Arteris (AIP) 28th Annual Needham Growth Conference Virtual summary

Business overview and technology focus

• Specializes in network-on-chip (NoC) IP and software for efficient data movement within and between semiconductor chips.

• Offers cache-coherent and non-coherent NoC IP, last-level caches, and acquired Magillem for SoC connectivity and integration.

• Increasing chip complexity and AI workloads drive demand for robust data movement solutions.

• Supports both Arm and RISC-V architectures, with a strong presence in automotive, AI, and data center markets.

• Maintains over 300 employees and 230 active customers globally, including major industry players.

Product innovation and roadmap

• Releases at least two product enhancements and one new product annually.

• Launched FlexGen in February 2025, enabling customers to generate NoC IPs up to 10x faster and reduce wire length by 30%.

• Plans to deliver a chiplet solution for cache-coherent heterogeneous chiplets by Q1 2026.

• Recent focus on AI applications, with about half of design starts now AI-related.

• Joined the Ultra Accelerator Link Consortium to support emerging industry standards.

Financial performance and growth

• Achieved strong Q3 performance, meeting or exceeding guidance, with positive free cash flow despite negative profitability due to deferred revenue.

• RPO (backlog) reached $105 million at Q3 end, up 34% year-over-year, representing 1.5x annual revenue.

• License revenue targeted to grow in high teens to low 20s percent, with royalties expected to grow at double that rate.

• Revenue model shows accelerating royalty growth, with inflection points projected in 2027 and 2028.

• Closed Cycuity acquisition to expand into hardware security verification, with further M&A opportunities anticipated.