Arteris (AIP) Q2 2024 earnings summary

Executive summary

• Achieved record annual contract value plus royalties of $60.1 million in Q2 2024, with positive free cash flow for the second consecutive quarter and seven new customers, including major global OEMs and top technology companies.

• Revenue for Q2 2024 was $14.6 million, up 13% sequentially but down 1% year-over-year, with strong demand in AI-driven automotive and enterprise computing SoC solutions.

• Expanded presence in automotive, including two global OEMs, notable design wins in robotaxi and ADAS sectors, and partnerships with Andes Technology and Esperanto Technologies for RISC-V and AI/ML solutions.

• Included in the Russell 2000 Index in June 2024.

• Continued investment in R&D and international expansion, including a new office in Poland.

Financial highlights

• Q2 2024 revenue was $14.6 million, up 13% sequentially and at the high end of guidance; ACV plus royalties reached a record $60.1 million, up 3% year-over-year; remaining performance obligations grew 19% year-over-year to $77.5 million.

• GAAP gross profit was $13.1 million (90% margin); non-GAAP gross profit was $13.4 million (92% margin).

• GAAP operating expense was $20.6 million (flat sequentially, down 7% year-over-year); non-GAAP operating expense was $16.8 million (down 6% year-over-year).

• GAAP operating loss was $7.4 million; non-GAAP operating loss was $3.5 million, both improved from prior year.

• Net loss was $8.3 million (GAAP) and $4.4 million (non-GAAP); diluted net loss per share was $0.22 (GAAP) and $0.11 (non-GAAP).

• Ended quarter with $53.9 million in cash, cash equivalents, and investments; free cash flow was $0.3 million for Q2 and $0.5 million for the first half of 2024.

Outlook and guidance

• Q3 2024 guidance: ACV plus royalties of $58.5M–$62.5M, revenue of $14.2M–$15.2M, non-GAAP operating loss of $3.5M–$5.5M, and non-GAAP free cash flow of -$1.4M to +$1.6M.

• Full year 2024 guidance: ACV plus royalties of $62M–$68M, revenue of $56M–$58M (midpoint raised by $1M), non-GAAP operating loss of $18M–$22M (midpoint improved by $1.4M), and non-GAAP free cash flow of -$2.4M to +$2.6M.

• Management expects continued investment in R&D and international expansion to drive long-term growth.