AIP

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 4:30 p.m. ET Chief Executive Officer - Karel Charles Janac Chief Financial Officer - Nicholas Bryan Hawkins Operator: Good afternoon, everyone, and welcome to the Arteris Second Quarter 2026 Earnings Call. Please note this call is being recorded and simultaneously webcast. All material contained in the webcast is the sole property and copyright of Arteris with all rights reserved. For opening remarks and introductions, I would now like to turn the call over to Erica Mannion, at Sapphire Investor Relations. Please go ahead. Erica Mannion: Thank you, and good afternoon. With me today from Arteris are Karel Charles Janac, Chief Executive Officer, and Nicholas Bryan Hawkins, Chief Financial Officer. Charlie will begin with a brief review of the business results for the second quarter ended 06/30/2026. Nick will review the financial results for the second quarter 2026 followed by the company's outlook for the third quarter and the full year of 2026. We will then open the call for questions. Before we begin, I would like to remind you that management will make statements during this call that are forward looking statements within the meaning of federal securities laws. These statements are based on management's current expectations and assumptions and involve material risks and uncertainties that could cause actual results to differ materially from those anticipated, and you should not place undue reliance on forward looking statements. Additional information regarding these risks, uncertainties and factors that could cause results to differ appear in the press release Arteris issued today and then in the documents and reports filed by Arteris from time to time with the Securities and Exchange Commission. Please note, during this call, we will cite certain non GAAP measures, including, among others, non-GAAP net loss, non-GAAP net loss per share and free cash flow, Which are not measures prepared in accordance with U.S. GAAP. The non GAAP measures are presented as we believe that they provide investors with the means of evaluating and understanding how the company, management, evaluates the company's operating performance. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with U.S. GAAP. A reconciliation of these non-GAAP measures to the nearest GAAP measure can be found in the press release for the quarter ended 06/30/2020. In addition, for a definition of certain of the key performance indicators used in this presentation, such as annual contract value, and remaining performance obligations, please see the press release for the quarter ended 06/30/2026. These key performance indicators are presented for supplemental informational purposes only should not be considered a substitute for financial information presented in accordance with GAAP and may differ from similarly titled metrics or measures used by other companies securities analysts, investors. Listeners who do not have a copy of the press release for the quarter ended 06/30/2026, may obtain a copy by visiting the Investor Relations section of the company's website. In addition, management will be referring to the second quarter 2026 earnings presentation can be found in the Investor Relations section of the company's website under the Events and Presentations tab. Now I will turn the call over to Charlie. Karel Charles Janac: Thank you, Erica. And thanks to everyone for joining us on our call today. The Arteris second quarter of 2026 produced multiple record breaking results. We reached another record annual contract value plus royalties, exiting the quarter at $99.5 million representing a 44% year-on-year increase. We achieved record revenue, royalties, and RPO backlog. License deal flow in the quarter was driven by several large deals with existing and new customers. These wins spanned all key verticals led by growth in enterprise computing and automotive, followed by aerospace and defense, communications, consumer electronics, and industrial markets, for varieties of semiconductors, including chiplets, system on chip or SOCs, application specific integrated circuits or ASICs, field programmable gate arrays or FPGAs, and microcontrollers. Further to our diversification strategy, no single customer made up more than 10% of our revenue in the first half of 2026. Our customer design activity was healthy again in the quarter, with a trailing 12-month to 06/30/2026 our customers reported 21% higher number of design starts year over year. Rapidly evolving high performance computing or HPC workloads continue to drive demand for more complex chips and chiplets across data centers, smart jet devices, and physical AI systems. This in turn is increasing the demand for Arteris products that help deliver the underlying high performance, efficient, safe, and secure data movement essential to semiconductors in the AI era. In the second quarter of 2026, the majority of our customers' design starts supported AI or HPC use cases as part of the device, and this trend is continuing. Data center chip and chiplet development continues to be a key revenue driver for Arteris. Over the past 4 quarters, enterprise computing has made up an average of 29% of our tariffs ACV plus royalties, with AI infrastructure representing some of the biggest deals in the second quarter. As an example, 1 of the world's largest hyperscale cloud companies has chosen to adopt and standardize on Arteris's infrastructure silicon system IT. Arteris technology will enable the high performance and energy efficient semiconductor data movement for the next generation of data centers. Large scale compute must adapt quickly for rapidly evolving software workloads that require ASICs, SoCs, and chiplets with interconnect that can support the throughput bandwidth and power requirements making Arteris the obvious choice for scale up and scale out architectures. Another example of Arteris' progress in data center applications was a large win with 1 of the top US semiconductor design houses building ASICs for various hyperscalers. Where Arteris FlexGen SmartNOC IP is increasingly being used with the underlying data movement in chiplets and multi die chips to support high end scale up AI compute. Additionally, we announced that Speedata, developer of the purpose built analytics processing unit or APU, has deployed Arteris in its Callisto processor, that runs large volume analytics processing for applications which require high bandwidth capable chips. Often in data centers. Physical AI from automotive to aerospace and defense and along with industrial applications such as robotics continues to experience strong and growing demand for Arteris products and solutions. Here, performance, energy, safety, security, and proven reliability are essential for foundational semiconductors. Li Auto, a leader in China's new energy vehicle market, has successfully deployed its in house design autonomous driving chips in their L9S SUV model. Multiple chips designed with Arteris are used in each vehicle and run 2.56 thousand trillion operations per second or tops, to effectively and safely perform autonomous driving and other advanced driving tasks. As customers take deliveries of these vehicles, we are starting to see initial royalty contributions. Another example is CyEngine, a provider of advanced automotive chips, selecting Arteris for its next generation SoC platforms with the intelligent cockpit advanced driver assistance applications, and AI cockpit drive fusion solution with high performance and functional safety requirements. On the product side, we are seeing equally strong momentum with customer adoption of new technologies. Following the acquisition of Cicuity earlier this year, which provides semiconductor cybersecurity assurance, We recently announced an expanded partnership with Arm. The security hardware security assurance technology is already in use by Arm, during the design phase of selected CPUs. Moving forward, Arm engineering teams are expanding their adoption of Security technology across additional next generation processors to help identify and mitigate potential security weaknesses and vulnerabilities supporting the delivery of robust and resilient CPUs. We are honored to be supporting Arm's leadership in the application of cybersecurity hardware assurance for safer CPU hardware. We see similar cybersecurity hardware assurance opportunities with other IP suppliers semiconductor companies, and system houses, building silicon for applications ranging from AI infrastructure mission critical applications where cybersecurity is rapidly moving from a 'should' to a 'must' technology accelerated by rapid development in frontier AI models and growing sets of required standards and regulations. On the NOC IP front, the number of FlexGen smart NOC customers continues to grow as customers are increasingly seeing the value in automation and wire length efficiency which helps reduce power, that Arteris SmartKnock IP offers. In the first half of 2026, we closed multiple 7-figure deals for FlexGen with major semiconductor customers. On the ecosystem front, we announced a collaboration with iCLINK by IMEC which is IMEC's service provider for high end ASICs and silicon photonics. Arteris technology will be deployed as part of their ongoing efforts to accelerate and simplify the development of next generation HPC chiplets and ASIC chips. Our customers continue to innovate in exciting high growth areas. All of these require a combination of high performance, energy efficiency, safety, and security. Overall, Arteris continues to be in a strong position to support growing semiconductor applications in the AI era across data centers, edge devices, and physical AI systems, helping customers to innovate and develop next generation of silicon chips and chiplets with our technology. I am happy also to announce that we have completed our ATM program raising $72 million to support our ability to invest in industry leading system IP products, global customer support, and additional tuck in acquisitions. As previously announced, Nick Hawkins will be retiring following a distinguished tenure as our CFO. Nick helped lead Arteris through its successful IPO, built an excellent finance organization, delivered at or above financial guidance on nearly all financial metrics, and was instrumental achieving a positive free cash flow operation while