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1. Company Snapshot

1.a. Company Description

Arteris, Inc.provides semiconductor interconnect intellectual property (IP) and IP deployment solutions in the Americas, the Asia Pacific, Europe, and the Middle East.The company develops, licenses, and supports the on-chip interconnect fabric technology used in System-on-Chip (Soc) designs and Network-on-Chip (NoC) interconnect IP.


Its products include FlexNoC, a silicon-proven interconnect IP product; FlexNoC Resilience Package, which provides on-chip data protection; Ncore, a silicon-proven and cache coherent interconnect IP product that provides scalable, configurable, and area efficient characteristics; CodaCache, a last-level cache semiconductor IP product; and Physical interconnect aware NoC optimizer, a software tool that estimates physical layout effects during the architecture and logic development stages of an SoC interconnect design; The company also offers FlexWay for IP subsystem interconnect; FlexPSI for All-digital inter chip link; and FlexNoC Physical for linking physical placement and routing tools.In addition, it provides IP deployment software solutions, including specification, design, documentation, artificial intelligence (AI) package, design data intelligence, and harmony trace.The company serves customers in the automotive, AI/machine learning, 5G and wireless communications, data centers, consumer electronics, and other markets.


Arteris, Inc.was founded in 2003 and is headquartered in Campbell, California.

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1.b. Last Insights on AIP

Arteris Inc.'s recent performance was negatively impacted by the company's Q4 loss of $0.10 per share, despite topping revenue estimates. The lack of profitability overshadowed the long growth runway ahead, as highlighted in the Q4 earnings release. The company's guidance for Q1 and full-year 2025 also suggests continued investment, potentially hindering short-term profitability.

1.c. Company Highlights

2. Arteris' Q3 2025 Earnings: Strong Growth in ACV and Royalties

Arteris reported a solid financial performance in Q3 2025, with revenue reaching $17.4 million, up 18% year-over-year. The non-GAAP gross margin stood at 91%, indicating a stable profitability profile. The company's non-GAAP operating loss was $3.5 million, and non-GAAP net loss was $3.8 million, or $0.09 per share, beating estimates of -$0.11 per share. The company's cash position remained healthy, with $56.2 million in cash and no debt, and reported positive free cash flow of $2.5 million.

Publication Date: Nov -23

📋 Highlights
  • Record ACV & Royalties:: Q3 2025 ACV plus royalties hit $74.9M, up 24% YoY, driven by AI applications (over 50% of licensing revenue).
  • Revenue Growth:: Q3 revenue rose to $17.4M (+18% YoY), with non-GAAP gross margin at 91% and positive free cash flow of $2.5M.
  • Royalty Expansion:: Variable royalties grew 36% YoY in 12 months to September, with FlexGen royalties expected to contribute meaningfully post-2030.
  • Customer Diversification:: Added 4 new FlexGen customers (e.g., Dream Chip) and diversified top 5 customers now contribute more than former single customer HiSilicon.
  • Book-to-Bill Strength:: $32M in bookings (Q3) with a book-to-bill ratio of $1.8B, reflecting strong demand for AI interconnects (50% of design starts linked to AI).

Growth Drivers

The company's growth was driven by increased product adoption in chiplets and SoCs across multiple vertical markets, with AI applications accounting for over half of licensing dollars. Notable customers include Altera, which selected Arteris' technology portfolio for its next-generation FPGA and SoC FPGA solutions, and AMD, which ordered additional licenses for its AI chiplets. The company also added four new FlexGen customers, including Dream Chip and a leading automotive OEM.

Outlook and Guidance

For Q4 2025, Arteris expects ACV plus royalties of $74-78 million, revenue of $18.4-18.8 million, and a non-GAAP operating loss of $2.3-3.3 million. For the full year, the company expects ACV plus royalties of $74-78 million, revenue of $68.8-69.2 million, and a non-GAAP operating loss of $12.5-13.5 million. Analysts estimate next year's revenue growth at 20.2%, indicating a positive outlook for the company's future performance.

Valuation and Metrics

Arteris' current valuation metrics show a P/S Ratio of 8.44 and an EV/EBITDA of -20.24, indicating that the market is pricing in significant growth expectations. The company's ROE is 551.42%, although this is likely distorted by the company's net loss. With a current price-to-book ratio of -47.56, it's clear that the market is focusing on the company's growth prospects rather than its current book value.

Long-term Prospects

The company's FlexGen product is expected to drive future growth, particularly in the automotive market, with royalties expected to start contributing meaningfully around 2030-2031. With 50% of design starts related to AI and a growing data center business, Arteris is well-positioned to capitalize on emerging trends in the semiconductor industry. The company's participation in the Ultra Accelerator Link Consortium is also expected to drive future license revenue.

