Arteris Announces Financial Results for the Second Quarter and Estimated Third Quarter and Updated Full Year 2025 Guidance

Rhea-AI Summary

Arteris (Nasdaq: AIP), a semiconductor system IP provider, reported its Q2 2025 financial results and updated guidance. The company achieved record Annual Contract Value plus royalties of $69.1 million and Remaining Performance Obligations of $99.3 million, up 28% year-over-year.

Q2 2025 highlights include revenue of $16.5 million (up 13% YoY), operating loss of $8.2 million, and net loss of $9.1 million ($0.22 per share). Business achievements include AMD licensing FlexGen IP, a Whalechip AI win, expanded multi-die solutions, and an AI Breakthrough Award for FlexGen.

For Q3 2025, Arteris expects ACV + royalties of $69.5-72.5 million and revenue of $16.8-17.2 million. Full year 2025 guidance projects revenue of $66.0-70.0 million.

Positive

• Record Annual Contract Value plus royalties of $69.1M, up 15% YoY
• RPO grew to highest level ever at $99.3M, up 28% YoY
• Revenue increased 13% YoY to $16.5M
• Secured major customer wins including AMD and Whalechip for AI applications
• Won AI Engineering Innovation Award for FlexGen technology

Negative

• Operating loss increased to $8.2M from $7.4M in Q2 2024
• Net loss of $9.1M ($0.22 per share)
• Non-GAAP operating loss remained flat at $3.5M

Insights

Financial Analyst

Arteris reports strong Q2 growth with record ACV and RPO despite continued losses, showing improving business momentum in AI and chiplet markets.

Arteris delivered solid growth in Q2 2025, with revenue increasing 13% year-over-year to $16.5 million. The company achieved record Annual Contract Value (ACV) plus royalties of $69.1 million, up 15% year-over-year, demonstrating healthy expansion of its customer base and revenue potential. Even more impressive is the 28% growth in Remaining Performance Obligations (RPO) to $99.3 million, indicating strong future revenue visibility.

Despite the top-line growth, Arteris continues to operate at a loss, with operating losses widening slightly to $8.2 million compared to $7.4 million in Q2 2024. On a non-GAAP basis, operating losses remained flat at $3.5 million. This suggests the company is investing significantly in growth initiatives while maintaining disciplined cost management on an adjusted basis.

The business highlights reveal Arteris' strategic positioning in high-growth semiconductor markets, particularly AI and multi-die/chiplet solutions. Landing AMD as a customer for their FlexGen network-on-chip IP for AI chiplets represents a significant win. The company is also expanding its presence in data center AI with Whalechip and broadening its multi-die solution portfolio through ecosystem partnerships with major players like Synopsys, Cadence, and RISC-V partners.

Looking forward, management provided Q3 guidance for ACV plus royalties of $69.5-72.5 million and revenue of $16.8-17.2 million, projecting continued sequential growth. The full-year 2025 guidance indicates confidence in accelerating momentum, with ACV plus royalties expected to reach $72-78 million and revenue of $66-70 million. While operating losses will persist, the company projects positive free cash flow of $1-7 million for the full year, which would mark an important milestone toward financial sustainability.

CAMPBELL, Calif., Aug. 05, 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 second quarter ended June 30, 2025 and provided estimated third quarter and updated full year 2025 guidance.

“In the second quarter of 2025, we achieved record Annual Contract Value plus royalties of $69.1 million and exited the quarter with $99.3 million in Remaining Performance Obligations, with the latter representing a year-over-year increase of 28%,” said K. Charles Janac, President and CEO of Arteris. “Looking ahead, we remain confident in Arteris’ long-term growth opportunity, supported by our strong product portfolio and pipeline, deepening relationships with leading electronics companies, and continued customer innovation across high-growth markets including AI, autonomous driving, advanced communications, and industrial and consumer applications.”

Second Quarter 2025 Financial Highlights:

• Revenue of $16.5 million, up 13% year-over-year
• Annual Contract Value (ACV) plus royalties of $69.1 million, up 15% year-over-year, growing to the highest level we have ever reported
• Remaining performance obligation (RPO) of $99.3 million, up 28% year-over-year, growing to the highest level we have ever reported
• Operating loss of $8.2 million, compared to an operating loss of $7.4 million in the second quarter of 2024
• Non-GAAP operating loss of $3.5 million, flat compared to a Non-GAAP operating loss of $3.5 million in the second quarter of 2024
• Net loss of $9.1 million or $0.22 per share
• Non-GAAP net loss of $4.4 million or $0.11 per share
  

Second Quarter 2025 Business Highlights:

• AMD licensed FlexGen smart network-on-chip IP to provide high-performance data transport for its chiplets powering AI, targeting a broad array of products;
• Announced a key customer AI win, Whalechip, that is licensing FlexNoC 5 for its high-performance AI computing at the data center;
• Expanded Arteris' multi-die solution, broadening the support for the Universal Chiplet Interconnect Express (UCIe), extended support for Arm AMBA protocols, collaborating with Synopsys and Cadence for chiplet interface, and supporting RISC-V ecosystems with partners such as Andes, SiFive, and Tenstorrent;
• Announced Magillem Packaging, a new software product designed to automate IP packaging, thereby simplifying and accelerating chiplet and SoC assembly; and
• Arteris was recognized in the 8th annual AI Breakthrough Awards, with FlexGen winning the “AI Engineering Innovation Award”.
  