laying the foundation for near future non GAAP profitability. I am very grateful for his leadership and contribution to Arteris over the years, and wish him the best in the next chapter of his life. I am pleased to share that Sarab Sinha, will join Arteris as our new CFO starting on September 8, 2026. Sarab comes to us from EVA Technologies where he was instrumental in taking the company public on Nasdaq and in managing financial operations, capital allocation, and investor relations. We expect a smooth transition and remain focused on executing our strategy meeting our customers' growing needs and delivering shareholder value. With that, I want to again thank Nick for having been an invaluable partner, and I will turn it over to him 1 last time to discuss our financial results in more detail. Nicholas Bryan Hawkins: Thank you, Charlie. Good afternoon, everyone. As Charlie mentioned, this is my final earnings call for Arteris. and I am delighted to be handing over the reins to Sarab next month. I have absolute confidence that you will continue the solid financial of the company, and he will be supported by our exceptional global finance team. This has been a great and enjoyable journey, and together, we have delivered many remarkable achievements that have benefited our stockholders and our people. As I review our second quarter results for 2026 today, please note I will be referring to GAAP as well as non GAAP metrics. Please also note that a reconciliation of GAAP to non GAAP financials is included in today's earnings release, which is available on our website. Also, as a reminder, I will be referring to the 2Q26 earnings presentation, which can be found in the Investor Relations section of the company's website. Under the Events and Presentations tab. We had a strong second quarter, beating the top end of our guidance for revenue and ACV plus royalties. Non-GAAP operating income was impacted by unexpectedly high employer payroll taxes related to French employee RSU vesting, which totaled $1.7 million in the quarter. This increased expense was driven by a much higher stock price. During the June quarter. Turning to Slide 5 of the presentation. Total revenue for the second quarter was $24.1 million up 46% year-over-year. And above the top end of our guidance range. Notably, trailing 12-month royalties was $8.6 million 65% higher year-over-year setting a new record high. Royalties continue to show strong growth. Driven by a healthy mix of customers across all of our verticals, and with exciting new royalty streams coming online every quarter. At the end of the second quarter, ACV plus royalties was $99.5 million, up 44% year-over-year, above the top end of our guidance range. Once again, a new record high. Remaining performance obligation to RPO, which is our contracted future revenue at the end of the second quarter totaled $135 million, another all time high for Arteris. We expect just over half our RPO at the end of the second quarter will be recognized as revenue in the province starting July 1, 2026. Non-GAAP gross profit in the quarter was $21 million, representing a gross margin of 87%. GAAP gross profit in the quarter was $20.5 million, representing a gross margin of 85%. A reminder that our 2026 gross margin now reflects the inclusion of subcontractor costs as cost of revenue for certain security government contracts. Now moving to Slide 6. Non-GAAP operating expense in the quarter was $25.5 million Our OpEx was slightly above trend as a result of the RSU driven payroll taxes that I mentioned earlier, together with higher commissions resulting from a very strong deal flow quarter. As a reminder, our long term operating leverage model is to limit our OpEx growth rate to approximately half our revenue growth rate. We continue to believe that our investments into product development and customer success will help to accelerate our top line growth in coming years. Total GAAP operating expense for the second quarter was $34.4 million, which included acquisition related expenses of $2.2 million Non-GAAP operating loss in the quarter was $4.6 million GAAP operating loss for the quarter was $13.9 million Non-GAAP net loss for the quarter was $4.7 million, or a diluted net loss per share of $0.10. GAAP net loss in the quarter was $14.1 million, or diluted net loss per share of $0.30. Moving to Slide 7 and turning to balance sheet and cash flow. We ended the quarter with $123 million in cash equivalents and investments. And we have no financial debt. The overall $81.6 million increase in cash equivalents and investments in the quarter was driven by the successful ATM execution which raised approximately $72 million of net proceeds at an average price of over $35, coupled with $8.6 million positive free cash flow in the second quarter which brought the trailing 12 month free cash flow to positive $6.8 million I would now like to turn to the outlook for the third quarter and the full year 2026, and refer now to Slide 8 For the sake of clarity, NOL guidance for the third quarter and the full year takes into account the higher run rate of French employer payroll taxes on RSU vesting. For the third quarter, we expect ACV plus royalties of $99 million to $103 million revenue of $24 million to $25 million, and a non-GAAP operating loss of between $3 million to $1 million. As a reminder, we are no longer guiding quarterly free cash flow. As we look forward to full-year 2026, we are seeing continued strength in semiconductors and signs of an upward trend in the cycle in the market. Consequently, we are raising our full year revenue guidance. For the full-year 2026, our guidance is as follows. ACV plus royalties to exit 2026 at $102 million to $106 million revenue of $95 million to $98 million an increase of $3.5 million from prior guidance and representing a 37% year-over-year increase at the midpoint. non-GAAP operating loss of between $10 million and $7 million, and non-GAAP free cash flow of between positive $5 million to positive $9 million, unchanged from prior guidance. We are seeing a strong start to the to the third quarter. With momentum and increasing customer engagement leading us to believe that we will see continued strength in the second half of the year. Building on our strong revenue growth, coupled with carefully focused expense discipline that is delivering operating leverage, we continue to believe that Arteris is on a path to profitability. And we expect to report a non-GAAP operating profit for a period as early as the fourth quarter of the current year. With that, I will turn the call back to the operator for the Q and A portion of the call. Operator: Your first question comes from Kevin Garrigan from Jefferies. Please go ahead. Kevin Garrigan: Yeah. Hey, Charlie and Nick, congrats on the great results. And Charlie, great working with you. Hope you and you enjoy your retirement. Hey, can you talk more about the expanded partnership with Arm on Cycuity? Should we think about it as a licensing deal and then get royalties? And did that displace a competing solution, or was this a greenfield opportunity? Karel Charles Janac: So it is a greenfield opportunity. There is not actually a whole lot of commercial situation solutions for what Cycuity does. Essentially what ARM is using it for is to identify potential weaknesses in the high end and midrange CPU designs. Right? And basically, they are essentially taking a leadership position about making the designs that they deliver to their customers be essentially have significant amount of hardware security assurance. So it is a greenfield opportunity. there is opportunities for expansion. And, you know, we think that other processor type companies should be taking the lead of ARM in deploying cybersecurity hardware assurance solutions. Got it. I will also That makes sense. I would also like to thank Arm that they allow us to announce it because security has a significant number of very impressive customers. But people tend to be secretive about security, so Arm was very nice to let us announce it. Nicholas Bryan Hawkins: Hey, Doug. Kevin. Okay. This is Nick. I just wanna chip in. You said that Charlie was retiring. I know that was a slip of the tongue, and you know that it is actually me who is retiring. But I just want everybody else who might be listening to this call to know that Charlie's not retiring. it is Nick. Kevin Garrigan: Yeah. I apologize for that. it is been a long week so far. My fault. And then so, I guess, you know, just kind of going off that, does the addition of Cycuity allow you to negotiate a higher royalty rate with customers? Karel Charles Janac: No. So Cycuity, at least so far, has been a non-royalty-bearing sort of software EDA type model. You know, in the future, there are opportunities between the network on chip and security to actually not only identify weaknesses, cybersecurity weaknesses, but also to fix them. So there might be some opportunities there. But right now, it is a nonroyalty bearing product. Kevin Garrigan: Okay. Perfect. Thanks, guys. And Nick, enjoy your retirement. Nicholas Bryan Hawkins: Thank you, Kevin. Been a delight working with you for over the last several years. Operator: Your next question comes from Joshua Buchalter from TD Cowen. Please go ahead. Joshua Buchalter: Hey guys, thanks for taking my questions, and let me echo the congrats to Nick on retirement and say thank you for all the work over the years and also Charlie, thank you for staying with us. Maybe to start, you called out the US Design House win for on an ASIC platform, I think, using for chiplets and multidie offerings. Can you elaborate on, is this a new customer and maybe speak to what type of applications and maybe timeline to materiality for this to be a revenue contribution? Thank you. Karel Charles Janac: it is not a new customer, but it was a very small customer or relatively small customer prior to this, but essentially the hyperscalers are employing a number of different business models. They buy commercial chips from Intel and maybe ARM in the future. They are building accelerators themselves and they are also working with partners to build chips to their specification. And this, a large semiconductor company, 1 of their strong business product lines is that they build chips for hyperscalers. And they have, after an extensive evaluation, decided to use Arteris for fulfilling those