Arteris Announces Financial Results for the Third Quarter 2024 and Fourth Quarter and Full Year 2024 Guidance
CAMPBELL, Calif., Nov. 05, 2024 (GLOBE NEWSWIRE) -- Arteris, Inc. (NASDAQ:AIP), a leading provider of system IP which accelerates system-on-chip (SoC) creation, today announced financial results for the third quarter ended September 30, 2024 and provided fourth quarter and full year 2024 guidance.
"We're excited to report a record $60.5 million in Annual Contract Value plus royalties, and our third consecutive quarter of positive free cash flow in the third quarter of 2024," said K. Charles Janac, President and CEO of Arteris. "Demonstrating our increasing traction with some of the largest customers in the market, the majority of license deal value in the quarter was with top 30 technology customers, as they create ever more sophisticated electronics that increasingly need high-performance and energy-efficient SoCs. Whether it be within industry verticals such as Automotive and Enterprise Computing, high growth horizontal vectors such as AI, or emerging opportunities like micro-controllers, the industry need for Arteris' high-performance commercial System IP solutions has continued to increase," concluded Janac.
Third Quarter 2024 Financial Highlights:
Revenue of $14.7 million
Annual Contract Value (ACV), plus royalties of $60.5 million, up 6% year-over-year
Remaining performance obligation (RPO) of $78.4 million, up 25% year-over-year, growing to the highest level we have ever reported
Non-GAAP free cash flow of positive $1.1 million or 7% of revenue
Operating loss of $7.9 million, compared to an operating loss of $8.5 million in the year ago period
Non-GAAP operating loss of $3.3 million, compared to a Non-GAAP operating loss of $4.5 million in the year ago period
Net loss of $7.7 million or $0.20 per share
Non-GAAP net loss of $3.1 million or $0.08 per share
Third Quarter 2024 Business Highlights:
Increased adoption of our technology with our existing customers, including a top 5 global technology company that is expanding its deployment of Arteris products to enable development of high-performance AI SoCs and chiplets;
Continued expansion of our footprint with large customers, with a majority of license dollars in the quarter coming from top 30 global technology companies;
Broadened our strategic focus to microcontrollers, expanding customer usage from complex SoCs to now include high volume MCU products;
Announced the addition of NoC tiling to our interconnect products, accelerating design of AI SoCs enabling scalable performance, power reduction, and design reuse capabilities;
Selected by Tier IV for its intelligent vehicle SoCs, and VeriSilicon for its high-performance data-center SoCs;
Announced an expanded partnership with SiFive, delivering pre-verified RISC-V datacenter solutions; and
Joachim Kunkel joined the Arteris Board of Directors and Ken Way joined Arteris as Executive Vice President of Global Sales.
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.
Fourth Quarter and Full Year 2024 Guidance:
Q4 2024
FY 2024
(in millions)
ACV + royalties
$63.0 - $67.0
$63.0 - $67.0
Revenue
$14.7 - $15.7
$56.9 - $57.9
Non-GAAP operating loss
$4.0 - $5.0
$16.1 - $17.1
Free cash flow
$(0.9) - $1.1
$0.7 - $2.7
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 November 5, 2024 to review its third quarter 2024 financial results and to discuss its financial outlook.
Time:
4:30PM ET
United States/Canada Toll Free:
1-646-307-1865
International Toll:
1-800-717-1738
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.
© 2004-2024 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:ArterisNick HawkinsChief Financial
Sapphire Investor Relations, LLCErica Mannion and Michael Funari+1 617 542
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 future financial and operating performance, including our GAAP and Non-GAAP guidance for the fourth quarter and full year 2024; our market opportunity and its potential growth; our ability to execute on existing customer contracts and drive increased customer adoption of our system IP; and our position within the market and our ability to drive customer value. The words "may," "might," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "expect," "estimate," "seek," "predict," "future," "project," "potential," "continue," "target" 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; the effects of geopolitical conflicts, such as the military conflict between Russia and Ukraine; 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; and the other factors described under the heading "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 to be filed with the Securities and Exchange Commission (SEC) on November 5, 2024. 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, 2024 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 EndedSeptember 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Revenue
Licensing, support and maintenance
$
13,507
$
12,084
$
38,799
$
36,926
Variable royalties and other
1,206
1,190
3,436
4,236
Total revenue
14,713
13,274
42,235
41,162
Cost of revenue
1,461
1,280
4,387
3,629
Gross profit
13,252
11,994
37,848
37,533
Operating expenses:
Research and development
11,923
10,997
33,475
34,465
Sales and marketing
4,962
5,024
15,431
15,630
General and administrative
4,286
4,426
13,436
13,331
Total operating expenses
21,171
20,447
62,342
63,426
Loss from operations
(7,919
)
(8,453
)
(24,494
)
(25,893
)
Interest expense
(55
)
(77
)
(199
)
(136
)
Other income (expense), net
775
898
2,576
2,641
Loss before income taxes and loss from equity method investment
(7,199
)
(7,632
)
(22,117
)
(23,388
)
Loss from equity method investment, net of tax
580
919
2,064
2,487
Provision for (benefit from) income taxes
(92
)
(398
)
1,253
453
Net loss
$
(7,687
)
$
(8,153
)
$
(25,434
)
$
(26,328
)
Net loss per share attributable to common stockholders, basic and diluted
$
(0.20
)
$
(0.23
)
$
(0.66
)
$
(0.75
)
Weighted average shares used in computing per share amounts, basic and diluted
39,295,743
36,010,106
38,496,838
35,291,207
Arteris, Inc.Condensed Consolidated Balance Sheets (In thousands, except share and per share data)(Unaudited)
As of
September 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
17,829
$
13,696
Short-term investments
30,840
27,477
Accounts receivable, net of allowance of $93 as of both September 30, 2024 and December 31, 2023
