Arteris Q3 2026 revenue rises 48%; net loss hits $11.2M
Arteris reported more than 1,000 confirmed design starts since inception, its measure of customer-started semiconductor designs using its interconnect IP.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Arteris, Inc. (AIP) reported third-quarter 2026 revenue of $25.8 million, up 48% year over year. Annual contract value plus royalties was $103.8 million, up 39%; trailing-twelve-month variable royalties were $9.4 million, up 71%; and remaining performance obligations were $135.5 million, up 29%. GAAP net loss was $11.154 million, compared with $8.991 million a year earlier, while operating loss was $11.316 million versus $8.714 million. Non-GAAP operating loss was $1.233 million, compared with $3.541 million.
Fourth-quarter 2026 guidance calls for revenue of $25.7 million to $26.7 million and a non-GAAP operating result ranging from a $0.9 million loss to $1.1 million income. Full-year guidance is revenue of $98.5 million to $99.5 million, ACV plus royalties of $103.0 million to $107.0 million, a non-GAAP operating loss of $7.2 million to $9.2 million, and free cash flow of $5.0 million to $9.0 million. Nine-month operating cash flow was $0.397 million, compared with $3.563 million; net proceeds from the at-the-market common stock offering were $72.037 million.
1 point · 0 major0 major · 2 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue rose 48% year over year to $25.8 million.
Negative
- Moderate pointGAAP net loss widened to $11.154 million from $8.991 million.
- Moderate pointQuarterly operating cash flow shifted to $(1.751) million from $3.187 million.
Filing Explained
The balance sheet shows Arteris’ common shares outstanding rose from 44,268,816 at
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Revenue: $25.8 million
Annual contract value plus royalties: $103.8 million
Trailing-twelve-month variable royalties: $9.4 million
+5 more
8 metrics
Revenue
$25.8 million
Third quarter 2026; up 48% year over year
Annual contract value plus royalties
$103.8 million
Third quarter 2026; up 39% year over year
Trailing-twelve-month variable royalties
$9.4 million
Third quarter 2026; up 71% year over year
Remaining performance obligations
$135.5 million
September 30, 2026; up 29% year over year
GAAP net loss
($11.154 million)
Third quarter 2026, compared with ($8.991 million) in third quarter 2025
GAAP operating loss
($11.316 million)
Third quarter 2026, compared with ($8.714 million) in third quarter 2025
Non-GAAP operating loss
($1.233 million)
Third quarter 2026, compared with ($3.541 million) in third quarter 2025
Free cash flow
($2.126 million)
Third quarter 2026, compared with $2.471 million in third quarter 2025
Key Terms
Annual Contract Value (ACV), Remaining Performance Obligations (RPO), Confirmed Design Starts, Non-GAAP loss from operations, +1 more
5 terms
Annual Contract Value (ACV) financial
"Annual Contract Value for an individual customer agreement"
Annual Contract Value (ACV) shows how much money a company expects to earn in one year from a single customer’s contract. It helps businesses understand the size and value of their customer relationships, much like knowing how much a subscription or membership costs each year. This metric is important for measuring growth and planning future sales.
Remaining Performance Obligations (RPO) financial
"amount of contracted future revenue that has not yet been recognized"
Remaining performance obligations (RPO) are the value of goods or services a company has contractually promised but has not yet delivered or billed, essentially future revenue already committed by customers. For investors, RPO is like a visible backlog or a promised paycheck—it shows how much revenue is expected to come in from existing contracts, helping assess near-term cash flow predictability and the reliability of a company’s revenue growth.