designs. Okay. And then data center hyperscaler application. Joshua Buchalter: Got it. Okay. Thank you for that, Charlie. And then maybe to follow-up, I thought the Li Auto announcement was interesting as well, especially given it is in for an in-house autonomous driving chip. Any way you can size this opportunity and maybe how big China auto is overall within your royalty portfolio? How big it can be over the next couple of years? Thank you. Karel Charles Janac: I think I will defer to Nick on the on the royalty question. But we have a strong presence in the China automotive market and also with China automotive OEMs. And so Li Auto is just 1 of the opportunities that we are pursuing or have pursued. And this has been underway for a while. And they are starting to ship their system in a car. In actual real world cars. But as far as the royalty percentage in China, Nick, do you wanna take that 1? Nicholas Bryan Hawkins: Sure. Absolutely, Charlie. Hi, Joshua. So yeah, so Li Auto is a midsize EV Chinese EV company. So their volumes can be meaningful and they are growing. So we are delighted that they have started to send checks so rapidly. It is a feature of the Chinese automotive market. As far as how far it can go, the jury's out on that. We will have to wait and see. But, typically, if you go back to any automotive royalty stream that we have seen in the past. Typically, you see a ramp over the first 3 years. Not necessarily totally even, but there is a ramp over the first 3 years, and then it plateaus for a large number of years. You will know that, for example, the Chinese automotive market has swung very heavily towards EVs. As part of their electrification strategy as a country. So this is something that we are watching very carefully, and I am sure my successor, Sarab, will be keeping a close watching eye on that. Joshua Buchalter: Got it. Thank you both. Karel Charles Janac: Welcome. Operator: Your next question comes from Martin Yang from Oppenheimer. Please go ahead. Martin Yang: Good afternoon. Thank you for taking my question. First, Nick, I hope you have a very satisfying retirement. it is been a pleasure working with you through different companies over the years. First question is on OpEx. Nicholas Bryan Hawkins: So the change in the annual guidance relating to profitability, is the bulk of that change related to the payroll tax increase or is there any additional OpEx increase? Yeah, Martin. So, yeah, you are absolutely right. The majority of that decrease in NOL guidance, the $2 million decrease is, as you rightly say, that is the French employer payroll taxes on RSU vesting. We had a-- maybe we should have seen this coming, but we did not. We had a very large, spike in the stock price during the June quarter. And it is tax that is levied based on the prevailing price at the date of vesting. And so completely exogenous to us, outside of our control. There are a couple of other things. We have had, at least you saw, a lot of success and we are guiding up on the revenue front. Some of that a good portion of that is coming from Cycuity. And a lot of that is coming from government work. And government work, as you know, carries a much lower gross margin than traditional, organic work or even the commercial business that, that Cycuity has. So those are the 2 big levers that have led us to that. There is also an element of this which is, again, a victim of our own success because our deal flow is so strong. And this also affected the second quarter. Our sales commissions and FAE commissions are significantly higher than we thought when we had that lower guide on revenue. Thanks, Nick. Martin Yang: Next question regarding royalty, and cadence of royalty. This quarter royalty has a very slight dip. So actually maybe give us the outlook on how the royalty revenue would trend into the second half or into 2027. Thanks. Nicholas Bryan Hawkins: Yeah. Yeah. Great observation, Martin. So the I would I would characterize it more that the upward trajectory is slightly slower than in a sequential quarter. based than it was last quarter, And, indeed the quarter before. There are a couple of things to bear in mind for that. 1 is that royalties do go through slight ups and downs. We remember we saw a down in the, March quarter of, of 2024 when Mobileye I think it was 2024. Somebody correct me if I got that wrong. But it was the March quarter when Mobileye had a they had an overstuffed channel, and they had to reduce their inventory levels in the channel. And so they shipped significantly less in the March quarter and then also in the second in the June quarter. So these things can happen. There was 1 of our customers, I obviously cannot mention who, but who had some logistical and supply chain issues and that held back 1 quarter's worth of shipments. And but that is come back on stream. So it is a pause. The growth rate, I mean, if you look at the last 12 months over the prior year last 12 months, at June 30, that is still up 67%. And that is still even with that little dip. That is still well above our long term CAGR that we have socialized with the street. Thank you, Nick. You did ask about 2027 as well. I am sorry. I did not-- Right. A longer-term a longer-term trajectory. So is another great question. So our long term guide on royalties CAGR, growth rate annual, is high thirties to low forties percent. that is what we have said in the past. Now clearly, we are traveling at a faster rate than that today. We are as you as Amber just mentioned, we are 67% up On a on a trailing 12 months basis. Now I do not want you to get to assume that rate can carry on ad infinitum. So I am sticking at the moment. Now Sarab, when he joins, may come to a different view. But right now, I think it is safe to stick with the high thirties to low forties percent. CAGR and we can revisit that if we see this level of robustness and royalties and success. Then, you know, we can revisit that in the coming quarters. Martin Yang: Thank you. I appreciate the color. Nicholas Bryan Hawkins: Of course. Operator: Your next question comes from Suji Desilva from Roth Capital. Please go ahead. Suji Desilva: Hi Charlie, hi Nick. Congrats on the results here. And Nick, best of luck with the transition. Certainly. On the deal activity, strong in the quarter. Maybe you can talk about the areas that you are seeing the strongest growth outside of your core auto and AI data center just to understand where some of these other areas might be inflecting earlier. Karel Charles Janac: Yeah. I mean, it is it is been a pretty broadly distributed sort of growth and deal flow. The data center has sort of taken the lead, I would say. Because there is a lot of investment in data center. And we think that some of that is going to perhaps change a little bit but I think AI is going to be everywhere. And as the cost of AI comes down a bit, people are just going to need more and more chips. So we think that whatever happens with the data center investment is not going to have a major effect on us. But we are also seeing strong action in microcontrollers. Automotive. We have some embedded FPGA business. The space business continues reasonably well. So we are pretty happy. And I think we have announced on the on the earnings is that for the first half, for the first time for 6 months, no 1 was more than 10% of our license revenue in the first half of 2026. So we are we are well distributed, I think. Nicholas Bryan Hawkins: Can I just add a couple of things to that, Suji? And thanks for your kind words. We will no doubt stay in touch. But the 2 other areas that are interesting to note, in terms of strong deal flow. 1 was Cycuity. Cycuity had a very solid quarter, and there are some consequences to that. You probably saw it as a $2.2 million GAAP OpEx charge that went through in the quarter because we had a more robust view in terms of the lack of them hitting their full earn out target. Which is obviously good news. And secondly, we are seeing some very interesting strength. in some of the memory players, And that is obviously ultimately data center related, but it has been some solid deal flow from them. Suji Desilva: Very interesting. And then my other question is on the-- you talked about data center AI generally and an ASIC customer in particular. Maybe, Charlie, you can talk about where those customers were hitting a breaking point where they cut over to you guys and what they were using in the past. Was it an in house solution? Just to understand the cutover and maybe the reasons for it. Thanks. Karel Charles Janac: So the hyperscalers are a specific type of customer. Their goal is not to make everything in house. So our observation is that they keep buying from Intel. They keep buying from AMD. They keep buying some from some of the new ARM chips. But they are also building they understand the workloads that they are dealing with through the data center better than anyone else. And sometimes they are reluctant to even share the information about how those workloads behave and what those specifications are. So they are doing a lot of that workload acceleration ASIC work in house. And sometimes they outsource that to large companies unfortunately, the 1 that we got a very large deal in the quarter wants to be remain confidential, but So they are doing a combination of buying commercial chips, making stuff in house, and also going to, you know, design partners or usually large design partners And they, I think, are going to keep on doing that. So there is no goal on their side to go 1 way or the other. They just wanna maintain a balance between those 3 approaches. Suji Desilva: Okay. Thanks, Charlie. Thanks, Nick. Operator: Ladies and gentlemen, Your next question comes from Madison de Paola from Rosenblatt. Please go ahead. Madison de Paola: Hey, guys. Calling on behalf of Kevin Cassidy. Thanks for taking my question. How do you expect physical AI products production cycle to compare to data center and automotive life cycles for driving royalty revenue? Karel Charles Janac: So to us, the physical AI chips look very much like automotive. Because you need functional safety, and you need security Because when mechanized systems interacts with human beings, those scenarios have to be handled. Right? So the functional safety and now the cybersecurity assurance capability we have are going to play very well in the physical AI space. But the design cycles we think, will be significantly faster in robotics than they will in automotive. But because you have functional safety and security involved, those design cycles will be slower than you see in data center where basically in a data center people come up with a workload and they that workload may be worth a billion or 2 in revenue. And they want a chip extremely fast. So you are going to have the fastest cycles be the data center workload accelerators The physical AI will be somewhere in the middle. And automotive will be, you know, among the longest design cycles. Madison de Paola: Okay. Thank you. Operator: And there are no further questions at this time. I will turn the call back over to Charlie for closing remarks. Karel Charles Janac: Well, thank you for joining us, on our call today. We really appreciate your interest in Arteris. We are very excited about our business. And we look forward to meeting and updating you on our business progress in the course ahead. Thank you very much. Operator: Ladies and gentlemen, this concludes today's conference call. 