Business
Arteris Announces Financial Results for the Second Quarter and Estimated Third Quarter and Updated Full Year 2026 Guidance
Arteris Announces Financial Results for the Second Quarter and Estimated Third Quarter and Updated Full Year 2026
About this update from Arteris, Inc.
CAMPBELL, Calif., Aug. 06, 2026 (GLOBE NEWSWIRE) -- Arteris, Inc. (Nasdaq: AIP), a leading provider of semiconductor technology for accelerating innovation in the AI era, today announced financial results for the second quarter ended June 30, 2026 and provided estimated third quarter and updated full year 2026 guidance. “In the second quarter we delivered multiple record-breaking results, including new highs in Annual Contract Value plus royalties exiting the quarter at $99.5 million, up 44% year-over-year, and record revenue, royalties and Remaining Performance Obligation,” said K. Charles Janac, President and Chief Executive Officer of Arteris. “Customer design activity remained strong, with number of design starts up 21% over the trailing-twelve-months compared to the previous trailing-twelve-months, as the majority of new designs now incorporate some form of AI compute. Data center chip and chiplet development remains a key growth driver, with enterprise computing averaging 29% of our Annual Contract Value plus royalties over the past four quarters and AI infrastructure deals among our largest in the quarter. With this momentum, we believe we remain well positioned to support our customers as they innovate across data centers, edge devices, and physical AI systems in the years ahead,” concluded Janac. Second Quarter 2026 Financial Highlights: Revenue of $24.1 million, up 46% year-over-year Trailing-twelve-months variable royalties of $8.6 million, up 65% year-over-year Annual Contract Value (ACV) plus royalties of $99.5 million, up 44% year-over-year Remaining Performance Obligation (RPO) of $135 million, up 36% year-over-year Operating loss of $13.9 million, compared to an operating loss of $8.2 million in the second quarter of 2025 Non-GAAP operating loss of $4.6 million, compared to a Non-GAAP operating loss of $3.5 million in the second quarter of 2025 Net loss of $14.1 million or $0.30 per share Non-GAAP net loss of $4.7 million or $0.10 per share Second Quarter 2026 Business Highlights: Second quarter deal activity was driven by record customer engagement in enterprise computing, automotive, aerospace and defense, communications, consumer electronics, and industrial markets; Healthy design activity in the quarter, with a 21% year-over-year increase in customer confirmed design starts in the trailing-twelve-months ended June 30, 2026 compared to the previous trailing-twelve-months; Speedata, developer of the purpose-built Analytics Processing Unit (APU), has deployed Arteris in its Callisto processor for large-volume analytics processing for applications; Li Auto, a leader in China’s new energy vehicle market, deployed its in-house designed autonomous driving chips in their newest SUV, leveraging Arteris technology; SiEngine, a provider of advanced automotive chips, selected Arteris for its intelligent cockpit, advanced driver assistance, and AI cockpit-drive fusion solutions; Arm expanded its partnership with Arteris, licensing Arteris hardware security assurance technology, already in use in selected Arm CPUs; and Saurabh Sinha will join Arteris as Chief Financial Officer starting September 8, 2026. Saurabh joins from Aeva Technologies where he was instrumental in taking the company public on Nasdaq and in managing financial operations, capital allocation and investor relations. Non-GAAP gross profit, Non-GAAP gross margin, Non-GAAP operating loss, Non-GAAP net loss, Non-GAAP net loss per share, and free cash flow are Non-GAAP financial measures. Additional information on Arteris’ historic reported results, including a reconciliation of these Non-GAAP financial measures to their most comparable GAAP measures, is included in the financial tables below. Estimated Third Quarter and Updated Full Year 2026 Guidance: Q3 2026 FY 2026 (in millions) ACV + royalties $99.0 - $103.0 $102.0 - $106.0 Revenue $24.0 - $25.0 $95.0 - $98.0 Non-GAAP operating loss $1.0 - $3.0 $7.0 - $10.0 Free cash flow * $5.0 - $9.0 *As previously mentioned during the first quarter 2026 earnings call, we will no longer provide quarterly free cash flow guidance. The guidance provided above are forward-looking statements and reflects Arteris' expectations as of today's date. Actual results may differ materially. Refer to the section titled "Forward-Looking Statements" below for information on the factors, among others, that could cause our actual results to differ materially from these forward-looking