Arteris, Inc. reported a significant increase in revenue for the first quarter of 2026, generating $22.9 million, a 39% rise from $16.5 million in the same period last year. The growth was driven by a 26% increase in licensing, support, and maintenance revenue, which reached $19.3 million, and a substantial 114% increase in variable royalties, totaling $2.5 million. The company also saw a notable rise in professional services revenue, which amounted to $1.2 million, compared to just $30,000 in the prior year. Despite this revenue growth, Arteris recorded a net loss of $8.0 million, slightly improved from a loss of $8.1 million in Q1 2025, resulting in a net loss per share of $0.17, compared to $0.20 in the previous year.

The company's financial position has changed significantly since the end of 2025, with total assets increasing to $139.9 million from $115.0 million. This growth was primarily attributed to the acquisition of Cycuity, completed on January 14, 2026, for approximately $43.1 million. The acquisition added $31.0 million in goodwill and $18.1 million in identifiable intangible assets, enhancing Arteris's capabilities in semiconductor cybersecurity. The company’s cash and cash equivalents decreased to $11.7 million from $33.9 million, reflecting cash outflows related to the acquisition and operational expenses.

Operationally, Arteris reported 25 Confirmed Design Starts in the first quarter of 2026, up from 17 in the same period last year, indicating increased customer engagement and product adoption. The company’s Annual Contract Value (ACV) rose to $84.9 million, up from $62.1 million in Q1 2025, while the total ACV plus royalties reached $92.8 million, compared to $66.8 million a year earlier. The increase in ACV reflects the successful expansion of customer contracts and the adoption of new products, particularly those related to hardware security verification services introduced through the Cycuity acquisition.

Despite the positive revenue trends, Arteris faced increased operating expenses, which rose to $29.0 million from $22.7 million year-over-year. Research and development expenses increased by 22% to $14.5 million, driven by investments in next-generation products and higher employee-related costs. Sales and marketing expenses also grew by 31% to $8.5 million, reflecting the need for increased headcount to support business growth. The company anticipates that these expenses will continue to rise in the near term as it invests in technology and product development.

Looking ahead, Arteris remains focused on leveraging its recent acquisitions to enhance its product offerings and address growing market demands, particularly in the semiconductor industry. The company expects to continue investing in research and development to drive innovation and maintain competitive advantages. However, it acknowledges the cyclical nature of the semiconductor market and the potential impact of global economic conditions on its operations and revenue.

About Arteris, Inc.

Arteris, Inc. provides semiconductor system intellectual property (IP) solutions, specializing in Network-on-Chip (NoC) interconnect IP and SoC Integration Automation (SIA) software. Its products enable efficient on-chip communication and integration of IP blocks in complex System-on-Chip (SoC) designs across automotive, enterprise computing, communications, consumer electronics, and industrial markets. Arteris licenses configurable IP and software under a fee and royalty model, offering performance, cost, and development time advantages to semiconductor and system companies worldwide.

This description was generated via AI from an annual report. Updated 8 months ago.

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