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This article first appeared on GuruFocus. Revenue: Total revenue for Q2 2026 was $24.1 million, up 46% year over year and above the top end of guidance. Annual Contract Value (ACV) Plus Royalties: Reached a record $99.5 million, a 44% year-over-year increase. Royalties: Trailing 12-month royalties hit a record $8.6 million, up 65% year over year. Remaining Performance Obligations (RPO): Totaled $135 million, an all-time high, with just over half expected to be recognized as revenue in the next 12 months. Gross Margin: Non-GAAP gross profit was $21 million, representing an 87% gross margin; GAAP gross profit was $20.5 million, an 85% margin. Operating Expenses: Non-GAAP operating expenses were $25.5 million, slightly above trend due to RSU-driven payroll taxes and high commissions; GAAP operating expenses were $34.4 million, including $2.2 million in acquisition-related expenses. Operating Loss: Non-GAAP operating loss was $4.6 million; GAAP operating loss was $13.9 million. Net Loss: Non-GAAP net loss was $4.7 million, or $0.10 per diluted share; GAAP net loss was $14.1 million, or $0.30 per diluted share. Cash and Investments: Ended the quarter with $123 million in cash, equivalents, and investments, with no financial debt. Free Cash Flow: Positive $8.6 million in Q2, bringing trailing 12-month free cash flow to positive $6.8 million. ATM Program: Completed the program, raising approximately $72 million in net proceeds at an average price of over $35 per share. Full-Year 2026 Guidance: Revenue raised to $95-$98 million (37% year-over-year increase at midpoint); ACV plus royalties expected to exit at $102-$106 million; non-GAAP operating loss of $10-$7 million; non-GAAP free cash flow of $5-$9 million. Warning! GuruFocus has detected 4 Warning Signs with AIP. Is AIP fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Arteris Inc (NASDAQ:AIP) achieved record annual contract value plus royalties of $99.5 million, a 44% year-over-year increase, and record revenue, royalties, and RPO backlog. The company reported strong customer diversification, with no single customer accounting for more than 10% of revenue in the first half of 2026. Arteris Inc (NASDAQ:AIP) secured major design wins, including a hyperscale cloud company standardizing on its technology and a top US semiconductor design house for custom AI chips. The company's acquisition of cybersecurity firm Sycuity is gaining traction, with an expanded partnership with ARM to use its hardware security assurance technology in CPU designs. Arteris Inc (NASDAQ:AIP) raised $72 million through its ATM program, strengthening its balance sheet to support investments and potential acquisitions. The company raised its full-year 2026 revenue guidance to $95-$98 million, representing a 37% year-over-year increase at the midpoint, and expects to achieve non-GAAP operating profitability as early as Q4 2026. Non-GAAP operating loss in Q2 2026 was $4.6 million, impacted by unexpectedly high French employer payroll taxes on RSU vesting totaling $1.7 million. The company's gross margin is being negatively affected by the inclusion of subcontractor costs and lower-margin government work from the Sycuity acquisition. Royalty revenue growth showed a slight sequential dip due to a customer's supply chain issues, which held back one quarter's worth of shipments. Higher sales commissions resulting from strong deal flow increased operating expenses in the quarter. The company's long-term royalty growth rate guidance of high 30s to low 40% may be conservative, but management is sticking with it for now, potentially limiting upside expectations. GAAP operating loss widened to $13.9 million in Q2 2026, including $2.2 million in acquisition-related expenses. Q: Can you elaborate on the expanded partnership with ARM regarding the Sycuity technology? Should we view this as a licensing deal with royalties, and did it displace a competing solution or was it a greenfield opportunity? A: K. Charles Janac (CEO): This is a greenfield opportunity, as there aren't many commercial solutions for what Sycuity does. ARM is using it to identify potential weaknesses in high-end and mid-range CPU designs, taking a leadership position in hardware security assurance. We see opportunities for expansion with other processor companies. Nick Hawkins (CFO) added that Sycuity is currently a non-royalty-bearing, software EDA-type model, though future opportunities exist to not only identify but also fix cybersecurity weaknesses. Q: Regarding the large win with a top US semiconductor design house building custom AI chips for hyperscalers, is this a new customer, and what is the timeline for revenue materiality? A: K. Charles Janac (CEO): This is not a new customer but was previously a relatively small one. Hyperscalers employ multiple business modelsbuying commercial chips, building accelerators in-house, and working with partners to build chips to their specifications. This large semiconductor company, after an extensive evaluation, decided to use our technology for fulfilling those hyperscaler designs. Q: Can you size the opportunity with Li Auto's in-house autonomous driving chip and discuss how big China Automotive is within your royalty portfolio? A: K. Charles Janac (CEO): Li Auto is one of several opportunities we are pursuing in the China automotive market, and they are starting to ship their system in real-world cars. Nick Hawkins (CFO): Li Auto is a mid-size Chinese EV company, so volumes can be meaningful and are growing. Typically, automotive royalty streams ramp over the first 3 years and then plateau for many years. The Chinese automotive market has swung heavily towards EVs, so we are watching this closely. Q: The change in annual guidance relating to profitabilityis the bulk of that change related to the payroll tax increase, or are there additional OpEx increases? A: Nick Hawkins (CFO): The majority of the $2 million decrease in non-GAAP operating income guidance is due to French employer payroll taxes on RSU vesting, which spiked due to the higher stock price in the June quartera completely exogenous factor. Additionally, a good portion of the revenue increase is coming from Sycuity, which carries a much lower gross margin due to government work. Also, strong deal flow has led to significantly higher sales commissions. Q: Royalty revenue had a slight sequential dip this quarter. Can you provide an outlook on how royalty revenue will trend into the second half or 2027? A: Nick Hawkins (CFO): The upward trajectory is slightly slower sequentially, but royalties do go through slight ups and downs. One customer had logistical and supply chain issues that held back one quarter's worth of shipments, but that has come back on stream. Trailing 12-month royalties are still up 67% year-over-year. Our long-term royalty CAGR guide remains high 30s to low 40s%, and we can revisit that if we see continued robustness. Q: Outside of core auto and AI data center, what areas are you seeing the strongest growth and deal activity? A: K. Charles Janac (CEO): Data center has taken the lead, but we're also seeing strong action in microcontrollers, automotive, embedded FPGA business, and the space business continues reasonably well. For the first half of 2026, no single customer made up more than 10% of our license revenue, showing good distribution. Nick Hawkins (CFO) added that Sycuity had a very solid quarter, and we're seeing interesting strength in memory players, which is ultimately data center-related. Q: For the data center AI and ASIC customer, what was the breaking point where they cut over to Arteris, and what were they using in the past? A: K. Charles Janac (CEO): Hyperscalers are a specific type of customer whose goal is not to make everything in-house. They keep buying from Intel and AMD, but they also understand their workloads better than anyone else and sometimes are reluctant to share specifications. They are doing acceleration work in-house and sometimes outsourcing to large design partners. There's no goal to go one way or the other; they want to maintain a balance between buying commercial chips, making chips in-house, and going to design partners. Q: How do you expect physical AI product production cycles to compare to data center and automotive life cycles for driving royalty revenue? A: K. Charles Janac (CEO): Physical AI chips look very much like automotive because you need functional safety and security when mechanized systems interact with human beings. Our functional safety and cybersecurity assurance capabilities will play well in the physical AI space. Design cycles will be significantly faster in robotics than automotive, but slower than data center, where people want chips extremely fast for workloads that may be worth $1-2 billion in revenue. So data center will have the fastest cycles, physical AI in the middle, and automotive among the longest. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Arteris, Inc.? Here are five stocks we like better. Record Q2 performance: Revenue rose 46% year over year to $24.1 million, while ACV plus royalties increased 44% to $99.5 million and remaining performance obligations reached $135 million. AI and automotive demand strengthened: Large hyperscaler and custom-ASIC wins helped drive growth in AI infrastructure, while Li Auto began paying royalties on vehicles using Arteris-designed autonomous-driving chips. 