statements. A reconciliation of Non-GAAP guidance measures reported above to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future, although it is important to note that these factors could be material to Arteris' results computed in accordance with GAAP. Definitions of the other business metrics used in this press release including ACV, confirmed design starts and RPO are included below under the heading “Other Business Metrics.” Conference Call Arteris will host a conference call today on August 6, 2026 to review its second quarter 2026 financial results and to discuss its financial outlook. Time: 4:30PM ET United States/Canada Toll Free: 1-800-717-1738 International Toll: 1-646-307-1865 A live webcast will also be available in the Investor Relations section of Arteris’ website at: https://ir.arteris.com/events-and-presentations A replay of the webcast will be available in the Investor Relations section of Arteris' website approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days. About Arteris Arteris is a leading provider of semiconductor technology that accelerates the creation of high-performance, power-efficient silicon with built-in safety, reliability, and security. Innovative Arteris products are designed to optimize data movement and help ease complexity in the modern AI era with network-on-chip (NoC) interconnect intellectual property (IP), system-on-chip (SoC) software for integration automation and hardware security assurance. All are used by the world’s top technology companies to improve overall performance and engineering productivity, reduce risk, lower costs, and bring cutting-edge designs to market faster. Learn more at arteris.com. © 2004-2026 Arteris, Inc. All rights reserved worldwide. Arteris, Arteris IP, the Arteris IP logo, and the other Arteris marks found at https://www.arteris.com/trademarks are trademarks or registered trademarks of Arteris, Inc. or its subsidiaries. All other trademarks are the property of their respective owners. Investor Contacts: Arteris Nick Hawkins Chief Financial Officer [email protected] Sapphire Investor Relations, LLC Erica Mannion and Michael Funari +1 617 542 6180 [email protected] Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including but not limited to, statements regarding market trends and whether we are well positioned to serve our customers as they innovate across data centers, edge devices, and physical AI systems in the years ahead, our long-term growth opportunity and future financial and operating performance, including our GAAP and Non-GAAP estimated third quarter and updated full year 2026 guidance. The words such as "may," "will," "could," "expect," "approximately," "believe," "estimate," "future," "guidance," "outlook," and similar words or expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements contained herein are based on our historical performance and our current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent our expectations as of the date of this press release. Subsequent events may cause these expectations to change, and we disclaim any obligation to update the forward-looking statements in the future, except as required by law. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from our current expectations. Important factors that could cause actual results to differ materially from those anticipated in our forward-looking statements include, but are not limited to, the significant competition we face from larger companies and third-party providers; our history of net losses; the amount of our future revenue recognition as it relates to our RPO as of June 30, 2026; whether semiconductor companies in the aerospace and defense market, automotive market, communications market, consumer electronics market, enterprise computing market, and industrial market incorporate our solutions into their end products and the growth and economic stability of these end markets; our ability to attract new customers and the extent to which our customers renew their subscriptions for our solutions; the ability of our customers’ end products achieving market acceptance or growth; our ability to sustain or grow our licensing revenue; our ability, and the cost, to successfully execute on research and development efforts; the occurrence of product errors or defects in our solutions; if we fail to offer high-quality support; the occurrence of macro-economic conditions that adversely impact us, our customers and their end product markets including, but not limited to, the imposition of tariffs in markets where we operate; the effects of geopolitical conflicts, such as the military conflict between Russia and Ukraine as well as the ongoing conflict in the