Confirmed Design Starts technical
"customers confirm their commencement of new semiconductor designs"
Non-GAAP loss from operations financial
"GAAP loss from operations adjusted to exclude stock-based compensation expense"
Free cash flow financial
"net cash provided by (used in) operating activities less cash used"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
Earnings Snapshot
Revenue: $25.774 million · Guidance included
Third quarter ended September 30, 2026
Revenue
$25.774 million
Up 48% year over year
GAAP net loss
($11.154 million)
Compared with ($8.991 million) in third quarter 2025
GAAP operating loss
($11.316 million)
Compared with ($8.714 million) in third quarter 2025
Non-GAAP operating loss
($1.233 million)
Compared with ($3.541 million) in third quarter 2025
Free cash flow
($2.126 million)
Compared with $2.471 million in third quarter 2025
Guidance
Fourth-quarter 2026: ACV plus royalties of $103.0 million to $107.0 million; revenue of $25.7 million to $26.7 million; non-GAAP operating result ranging from a $0.9 million loss to $1.1 million income. Full-year 2026: ACV plus royalties of $103.0 million to $107.0 million; revenue of $98.5 million to $99.5 million; non-GAAP operating loss of $7.2 million to $9.2 million; free cash flow of $5.0 million to $9.0 million.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was AIP's revenue in the third quarter of 2026?
AIP reported third-quarter revenue of $25.8 million, up 48% year over year. Licensing, support and maintenance contributed $22.368 million, variable royalties contributed $2.294 million, and professional services and other revenue contributed $1.112 million.
What is Arteris's 2026 revenue guidance?
Arteris estimated full-year 2026 revenue of $98.5 million to $99.5 million and fourth-quarter revenue of $25.7 million to $26.7 million. The guidance reflects the company's expectations as of November 5, 2026.
How many confirmed design starts has Arteris reported?
Arteris said it had surpassed 1,000 confirmed design starts since inception. It defines a confirmed design start as a customer-confirmed commencement of a new semiconductor design using its interconnect IP, with the customer notifying Arteris.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): November 5, 2026
(Exact name of Registrant, as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||||||||
(Address of principal executive offices, including Zip code)
Registrant's telephone number, including area code: (408 ) 470-7300
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 5, 2026 , Arteris, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2026. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information contained in this Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including the accompanying Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filings, unless expressly incorporated by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |||||||
99.1 | Press Release dated November 5, 2026 | |||||||
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document). | |||||||
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 5, 2026
| By: | /s/ Saurabh Sinha | |||||||
| Name: | Saurabh Sinha | |||||||
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) | |||||||
3
Arteris Announces Financial Results for the Third Quarter and Estimated Fourth Quarter and Updated Full Year 2026 Guidance
CAMPBELL, Calif. - November 5, 2026 - Arteris, Inc. (Nasdaq: AIP), a leading provider of semiconductor technology for accelerating innovation in the AI era, today announced financial results for the third quarter ended September 30, 2026 and provided estimated fourth quarter and updated full year 2026 guidance.
“In the third quarter, Arteris delivered another set of record results, including Annual Contract Value plus royalties of $103.8 million, up 39% year-over-year, and record revenue of $25.8 million, representing an increase of 48%, along with new highs in royalties and Remaining Performance Obligations,” said K. Charles Janac, President and Chief Executive Officer of Arteris. “Customer design activity remained strong, driven by continued innovation in AI infrastructure, edge computing, and physical AI applications. Notably, one-third of our license wins by dollar value came from top 30 global technology companies, while increasing adoption of multiple products across our portfolio reflects the growing complexity of semiconductor designs and the expanding value of our solutions. During the quarter, we also surpassed the milestone of 1,000 confirmed design starts since inception, underscoring the confidence customers place in our technology and global support capabilities. As the demand for increasingly sophisticated, high-performance, power-efficient, safe, and secure silicon continues to grow, we believe Arteris remains well positioned to help customers accelerate innovation and bring their next-generation products to market,” concluded Janac.