2026 outlook raised: Arteris increased its full-year revenue forecast to $95 million–$98 million and expects to potentially reach non-GAAP operating profitability as early as Q4 2026. The company also raised $72 million through its at-the-market equity program and ended the quarter with $123 million in cash and no debt. 3 Humanoid Robot ETFs to Ride a Speculative Trend Arteris (NASDAQ:AIP) reported record second-quarter results for 2026, with revenue, annual contract value plus royalties, royalty revenue and remaining performance obligations all reaching new highs. Management said demand was supported by large license agreements across enterprise computing, automotive, aerospace and defense, communications, consumer electronics and industrial markets. Revenue for the quarter ended June 30 rose 46% year over year to $24.1 million, exceeding the high end of the company’s guidance. Annual contract value, or ACV, plus royalties reached $99.5 million at quarter-end, up 44% from a year earlier. Remaining performance obligations, representing contracted future revenue, rose to $135 million, with Arteris expecting just over half of that balance to be recognized during the 12 months beginning July 1. → 3 Drone Stocks That Should Soar After the Summer Slump GE Vernova Just Sent a Mixed AI Signal to Investors Chief Executive Officer Charlie Janac said the company’s customers reported a 21% year-over-year increase in design starts over the trailing 12 months ended June 30. The majority of customer design starts in the second quarter supported artificial intelligence or high-performance computing use cases, he said. Janac said data-center chip and chiplet development remained a key revenue driver, with enterprise computing accounting for an average of 29% of ACV plus royalties over the past four quarters. He said AI infrastructure represented some of the company’s largest deals in the second quarter. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth The AI Trade Is Getting Harder to Pick, But These 3 ETFs Take a Different Route Among those wins, Arteris said one of the world’s largest hyperscale cloud companies selected its infrastructure silicon system intellectual property for next-generation data centers. The company also cited a large win with a U.S. semiconductor design house that is developing custom ASICs for hyperscalers. That customer is using Arteris’ FlexGen smart network-on-chip, or NoC, IP for data movement in chiplets and multi-die chips supporting high-end AI computing. During the question-and-answer session, Janac said the U.S. semiconductor design house was an existing but previously smaller customer. He said hyperscalers use a mix of commercial chips, internally developed accelerators and chips developed by outside design partners. → Jersey Mike's Serves Fresh Gains After IPO Stumble Automotive and other physical AI applications also contributed to demand, according to management. Arteris said Li Auto has deployed internally designed autonomous-driving chips in its newest SUV model, with multiple Arteris-designed chips used in each vehicle. Janac said the chips provide about 2,560 trillion operations per second for autonomous driving and other advanced driving tasks. Chief Financial Officer Nick Hawkins said Li Auto had begun making royalty payments. He said automotive royalty streams generally ramp over their first three years before plateauing for an extended period, though he added that the eventual scale of the Li Auto opportunity remains uncertain. Arteris also highlighted progress in semiconductor cybersecurity assurance following its acquisition of Cycuity earlier in 2026. The company announced an expanded partnership with Arm, whose engineering teams are using Cycuity technology during the design of selected CPUs and intend to broaden use across additional next-generation processors. Janac characterized the Arm relationship as a “greenfield opportunity,” saying there are relatively few commercial solutions serving the same hardware-security-assurance function. He said Cycuity currently operates under a non-royalty-bearing, software electronic design automation model, although Arteris sees potential future opportunities to combine cybersecurity weakness identification with technologies that could address those weaknesses. Management said security had a solid second quarter, including government-related work. Hawkins noted that government contracts carry lower gross margins than Arteris’ traditional business and commercial Cycuity operations. Arteris also announced a collaboration with IC-Link by imec, under which its technology will be used in efforts to accelerate development of high-performance computing chiplets and ASICs. Janac said FlexGen customer adoption continued to expand, with multiple seven-figure FlexGen agreements closed with major semiconductor customers during the first half of 2026. On a non-GAAP basis, Arteris reported gross profit of $21 million and a gross margin of 87%. GAAP gross profit was $20.5 million, or an 85% margin. Non-GAAP operating loss was $4.6 million, while GAAP operating loss was $13.9 million. Non-GAAP net loss was $4.7 million, or $0.10 per diluted share. GAAP net loss totaled $14.1 million, or $0.30 per diluted share. Hawkins said non-GAAP operating income was affected by $1.7 million in unexpectedly high French employer payroll taxes associated with employee restricted stock unit vesting. The expense reflected a higher Arteris share price during the June quarter. Higher sales and field-engineering commissions tied to strong deal flow also increased expenses. The company generated $8.6 million in free cash flow during the quarter, bringing trailing-12-month free cash flow to positive $6.8 million. Arteris ended the quarter with $123 million in cash equivalents and investments and no financial debt. Arteris completed its at-the-market equity program during the quarter, raising approximately $72 million in net proceeds at an average price above $35 per share. Janac said the proceeds will support investments in system IP products, global customer support and potential tuck-in acquisitions. For the third quarter, Arteris forecast ACV plus royalties of $99 million to $103 million, revenue of $24 million to $25 million, and a non-GAAP operating loss of $3 million to $1 million. The company raised its full-year revenue outlook to $95 million to $98 million, an increase of $3.5 million from its previous forecast. At the midpoint, the revised revenue range would represent 37% year-over-year growth. Arteris maintained its expectation for year-end ACV plus royalties of $102 million to $106 million and non-GAAP free cash flow of positive $5 million to positive $9 million. Management forecast a full-year non-GAAP operating loss of $10 million to $7 million and said it expects to report non-GAAP operating profit for a period as early as the fourth quarter of 2026. Hawkins, who is retiring, said Saurabh Sinha will become Arteris’ CFO on Sept. 8. Sinha previously served at Aeva Technologies, where Arteris said he helped manage financial operations, capital allocation and investor relations. Arteris, Inc is a fabless semiconductor intellectual property (IP) company specializing in on-chip interconnect solutions and system IP for advanced integrated circuits. The company's core products include its FlexNoC network-on-chip (NoC) fabrics, Ncore cache coherent interconnect IP, and CodaCache memory subsystem IP. These technologies enable semiconductor and systems companies to design scalable, energy-efficient chips for applications ranging from automotive and artificial intelligence (AI) to 5G communications and high-performance computing. Founded in 2003 and headquartered in Santa Clara, California, Arteris serves a global customer base across North America, Europe, and Asia. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Arteris Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

CAMPBELL, Calif., Aug. 06, 2026 (GLOBE NEWSWIRE) -- Arteris, Inc. (Nasdaq: AIP), a leading provider of semiconductor technology for accelerating innovation in the AI era, today announced financial results for the second quarter ended June 30, 2026 and provided estimated third quarter and updated full year 2026 guidance. “In the second quarter we delivered multiple record-breaking results, including new highs in Annual Contract Value plus royalties exiting the quarter at $99.5 million, up 44% year-over-year, and record revenue, royalties and Remaining Performance Obligation,” said K. Charles Janac, President and Chief Executive Officer of Arteris. “Customer design activity remained strong, with number of design starts up 21% over the trailing-twelve-months compared to the previous trailing-twelve-months, as the majority of new designs now incorporate some form of AI compute. Data center chip and chiplet development remains a key growth driver, with enterprise computing averaging 29% of our Annual Contract Value plus royalties over the past four quarters and AI infrastructure deals among our largest in the quarter. With this momentum, we believe we remain well positioned to support our customers as they innovate across data centers, edge devices, and physical AI systems in the years ahead,” concluded Janac. Second Quarter 2026 Financial Highlights: Revenue of $24.1 million, up 46% year-over-year Trailing-twelve-months variable royalties of $8.6 million, up 65% year-over-year Annual Contract Value (ACV) plus royalties of $99.5 million, up 44% year-over-year Remaining Performance Obligation (RPO) of $135 million, up 36% year-over-year Operating loss of $13.9 million, compared to an operating loss of $8.2 million in the second quarter of 2025 Non-GAAP operating loss of $4.6 million, compared to a Non-GAAP operating loss of $3.5 million in the second quarter of 2025 Net loss of $14.1 million or $0.30 per share Non-GAAP net loss of $4.7 million or $0.10 per share Second Quarter 2026 Business Highlights: Second quarter deal activity was driven by record customer engagement in enterprise computing, automotive, aerospace and defense, communications, consumer electronics, and industrial markets; Healthy design activity in the quarter, with a 21% year-over-year increase in customer confirmed design starts in the trailing-twelve-months ended June 30, 2026 compared to the previous trailing-twelve-months; Speedata, developer of the purpose-built Analytics Processing Unit (APU), has deployed Arteris in its Callisto processor for large-volume analytics processing for applications; Li Auto, a leader in China’s new energy vehicle market, deployed its in-house designed autonomous driving chips in their newest SUV, leveraging Arteris technology; SiEngine, a provider of advanced automotive chips, selected Arteris for its intelligent cockpit, advanced driver assistance, and AI cockpit-drive fusion solutions; Arm expanded its partnership with Arteris, licensing Arteris hardware security assurance technology, already in use in selected Arm CPUs; and Saurabh Sinha will join Arteris as Chief Financial Officer starting September 8, 2026. Saurabh joins from Aeva Technologies where he was instrumental in taking the company public on Nasdaq and in managing financial operations, capital allocation and investor relations. Non-GAAP gross profit, Non-GAAP gross margin, Non-GAAP operating loss, Non-GAAP net loss, Non-GAAP net loss per share, and free cash flow 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. Estimated Third Quarter and Updated Full Year 2026 Guidance: *As previously mentioned during the first quarter 2026 earnings call, we will no longer provide quarterly free cash flow guidance. The guidance provided above are forward-looking statements and reflects Arteris' 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. 