Middle East; the range of regulatory, operational, financial and political risks we are exposed to as a result of our dependence on international customers and operations; our ability to protect our proprietary technology and inventions through patents and other IP rights; whether we are subject to any liabilities or fines as a result of government regulation, including import, export and economic sanctions laws and regulations; the occurrence of a disruption in our networks or a security breach; risks associated with doing business in China, including as a result of changes to trade relations between the United States and China; and the other factors described under the heading “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 to be filed with the Securities and Exchange Commission (SEC) on August 6, 2026. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances. Our results for the quarter ended June 30, 2026 are not necessarily indicative of our operating results for any future periods. Arteris, Inc. Condensed Consolidated Statements of Operations (In thousands, except share and per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue Licensing, support and maintenance $ 20,824 $ 15,088 $ 40,096 $ 30,423 Variable royalties 2,103 1,402 4,606 2,569 Professional services and other 1,207 12 2,368 42 Total revenue 24,134 16,502 47,070 33,034 Cost of revenue 3,607 1,742 6,857 3,268 Gross profit 20,527 14,760 40,213 29,766 Operating expenses: Research and development 16,762 12,171 31,219 24,033 Sales and marketing 9,386 6,335 17,916 12,864 General and administrative 6,072 4,502 11,487 8,825 Acquisition-related costs 2,215 — 2,799 — Total operating expenses 34,435 23,008 63,421 45,722 Loss from operations (13,908 ) (8,248 ) (23,208 ) (15,956 ) Interest expense (30 ) (42 ) (68 ) (90 ) Other income (expense), net 570 786 1,240 1,504 Loss before income taxes and loss from equity method investment (13,368 ) (7,504 ) (22,036 ) (14,542 ) Loss from equity method investment, net of tax — 780 2,989 1,595 Loss before income taxes (13,368 ) (8,284 ) (25,025 ) (16,137 ) Provision for (benefit from) income taxes 697 846 (3,001 ) 1,114 Net loss $ (14,065 ) $ (9,130 ) $ (22,024 ) $ (17,251 ) Net loss per share attributable to common stockholders, basic $ (0.30 ) $ (0.22 ) $ (0.47 ) $ (0.42 ) Weighted-average shares used in computing per share amounts, basic and diluted 47,276,533 41,819,427 46,415,392 41,338,907 Arteris, Inc. Condensed Consolidated Balance Sheets (In thousands, except share and per share data) As of June 30, December 31, 2026 2025 ASSETS Current assets: Cash and cash equivalents $ 93,270 $ 33,901 Short-term investments 28,794 20,698 Accounts receivable, net of allowance of $73 as of both June 30, 2026 and December 31, 2025 15,222 19,183 Prepaid expenses and other current assets 9,055 8,608 Total current assets 146,341 82,390 Property and equipment, net 5,968 3,872 Long-term investments 1,198 4,946 Equity method investment — 2,989 Operating lease right-of-use assets 4,918 3,919 Intangibles, net 18,767 2,168 Goodwill 35,299 4,178 Other assets 12,222 10,569 TOTAL ASSETS $ 224,713 $ 115,031 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable $ 558 $ 340 Accrued expenses and other current liabilities 30,442 19,094 Operating lease liabilities, current 1,466 1,233 Deferred revenue, current 59,577 51,367 Vendor financing arrangements, current 1,302 1,166 Total current liabilities 93,345 73,200 Deferred revenue, noncurrent 49,280 43,974 Operating lease liabilities, noncurrent 3,725 3,116 Vendor financing arrangements, noncurrent 2,193 452 Deferred income, noncurrent 5,867 6,452 Other liabilities 2,629 2,469 Total liabilities 157,039 129,663 Stockholders' equity (deficit): Preferred stock, par value of $0.001 - 10,000,000 shares authorized and no shares issued and outstanding as of both June 30, 2026 and December 31, 2025 — — Common stock, par value of $0.001 - 300,000,000 shares authorized as of both June 30, 2026 and December 31, 2025; 49,051,892 and 44,268,816 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 49 44 Additional paid-in capital 261,174 156,776 Accumulated other comprehensive income 106 179 Accumulated deficit (193,655 ) (171,631 ) Total stockholders' equity (deficit) 67,674 (14,632 ) TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $ 224,713 $ 115,031 Arteris, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) Six Months Ended June 30, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (22,024 ) $ (17,251 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 2,861 1,689 Stock-based compensation 11,858 8,809 Amortization of deferred income (585 ) (585 ) Loss from equity method investment 2,989 1,595 Deferred income