Third Quarter 2026 Financial Highlights:
•Revenue of $25.8 million, up 48% year-over-year
•Trailing-twelve-months variable royalties of $9.4 million, up 71% year-over-year
•Annual Contract Value (ACV) plus royalties of $103.8 million, up 39% year-over-year
•Remaining Performance Obligation (RPO) of $135.5 million, up 29% year-over-year
•Operating loss of $11.3 million, compared to an operating loss of $8.7 million in the third quarter of 2025
•Non-GAAP operating loss of $1.2 million, compared to a Non-GAAP operating loss of $3.5 million in the third quarter of 2025
•Net loss of $11.2 million or $0.23 per share
•Non-GAAP net loss of $1.1 million or $0.02 per share
Third Quarter 2026 Business Highlights:
•Strong license activity in the third quarter, supported by integration of data center, edge, and physical AI computing across all market verticals. Increases in customers shifting to multi-product orders, supporting the ever-growing complexity of semiconductor innovation;
•Surpassed 1,000 confirmed design starts since inception. Arteris has supported innovation from the smartphone inflection to today’s deployments in sophisticated infrastructure AI, intelligent edge devices, and physical AI;
•Expanded our chiplet and multi-die solution. FlexGen Multi-Die and Ncore Multi-Die products support chiplet architectures for agentic AI workflows, HPC, data center, cloud infrastructure, physical AI, and more;
•Major license deals with a top US hyperscaler and two market-leading semiconductor companies, expanding their existing use of Arteris technology to accelerate development of chips and chiplets;
•Major license deal with a leading automotive OEM, expanding its use of Arteris technology for successive generations of their in-house advanced chip designs; and
•Announced the expansion of semiconductor cybersecurity third-party IP security assurance through the Trusted and Assured Microelectronics program, in collaboration with BAE Systems and SiFive.
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 2026 Guidance:
Q4 2026 | FY 2026 | |||||||
(in millions) | ||||||||
ACV + royalties | $103.0 - $107.0 | $103.0 - $107.0 | ||||||
Revenue | $25.7 - $26.7 | $98.5 - $99.5 | ||||||
Non-GAAP operating (loss) income | $(0.9) - $1.1 | $(9.2) - $(7.2) | ||||||
Free cash flow | * | $5.0 - $9.0 | ||||||
*As previously mentioned during the first quarter 2026 earnings call, we no longer provide quarterly free cash flow guidance.
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 today on November 5, 2026 to review its third quarter 2026 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 leading provider of semiconductor technology that accelerates the creation of high-performance, power-efficient silicon with built-in safety, reliability, and security. Innovative Arteris products are designed to optimize data movement and help ease complexity in the modern AI era with network-on-chip (NoC) interconnect intellectual property (IP), system-on-chip (SoC) software for integration automation and hardware security assurance. All are used by the world’s top technology companies to improve overall performance and engineering productivity, reduce risk, lower costs, and bring cutting-edge designs to market faster. Learn more at arteris.com.
© 2004-2026 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
Saurabh Sinha
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 market trends and whether we are well positioned to serve our customers accelerate innovation and bring their next-generation products to market, our long-term growth opportunity and future financial and operating performance, including our GAAP and Non-GAAP estimated fourth quarter and updated full year 2026 guidance. The words such as "may," "will," "could," "should", "anticipate", "plan", "intend", "continue", "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; the amount of our future revenue recognition as it relates to our RPO as of September 30, 2026; whether semiconductor companies in the aerospace and defense market, automotive market, communications market, consumer electronics market, enterprise computing market, and industrial market incorporate our solutions into their end products and the growth and economic stability of these end markets; demand for, and the pace of adoption of, AI computing and chiplet and multi-die architectures, including our FlexGen Multi-Die and Ncore Multi-Die products; 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 conflicts 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, 2026 to be filed with the Securities and Exchange Commission (SEC) on November 5, 2026. 