AIP — Arteris, Inc.

Summary of AIP Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Q4 2025 Revenue: $20.1 million, a 30% increase year-over-year and 16% sequentially, exceeding guidance.
• Full Year 2025 Revenue: $70.6 million, up 22% year-over-year.
• Annual Contract Value (ACV) plus Royalties: Reached $83.6 million, a 28% year-over-year increase.
• Remaining Performance Obligations (RPO): $117 million, a 32% year-over-year increase.
• Non-GAAP Gross Profit: $18.5 million (92% gross margin) for Q4; $64.8 million (92% gross margin) for the full year.
• Non-GAAP Operating Loss: $2.2 million for Q4; $12.5 million for the full year, showing improvement from the previous year.
• GAAP Net Loss: $8.5 million for Q4; $34.7 million for the full year.
• Free Cash Flow: Positive $3 million for Q4 and $5.3 million for the full year.

2. Strategic Updates and Business Highlights:

• Acquisition of Cycuity: Closed on January 14, 2026, enhancing Arteris's cybersecurity capabilities in semiconductor design.
• Product Adoption: Strong uptake of FlexNoC, with over 30 production device deployments, and continued growth in Ncore licensing.
• Customer Expansion: Notable partnerships with companies like NXP and Black Sesame, indicating a broader adoption of Arteris products across various sectors including automotive and AI.
• Chiplet Projects: The number of projects incorporating Arteris technology has tripled in two years, reflecting a growing trend in the industry.

3. Forward Guidance and Outlook:

• Q1 2026 Guidance: Expected ACV plus royalties of $85-$89 million; revenue of $20.5-$21.5 million; non-GAAP operating loss of $3.5-$2.5 million.
• Full Year 2026 Guidance: Revenue forecast of $89-$93 million, including $7 million from Cycuity; non-GAAP operating loss of $9-$5 million.
• Management believes the company is on a path to profitability, with potential for non-GAAP operating profit as early as 2026.

4. Bad News, Challenges, or Points of Concern:

• Operating Losses: Despite improvements, the company continues to report significant operating losses, particularly in GAAP terms.
• Impact of Cycuity Acquisition: Expected to contribute to operating losses in the short term, with initial negative cash flow anticipated.
• Market Risks: The semiconductor industry faces increasing cybersecurity threats, which could pose risks if not adequately addressed.

5. Notable Q&A Insights:

• Cross-Sell Opportunities: The Cycuity acquisition is expected to enhance Arteris's ability to cross-sell products, particularly in the growing area of hardware security.
• Customer Engagement: Increased interest from customers to deploy a full suite of solutions, potentially raising average selling prices above $1 million.
• Royalty Growth: The growth in royalties is attributed to diversification across customer segments, with significant contributions from automotive, consumer, and enterprise sectors.
• Equity-Raising Efforts: The company is in the process of activating an At-the-Market (ATM) program to replenish cash used for the Cycuity acquisition, with small amounts expected to be raised in Q1 2026.

Overall, Arteris, Inc. demonstrated strong growth in Q4 2025, with strategic acquisitions and product developments positioning the company well for future growth, despite ongoing operating losses and market challenges.