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, 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 Third Quarter and Updated Full Year 2025 Guidance:

	Q3 2025	FY 2025
	(in millions)
ACV + royalties	$69.5 - $72.5	$72.0 - $78.0
Revenue	$16.8 - $17.2	$66.0 - $70.0
Non-GAAP operating loss	$3.0 - $4.0	$10.5 - $15.5
Free cash flow	$0.5 - $3.5	$1.0 - $7.0

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 August 5, 2025 to review its second 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.

© 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 third 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 June 30, 2025 to be filed with the Securities and Exchange Commission (SEC) on August 5, 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 June 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 June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Revenue
Licensing, support and maintenance	$	15,088			$	13,553			$	30,423			$	25,292
Variable royalties and other		1,414				1,022				2,611				2,230
Total revenue		16,502				14,575				33,034				27,522
Cost of revenue		1,742				1,458				3,268				2,926
Gross profit		14,760				13,117				29,766				24,596
Operating expenses:
Research and development		12,171				10,717				24,033				21,552
Sales and marketing		6,335				5,013				12,864				10,469
General and administrative		4,502				4,828				8,825				9,150
Total operating expenses		23,008				20,558				45,722				41,171
Loss from operations		(8,248	)			(7,441	)			(15,956	)			(16,575	)
Interest expense		(42	)			(68	)			(90	)			(144	)
Other income (expense), net		786				865				1,504				1,801
Loss before income taxes and loss from equity method investment		(7,504	)			(6,644	)			(14,542	)			(14,918	)
Loss from equity method investment, net of tax		780				725				1,595				1,484
Provision for income taxes		846				975				1,114				1,345
Net loss	$	(9,130	)		$	(8,344	)		$	(17,251	)		$	(17,747	)
Net loss per share attributable to common stockholders, basic	$	(0.22	)		$	(0.22	)		$	(0.42	)		$	(0.47	)
Weighted-average shares used in computing per share amounts, basic and diluted		41,819,427				38,476,934				41,338,907				38,092,996

Arteris, Inc. Condensed Consolidated Balance Sheets (In thousands, except share and per share data)
	As of
	June 30,				December 31,
		2025				2024
ASSETS
Current assets:
Cash and cash equivalents	$	16,100			$	13,684
Short-term investments		21,857				30,157
Accounts receivable, net of allowance of $123 and $131 as of June 30, 2025 and December 31, 2024, respectively		18,753				20,608
Prepaid expenses and other current assets		4,833				4,634
Total current assets		61,543				69,083
Property and equipment, net		4,290				4,019
Long-term investments		15,905				8,504
Equity method investment		4,207				5,802
Operating lease right-of-use assets		4,430				3,838
Intangibles, net		2,582				3,024
Goodwill		4,178				4,178
Other assets		9,745				7,687
TOTAL ASSETS	$	106,880			$	106,135
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	856			$	539
Accrued expenses and other current liabilities		15,321				15,899
Operating lease liabilities, current		1,106				917
Deferred revenue, current		43,321				40,445
Vendor financing arrangements, current		1,955				1,482
Total current liabilities		62,559				59,282
Deferred revenue, noncurrent		38,626				35,177
Operating lease liabilities, noncurrent		3,733				2,998
Vendor financing arrangements, noncurrent		563				594
Deferred income, noncurrent		7,046				7,631
Other liabilities		1,882				1,641
Total liabilities		114,409				107,323
Stockholders' deficit:
Preferred stock, par value of $0.001 - 10,000,000 shares authorized as of both June 30, 2025 and December 31, 2024; no shares issued and outstanding as of both June 30, 2025 and December 31, 2024		—				—
Common stock, par value of $0.001 - 300,000,000 shares authorized as of both June 30, 2025 and December 31, 2024; 42,592,418 and 40,724,936 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively		42				40
Additional paid-in capital		146,350				135,522
Accumulated other comprehensive income		215				135
Accumulated deficit		(154,136	)			(136,885	)
Total stockholders' deficit		(7,529	)			(1,188	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	106,880			$	106,135

Arteris, Inc. Condensed Consolidated Statements of Cash Flows (In thousands)
	Six Months Ended June 30,
		2025				2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(17,251	)		$	(17,747	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		1,689				1,630
Stock-based compensation		8,809				7,417
Amortization of deferred income		(585	)			(588	)
Loss from equity method investment		1,595				1,484
Net accretion of discounts on available-for-sale securities		(221	)			(344	)
Other, net		378				24
Changes in operating assets and liabilities:
Accounts receivable, net		1,855				3,055
Prepaid expenses and other assets		(2,261	)			865
Accounts payable		319				156
Accrued expenses and other liabilities		(277	)			103
Deferred revenue		6,325				4,733
Net cash provided by operating activities		375				788
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(538	)			(243	)
Purchases of available-for-sale securities		(17,160	)			(12,981	)
Proceeds from maturities of available-for-sale securities and other		18,282				20,769
Net cash provided by investing activities		584				7,545
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under vendor financing arrangements		(558	)			(485	)
Proceeds from exercise of stock options		1,452				584
Proceeds from employee stock purchase plan		535				—
Other financing activities		27				—
Net cash provided by financing activities		1,456				99
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		2,415				8,432
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period		14,072				14,084
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	16,487			$	22,516