taxes (4,103 ) — Net accretion of discounts on available-for-sale securities (69 ) (221 ) Change in fair value of contingent consideration liability 2,058 — Other, net (55 ) 378 Changes in operating assets and liabilities: Accounts receivable, net 5,376 1,855 Prepaid expenses and other assets (2,504 ) (2,261 ) Accounts payable (794 ) 319 Accrued expenses and other liabilities (2,916 ) (277 ) Deferred revenue 10,056 6,325 Net cash provided by operating activities 2,148 375 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (890 ) (538 ) Purchases of available-for-sale securities (16,329 ) (17,160 ) Proceeds from maturities of available-for-sale securities 11,978 18,282 Payments for business combination, net of cash acquired (11,179 ) — Net cash (used in) provided by investing activities (16,420 ) 584 CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments under vendor financing arrangements (681 ) (558 ) Proceeds from exercise of stock options 1,037 1,452 Proceeds from employee stock purchase plan 644 535 Proceeds from issuance of common stock under the at-the-market offering, net of commissions and offering costs 72,546 — Other financing activities 93 27 Net cash provided by financing activities 73,639 1,456 NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 59,367 2,415 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period 34,250 14,072 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $ 93,617 $ 16,487 Non-GAAP Financial Measures To supplement our financial results, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core performance. These non-GAAP measures, which may be different than similarly-titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We define "Non-GAAP gross profit" and "Non-GAAP gross margin" as GAAP gross profit and GAAP gross margin, respectively, adjusted for stock-based compensation expense included in cost of revenue and amortization of acquired intangible assets included in cost of revenue. We define “Non-GAAP loss from operations” as our GAAP loss from operations adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets and acquisition-related costs, which include advisory, legal, accounting, valuation, other professional or consulting fees, integration costs and changes in the fair value of the contingent consideration related to our acquisition of Cycuity. We define “Non-GAAP net loss” as our net loss adjusted to exclude stock-based compensation, amortization of acquired intangible assets and acquisition-related costs. We define “Non-GAAP net loss per share attributable to common stockholders, basic and diluted”, as our Non-GAAP net loss divided by our GAAP weighted-average number of shares outstanding for the period on a basic or diluted basis, respectively. Management uses this non-GAAP measure to evaluate the performance of our business on a comparable basis from period to period. The above items are excluded from our Non-GAAP gross profit, Non-GAAP loss from operations and Non-GAAP net loss because these items are non-cash in nature, or are not indicative of our core operating performance, and render comparisons with prior periods and competitors less meaningful. We believe Non-GAAP gross profit, Non-GAAP loss from operations and Non-GAAP net loss provide useful supplemental information to investors and others in understanding and evaluating our results of operations, as well as provide a useful measure for period-to-period comparisons of our business performance. We define free cash flow as net cash provided by (used in) operating activities less cash used for purchases of property and equipment. We believe that free cash flow is a useful indicator of liquidity that provides information to management and investors, even if negative, about the amount of cash provided by (used in) our operations other than that used for investments in property and equipment. Other Business Metrics Annual Contract Value (ACV) – we define Annual Contract Value for an individual customer agreement as the total fixed fees under the agreement divided by the number of years in the agreement term. Our total ACV is the aggregate ACVs for all our customers as measured at a given point in time. Total fixed fees includes licensing, support and maintenance and other fixed fees under IP licensing or software licensing agreements but excludes variable revenue derived from licensing agreements with customers, particularly royalties. We define ACV plus royalties as ACV plus the trailing-twelve-months variable royalties and other revenue. Confirmed Design Starts – we define Confirmed Design Starts as when customers confirm their commencement of new semiconductor designs using our interconnect IP and notify us. Confirmed Design