 45,408 37,848
---------- ---------- ---------- ----------
Operating
expenses:
Research and
development 12,648 11,923 36,681 33,475
Sales and
marketing 6,850 4,962 19,714 15,431
General and
administrative 4,858 4,286 13,683 13,436
---------- ---------- ---------- ----------
Total operating
expenses 24,356 21,171 70,078 62,342
---------- ---------- ---------- ----------
Loss from
operations (8,714) (7,919) (24,670) (24,494)
Interest expense (49) (55) (139) (199)
Other income
(expense), net 636 775 2,140 2,576
---------- ---------- ---------- ----------
Loss before
income taxes and
loss from equity
method
investment (8,127) (7,199) (22,669) (22,117)
---------- ---------- ---------- ----------
Loss from equity
method
investment, net
of tax 484 580 2,079 2,064
Provision for
(benefit from)
income taxes 380 (92) 1,494 1,253
---------- ---------- ---------- ----------
Net loss $ (8,991) $ (7,687) $ (26,242) $ (25,434)
========== ========== ========== ==========
Net loss per
share
attributable to
common
stockholders,
basic $ (0.21) $ (0.20) $ (0.63) $ (0.66)
Weighted-average
shares used in
computing per
share amounts,
basic and
diluted 42,743,518 39,295,743 41,812,256 38,496,838
Arteris, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
As of
---------------------------------
September 30, December 31,
2025 2024
ASSETS
Current assets:
Cash and cash equivalents $ 17,417 $ 13,684
Short-term investments 21,567 30,157
Accounts receivable, net of allowance
of $123 and $131 as of September 30,
2025 and December 31, 2024,
respectively 16,480 20,608
Prepaid expenses and other current
assets 5,566 4,634
---------- ---------
Total current assets 61,030 69,083
Property and equipment, net 4,461 4,019
Long-term investments 17,237 8,504
Equity method investment 3,723 5,802
Operating lease right-of-use assets 4,195 3,838
Intangibles, net 2,361 3,024
Goodwill 4,178 4,178
Other assets 10,552 7,687
---------- ---------
TOTAL ASSETS $ 107,737 $ 106,135
========== =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 517 $ 539
Accrued expenses and other current
liabilities 17,212 15,899
Operating lease liabilities, current 1,186 917
Deferred revenue, current 46,243 40,445
Vendor financing arrangements, current 1,614 1,482
---------- ---------
Total current liabilities 66,772 59,282
Deferred revenue, noncurrent 39,629 35,177
Operating lease liabilities, noncurrent 3,431 2,998
Vendor financing arrangements,
noncurrent 624 594
Deferred income, noncurrent 6,749 7,631
Other liabilities 1,981 1,641
---------- ---------
Total liabilities 119,186 107,323
---------- ---------
Stockholders' deficit:
Preferred stock, par value of $0.001
- 10,000,000 shares authorized and
no shares issued and outstanding as
of both September 30, 2025 and
December 31, 2024 -- --
Common stock, par value of $0.001 -
300,000,000 shares authorized as of
both September 30, 2025 and
December 31, 2024; 43,584,272 and
40,724,936 shares issued and
outstanding as of September 30,
2025 and December 31, 2024,
respectively 43 40
Additional paid-in capital 151,377 135,522
Accumulated other comprehensive income 258 135
Accumulated deficit (163,127) (136,885)
---------- ---------
Total stockholders' deficit (11,449) (1,188)
---------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT $ 107,737 $ 106,135
========== =========
Arteris, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
Nine Months Ended
September 30,
----------------------
2025 2024
-------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(26,242) $(25,434)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 2,532 2,474
Stock-based compensation 13,765 11,807
Amortization of deferred income (882) (885)
Loss from equity method investment 2,079 2,064
Net accretion of discounts on
available-for-sale securities (306) (522)
Other, net 390 124
Changes in operating assets and
liabilities:
Accounts receivable, net 4,128 3,288
Prepaid expenses and other assets (3,740) (1,249)
Accounts payable (77) (43)
Accrued expenses and other liabilities 1,666 1,494
Deferred revenue 10,250 8,793
------- -------
Net cash provided by operating
activities 3,563 1,911
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,254) (274)
Purchases of available-for-sale securities (25,308) (25,997)
Proceeds from maturities of available-for-sale
securities and other 25,515 29,169
------- -------