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, 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 6, 2026 to review its second quarter 2026 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 Arteris' website approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days. About Arteris Arteris is a leading provider of semiconductor technology that accelerates the creation of high-performance, power-efficient silicon with built-in safety, reliability, and security. Innovative Arteris products are designed to optimize data movement and help ease complexity in the modern AI era with network-on-chip (NoC) interconnect intellectual property (IP), system-on-chip (SoC) software for integration automation and hardware security assurance. All are used by the world’s top technology companies to improve overall performance and engineering productivity, reduce risk, lower costs, and bring cutting-edge designs to market faster. Learn more at arteris.com. © 2004-2026 Arteris, Inc. All rights reserved worldwide. Arteris, Arteris IP, the Arteris IP logo, and the other Arteris marks found at https://www.arteris.com/trademarks are trademarks or registered trademarks of Arteris, Inc. or its subsidiaries. All other trademarks are the property of their respective owners. Investor Contacts:ArterisNick HawkinsChief Financial [email protected] Sapphire Investor Relations, LLCErica Mannion and Michael Funari+1 617 542 [email protected] Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including but not limited to, statements regarding market trends and whether we are well positioned to serve our customers as they innovate across data centers, edge devices, and physical AI systems in the years ahead, our long-term growth opportunity and future financial and operating performance, including our GAAP and Non-GAAP estimated third quarter and updated full year 2026 guidance. The words such as "may," "will," "could," "expect," "approximately," "believe," "estimate," "future," "guidance," "outlook," and similar words or expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements contained herein are based on our historical performance and our current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent our expectations as of the date of this press release. Subsequent events may cause these expectations to change, and we disclaim any obligation to update the forward-looking statements in the future, except as required by law. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from our current expectations. Important factors that could cause actual results to differ materially from those anticipated in our forward-looking statements include, but are not limited to, the significant competition we face from larger companies and third-party providers; our history of net losses; the amount of our future revenue recognition as it relates to our RPO as of June 30, 2026; whether semiconductor companies in the aerospace and defense market, automotive market, communications market, consumer electronics market, enterprise computing market, and industrial market incorporate our solutions into their end products and the growth and economic stability of these end markets; our ability to attract new customers and the extent to which our customers renew their subscriptions for our solutions; the ability of our customers’ end products achieving market acceptance or growth; our ability to sustain or grow our licensing revenue; our ability, and the cost, to successfully execute on research and development efforts; the occurrence of product errors or defects in our solutions; if we fail to offer high-quality support; the occurrence of macro-economic conditions that adversely impact us, our customers and their end product markets including, but not limited to, the imposition of tariffs in markets where we operate; the effects of geopolitical conflicts, such as the military conflict between Russia and Ukraine as well as the ongoing conflict in the Middle East; the range of regulatory, operational, financial and political risks we are exposed to as a result of our dependence on international customers and operations; our ability to protect our proprietary technology and inventions through patents and other IP rights; whether we are subject to any liabilities or fines as a result of government regulation, including import, export and economic sanctions laws and regulations; the occurrence of a disruption in our networks or a security breach; risks associated with doing business in China, including as a result of changes to trade relations between the United States and China; and the other factors described under the heading “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 to be filed with the Securities and Exchange Commission (SEC) on August 6, 2026. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances. Our results for the quarter ended June 30, 2026 are not necessarily indicative of our operating results for any future periods. Non-GAAP Financial Measures To supplement our financial results, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core performance. These non-GAAP measures, which may be different than similarly-titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We define "Non-GAAP gross profit" and "Non-GAAP gross margin" as GAAP gross profit and GAAP gross margin, respectively, adjusted for stock-based compensation expense included in cost of revenue and amortization of acquired intangible assets included in cost of revenue. We define “Non-GAAP loss from operations” as our GAAP loss from operations adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets and acquisition-related costs, which include advisory, legal, accounting, valuation, other professional or consulting fees, integration costs and changes in the fair value of the contingent consideration related to our acquisition of Cycuity. We define “Non-GAAP net loss” as our net loss adjusted to exclude stock-based compensation, amortization of acquired intangible assets and acquisition-related costs. We define “Non-GAAP net loss per share attributable to common stockholders, basic and diluted”, as our Non-GAAP net loss divided by our GAAP weighted-average number of shares outstanding for the period on a basic or diluted basis, respectively. Management uses this non-GAAP measure to evaluate the performance of our business on a comparable basis from period to period. The above items are excluded from our Non-GAAP gross profit, Non-GAAP loss from operations and Non-GAAP net loss because these items are non-cash in nature, or are not indicative of our core operating performance, and render comparisons with prior periods and competitors less meaningful. We believe Non-GAAP gross profit, Non-GAAP loss from operations and Non-GAAP net loss provide useful supplemental information to investors and others in understanding and evaluating our results of operations, as well as provide a useful measure for period-to-period comparisons of our business performance. We define free cash flow as net cash provided by (used in) operating activities less cash used for purchases of property and equipment. We believe that free cash flow is a useful indicator of liquidity that provides information to management and investors, even if negative, about the amount of cash provided by (used in) our operations other than that used for investments in property and equipment. Other Business Metrics Annual Contract Value (ACV) – we define Annual Contract Value for an individual customer agreement as the total fixed fees under the agreement divided by the number of years in the agreement term. Our total ACV is the aggregate ACVs for all our customers as measured at a given point in time. Total fixed fees includes licensing, support and maintenance and other fixed fees under IP licensing or software licensing agreements but excludes variable revenue derived from licensing agreements with customers, particularly royalties. We define ACV plus royalties as ACV plus the trailing-twelve-months variable royalties and other revenue. Confirmed Design Starts – we define Confirmed Design Starts as when customers confirm their commencement of new semiconductor designs using our interconnect IP and notify us. Confirmed Design Starts is a metric management uses to assess the activity level of our customers in terms of the number of new semiconductor designs that are started using our interconnect IP in a given period. We believe that the number of Confirmed Design Starts is an important indicator of the growth of our business and future royalty revenue trends. Remaining Performance Obligations (RPO) – we define Remaining Performance Obligations as the amount of contracted future revenue that has not yet been recognized, including deferred revenue, billed and unbilled cancelable and non-cancelable contracted amounts. (1) Represents the amortization expenses of our intangible assets attributable to our acquisitions.(2) Includes advisory, legal, accounting, valuation, other professional or consulting fees and integration costs associated with the Cycuity acquisition. Acquisition-related costs also include changes in the fair value of the contingent consideration related to our acquisition of Cycuity.(3) Our GAAP tax provision is primarily related to foreign withholding taxes and income tax in profitable foreign jurisdictions. We maintain a full valuation allowance against our deferred tax assets in the US. Accordingly, there is no significant tax impact associated with these Non-GAAP adjustments. (1) Reflects the aggregate adjustments made to reconcile Non-GAAP net loss to our net loss as noted in the above table, divided by the GAAP diluted weighted average number of shares of the relevant period. Free Cash Flow