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 June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Gross profit	$	14,760			$	13,117			$	29,766			$	24,596
Add:
Stock-based compensation expense included in cost of revenue		232				186				437				375
Amortization of acquired intangible assets (1)		50				50				100				100
Non-GAAP gross profit	$	15,042			$	13,353			$	30,303			$	25,071
Gross margin		89	%			90	%			90	%			89	%
Non-GAAP gross margin		91	%			92	%			92	%			91	%
Research and development	$	12,171			$	10,717			$	24,033			$	21,552
Stock-based compensation expense		(1,926	)			(1,788	)			(3,898	)			(3,396	)
Amortization of acquired intangible assets (1)		(110	)			(85	)			(220	)			(170	)
Non-GAAP research and development	$	10,135			$	8,844			$	19,915			$	17,986
Sales and marketing	$	6,335			$	5,013			$	12,864			$	10,469
Stock-based compensation expense		(1,048	)			(657	)			(2,017	)			(1,380	)
Amortization of acquired intangible assets (1)		(57	)			(57	)			(114	)			(114	)
Non-GAAP sales and marketing	$	5,230			$	4,299			$	10,733			$	8,975
General and administrative	$	4,502			$	4,828			$	8,825			$	9,150
Stock-based compensation expense		(1,291	)			(1,129	)			(2,457	)			(2,266	)
Non-GAAP general and administrative	$	3,211			$	3,699			$	6,368			$	6,884
Total operating expenses	$	23,008			$	20,558			$	45,722			$	41,171
Stock-based compensation expense		(4,265	)			(3,574	)			(8,372	)			(7,042	)
Amortization of acquired intangible assets (1)		(167	)			(142	)			(334	)			(284	)
Total Non-GAAP operating expenses	$	18,576			$	16,842			$	37,016			$	33,845
Loss from operations	$	(8,248	)		$	(7,441	)		$	(15,956	)		$	(16,575	)
Stock-based compensation expense		4,497				3,760				8,809				7,417
Amortization of acquired intangible assets (1)		217				192				434				384
Non-GAAP loss from operations	$	(3,534	)		$	(3,489	)		$	(6,713	)		$	(8,774	)
Net loss	$	(9,130	)		$	(8,344	)		$	(17,251	)		$	(17,747	)
Stock-based compensation expense		4,497				3,760				8,809				7,417
Amortization of acquired intangible assets (1)		217				192				434				384
Non-GAAP net loss (2)	$	(4,416	)		$	(4,392	)		$	(8,008	)		$	(9,946	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.22	)		$	(0.22	)		$	(0.42	)		$	(0.47	)
Per share impacts of adjustments to net loss (3)	$	0.11			$	0.11			$	0.22			$	0.21
Non-GAAP net loss per share attributable to common stockholders, basic and diluted	$	(0.11	)		$	(0.11	)		$	(0.20	)		$	(0.26	)
Weighted-average shares used in computing per share amounts, basic and diluted		41,819,427				38,476,934				41,338,907				38,092,996

(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 June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Net cash (used in) provided by operating activities	$	(2,485	)		$	311			$	375			$	788
Less:
Purchase of property and equipment		(355	)			(47	)			(538	)			(243	)
Free cash flow	$	(2,840	)		$	264			$	(163	)		$	545
Net cash provided by (used in) investing activities	$	705			$	(4,357	)		$	584			$	7,545
Net cash provided by financing activities	$	1,508			$	55			$	1,456			$	99

FAQ

What were Arteris (AIP) key financial results for Q2 2025?

Arteris reported revenue of $16.5M (up 13% YoY), record ACV plus royalties of $69.1M (up 15% YoY), and a net loss of $9.1M ($0.22 per share).

What is Arteris (AIP) revenue guidance for full year 2025?

Arteris projects full year 2025 revenue between $66.0-70.0 million and ACV plus royalties of $72.0-78.0 million.

What major customer wins did Arteris (AIP) announce in Q2 2025?

Arteris secured AMD as a licensee for FlexGen IP for AI chiplets and Whalechip for FlexNoC 5 for high-performance AI computing in data centers.

How much did Arteris (AIP) Remaining Performance Obligations (RPO) grow in Q2 2025?

Arteris' RPO grew to $99.3 million, representing a 28% increase year-over-year, reaching the highest level ever reported.

What are Arteris (AIP) Q3 2025 revenue projections?

For Q3 2025, Arteris expects revenue between $16.8-17.2 million and ACV plus royalties of $69.5-72.5 million.