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What were the key takeaways from Arteris's earnings call?

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- **Revenue Record**: Q3 ACV+royalties $74.9M (+24% YoY), driven by AI (50% of licensing) and 4 new FlexGen customers.
- **Strategic Wins**: Altera, AMD expand use of FlexGen for FPGA/SoC and AI chiplets; automotive and aerospace wins.
- **Financial Strength**: $17.4M revenue (+18% YoY), 91% gross margin, $104.7M RPO (34% YoY growth).
- **Future Outlook**: Q4 ACV $74-78M, full year exit $74-78M. Royalty growth accelerating with 36% YoY increase.
- **Competitive Edge**: 3.9B silicon-proven SoCs, UALink Consortium leadership in AI data centers.

**【CEO Summary Section】**
- **Revenue Growth**: Annual contract value (ACV) plus royalties reached $74.9 million, up 24% year-over-year, driven by AI applications accounting for over 50% of licensing revenue.
- **Key Wins**: Altera selected Arteris' FlexGen and Magillem for FPGA/SoC designs; AMD expanded FlexGen licenses for AI chiplets. Four new FlexGen customers added in Q3, including automotive and aerospace firms.
- **Product Adoption**: FlexGen used in 5nm+ chiplets, with automotive customers shifting to multi-die SoCs. Magillem automation software integrated with Alibaba's RISC-V CPUs.
- **Ecosystem Expansion**: Joined UALink Consortium for AI data center chiplets, collaborating with AMD, Intel, Google, etc. Won 2025 International Business Award for innovation.

**【CFO Financial Commentary】**
- **Revenue**: Q3 revenue $17.4M (18% YoY), above guidance. Trailing 12-month variable royalties up 36% YoY.
- **Margins**: Gross margin 91% (non-GAAP), operating loss $3.5M, net loss $3.8M. Free cash flow $2.5M.
- **Pipeline**: Remaining performance obligations (RPO) $104.7M (34% YoY), exceeding $100M for first time.
- **Guidance**: Q4 ACV $74-78M, revenue $18.4-18.8M. Full year ACV exit $74-78M, up $1M from prior guidance.

**【Q&A Highlights】**
- **Altera Adoption**: Altera using Arteris for FPGA/SoC interconnects, with potential for broader Intel collaboration.
- **AMD Expansion**: AMD's central engineering group and additional teams adopting FlexGen for AI chiplets.
- **Reliability Focus**: 3.9B shipped SoCs with zero field failures; safety-critical automotive and aerospace wins.
- **Royalty Growth**: 36% YoY variable royalties, diversifying from HiSilicon to five major customers.
- **Market Penetration**: Targeting top 40 tech companies, with >50% in customer base. FlexGen ASP higher, but royalty impact 2028+.


Arteris, Inc. (AIP) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

AIP

AIP fundamentals

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