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, 2026 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Licensing, support and maintenance | $ | 22,368 | $ | 15,896 | $ | 62,464 | $ | 46,319 | |||||||||||||||
Variable royalties | 2,294 | 1,505 | 6,900 | 4,074 | |||||||||||||||||||
Professional services and other | 1,112 | 7 | 3,480 | 49 | |||||||||||||||||||
Total revenue | 25,774 | 17,408 | 72,844 | 50,442 | |||||||||||||||||||
Cost of revenue | 3,451 | 1,766 | 10,308 | 5,034 | |||||||||||||||||||
Gross profit | 22,323 | 15,642 | 62,536 | 45,408 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research and development | 16,434 | 12,648 | 47,653 | 36,681 | |||||||||||||||||||
Sales and marketing | 9,787 | 6,850 | 27,703 | 19,714 | |||||||||||||||||||
General and administrative | 7,297 | 4,858 | 18,784 | 13,683 | |||||||||||||||||||
Acquisition-related costs | 121 | — | 2,920 | — | |||||||||||||||||||
Total operating expenses | 33,639 | 24,356 | 97,060 | 70,078 | |||||||||||||||||||
Loss from operations | (11,316) | (8,714) | (34,524) | (24,670) | |||||||||||||||||||
Interest expense | (85) | (49) | (153) | (139) | |||||||||||||||||||
Other income (expense), net | 1,092 | 636 | 2,332 | 2,140 | |||||||||||||||||||
Loss before income taxes and loss from equity method investment | (10,309) | (8,127) | (32,345) | (22,669) | |||||||||||||||||||
Loss from equity method investment, net of tax | — | 484 | 2,989 | 2,079 | |||||||||||||||||||
Loss before income taxes | (10,309) | (8,611) | (35,334) | (24,748) | |||||||||||||||||||
Provision for (benefit from) income taxes | 845 | 380 | (2,156) | 1,494 | |||||||||||||||||||
Net loss | $ | (11,154) | $ | (8,991) | $ | (33,178) | $ | (26,242) | |||||||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.23) | $ | (0.21) | $ | (0.70) | $ | (0.63) | |||||||||||||||
Weighted-average shares used in computing per share amounts, basic and diluted | 49,384,114 | 42,743,518 | 47,415,840 | 41,812,256 | |||||||||||||||||||
Arteris, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
As of | |||||||||||
September 30, | December 31, | ||||||||||
2026 | 2025 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 71,014 | $ | 33,901 | |||||||
Short-term investments | 33,169 | 20,698 | |||||||||
Accounts receivable, net of allowance of $73 as of both September 30, 2026 and December 31, 2025 | 20,959 | 19,183 | |||||||||
Prepaid expenses and other current assets | 9,036 | 8,608 | |||||||||
Total current assets | 134,178 | 82,390 | |||||||||
Property and equipment, net | 6,946 | 3,872 | |||||||||
Long-term investments | 16,114 | 4,946 | |||||||||
Equity method investment | — | 2,989 | |||||||||
Operating lease right-of-use assets | 4,634 | 3,919 | |||||||||
Intangibles, net | 17,986 | 2,168 | |||||||||
Goodwill | 35,156 | 4,178 | |||||||||
Other assets | 12,917 | 10,569 | |||||||||
TOTAL ASSETS | $ | 227,931 | $ | 115,031 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 1,490 | $ | 340 | |||||||
Accrued expenses and other current liabilities | 31,187 | 19,094 | |||||||||
Operating lease liabilities, current | 1,501 | 1,233 | |||||||||
Deferred revenue, current | 63,524 | 51,367 | |||||||||
Vendor financing arrangements, current | 2,031 | 1,166 | |||||||||
Total current liabilities | 99,733 | 73,200 | |||||||||
Deferred revenue, noncurrent | 48,527 | 43,974 | |||||||||
Operating lease liabilities, noncurrent | 3,386 | 3,116 | |||||||||
Vendor financing arrangements, noncurrent | 2,256 | 452 | |||||||||
Deferred income, noncurrent | 5,570 | 6,452 | |||||||||
Other liabilities | 2,595 | 2,469 | |||||||||
Total liabilities | 162,067 | 129,663 | |||||||||
Stockholders' equity (deficit): | |||||||||||
