On August 1, 2024, Arteris Inc (AIP, Financial) released its 8-K filing for the second quarter of 2024, showcasing a mixed financial performance. Arteris Inc, a developer of on-chip interconnect fabric technology, reported a revenue of $14.6 million, surpassing the analyst estimate of $13.69 million. However, the company posted a net loss of $8.3 million, or $0.22 per share, which was above the estimated earnings per share of -$0.24.
Company Overview
Arteris Inc is a leading provider of system IP that accelerates system-on-chip (SoC) creation. The company's technology is used in various devices and provides software and services to automate SoC integration. Arteris operates in the Americas, Asia Pacific, and Europe, with the Asia Pacific region contributing the most to its profits.
Performance and Challenges
Arteris Inc reported a sequential revenue increase of 13%, reaching $14.6 million in Q2 2024. The company also achieved a record $60.1 million in Annual Contract Value (ACV) and Trailing-Twelve-Month (TTM) Variable Royalties. Despite these positive indicators, the company faced an operating loss of $7.4 million and a net loss of $8.3 million. The challenges of high operating expenses and a competitive market landscape continue to impact the company's profitability.
Financial Achievements
Arteris Inc's financial achievements include a 19% year-over-year increase in Remaining Performance Obligation (RPO), reaching $77.5 million. The company also reported its second consecutive quarter of positive free cash flow, amounting to $0.3 million or 1.8% of revenue. These metrics are crucial for a company in the semiconductor industry, as they indicate strong customer commitments and efficient cash management.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $14.6 million | $14.7 million |
| Operating Loss | $7.4 million | $8.7 million |
| Net Loss | $8.3 million | $9.2 million |
| Non-GAAP Net Loss | $4.4 million | $4.7 million |
| Free Cash Flow | $0.3 million | -$0.1 million |
Analysis and Commentary
Arteris Inc's performance in Q2 2024 highlights its ability to grow revenue and secure long-term customer commitments despite ongoing challenges. The company's focus on expanding its customer base in key markets such as Automotive and AI technology sectors is evident. As K. Charles Janac, President and CEO of Arteris, stated,
“We’re excited to report a record $60.1 million in Annual Contract Value and Trailing-Twelve-Month Variable Royalties and our second consecutive quarter of positive free cash flow in the second quarter of 2024.”
Looking ahead, Arteris Inc has provided guidance for Q3 2024 and the full year 2024, with expected revenue ranging from $14.2 million to $15.2 million for Q3 and $56.0 million to $58.0 million for the full year. The company also anticipates a non-GAAP operating loss between $3.5 million and $5.5 million for Q3 and between $18.0 million and $22.0 million for the full year.
For more detailed insights and the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Arteris Inc for further details.