Vertex (VERX) came out with quarterly earnings of $0.2 per share, beating the Zacks Consensus Estimate of $0.19 per share. This compares to earnings of $0.15 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5.26%. A quarter ago, it was expected that this company would post earnings of $0.16 per share when it actually produced earnings of $0.17, delivering a surprise of +6.25%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Vertex, which belongs to the Zacks Internet - Software industry, posted revenues of $203.97 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.98%. This compares to year-ago revenues of $184.56 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Vertex shares have lost about 35.4% since the beginning of the year versus the S&P 500's gain of 9.4%. While Vertex has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Vertex was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.21 on $211.19 million in revenues for the coming quarter and $0.79 on $827.05 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Arteris, Inc. (AIP), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of +54.6%. The consensus EPS estimate for the quarter has been revised 7.7% lower over the last 30 days to the current level. Arteris, Inc.'s revenues are expected to be $23.45 million, up 42.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vertex, Inc. (VERX) : Free Stock Analysis Report Arteris, Inc. (AIP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Wall Street expects a year-over-year increase in earnings on higher revenues when Arteris, Inc. (AIP) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 6. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of +54.6%. Revenues are expected to be $23.45 million, up 42.1% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 7.69% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Arteris, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -20.00%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that Arteris will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Arteris would post a loss of$0.08 per share when it actually produced a loss of -$0.03, delivering a surprise of +62.50%. Over the last four quarters, the company has beaten consensus EPS estimates three times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Arteris doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Block (XYZ), another stock in the Zacks Internet - Software industry, is expected to report earnings per share of $0.86 for the quarter ended June 2026. This estimate points to a year-over-year change of +38.7%. Revenues for the quarter are expected to be $6.54 billion, up 8% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Block has been revised 0.2% up to the current level. Nevertheless, the company now has an Earnings ESP of +0.23%, reflecting a higher Most Accurate Estimate. This Earnings ESP, combined with its Zacks Rank #2 (Buy), suggests that Block will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arteris, Inc. (AIP) : Free Stock Analysis Report Block, Inc. (XYZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

In the past few days, Arteris, Inc. reported first-quarter 2026 results showing revenue of US$22.94 million versus US$16.53 million a year earlier, a slightly smaller net loss of US$7.96 million, issued higher revenue guidance for 2026, and announced the upcoming retirement of CFO Nicholas B. Hawkins. Alongside this, Arteris highlighted strong contracted revenue indicators, including increased annual contract value and remaining performance obligations, underscoring growing demand for its semiconductor system IP despite continued losses and integration costs from the Cycuity acquisition. With Arteris raising full-year 2026 revenue guidance, we’ll now examine how this updated outlook influences the company’s existing investment narrative. The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 16 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. To own Arteris, you need to believe its network on chip and security IP can convert a growing AI and automotive design footprint into a scalable, software like revenue base while eventually narrowing persistent losses. The key near term catalyst is execution on this higher 2026 revenue outlook and contracted backlog. The biggest risk remains that operating costs and integration spending stay elevated, prolonging losses. The latest results modestly support the catalyst without materially changing that risk balance. The most relevant update here is Arteris lifting full year 2026 revenue guidance to US$91.0 million to US$95.0 million after delivering US$22.94 million in Q1. That higher range leans on strong annual contract value and remaining performance obligations and will likely shape how investors weigh the upside from AI related design wins against ongoing losses and customer concentration, especially after the Cycuity acquisition. Yet beneath the stronger guidance, investors should still be aware of how rising R&D and integration costs could... Read the full narrative on Arteris (it's free!) Arteris' narrative projects $130.9 million revenue and $15.0 million earnings by 2029. Uncover how Arteris' forecasts yield a $20.50 fair value, a 42% downside to its current price. While consensus already expected about 23 percent annual revenue growth and no profits, the most optimistic analysts saw faster AI driven adoption and far higher future earnings, so this upside surprise may either reinforce that bullish view or prompt you to question whether those more aggressive assumptions still fit your own tolerance for persistent losses and concentration risk. Explore 5 other fair value estimates on Arteris - why the stock might be worth as much as $20.50! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Arteris research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision. Our free Arteris research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Arteris' overall financial health at a glance. Opportunities like this don't last. These are today's most promising picks. Check them out now: The future of work is here. Discover the 31 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. The latest GPUs need a type of rare earth metal called Neodymium and there are only 33 companies in the world exploring or producing it. Find the list for free. Explore 26 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AIP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Record performance was driven by the rapid integration of AI into electronics, with two-thirds of current customer engagements now focused on AI chips. The enterprise computing sector, including data centers and high-bandwidth memory, has become the company's largest licensing vertical, surpassing automotive. Royalty revenue grew 67% year-over-year, fueled by a diversifying base of high-volume customers in automotive, consumer, and enterprise computing. Management attributes increased adoption to the rising complexity of chiplets and multi-die systems, which require advanced network-on-chip technology for efficient data movement. The acquisition of Semifore has strategically positioned the company to address critical cybersecurity vulnerabilities during the chip development phase. Operational leverage is being achieved by limiting operating expense growth to 50% of revenue growth, specifically through disciplined G&A spending. Management expects to reach the strategic milestone of non-GAAP operating profitability as early as the fourth quarter of 2026. Guidance for 2026 was raised across all top and bottom-line metrics based on a strong start to Q2 and an upward trend cycle in the semiconductor market. The company plans to deploy two new products for optimized chiplet and multi-die system IP into production during 2026, targeting AI and ADAS designs. Future royalty growth is expected to benefit from shorter design cycles in the data center and AI infrastructure segments compared to traditional automotive timelines. The company will no longer provide quarterly free cash flow guidance due to fluctuations caused by increasing average deal sizes, focusing instead on annual targets. CFO Nick Hawkins announced his retirement effective August 31, 2026, following a seven-year tenure that included the company's IPO and three acquisitions. The first quarter results included $3 million in deal consideration and fees related to the closing of the Semifore acquisition. Cost of revenue now includes subcontractor costs for the first time, specifically related to certain security government contracts. Management highlighted that while data center chips command higher prices, they typically have shorter lifecycles and lower volumes than automotive products. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that data center design cycles are typically 2 to 3 years, significantly faster than the 6-year cycles often seen in automotive. While these products have faster churn and shorter lifecycles, they are increasingly high-priced and high-volume compared to previous generations. The raise is supported by a 100% year-over-year increase in Q1 royalties and the strongest April on record for deal flow. April's deal flow was approximately 4x larger than any previous April, indicating a very robust pipeline for the remainder of the year. Early results include closing existing government orders and seeing promising commercial deals for the second quarter. Management believes the cybersecurity product has cross-selling potential across their entire base of over 200 semiconductor design customers.