Preferred stock, par value of $0.001 - 10,000,000 shares authorized and no shares issued and outstanding as of both September 30, 2026 and December 31, 2025 | — | — | |||||||||
Common stock, par value of $0.001 - 300,000,000 shares authorized as of both September 30, 2026 and December 31, 2025; 49,657,293 and 44,268,816 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively | 49 | 44 | |||||||||
Additional paid-in capital | 270,569 | 156,776 | |||||||||
Accumulated other comprehensive income | 55 | 179 | |||||||||
Accumulated deficit | (204,809) | (171,631) | |||||||||
Total stockholders' equity (deficit) | 65,864 | (14,632) | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 227,931 | $ | 115,031 | |||||||
Arteris, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended September 30, | |||||||||||
2026 | 2025 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net loss | $ | (33,178) | $ | (26,242) | |||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 4,333 | 2,532 | |||||||||
Stock-based compensation | 21,044 | 13,765 | |||||||||
Amortization of deferred income | (882) | (882) | |||||||||
Loss from equity method investment | 2,989 | 2,079 | |||||||||
Deferred income taxes | (4,103) | — | |||||||||
Net accretion of discounts on available-for-sale securities | (105) | (306) | |||||||||
Change in fair value of contingent consideration liability | 2,058 | — | |||||||||
Other, net | 47 | 390 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable, net | (360) | 4,128 | |||||||||
Prepaid expenses and other assets | (3,085) | (3,740) | |||||||||
Accounts payable | 116 | (77) | |||||||||
Accrued expenses and other liabilities | (1,727) | 1,666 | |||||||||
Deferred revenue | 13,250 | 10,250 | |||||||||
Net cash provided by operating activities | 397 | 3,563 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchases of property and equipment | (1,265) | (1,254) | |||||||||
Purchases of available-for-sale securities | (44,223) | (25,308) | |||||||||
Proceeds from maturities of available-for-sale securities | 20,465 | 25,515 | |||||||||
Payments for business combination, net of cash acquired | (11,179) | — | |||||||||
Net cash used in investing activities | (36,202) | (1,047) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Principal payments under vendor financing arrangements | (1,100) | (882) | |||||||||
Proceeds from exercise of stock options | 1,241 | 1,523 | |||||||||
Proceeds from employee stock purchase plan | 644 | 535 | |||||||||
Proceeds from issuance of common stock under the at-the-market offering, net of commissions and offering costs | 72,037 | — | |||||||||
Other financing activities | 93 | 99 | |||||||||
Net cash provided by financing activities | 72,915 | 1,275 | |||||||||
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 37,110 | 3,791 | |||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 34,250 | 14,072 | |||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ | 71,360 | $ | 17,863 | |||||||
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, amortization of acquired intangible assets and acquisition-related costs, which include advisory, legal, accounting, valuation, other professional or consulting fees, integration costs and changes in the fair value of the contingent consideration related to our acquisition of Cycuity. We define “Non-GAAP net loss” as our net loss adjusted to exclude stock-based compensation, amortization of acquired intangible assets and acquisition-related costs.
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 (used in) 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 provided by (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)
(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Gross profit | $ | 22,323 | $ | 15,642 | $ | 62,536 | $ | 45,408 | |||||||||||||||
Add: | |||||||||||||||||||||||
Stock-based compensation expense included in cost of revenue | 442 | 228 | 1,147 | 665 | |||||||||||||||||||
Amortization of acquired intangible assets (1) | 50 | 50 | 150 | 150 | |||||||||||||||||||
Non-GAAP gross profit | $ | 22,815 | $ | 15,920 | $ | 63,833 | $ | 46,223 | |||||||||||||||
Gross margin | 87 | % | 90 | % | 86 | % | 90 | % | |||||||||||||||
Non-GAAP gross margin | 89 | % | 91 | % | 88 | % | 92 | % | |||||||||||||||
