Education
About Us
Working with TipRanks
Follow Us
Arteris, Inc. (AIP)
:AIP
Top Page
Arteris
(NASDAQ:AIP)
Rating:62Neutral
Price Target:
$9.00
▼(-2.49%Downside)
Positive Factors
Customer Growth
Arteris added 14 new customers and demonstrated continued momentum with higher ASP products and new offerings.
Financial Performance
The company reported record annual contract value (ACV) plus royalties, record RPO, and strong FCF generation, an indicator of the strong underlying demand for its network-on-chip IP solutions.
Licensing Success
Securing a licensing win with a leading Japanese automotive OEM for a new autonomous driving SoC was another highlight, bringing the company's total direct Auto OEM engagements to 10.
Negative Factors
Economic Environment
The uncertain economic environment is impacting demand for Arteris' customers' products, particularly in Automotive and Consumer.
Royalty Challenges
A lighter-than-anticipated royalty line likely contributed to a mixed quarter performance due to the tepid auto backdrop.
Arteris (AIP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$387.45M
Dividend YieldN/A
Average Volume (3M)504.33K
Price to Earnings (P/E)―
Beta (1Y)2.22
Revenue Growth14.68%
EPS Growth20.20%
CountryUS
Employees267
SectorTechnology
Sector Strength87
IndustrySemiconductors
Share Statistics
EPS (TTM)-0.09
Shares Outstanding41,977,730
10 Day Avg. Volume734,191
30 Day Avg. Volume504,327
Financial Highlights & Ratios
PEG Ratio-0.42
Price to Book (P/B)3.73
Price to Sales (P/S)0.00
P/FCF Ratio-17.92
Enterprise Value/Market Cap0.27
Enterprise Value/Revenue0.47
Enterprise Value/Gross Profit1.94
Enterprise Value/Ebitda-1.02
Forecast
1Y Price Target
$13.33Price Target Upside44.42% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Arteris Business Overview & Revenue Model
Company DescriptionArteris (AIP) is a leading provider of interconnect and IP solutions for system-on-chip (SoC) design, primarily serving markets such as automotive, artificial intelligence, machine learning, and consumer electronics. The company's flagship products are its network-on-chip (NoC) interconnect IP and associated software tools, which enable efficient and scalable SoC design, enhancing performance while reducing power consumption and cost.
How the Company Makes MoneyArteris makes money primarily by licensing its intellectual property (IP) solutions to semiconductor and electronic device manufacturers who integrate these solutions into their SoC designs. The company charges upfront licensing fees as well as royalties based on the production volume of chips that incorporate its IP. Additionally, Arteris offers maintenance and support services, which provide recurring revenue streams. Strategic partnerships with major semiconductor companies and technology firms also contribute to Arteris' revenue by expanding its market reach and fostering innovation in its product offerings.
Arteris Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: 10.54%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, strategic wins, and innovation recognition, indicating positive momentum. However, concerns about economic uncertainties, tariffs, and currency impacts were noted. Overall, the positive aspects and growth prospects slightly outweigh the challenges.Q1-2025 Updates
Positive Updates
Record Annual Contract Value and Positive Free Cash Flow
Arteris achieved a record annual contract value plus royalties of $66.8 million and generated $2.7 million in non-GAAP positive free cash flow driven by demand for semiconductor system IP products.
Significant Design Wins and New Customers
Arteris secured several key design wins, including four from top 30 global technology companies and expanded orders from a top five technology company. They also added three new customers, including a Japanese automotive OEM.
Recognition for Innovation
Arteris received awards in three categories at the 23rd Annual American Business Awards, including Gold Awards for Most Innovative Tech Company and Technical Innovation of the Year.
Strong Financial Performance
The company reported a total revenue of $16.5 million, up 28% year-over-year, and a non-GAAP gross margin of 92%.
Growing Pipeline and Product Success
Arteris has over 20 customer SoC projects evaluating FlexGen, expected to generate revenue and ACV in the second half of the year.
Negative Updates
Economic and Tariff Concerns
Arteris expressed concerns over global economic uncertainty, potential short-term headwinds to royalties, and potential impacts from trade challenges and tariffs, especially in automotive and consumer markets.
Currency Exchange Impact
The weakening of the U.S. dollar against major currencies could increase Arteris's expenses by approximately $1 million annually.