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Arteris (AIP) is back in focus after its latest first quarter update, reporting revenue of US$22.94 million, a net loss of US$7.96 million, and a loss per share of US$0.17. See our latest analysis for Arteris. The latest earnings release appears to be the main catalyst behind Arteris’s recent momentum, with a 30 day share price return of 67.68% and a 1 year total shareholder return of 288.38% pointing to strong positive sentiment building around the stock. If Arteris’s surge has you thinking about where else growth stories might be emerging in this space, it could be worth scanning a broader set of AI related semiconductor plays through 38 AI infrastructure stocks After such a sharp move and with Arteris trading above the latest analyst price target and intrinsic value estimate, the key question now is simple: is there still a buying opportunity here, or has the market already priced in future growth? The most followed narrative places Arteris’s fair value at $20.50, well below the last close at $32.43. This sets a very high bar for future execution. Read the complete narrative. The narrative leans heavily on brisk revenue growth, a major swing in profit margins, and a rich future earnings multiple to back into that fair value. Want to see how those pieces fit together? Result: Fair Value of $20.50 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, this hinges on Arteris turning recurring contracts and large AI focused wins into profitable growth, while managing customer concentration and rising R&D and support costs. Find out about the key risks to this Arteris narrative. With sentiment clearly split between risk and reward, it makes sense to move quickly, stress test the assumptions yourself and weigh both sides through 1 key reward and 3 important warning signs If Arteris has caught your attention, do not stop here. Use this momentum to widen your watchlist and uncover other opportunities that might not stay under the radar for long. Target stability with 69 resilient stocks with low risk scores that have kept risk scores in check while still offering potential for solid long term compounding. Hunt for quality at a discount by scanning 44 high quality undervalued stocks that pair healthy fundamentals with prices that may not fully reflect them. Prioritise resilience by reviewing solid balance sheet and fundamentals stocks screener (46 results) to find companies with stronger financial foundations that could better handle business setbacks. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AIP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in Arteris, Inc.? Here are five stocks we like better. Arteris posted record Q1 2026 results, with revenue up 39% year over year to $22.9 million and annual contract value plus royalties reaching a record $92.8 million. Royalties also accelerated sharply, rising 67% to a record $7.9 million on a trailing 12-month basis. Demand was strongest in AI, data center, automotive and cybersecurity, with management noting that two-thirds of customer engagements are now tied to AI chips. Key wins included expanded hyperscaler and memory supplier use, a Renesas automotive design win, and early traction from the Cycuity cybersecurity acquisition. The company raised its 2026 outlook and now expects full-year revenue of $91 million to $95 million, along with positive full-year free cash flow of $5 million to $9 million. Arteris also ended the quarter with $41.9 million in cash and no debt, while CFO Nick Hawkins announced he will retire on Aug. 31, 2026. 3 Under-The-Radar Small Caps Making New All-Time Highs Arteris (NASDAQ:AIP) reported record first-quarter results for 2026, with management pointing to strong demand tied to artificial intelligence chips, data center infrastructure, automotive systems and cybersecurity as key drivers of growth. Chief Executive Officer K. Charles Janac said the quarter was “robust” for Arteris, as annual contract value plus royalties reached a record $92.8 million, up 39% from a year earlier. The company also posted record revenue, royalties and revenue backlog during the quarter ended March 31, 2026. → Beyond NVIDIA: Picks-and-Shovels AI Plays with Strong Momentum 3 Straightforward ETF Plays to Build AI Exposure Into a Portfolio “AI integration into all types of electronics from data centers to edge devices and physical AI systems is increasing the demand for advanced connectivity and security products,” Janac said, adding that two-thirds of Arteris’ customer engagements are now tied to AI chips. Chief Financial Officer Nick Hawkins said total revenue for the first quarter was $22.9 million, up 39% year over year and above the high end of the company’s guidance range. Trailing 12-month royalties reached $7.9 million, up 67% year over year and a record for the company. → MercadoLibre Boldly Invests in Growth: Discount Deepens Small Cap, Big Potential: 3 Tech Disruptors You Should Know About Hawkins said Arteris’ royalty base is becoming more diversified, with large royalty reporters in automotive, consumer, enterprise computing, and aerospace and defense. The number of customers reporting more than $250,000 in quarterly royalties increased to three from one a year earlier. Remaining performance obligations, or contracted future revenue, totaled $118 million at quarter-end, up 33% year over year. Hawkins said Arteris expects just over half of that amount to be recognized as revenue in the 12 months beginning April 1, 2026. → Rocket Lab Just Hit a New All-Time High—Time to Buy or Let It Breathe? Non-GAAP gross profit was $20.1 million, representing an 87% gross margin. GAAP gross profit was $19.7 million, representing an 86% gross margin. Hawkins said the GAAP result reflected, for the first time, subcontractor costs included as cost of revenue for certain security government contracts. Non-GAAP operating loss was $2.5 million, while GAAP operating loss was $9.3 million, compared with a GAAP operating loss of $7.7 million in the prior-year period. Non-GAAP net loss was $1.2 million, or $0.03 per diluted share. GAAP net loss was $8 million, or $0.17 per diluted share. Janac said enterprise computing, including data centers, high-performance computing and high-bandwidth memory, was again the largest contributor to licensing activity in the quarter. He said a leading global hyperscaler expanded its use of Arteris’ Network-on-Chip technology for next-generation data center chips, and another leading global memory supplier is using Arteris system IP to accelerate memory chip development. Automotive also remained a strong sector, Janac said. He cited a first-quarter deal with Renesas, which increased its licenses and deployed Arteris system IP for Renesas’ R-Car Gen 5 SoC series. According to Janac, that system-on-chip is tailored for advanced driver assistance and automated driving systems and uses Arteris’ Network-on-Chip technology for silicon data movement. In communications, Janac said a leading European 5G and 6G communications equipment company expanded its use of Arteris technology. In aerospace and defense, he said a leading U.S. space infrastructure company expanded its use of Arteris for next-generation space applications. During the question-and-answer portion of the call, Hawkins said data center and high-bandwidth memory design cycles are generally faster than automotive, typically around two to three years, compared with up to six years in some automotive cases. Janac said data center licensing is growing, while automotive is expected to remain a strong royalty generator due to volume. Hawkins said enterprise computing is now Arteris’ largest vertical by license generation, slightly ahead of automotive, with both in the 30% to 35% range. He added that aerospace and defense is approaching 10% of annual contract value, partly due to the acquisition of Cycuity. Janac said Arteris broadened its system IP portfolio through the acquisition of Cycuity, a chip cybersecurity company. He said the technology helps identify and mitigate cybersecurity vulnerabilities during chip development before mass production. Janac said a top-five U.S.-based hyperscaler that is already an Arteris customer licensed Arteris security technology in the first quarter to help address cybersecurity risks. He added that Arteris is seeing interest from customers in data center, aerospace and defense, consumer, automotive and communications markets. In response to an analyst question, Janac said the Cycuity acquisition was still in its early stages, having started in mid-January, but that government orders were completed and commercial opportunities were emerging in the second quarter. “We think that this acquisition is gonna turn out just fine,” he said, adding that Arteris believes its more than 200 customers can use the Cycuity product. Hawkins said Arteris is seeing continued strength in semiconductors and signs of an upward market trend cycle. The company raised its full-year outlook for 2026 on both top- and bottom-line metrics. Second-quarter 2026 outlook: ACV plus royalties of $95 million to $99 million, revenue of $23 million to $24 million, and a non-GAAP operating loss of $3 million to $2 million. Full-year 2026 outlook: ACV plus royalties exiting the year at $102 million to $106 million, revenue of $91 million to $95 million, and a non-GAAP operating loss of $8.5 million to $4.5 million. Free cash flow: Full-year non-GAAP free cash flow is expected to be positive $5 million to positive $9 million. Hawkins said full-year revenue guidance is $2 million higher than prior guidance and represents 32% year-over-year growth at the midpoint. He also said Arteris expects to report a non-GAAP operating profit for a period as early as the fourth quarter of 2026. Arteris ended the quarter with $41.9 million in cash, cash equivalents and investments, and no financial debt. Free cash flow was negative $7.4 million in the first quarter, including about $3 million in deal consideration elements and fees related to the Cycuity acquisition. Arteris also announced that Hawkins will retire as CFO effective Aug. 31, 2026. Janac said Hawkins will participate in the company’s second-quarter report and then serve as an adviser to help with the transition. “Nick leaves the company in great shape with no debt, positive free cash flow, and major contributions to three acquisitions,” Janac said. Hawkins said it had been “a rewarding and enjoyable experience” to help lead Arteris through its development, including its initial public offering and M&A activity. He said the company is now cash flow positive and “transitioning to profitability this year.” Arteris, Inc is a fabless semiconductor intellectual property (IP) company specializing in on-chip interconnect solutions and system IP for advanced integrated circuits. The company's core products include its FlexNoC network-on-chip (NoC) fabrics, Ncore cache coherent interconnect IP, and CodaCache memory subsystem IP. These technologies enable semiconductor and systems companies to design scalable, energy-efficient chips for applications ranging from automotive and artificial intelligence (AI) to 5G communications and high-performance computing. Founded in 2003 and headquartered in Santa Clara, California, Arteris serves a global customer base across North America, Europe, and Asia. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Arteris Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.