Arteris Announces Financial Results for the Fourth Quarter and Full Year 2022 and Estimated First Quarter and Full Year 2023 Guidance

CAMPBELL, Calif., Feb. 28, 2023 -- 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 fourth quarter and year ended December 31, 2022, and provided estimated first quarter and full year 2023 guidance.

“We’re excited to report a strong finish to 2022, with Annual Contract Value plus Trailing Twelve Month Royalties of $52.4 million, an increase of 22% year-over-year when adjusted for the loss of HiSilicon and DJI, which can be attributed to tighter BIS restrictions after 2019,” said K. Charles Janac, President and CEO of Arteris IP. “With the introduction of our new FlexNoC 5 innovation and the acquisition of Semifore in the fourth quarter, we are working to enable our customers to accelerate their SoC design and improve the overall SoC design economics while shortening product schedules and the risks of costly redesigns. Despite short-term macro-economic uncertainties, we believe Arteris is well positioned for growth as our customers continue to innovate in areas such as automotive, consumer electronics, and machine learning across all applications, driving the need for increased use of commercial System IP.”

Fourth Quarter 2022 Financial Highlights:

• Annual Contract Value (ACV) and trailing twelve months (TTM) royalties of $52.4 million, compared to $50.0 million for the same period last year
• Revenue of $11.2 million, down 2% year-over-year
• Remaining performance obligation (RPO) of $57.7 million, down 5% year-over-year
• Operating loss of $9.1 million
• Non-GAAP operating loss of $5.8 million, compared to a Non-GAAP operating loss of $2.8 million in the year-ago period
• Net loss of $7.2 million or $0.21 per share
• Non-GAAP net loss of $4.0 million or $0.12 per share
• Non-GAAP free cash flow of $(0.8) million or (7)% of revenue

Full year 2022 Financial Highlights:

• Revenue of $50.4 million, up 33% year-over-year
• Operating loss of $28.9 million
• Non-GAAP operating loss of $16.2 million, compared to a Non-GAAP operating loss of $15.5 million for the year-ended 2021
• Net loss of $27.4 million or $0.84 per share
• Non-GAAP net loss of $14.7 million or $0.45 per share
• Non-GAAP free cash flow of $(7.8) million or (16)% of revenue

Fourth Quarter 2022 Business Highlights:

• 38 Active Customers added in FY2022, highlighting an accelerating Arteris customer base;
• 24 confirmed design starts in the fourth quarter across many of our core verticals, including in automotive, enterprise computing, communications, consumer electronics and industrial markets;
• We announced the release of FlexNoC 5, the 5^th generation of Arteris’ network-on-chip interconnect technology;
• We acquired Semifore, expanding our IP deployment automation solutions, and accelerating SoC development with the integration of Semifore's hardware/software interface (HSI) technology;
• We announced a partnership with SiFive to accelerate RISC-V SoC designs for Edge AI applications; and
• Telechips licensed FlexNoC interconnect IP for use in its advanced automotive applications.

Estimated First Quarter and Full Year 2023 Guidance:

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 February 28, 2023 to review its fourth quarter and full year 2022 financial results and to discuss its financial outlook.

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.

Financial Tables

To read financial tables, click here

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.