Net cash (used in) provided by investing
activities (1,047) 2,898
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under vendor financing
arrangements (882) (1,438)
Proceeds from exercise of stock options 1,523 703
Proceeds from employee stock purchase plan 535 --
Other financing activities 99 59
------- -------
Net cash provided by (used in) financing
activities 1,275 (676)
------- -------
NET INCREASE IN CASH, CASH EQUIVALENTS AND
RESTRICTED CASH 3,791 4,133
CASH, CASH EQUIVALENTS AND RESTRICTED CASH,
beginning of period 14,072 14,084
------- -------
CASH, CASH EQUIVALENTS AND RESTRICTED CASH,
end of period $ 17,863 $ 18,217
======= =======
Non-GAAP Financial Measures
To supplement our financial results, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core performance. These non-GAAP measures, which may be different than similarly-titled measures used by other companies, are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We define "Non-GAAP gross profit" and "Non-GAAP gross margin" as GAAP gross profit and GAAP gross margin, respectively, adjusted for stock-based compensation expense included in cost of revenue and amortization of acquired intangible assets included in cost of revenue. We define "Non-GAAP loss from operations" as our GAAP loss from operations adjusted to exclude stock-based compensation expense and amortization of acquired intangible assets. We define "Non-GAAP net loss" as our net loss adjusted to exclude stock-based compensation and amortization of acquired intangible assets.
We define "Non-GAAP net loss per share attributable to common stockholders, basic and diluted", as our Non-GAAP net loss divided by our GAAP weighted-average number of shares outstanding for the period on a basic or diluted basis, respectively. Management uses this non-GAAP measure to evaluate the performance of our business on a comparable basis from period to period.
The above items are excluded from our Non-GAAP gross profit, Non-GAAP loss from operations and Non-GAAP net loss because these items are non-cash in nature, or are not indicative of our core operating performance, and render comparisons with prior periods and competitors less meaningful. We believe Non-GAAP gross profit, Non-GAAP loss from operations and Non-GAAP net loss provide useful supplemental information to investors and others in understanding and evaluating our results of operations, as well as provide a useful measure for period-to-period comparisons of our business performance.
We define free cash flow as net cash provided by operating activities less cash used for purchases of property and equipment. We believe that free cash flow is a useful indicator of liquidity that provides information to management and investors, even if negative, about the amount of cash used in our operations other than that used for investments in property and equipment.
Other Business Metrics
Annual Contract Value (ACV) -- we define Annual Contract Value for an individual customer agreement as the total fixed fees under the agreement divided by the number of years in the agreement term. Our total ACV is the aggregate ACVs for all our customers as measured at a given point in time. Total fixed fees includes licensing, support and maintenance and other fixed fees under IP licensing or software licensing agreements but excludes variable revenue derived from licensing agreements with customers, particularly royalties. We define ACV plus royalties as ACV plus the trailing-twelve-months variable royalties and other revenue.
Confirmed Design Starts -- we define Confirmed Design Starts as when customers confirm their commencement of new semiconductor designs using our interconnect IP and notify us. Confirmed Design Starts is a metric management uses to assess the activity level of our customers in terms of the number of new semiconductor designs that are started using our interconnect IP in a given period. We believe that the number of Confirmed Design Starts is an important indicator of the growth of our business and future royalty revenue trends.
Remaining Performance Obligations (RPO) -- we define Remaining Performance Obligations as the amount of contracted future revenue that has not yet been recognized, including deferred revenue, billed and unbilled cancelable and non-cancelable contracted amounts.
Arteris, Inc.
