Arteris, Inc. Q3 FY2025 earnings call

• Achieved record annual contract value plus royalties of $74.9 million, 24% Y/Y growth. • AI applications accounted for over half of licensing dollars. • Notable customers: Altera selected Arteris technology for design workflows; AMD ordered additional incremental licenses for Smart NoC IP; added 4 new FlexGen customers; Dream Chip and a leading automotive OEM deployed FlexGen; NanoXplore licensed FlexGen for space applications. • Expanded collaboration with Alibaba Damo Academy and joined UALink Consortium. • Recognized as the most innovative technology company of the year by the 22nd Annual International Business Awards.

In the third quarter of 2025, total revenue was $17.4 million, up 5% sequentially and 18% year-over-year. Annual contract value plus royalties reached $74.9 million, a 24% year-over-year growth. AI applications accounted for over half of licensing dollars. Product segments include network on-chip IP (Ncore, FlexGen), with examples like Altera adopting Arteris technology for design workflows, AMD ordering additional incremental licenses for Smart NoC IP, and FlexGen being deployed in automotive and industrial sectors. Revenue contribution from AI applications was over 50% of licensing dollars.

• Q4 2025: Expect ACV plus royalties of $74 million to $78 million, revenue of $18.4 million to $18.8 million, non-GAAP operating loss of $2.3 million to $3.3 million, and non-GAAP free cash flow of $0.2 million to $3.2 million. • Full year 2025: ACV plus royalties to exit at $74 million to $78 million, revenue of $68.8 million to $69.2 million, non-GAAP operating loss of $12.5 million to $13.5 million, and non-GAAP free cash flow of $2.5 million to $5.5 million.

• Forward-looking statements involve material risks and uncertainties that could cause actual results to differ from anticipated. Risks are detailed in the press release and SEC filings.

Q: Kevin Garrigan from Jefferies asked about Altera's use of Arteris technology and future opportunities.

A: Karel Janac said there are more opportunities, Altera is using Arteris in the SoC part and there's future potential.

Q: Kevin Garrigan asked about AMD increasing usage of products.

A: Karel Janac said AMD has many groups to work with and they're looking forward to helping accelerate chip deliveries.

Q: Kevin Garrigan asked about reliability and safety as a competitive advantage.

A: Karel Janac said reliability is crucial as network on chips are vital for chip functionality, and Arteris is silicon-proven with a large installed base.

Q: Kevin Cassidy from Rosenblatt Securities asked about UALink consortium timing.

A: Karel Janac said the consortium aims to scale up data center solutions and Arteris is involved in related designs.

Q: Auguste Richard from Northland asked about royalty acceleration.

A: Nicholas Hawkins said royalties grow with design starts, there's diversity in customers, and an inflection point expected by 2028.

Q: Auguste Richard asked about top tech companies penetrated.

A: Karel Janac said over 50% of top 40 largest technology companies are customers but there's room for growth.

Q: Joshua Buchalter from TD Cowen asked about AI data center vs edge.

A: Karel Janac said data center could be 35% of business long-term, currently AI design starts are strong.

Q: Joshua Buchalter asked about FlexGen royalty impact.

A: Nicholas Hawkins said FlexGen is accretive to royalties, early stages but expected more penetration, with automotive royalties having a long lead time.