Arteris Announces Financial Results for the Second Quarter 2022 and Estimated Third Quarter and Full Year 2022 Guidance

CAMPBELL, Calif. -- August 09, 2022 -- Arteris, Inc. (Arteris or Arteris IP), a leading provider of network-on-chip (NoC) interconnect and other intellectual property (IP) technology that manages the on-chip communications in system-on-chip (SoC) semiconductor devices, today announced financial results for the second quarter ended June 30, 2022 as well as estimated third quarter and full year 2022 guidance.

“We’re excited to report our continued momentum in 2022, with Annual Contract Value plus Trailing-Twelve-Month Royalties of $51.7 million in the second quarter,” said K. Charles Janac, President and CEO of Arteris IP. “Despite macroeconomic headwinds, we believe that Arteris IP is well positioned to make progress even in a challenging economic environment. We continue to see higher levels of silicon integration, driving system houses to become more involved in silicon design.”

Second Quarter 2022 Financial Highlights:

• Annual Contract Value (ACV) and Trailing-twelve-month (TTM) royalties of $51.7 million, up 18% year-over-year
• Revenue of $14.8 million, up 37% year-over-year
• Remaining performance obligation (RPO) of $55.7 million, up 11% year-over-year
• Operating loss of $5.4 million or 37% of revenue
• Non-GAAP operating loss of $1.9 million or 13% of revenue, compared to a loss of $3.0 million in the year-ago period
• Net loss of $5.7 million or $0.18 per share
• Non-GAAP net loss of $2.2 million or $0.07 per share
• Non-GAAP free cash flow of $0.1 million or 1% of revenue

Second Quarter 2022 Business Highlights:

• Added nine Active Customers in the second quarter, including major new customer wins such as Telechips in automotive, Pliops in consumer and Sunrise Memory in enterprise, as well as a leading automotive OEM, leading enterprise hyperscaler, and a leading AI/ML semiconductor company;
• We made a major release of our Ncore cache coherent interconnect product to multiple automotive and enterprise customers;
• 18 confirmed design starts in the second quarter across our core markets, including in automotive, datacenter, and in mobile computing;
• We announced Inuitive as a customer, which will use our IP in the development of next generation vision processing for edge devices for robotics, drones, augmented reality and virtual reality, and mobile products; and
• We announced the addition of Claudia Fan Munce to Arteris IP’s Board of Directors. Claudia’s experience includes a distinguished 30-year career at IBM, a Stanford University lecturer, and board of director roles at major public companies.

Estimated Third Quarter and Full Year 2022 Guidance:

	Q3 2022	FY 2022
	(in millions, except %)
ACV + TTM royalties	$51.0 - $53.0	$48.0 - $52.0
Revenue	$10.5 - $12.5	$49.5 - $52.5
Non-GAAP operating loss (%)	41.2% - 56.2%	24.3% - 39.3%
Free cash flow (%)	(56.2)% - (41.2)%	(25.1)% - (10.1)%

The guidance provided above are forward-looking statements and reflect our 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.

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. 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 August 9, 2022 to review its second quarter 2022 financial results and to discuss its financial outlook.

	Time:	4:30PM ET
	United States/Canada Toll Free:	877-407-9208
	International Toll:	1-201-493-6784
	Conference ID:	13730927

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 the company’s web site approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.

About Arteris

Arteris IP (Nasdaq: AIP) provides system-on-chip (SoC) system IP consisting of network-on-chip (NoC) interconnect IP and IP deployment technology to accelerate system-on-chip (SoC) semiconductor development and integration for a wide range of applications from AI to automobiles, mobile phones, IoT, cameras, SSD controllers, and servers for customers such as Bosch, Mobileye, Samsung, Toshiba and NXP. Arteris IP products include the Ncore® cache coherent and FlexNoC® non-coherent interconnect IP, the CodaCache® standalone last level cache, and optional Resilience Package (ISO 26262 functional safety), FlexNoC AI Package, and PIANO® automated timing closure capabilities. Our IP deployment products provide intelligent automation that accelerates the development and increases the quality of SoC hardware designs and their associated software and firmware, verification and simulation platforms, and specifications and customer documentation. Customer results obtained by using Arteris IP products include lower power, higher performance, more efficient design reuse and faster SoC development, leading to lower development and production costs.