Arteris (AIP) Q4 2024 earnings summary

Executive summary

• Achieved record annual contract value plus royalties of $65.1 million in Q4 2024, up 16% year-over-year, driven by strong demand in AI-driven enterprise computing, automotive SoCs, and microcontrollers.

• Added 14 new customers in 2024, including major technology and automotive companies, expanding both new and existing relationships and reaching nearly 850 SoC designs.

• Major customer wins included Infineon, GigaDevice, Tenstorrent, and a partnership with MIPS for RISC-V reference platforms.

• Launched FlexGen Smart NoC IP, promising up to 10x engineering productivity, improved power, performance, and area (PPA), and early adoption by over 10 companies.

Financial highlights

• Q4 2024 revenue was $15.5 million, up 24% year-over-year; full year 2024 revenue was $57.7 million, up 8% year-over-year.

• Remaining performance obligations reached $88.4 million, a 22% year-over-year increase.

• Q4 2024 non-GAAP gross margin was 91%; GAAP gross margin was 90%.

• Q4 2024 non-GAAP operating loss improved to $2.8 million from $5.5 million year-over-year; GAAP operating loss was $7.1 million.

• Free cash flow for 2024 was $(1.0) million, a significant improvement from $(17.2) million in 2023.

Outlook and guidance

• Q1 2025 guidance: ACV plus royalties of $65.5M–$67.5M, revenue of $15.7M–$16.1M, non-GAAP operating loss of $3M–$4M, and free cash flow of $(2.0)M–$2.0M.

• Full year 2025 guidance: ACV plus royalties of $73M–$77M, revenue of $66M–$70M, non-GAAP operating loss of $8.5M–$12.5M, and free cash flow of $1M–$7M.

• Management expects further improvements in key financial metrics in 2025, supported by strong deal flow and cost control.