Research and development | $ | 16,434 | $ | 12,648 | $ | 47,653 | $ | 36,681 | |||||||||||||||
Stock-based compensation expense | (3,550) | (2,095) | (8,368) | (5,994) | |||||||||||||||||||
Amortization of acquired intangible assets (1) | (367) | (110) | (1,054) | (330) | |||||||||||||||||||
Non-GAAP research and development | $ | 12,517 | $ | 10,443 | $ | 38,231 | $ | 30,357 | |||||||||||||||
Sales and marketing | $ | 9,787 | $ | 6,850 | $ | 27,703 | $ | 19,714 | |||||||||||||||
Stock-based compensation expense | (1,916) | (1,335) | (4,967) | (3,352) | |||||||||||||||||||
Amortization of acquired intangible assets (1) | (359) | (57) | (1,035) | (171) | |||||||||||||||||||
Non-GAAP sales and marketing | $ | 7,512 | $ | 5,458 | $ | 21,701 | $ | 16,191 | |||||||||||||||
General and administrative | $ | 7,297 | $ | 4,858 | $ | 18,784 | $ | 13,683 | |||||||||||||||
Stock-based compensation expense | (3,278) | (1,298) | (6,562) | (3,754) | |||||||||||||||||||
Non-GAAP general and administrative | $ | 4,019 | $ | 3,560 | $ | 12,222 | $ | 9,929 | |||||||||||||||
Acquisition-related costs | $ | 121 | $ | — | $ | 2,920 | $ | — | |||||||||||||||
Acquisition-related costs (2) | (121) | — | (2,920) | — | |||||||||||||||||||
Non-GAAP acquisition-related costs | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Total operating expenses | $ | 33,639 | $ | 24,356 | $ | 97,060 | $ | 70,078 | |||||||||||||||
Stock-based compensation expense | (8,744) | (4,728) | (19,897) | (13,100) | |||||||||||||||||||
Amortization of acquired intangible assets (1) | (726) | (167) | (2,089) | (501) | |||||||||||||||||||
Acquisition-related costs (2) | (121) | — | (2,920) | — | |||||||||||||||||||
Total Non-GAAP operating expenses | $ | 24,048 | $ | 19,461 | $ | 72,154 | $ | 56,477 | |||||||||||||||
Loss from operations | $ | (11,316) | $ | (8,714) | $ | (34,524) | $ | (24,670) | |||||||||||||||
Stock-based compensation expense | 9,186 | 4,956 | 21,044 | 13,765 | |||||||||||||||||||
Amortization of acquired intangible assets (1) | 776 | 217 | 2,239 | 651 | |||||||||||||||||||
Acquisition-related costs (2) | 121 | — | 2,920 | — | |||||||||||||||||||
Non-GAAP loss from operations | $ | (1,233) | $ | (3,541) | $ | (8,321) | $ | (10,254) | |||||||||||||||
Net loss | $ | (11,154) | $ | (8,991) | $ | (33,178) | $ | (26,242) | |||||||||||||||
Stock-based compensation expense | 9,186 | 4,956 | 21,044 | 13,765 | |||||||||||||||||||
Amortization of acquired intangible assets (1) | 776 | 217 | 2,239 | 651 | |||||||||||||||||||
Acquisition-related costs (2) | 121 | — | 2,920 | — | |||||||||||||||||||
Non-GAAP net loss (3) | $ | (1,071) | $ | (3,818) | $ | (6,975) | $ | (11,826) | |||||||||||||||
(2) Includes advisory, legal, accounting, valuation, other professional or consulting fees and integration costs associated with the Cycuity acquisition. Acquisition-related costs also include change in the fair value of the contingent consideration related to our acquisition of Cycuity.
(3) 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.
Arteris, Inc.
Reconciliation of GAAP Measures to Non-GAAP Measures
(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.23) | $ | (0.21) | $ | (0.70) | $ | (0.63) | |||||||||||||||
Per share impacts of adjustments to net loss (1) | $ | 0.21 | $ | 0.12 | $ | 0.55 | $ | 0.35 | |||||||||||||||
Non-GAAP net loss per share attributable to common stockholders, basic and diluted | $ | (0.02) | $ | (0.09) | $ | (0.15) | $ | (0.28) | |||||||||||||||
Weighted-average shares used in computing per share amounts, basic and diluted | 49,384,114 | 42,743,518 | 47,415,840 | 41,812,256 | |||||||||||||||||||
(1) 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (1,751) | $ | 3,187 | $ | 397 | $ | 3,563 | |||||||||||||||
Less: | |||||||||||||||||||||||
Purchase of property and equipment | (375) | (716) | (1,265) | (1,254) | |||||||||||||||||||
Free cash flow | $ | (2,126) | $ | 2,471 | $ | (868) | $ | 2,309 | |||||||||||||||
Net cash used in investing activities | $ | (19,782) | $ | (1,631) | $ | (36,202) | $ | (1,047) | |||||||||||||||
Net cash (used in) provided by financing activities | $ | (724) | $ | (180) | $ | 72,915 | $ | 1,275 | |||||||||||||||