Arteris, Inc. (AIP) Q2 2025 Earnings Call Transcript
Total Revenue $16.5 million, up 13% year-over-year. The increase was driven by strong deal execution and growing demand for system IP technology.
Annual Contract Value (ACV) plus Royalties $69.1 million, up 15% year-over-year. This growth reflects increased adoption of Arteris' technology, particularly in enterprise computing and automotive applications.
Remaining Performance Obligations (RPO) $99.3 million, representing a 28% year-over-year increase. This highlights the growing demand for Arteris' system IP technology.
Non-GAAP Gross Profit $15 million, representing a gross margin of 91%. This was driven by efficient cost management and strong revenue growth.
GAAP Gross Profit $14.8 million, representing a gross margin of 89%. This aligns closely with the non-GAAP gross profit, reflecting consistent financial performance.
Non-GAAP Operating Expense $18.6 million, 10% higher year-over-year. The increase was due to scaling investments in R&D and field application engineering teams.
GAAP Operating Expense $23 million, representing a 12% year-over-year increase. This was driven by strategic investments in new product development and customer support.
Non-GAAP Operating Loss $3.5 million, flat year-over-year. This reflects controlled spending and efficient operations.
GAAP Operating Loss $8.2 million, compared to a loss of $7.4 million in the prior year period. The increase was influenced by higher operating expenses.
Non-GAAP Net Loss $4.4 million or $0.11 per share. This was in line with guidance and reflects ongoing investments in growth initiatives.
GAAP Net Loss $9.1 million or $0.22 per share. This was higher than the prior year due to increased operating expenses.
Free Cash Flow Negative $2.8 million. This was approximately at the midpoint of guidance and reflects capital expenditures and operational investments.
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Arteris Grants 477,208 RSUs to 25 New Employees as Inducement Awards
- Employee Incentive Plan: Arteris has granted a total of 477,208 restricted stock units (RSUs) to 25 newly hired employees under its 2022 Employee Inducement Incentive Plan, aimed at attracting and retaining talent to enhance its competitiveness in the semiconductor industry.
- Compliance Assurance: The stock grants comply with Nasdaq Listing Rule 5635(c)(4), ensuring transparency and compliance in the company's incentive measures, thereby boosting investor confidence.
- Strategic HR Investment: This stock incentive not only attracts high-quality talent but also enhances employee engagement and motivation, driving the company's technological innovation and market expansion in the AI era.
- Technological Leadership: As a leading provider of semiconductor technology, Arteris is committed to accelerating the creation of high-performance, power-efficient silicon, further solidifying its market leadership in the modern AI era.
Arteris Acquires Cycuity to Enhance Semiconductor Security
- Acquisition Completed: Arteris, Inc. has finalized its acquisition of Cycuity, Inc., a leading provider of semiconductor cybersecurity technology, which will enhance Arteris's capabilities in semiconductor security to meet the growing market demand.
- Surging Market Demand: According to the U.S. National Institute of Standards and Technology (NIST), the number of new Common Vulnerabilities and Exposures (CVEs) in hardware has increased over 15 times in the past five years, highlighting the critical importance of semiconductor security, and Arteris's acquisition is a proactive response to this trend.
- Technological Integration Advantage: By combining Arteris's innovative system IP with Cycuity's hardware security technology, Arteris can offer more comprehensive products and solutions that help customers achieve secure on-chip data movement, thereby enhancing overall market competitiveness.
- Clear Strategic Positioning: This acquisition not only strengthens Arteris's product portfolio but also demonstrates the company's long-term commitment to semiconductor security, which is expected to drive further growth in the AI and edge device markets.
Friday's Underperforming Sectors: Semiconductors and Computer Peripherals
Market Performance: Computer peripherals shares are down approximately 3.8%, with Seagate Technology Holdings and Logitech International leading the decline at 7% and 5.8%, respectively.
Sector Laggards: The semiconductor and computer peripherals sectors are identified as laggards in the market on Friday.
