Arteris (NASDAQ:AIP) reported record third-quarter revenue and raised its full-year outlook, citing strong semiconductor licensing activity across artificial intelligence infrastructure and other applications.
Revenue for the quarter ended Sept. 30 rose 48% from a year earlier to $25.8 million, exceeding the top end of the company’s guidance. Annual contract value plus royalties reached $104 million, up 39% year over year and also above the company’s forecast range.
CEO Charlie Janac said enterprise computing led licensing activity, followed by automotive, industrial, consumer electronics, communications, and aerospace and defense applications. About one-third of the quarter’s wins by dollar value came from top-30 global technology customers, he said.
AI Inference and Chiplet Demand
Janac said the company’s largest deal in the quarter was an expansion with a top hyperscaler using Arteris technology to develop and integrate chips and chiplets. Two of the industry’s top 10 semiconductor companies also expanded their use of Arteris products. In response to an analyst’s question, Janac said the applications were custom silicon for AI inference.
Arteris also announced expanded chiplet and multi-die offerings, including its FlexGen Multi-Die and Ncore Multi-Die products. The products extend data movement across die-to-die links, allowing multiple dies to operate as a unified architecture, Janac said.
Chiplet designs currently represent about 10% of design starts, Janac said. He estimated that share could grow to around 35% or more over the next two to three years, while noting that the company does not break out revenue from its multi-die products.
Each chiplet generally carries its own project price and royalty stream, although pricing and discounts are subject to negotiation, Janac said. He added that chiplet projects generally have higher average selling prices than single-die projects.
Arteris also surpassed 1,000 customer-confirmed design starts during the quarter. One of its largest deals was with an automotive manufacturer that expanded its use of the company’s technology for successive generations of in-house chip designs, Janac said.
Loss Narrows on an Adjusted Basis
Trailing 12-month royalties rose 71% year over year to a record $9.4 million. Remaining performance obligations, representing contracted future revenue, reached a record $135 million. CFO Saurabh Sinha said the company expects to recognize slightly more than half of that amount as revenue in the 12 months beginning Oct. 1, 2026.
Arteris reported a GAAP net loss of $11.2 million, or $0.23 per diluted share. Its non-GAAP net loss was $1.1 million, or $0.02 per diluted share. The non-GAAP operating loss narrowed by $2.3 million from a year earlier to $1.2 million.
Free cash flow was negative $2.1 million, primarily reflecting the timing of customer payments, Sinha said. The company ended the quarter with $120 million in cash, equivalents and investments and no financial debt. That balance included the completion of its at-the-market stock offering program.
Sinha, who joined Arteris in September, said the company’s long-term objective is to grow operating expenses at approximately half the rate of revenue growth.
Full-Year Outlook Raised
For 2026, Arteris raised its revenue guidance by $2.5 million to a range of $98.5 million to $99.5 million. It also raised its year-end outlook for annual contract value plus royalties by $1 million to $103 million to $107 million.
The company projected a full-year non-GAAP operating loss of $7.2 million to $9.2 million, an improvement of $0.3 million from its prior guidance. Its forecast for positive non-GAAP free cash flow remained unchanged at $5 million to $9 million.
For the fourth quarter, Arteris expects revenue of $25.7 million to $26.7 million and non-GAAP operating results ranging from a loss of $0.9 million to income of $1.1 million.
Asked about moderating sequential growth in annual contract value plus royalties, Sinha said the measure can be affected by deal timing and that the company focuses on year-over-year growth.
About Arteris (NASDAQ:AIP)
Arteris, Inc is a semiconductor intellectual property (IP) company that provides technology used to design and integrate complex systems-on-chip (SoCs). Its products help semiconductor and system developers connect, manage and verify the various processing, memory and specialized functional components incorporated into modern chips.
The company’s portfolio includes network-on-chip (NoC) interconnect and semiconductor IP solutions, including its FlexNoC interconnect technology, Ncore cache-coherent interconnect IP and CodaCache products.