3. NewsRoom

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Head to Head Comparison: Calix (NYSE:CALX) vs. Arteris (NASDAQ:AIP)

Dec -04

Source: defenseworld.net

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Arteris Selected by Black Sesame Technologies for Next Generation of Intelligent Driving Silicon

Dec -02

Source: globenewswire.com

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Arteris: The Hidden Gem Powering The Chiplet Revolution

Nov -27

Source: seekingalpha.com

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Campbell & CO Investment Adviser LLC Buys Shares of 26,699 Arteris, Inc. $AIP

Nov -18

Source: defenseworld.net

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Blaize Deploys Arteris NoC IP to Power Scalable, Energy-Efficient Edge AI Solutions

Nov -11

Source: globenewswire.com

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Arteris, Inc. (AIP) Reports Q3 Loss, Beats Revenue Estimates

Nov -05

Source: zacks.com

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Arteris, Inc. (AIP) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Arteris Announces Financial Results for the Third Quarter and Estimated Fourth Quarter and Updated Full Year 2025 Guidance

Nov -04

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (15.11%)

6. Segments

Licensing, Support and Maintenance

Expected Growth: 15.4%

Growing demand for autonomous vehicles, AI, and 5G technologies drives the need for advanced IP and interconnect products, fueling Arteris' growth. The company's flexible licensing models, 24/7 support, and maintenance services further enhance its market position.

Variable Royalties

Expected Growth: 12.3%

Growing demand for autonomous vehicles, AI, and 5G technologies drives the need for advanced semiconductor IP, increasing royalties for Arteris, Inc. The company's leading position in the market, coupled with the rising adoption of its IP in customer designs, fuels revenue growth.

Other

Expected Growth: 10.2%

Growing demand for semiconductor interconnect IP products, increasing adoption of autonomous vehicles and AI-driven applications, and rising need for efficient data transfer drive the 'Other' segment growth.

7. Detailed Products

Ncore Cache Coherent Interconnect

A highly scalable and configurable cache coherent interconnect IP that enables the design of large, complex systems-on-chip (SoCs) with multiple heterogeneous processors and accelerators.

FlexNoC Interconnect IP

A highly scalable and configurable network-on-chip (NoC) interconnect IP that enables the design of complex SoCs with multiple processors, accelerators, and peripherals.

CodaCache Last-Level Cache (LLC) IP

A highly scalable and configurable last-level cache (LLC) IP that enables the design of high-performance and power-efficient SoCs.

Arteris IP Deployment Kits (DKs)

Pre-integrated and validated IP deployment kits that enable rapid integration of Arteris IP into SoC designs.

Arteris Harmony Trace

A system-level tracing and analysis tool that enables SoC designers to visualize and analyze the behavior of complex SoCs.

8. Arteris, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Arteris, Inc. has a moderate threat of substitutes due to the availability of alternative semiconductor intellectual property (IP) solutions.

Bargaining Power Of Customers

Arteris, Inc. has a low bargaining power of customers due to its strong relationships with leading semiconductor companies and its dominant market position.

Bargaining Power Of Suppliers

Arteris, Inc. has a moderate bargaining power of suppliers due to its dependence on a few key suppliers for its IP solutions.

Threat Of New Entrants

Arteris, Inc. has a low threat of new entrants due to the high barriers to entry in the semiconductor IP market, including significant R&D investments and established relationships with leading semiconductor companies.

Intensity Of Rivalry

Arteris, Inc. operates in a highly competitive market with several established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 21.53%
Debt Cost 3.95%
Equity Weight 78.47%
Equity Cost 9.17%
WACC 8.04%
Leverage 27.43%

11. Quality Control: Arteris, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Arteris

A-Score: 4.4/10

Value: 8.2

Growth: 2.1

Quality: 6.6

Yield: 0.0

Momentum: 8.5

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Aehr Test

A-Score: 4.1/10

Value: 6.2

Growth: 3.3

Quality: 4.5

Yield: 0.0

Momentum: 9.5

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
CEVA

A-Score: 3.6/10

Value: 6.8

Growth: 1.4

Quality: 4.5

Yield: 0.0

Momentum: 6.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
MaxLinear

A-Score: 3.5/10

Value: 7.2

Growth: 0.6

Quality: 4.7

Yield: 0.0

Momentum: 6.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
WiSA Technologies

A-Score: 3.4/10

Value: 6.6

Growth: 4.7

Quality: 3.3

Yield: 0.0

Momentum: 5.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Semtech

A-Score: 3.0/10

Value: 0.5

Growth: 2.0

Quality: 4.7

Yield: 0.0

Momentum: 8.5

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

17.51$

Current Price

17.51$

Potential

-0.00%

Expected Cash-Flows