Arteris (AIP) 1 Aug 24 2024 Q2 Earnings call transcript

In the second quarter of 2024, Arteris Inc. showcased robust performance, achieving a record annual contract value of $60.1 million, marking a significant milestone for the company. This success was driven by the growing demand for AI-driven Automotive and Enterprise Computing SoC Solutions, as well as the expanding momentum in other verticals. The company's strategic focus on AI technology, particularly in the automotive industry, has positioned Arteris as a key player in the development of optimized electronics for autonomous driving applications.

Strategic Customer Wins and Growing Market Opportunities

During the quarter, Arteris secured seven new customers, including two market-leading global automotive OEMs, demonstrating the importance of its Arteris system IP in the growing autonomous driving sector. Furthermore, the company signed four new license deals with existing customers, emphasizing the value and relevance of its technology in the rapidly evolving technology landscape. These strategic customer wins, coupled with the highest number of licenses secured in the data center application, underscore Arteris's ability to cater to diverse market needs and capitalize on emerging opportunities.

Financial Performance and Future Outlook

Arteris reported a total revenue of $14.6 million for the second quarter, marking a 13% increase sequentially and surpassing the top end of its guidance range. The company's focus on prudent management of operating expenses and a strong customer base have contributed to its achievement of positive free cash flow in the second quarter, a feat it aims to continue in the third quarter and throughout the full year of 2024. Arteris's strategic financial management, coupled with its innovative technology offerings, positions the company for continued growth and profitability.

Customer-Driven Innovation and Expanding IP Ecosystem

Arteris's success is attributed to its customer-driven approach, with the company proactively working to expand its IP ecosystem to accelerate innovation. The recent support for Armv9 processors and the partnership with ADAS Technology for RISC-V SoCs underscores Arteris's commitment to addressing the evolving needs of the semiconductor industry. These strategic moves further solidify Arteris's position as a leading provider of system IP technologies, enabling it to cater to a diverse range of customer requirements.

Conclusion

Arteris's strong second quarter performance, strategic customer wins, and focus on innovation underscore its robust financial health and growth prospects. The company's strategic expansion in the automotive and enterprise computing sectors, coupled with its innovative approach to addressing the evolving needs of the semiconductor industry, position Arteris for continued success in the years ahead. With a solid pipeline of new system IP technologies and a commitment to customer-driven innovation, Arteris is well-positioned to capitalize on the growing opportunities in the technology sector.