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 for semiconductor system IP, especially in AI-driven enterprise computing and automotive SoCs.

• Added 14 new customers in 2024, including major wins with Infineon, GigaDevice, Tenstorrent, and expanded partnerships with top technology and automotive companies, reaching nearly 850 SoC designs.

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

• Continued expansion into chiplet-based designs and maintained a neutral IP provider position, supporting Arm, RISC-V, and x86 architectures.

Financial highlights

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

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

• Non-GAAP gross margin was 91% for both Q4 and the full year; GAAP gross margin was 90%.

• Q4 non-GAAP operating loss was $2.8 million, a $2.7 million improvement year-over-year; GAAP operating loss was $7.1 million.

• Q4 non-GAAP net loss was $3.9 million ($0.10/share); GAAP net loss was $8.2 million ($0.20/share).

• Ended Q4 with $52.3 million in cash and no financial debt.

• Free cash flow was negative $2.7 million in Q4 and negative $1.0 million for the year, a significant improvement from 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 $4M–$3M, and free cash flow of -$2M to +$2M.

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

• Expect continued top-line growth in the high teens to low 20% range, with OpEx growth constrained to about half that rate.