Author's Perspective: The views expressed in the article are those of the author and do not necessarily represent Nasdaq, Inc.
Video Content: A video segment highlights the Friday sector laggards, focusing on semiconductors and computer peripherals.
Arteris Acquires Cycuity to Enhance Semiconductor Security
- Strategic Acquisition: Arteris has signed a definitive agreement to acquire Cycuity, which will enhance its semiconductor cybersecurity product portfolio, addressing the growing hardware security needs and potentially increasing customer trust in data security.
- Market Demand: With reported hardware vulnerabilities increasing over 15 times in the past five years, this acquisition will enable Arteris' customers to achieve secure data movement in AI data centers and edge devices, ensuring system integrity.
- Technology Integration: Cycuity's Radix software products will seamlessly integrate with Arteris' system IP solutions, assisting designers in identifying and resolving security risks prior to silicon implementation, thereby enhancing product competitiveness in the market.
- Future Outlook: The transaction is expected to close in the first quarter of fiscal year 2026, marking a significant step for Arteris in the semiconductor security domain and positioning the company to lead in a rapidly evolving market.
Arteris Acquires Cycuity to Enhance Semiconductor Security
- Strategic Acquisition: Arteris has signed a definitive agreement to acquire Cycuity, which will enhance its semiconductor cybersecurity product portfolio, enabling chip designers to better understand and improve data security, thereby addressing the growing complexity of cyber threats.
- Market Demand: With reported hardware security vulnerabilities increasing over 15 times in the past five years, this acquisition by Arteris will meet the urgent market need for semiconductor security solutions, ensuring that SoC functionality and performance remain unaffected.
- Technological Complementarity: Cycuity's hardware security products complement Arteris' SoC data transmission solutions, facilitating the accelerated secure design and deployment of microelectronics to meet the needs of commercial and defense engineering teams.
- Future Outlook: The transaction is expected to close in Arteris' first quarter of fiscal year 2026, marking a strategic positioning for the company in the semiconductor security sector aimed at capturing the expanding market opportunities.
Meihua International Medical Technologies, Fly-E Group, and Other Major Stocks Decline in Pre-Market Trading on Monday
U.S. Stock Futures: U.S. stock futures showed mixed results, with Dow futures down approximately 0.1% on Monday morning.
Meihua International Medical Technologies: Shares of Meihua International Medical Technologies fell 32.9% in pre-market trading after the announcement of its delisting from Nasdaq.
Other Notable Stock Movements: Several other stocks experienced significant declines in pre-market trading, including SMX down 17.2%, Gulf Resources down 16.1%, and Wheeler Real Estate down 16.1%.
Market Reactions: The market saw various stocks decline after previous gains, with Fly-E Group and Ecarx Holdings also reporting notable drops due to regulatory issues and market fluctuations.
Arteris Grants 477,208 RSUs to 25 New Employees as Inducement Awards
- Employee Incentive Plan: Arteris has granted a total of 477,208 restricted stock units (RSUs) to 25 newly hired employees under its 2022 Employee Inducement Incentive Plan, aimed at attracting and retaining talent to enhance its competitiveness in the semiconductor industry.
- Compliance Assurance: The stock grants comply with Nasdaq Listing Rule 5635(c)(4), ensuring transparency and compliance in the company's incentive measures, thereby boosting investor confidence.
- Strategic HR Investment: This stock incentive not only attracts high-quality talent but also enhances employee engagement and motivation, driving the company's technological innovation and market expansion in the AI era.
- Technological Leadership: As a leading provider of semiconductor technology, Arteris is committed to accelerating the creation of high-performance, power-efficient silicon, further solidifying its market leadership in the modern AI era.
Arteris Acquires Cycuity to Enhance Semiconductor Security
- Acquisition Completed: Arteris, Inc. has finalized its acquisition of Cycuity, Inc., a leading provider of semiconductor cybersecurity technology, which will enhance Arteris's capabilities in semiconductor security to meet the growing market demand.