Starts is a metric management uses to assess the activity level of our customers in terms of the number of new semiconductor designs that are started using our interconnect IP in a given period. We believe that the number of Confirmed Design Starts is an important indicator of the growth of our business and future royalty revenue trends. Remaining Performance Obligations (RPO) – we define Remaining Performance Obligations as the amount of contracted future revenue that has not yet been recognized, including deferred revenue, billed and unbilled cancelable and non-cancelable contracted amounts. Arteris, Inc. Reconciliation of GAAP Measures to Non-GAAP Measures (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Gross profit $ 20,527 $ 14,760 $ 40,213 $ 29,766 Add: Stock-based compensation expense included in cost of revenue 384 232 705 437 Amortization of acquired intangible assets (1) 50 50 100 100 Non-GAAP gross profit $ 20,961 $ 15,042 $ 41,018 $ 30,303 Gross margin 85 % 89 % 85 % 90 % Non-GAAP gross margin 87 % 91 % 87 % 92 % Research and development $ 16,762 $ 12,171 $ 31,219 $ 24,033 Stock-based compensation expense (2,562 ) (1,926 ) (4,818 ) (3,898 ) Amortization of acquired intangible assets (1) (368 ) (110 ) (687 ) (220 ) Non-GAAP research and development $ 13,832 $ 10,135 $ 25,714 $ 19,915 Sales and marketing $ 9,386 $ 6,335 $ 17,916 $ 12,864 Stock-based compensation expense (1,668 ) (1,048 ) (3,051 ) (2,017 ) Amortization of acquired intangible assets (1) (359 ) (57 ) (676 ) (114 ) Non-GAAP sales and marketing $ 7,359 $ 5,230 $ 14,189 $ 10,733 General and administrative $ 6,072 $ 4,502 $ 11,487 $ 8,825 Stock-based compensation expense (1,733 ) (1,291 ) (3,284 ) (2,457 ) Non-GAAP general and administrative $ 4,339 $ 3,211 $ 8,203 $ 6,368 Acquisition-related costs $ 2,215 $ — $ 2,799 $ — Acquisition-related costs (2) (2,215 ) — (2,799 ) — Non-GAAP acquisition-related costs $ — $ — $ — $ — Total operating expenses $ 34,435 $ 23,008 $ 63,421 $ 45,722 Stock-based compensation expense (5,963 ) (4,265 ) (11,153 ) (8,372 ) Amortization of acquired intangible assets (1) (727 ) (167 ) (1,363 ) (334 ) Acquisition-related costs (2) (2,215 ) — (2,799 ) — Total Non-GAAP operating expenses $ 25,530 $ 18,576 $ 48,106 $ 37,016 Loss from operations $ (13,908 ) $ (8,248 ) $ (23,208 ) $ (15,956 ) Stock-based compensation expense 6,347 4,497 11,858 8,809 Amortization of acquired intangible assets (1) 777 217 1,463 434 Acquisition-related costs (2) 2,215 — 2,799 — Non-GAAP loss from operations $ (4,569 ) $ (3,534 ) $ (7,088 ) $ (6,713 ) Net loss $ (14,065 ) $ (9,130 ) $ (22,024 ) $ (17,251 ) Stock-based compensation expense 6,347 4,497 11,858 8,809 Amortization of acquired intangible assets (1) 777 217 1,463 434 Acquisition-related costs (2) 2,215 — 2,799 — Non-GAAP net loss (3) $ (4,726 ) $ (4,416 ) $ (5,904 ) $ (8,008 ) (1) Represents the amortization expenses of our intangible assets attributable to our acquisitions. (2) Includes advisory, legal, accounting, valuation, other professional or consulting fees and integration costs associated with the Cycuity acquisition. Acquisition-related costs also include changes in the fair value of the contingent consideration related to our acquisition of Cycuity. (3) Our GAAP tax provision is primarily related to foreign withholding taxes and income tax in profitable foreign jurisdictions. We maintain a full valuation allowance against our deferred tax assets in the US. Accordingly, there is no significant tax impact associated with these Non-GAAP adjustments. Arteris, Inc. Reconciliation of GAAP Measures to Non-GAAP Measures (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net loss per share attributable to common stockholders, basic and diluted $ (0.30 ) $ (0.22 ) $ (0.47 ) $ (0.42 ) Per share impacts of adjustments to net loss (1) $ 0.20 $ 0.11 $ 0.34 $ 0.22 Non-GAAP net loss per share attributable to common stockholders, basic and diluted $ (0.10 ) $ (0.11 ) $ (0.13 ) $ (0.20 ) Weighted-average shares used in computing per share amounts, basic and diluted 47,276,533 41,819,427 46,415,392 41,338,907 (1) Reflects the aggregate adjustments made to reconcile Non-GAAP net loss to our net loss as noted in the above table, divided by the GAAP diluted weighted average number of shares of the relevant period. Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Net cash provided by (used in) operating activities $ 9,210 $ (2,485 ) $ 2,148 $ 375 Less: Purchase of property and equipment (595 ) (355 ) (890 ) (538 ) Free cash flow $ 8,615 $ (2,840 ) $ 1,258 $ (163 ) Net cash (used in) provided by investing activities $ (372 ) $ 705 $ (16,420 ) $ 584 Net cash provided by financing activities $ 72,757 $ 1,508 $ 73,639 $ 1,456