Arteris — Q2 2026 Earnings Summary

Financial Performance

• Revenue for the quarter ended June 30, 2026, was $24.1 million, representing a 46% year-over-year increase.
• Trailing-twelve-months variable royalties reached $8.6 million, up 65% year-over-year.
• Annual Contract Value (ACV) plus royalties totaled $99.5 million, an increase of 44% year-over-year.
• Remaining Performance Obligation (RPO) stood at $135 million, up 36% year-over-year.
• Operating loss was $13.9 million, compared to an operating loss of $8.2 million in the second quarter of 2025.
• Non-GAAP operating loss was $4.6 million, compared to a Non-GAAP operating loss of $3.5 million in the second quarter of 2025.
• Net loss was $14.1 million ($0.30 per share), compared to a net loss of $9.1 million ($0.22 per share) in the second quarter of 2025.
• Non-GAAP net loss was $4.7 million ($0.10 per share), compared to a Non-GAAP net loss of $4.4 million ($0.11 per share) in the second quarter of 2025.
• Cash and cash equivalents were $93.27 million as of June 30, 2026, compared to $33.9 million as of December 31, 2025.
• Total deferred revenue (current and noncurrent) was $108.86 million as of June 30, 2026, compared to $95.34 million as of December 31, 2025.

Guidance and Future Outlook

• Estimated Q3 2026 revenue guidance is $24.0 million to $25.0 million.
• Updated Full Year 2026 revenue guidance is $95.0 million to $98.0 million.
• Estimated Q3 2026 Non-GAAP operating loss guidance is $1.0 million to $3.0 million.
• Updated Full Year 2026 Non-GAAP operating loss guidance is $7.0 million to $10.0 million.
• Estimated Full Year 2026 Free Cash Flow guidance is $5.0 million to $9.0 million; quarterly free cash flow guidance is no longer provided.
• Estimated Q3 2026 ACV plus royalties guidance is $99.0 million to $103.0 million.
• Updated Full Year 2026 ACV plus royalties guidance is $102.0 million to $106.0 million.

Business Segments and Product Lines

• Design starts increased 21% year-over-year in the trailing-twelve-months ended June 30, 2026, with the majority of new designs incorporating some form of AI compute.
• Enterprise computing averaged 29% of ACV plus royalties over the past four quarters.
• Speedata deployed Arteris technology in its Callisto processor for large-volume analytics processing.
• Li Auto deployed Arteris technology in its in-house designed autonomous driving chips for its newest SUV.
• SiEngine selected Arteris for intelligent cockpit, advanced driver assistance, and AI cockpit-drive fusion solutions.
• Arm expanded its partnership with Arteris by licensing Arteris hardware security assurance technology for use in selected Arm CPUs.
• Deal activity was recorded across enterprise computing, automotive, aerospace and defense, communications, consumer electronics, and industrial markets.

Market and Competitive Landscape

• Data center chip and chiplet development remains a key growth driver.
• AI infrastructure deals were among the largest in the quarter.
• Management stated the company is well-positioned to support customers innovating across data centers, edge devices, and physical AI systems.

Risks and Challenges

• Significant competition from larger companies and third-party providers.
• History of net losses.
• Uncertainty regarding the amount of future revenue recognition related to RPO as of June 30, 2026.
• Risk of customers not incorporating solutions into end products or growth/stability of end markets (aerospace, defense, automotive, communications, consumer electronics, enterprise computing, industrial).
• Risks associated with product errors, defects, and support quality.
• Macro-economic conditions, including tariffs and geopolitical conflicts (Russia/Ukraine, Middle East).
• Dependence on international customers and operations, including regulatory and political risks.
• Risks related to doing business in China and trade relations.
• Potential security breaches or network disruptions.

Management Commentary and Tone

• CEO K. Charles Janac described the second quarter as delivering "multiple record-breaking results."
• Management highlighted strong customer design activity and the trend of new designs incorporating AI compute.
• The tone indicates confidence in the company's position to support innovation in data centers, edge devices, and physical AI systems.

Other Key Points

• Saurabh Sinha will join Arteris as Chief Financial Officer starting September 8, 2026, succeeding Nick Hawkins.
• The company completed a business combination (acquisition of Cycuity) during the six months ended June 30, 2026, incurring $2.8 million in acquisition-related costs.
• Net cash provided by financing activities for the six months ended June 30, 2026, was $73.6 million, primarily driven by $72.5 million in proceeds from the issuance of common stock under the at-the-market offering.
• Free cash flow for the six months ended June 30, 2026, was $1.3 million.
• The company will host a conference call on August 6, 2026, at 4:30 PM ET to review results and discuss outlook.