Reconciliation of GAAP Measures to Non-GAAP Measures
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- --------------------------------
2025 2024 2025 2024
---------- ----------
Gross profit $ 15,642 $ 13,252 $ 45,408 $ 37,848
Add:
Stock-based
compensation
expense included
in cost of
revenue 228 221 665 596
Amortization of
acquired
intangible
assets(1) 50 50 150 150
---------- ---------- ---------- ----------
Non-GAAP gross
profit $ 15,920 $ 13,523 $ 46,223 $ 38,594
========== ========== ========== ==========
Gross margin 90% 90% 90% 90%
Non-GAAP gross
margin 91% 92% 92% 91%
Research and
development $ 12,648 $ 11,923 $ 36,681 $ 33,475
Stock-based
compensation
expense (2,095) (2,154) (5,994) (5,550)
Amortization of
acquired
intangible
assets(1) (110) (110) (330) (280)
---------- ---------- ---------- ----------
Non-GAAP research
and development $ 10,443 $ 9,659 $ 30,357 $ 27,645
========== ========== ========== ==========
Sales and
marketing $ 6,850 $ 4,962 $ 19,714 $ 15,431
Stock-based
compensation
expense (1,335) (850) (3,352) (2,230)
Amortization of
acquired
intangible
assets(1) (57) (57) (171) (171)
---------- ---------- ---------- ----------
Non-GAAP sales
and marketing $ 5,458 $ 4,055 $ 16,191 $ 13,030
========== ========== ========== ==========
General and
administrative $ 4,858 $ 4,286 $ 13,683 $ 13,436
Stock-based
compensation
expense (1,298) (1,165) (3,754) (3,431)
---------- ---------- ---------- ----------
Non-GAAP general
and
administrative $ 3,560 $ 3,121 $ 9,929 $ 10,005
========== ========== ========== ==========
Total operating
expenses $ 24,356 $ 21,171 $ 70,078 $ 62,342
Stock-based
compensation
expense (4,728) (4,169) (13,100) (11,211)
Amortization of
acquired
intangible
assets(1) (167) (167) (501) (451)
---------- ---------- ---------- ----------
Total Non-GAAP
operating
expenses $ 19,461 $ 16,835 $ 56,477 $ 50,680
========== ========== ========== ==========
Loss from
operations $ (8,714) $ (7,919) $ (24,670) $ (24,494)
Stock-based
compensation
expense 4,956 4,390 13,765 11,807
Amortization of
acquired
intangible
assets(1) 217 217 651 601
---------- ---------- ---------- ----------
Non-GAAP loss
from operations $ (3,541) $ (3,312) $ (10,254) $ (12,086)
========== ========== ========== ==========
Net loss $ (8,991) $ (7,687) $ (26,242) $ (25,434)
Stock-based
compensation
expense 4,956 4,390 13,765 11,807
Amortization of
acquired
intangible
assets(1) 217 217 651 601
---------- ---------- ---------- ----------
Non-GAAP net
loss(2) $ (3,818) $ (3,080) $ (11,826) $ (13,026)
========== ========== ========== ==========
Net loss per
share
attributable to
common
stockholders,
basic and
diluted $ (0.21) $ (0.20) $ (0.63) $ (0.66)
Per share impacts
of adjustments
to net loss(3) $ 0.12 $ 0.12 $ 0.35 $ 0.32
Non-GAAP net loss
per share
attributable to
common
stockholders,
basic and
diluted $ (0.09) $ (0.08) $ (0.28) $ (0.34) Weighted-average shares used in computing per share amounts, basic and diluted 42,743,518 39,295,743 41,812,256 38,496,838
(1) Represents the amortization expenses of our intangible assets attributable to our acquisitions.
(2) Our GAAP tax provision is primarily related to foreign withholding taxes and income tax in profitable foreign jurisdictions. We maintain a full valuation allowance against our deferred tax assets in the US. Accordingly, there is no significant tax impact associated with these Non-GAAP adjustments.
(3) Reflects the aggregate adjustments made to reconcile Non-GAAP net loss to our net loss as noted in the above table, divided by the GAAP diluted weighted average number of shares of the relevant period.
Free Cash Flow
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- -----------------------
2025 2024 2025 2024
------ -----
Net cash
provided by
operating
activities $ 3,187 $ 1,124 $ 3,563 $1,911
Less:
Purchase of
property and
equipment (716) (31) (1,254) (274)
------- ------ ------- -----
Free cash
flow $ 2,471 $ 1,093 $ 2,309 $1,637
======= ====== ======= =====
Net cash
(used in)
provided by
investing
activities $ (1,631) $(4,647) $ (1,047) $2,898
Net cash
(used in)
provided by
financing
activities $ (180) $ (775) $ 1,275 $ (676)
(END) Dow Jones Newswires
November 04, 2025 16:06 ET (21:06 GMT)
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