- Surging Market Demand: According to the U.S. National Institute of Standards and Technology (NIST), the number of new Common Vulnerabilities and Exposures (CVEs) in hardware has increased over 15 times in the past five years, highlighting the critical importance of semiconductor security, and Arteris's acquisition is a proactive response to this trend.
- Technological Integration Advantage: By combining Arteris's innovative system IP with Cycuity's hardware security technology, Arteris can offer more comprehensive products and solutions that help customers achieve secure on-chip data movement, thereby enhancing overall market competitiveness.
- Clear Strategic Positioning: This acquisition not only strengthens Arteris's product portfolio but also demonstrates the company's long-term commitment to semiconductor security, which is expected to drive further growth in the AI and edge device markets.
Friday's Underperforming Sectors: Semiconductors and Computer Peripherals
Market Performance: Computer peripherals shares are down approximately 3.8%, with Seagate Technology Holdings and Logitech International leading the decline at 7% and 5.8%, respectively.
Sector Laggards: The semiconductor and computer peripherals sectors are identified as laggards in the market on Friday.
Author's Perspective: The views expressed in the article are those of the author and do not necessarily represent Nasdaq, Inc.
Video Content: A video segment highlights the Friday sector laggards, focusing on semiconductors and computer peripherals.
Arteris Acquires Cycuity to Enhance Semiconductor Security
- Strategic Acquisition: Arteris has signed a definitive agreement to acquire Cycuity, which will enhance its semiconductor cybersecurity product portfolio, addressing the growing hardware security needs and potentially increasing customer trust in data security.
- Market Demand: With reported hardware vulnerabilities increasing over 15 times in the past five years, this acquisition will enable Arteris' customers to achieve secure data movement in AI data centers and edge devices, ensuring system integrity.
- Technology Integration: Cycuity's Radix software products will seamlessly integrate with Arteris' system IP solutions, assisting designers in identifying and resolving security risks prior to silicon implementation, thereby enhancing product competitiveness in the market.
- Future Outlook: The transaction is expected to close in the first quarter of fiscal year 2026, marking a significant step for Arteris in the semiconductor security domain and positioning the company to lead in a rapidly evolving market.
Arteris Acquires Cycuity to Enhance Semiconductor Security
- Strategic Acquisition: Arteris has signed a definitive agreement to acquire Cycuity, which will enhance its semiconductor cybersecurity product portfolio, enabling chip designers to better understand and improve data security, thereby addressing the growing complexity of cyber threats.
- Market Demand: With reported hardware security vulnerabilities increasing over 15 times in the past five years, this acquisition by Arteris will meet the urgent market need for semiconductor security solutions, ensuring that SoC functionality and performance remain unaffected.
- Technological Complementarity: Cycuity's hardware security products complement Arteris' SoC data transmission solutions, facilitating the accelerated secure design and deployment of microelectronics to meet the needs of commercial and defense engineering teams.
- Future Outlook: The transaction is expected to close in Arteris' first quarter of fiscal year 2026, marking a strategic positioning for the company in the semiconductor security sector aimed at capturing the expanding market opportunities.
Meihua International Medical Technologies, Fly-E Group, and Other Major Stocks Decline in Pre-Market Trading on Monday
U.S. Stock Futures: U.S. stock futures showed mixed results, with Dow futures down approximately 0.1% on Monday morning.
Meihua International Medical Technologies: Shares of Meihua International Medical Technologies fell 32.9% in pre-market trading after the announcement of its delisting from Nasdaq.
Other Notable Stock Movements: Several other stocks experienced significant declines in pre-market trading, including SMX down 17.2%, Gulf Resources down 16.1%, and Wheeler Real Estate down 16.1%.
Market Reactions: The market saw various stocks decline after previous gains, with Fly-E Group and Ecarx Holdings also reporting notable drops due to regulatory issues and market fluctuations.