Operating Losses Despite Revenue Growth
Despite revenue growth, Arteris reported a non-GAAP operating loss of $3.2 million and a GAAP operating loss of $7.7 million for the first quarter.
Company Guidance
During the first quarter of 2025, Arteris reported a record annual contract value (ACV) plus royalties of $66.8 million, marking a 15% year-over-year increase, which was above the midpoint of their guidance range. The company achieved a total revenue of $16.5 million, representing a 28% year-over-year growth, and exceeded the top end of their guidance range. Non-GAAP gross profit was $15.3 million, with a gross margin of 92%, while GAAP gross profit was $15.0 million, with a gross margin of 91%. Arteris also generated $2.7 million in non-GAAP positive free cash flow. The company's remaining performance obligations (RPO) were reported at $88.9 million, a 19% increase from the previous year. Despite economic uncertainties, Arteris maintained their full year 2025 guidance for ACV plus royalties to exit the year between $71 million and $79 million, with revenue projected between $65 million and $71 million. They anticipate a non-GAAP operating loss ranging from $14 million to $7 million and non-GAAP free cash flow between 0 to positive $8 million for the full year.Arteris Financial Statement Overview
Summary
Arteris shows strong revenue growth and a high gross profit margin. However, the company faces profitability issues with negative net and EBIT margins. Its balance sheet reveals financial leverage risks with negative equity, though liabilities are decreasing. Cash flow has improved but remains weak relative to net income.Income Statement
Arteris has shown consistent revenue growth, with a revenue increase of 13.51% from 2023 to 2024 and an additional 6.21% in TTM. However, profitability remains a challenge with negative net profit margins and EBIT margins. Despite a strong gross profit margin of 89.19% in TTM, the sustained losses highlight ongoing operational challenges.62
Positive
Balance Sheet
The company's balance sheet reveals significant financial leverage, with negative stockholders' equity in TTM, indicating high reliance on debt financing. This is a potential risk factor, though total liabilities have decreased over the periods. The equity ratio is negative due to liabilities exceeding assets, indicating weak financial stability.45
Neutral
Cash Flow
Arteris has improved its free cash flow position, turning positive in TTM, which is a positive indicator. However, cash flow from operations remains weak relative to net income, reflecting challenges in converting sales into cash. The operating cash flow to net income ratio suggests inefficiencies in cash generation.58
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 61.31M | 57.72M | 53.67M | 50.38M | 37.86M | 31.81M |
| Gross Profit | 54.69M | 51.76M | 48.59M | 46.10M | 34.13M | 30.32M |
| EBITDA | -25.18M | -24.83M | -28.52M | -25.35M | -20.27M | -1.25M |
| Net Income | -32.36M | -33.64M | -36.87M | -27.10M | -23.38M | -3.26M |
Balance Sheet | ||||||
| Total Assets | 98.32M | 106.14M | 102.80M | 115.52M | 120.44M | 42.74M |
| Cash, Cash Equivalents and Short-Term Investments | 16.37M | 43.84M | 41.17M | 68.15M | 85.83M | 11.74M |
| Total Debt | 4.54M | 5.99M | 7.75M | 3.62M | 3.91M | 4.77M |
| Total Liabilities | 103.14M | 107.32M | 87.70M | 77.98M | 67.54M | 54.74M |
| Stockholders Equity | -4.82M | -1.19M | 15.10M | 37.53M | 52.90M | -12.01M |
Cash Flow | ||||||
| Free Cash Flow | 1.35M | -1.04M | -17.23M | -7.82M | -1.62M | 1.51M |
| Operating Cash Flow | 1.66M | -720.00K | -15.73M | -6.77M | -814.00K | 2.16M |
| Investing Cash Flow | -11.05M | 970.00K | -4.69M | -37.48M | -1.36M | -5.15M |
| Financing Cash Flow | -358.00K | -262.00K | -2.92M | -4.15M | 76.25M | 790.00K |
Arteris Technical Analysis
Positive
9.23
Price Trends
7.84
Positive
7.80
Positive
8.34
Positive
Market Momentum
0.44
Negative
60.08
Neutral
50.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIP, the sentiment is Positive. The current price of 9.23 is above the 20-day moving average (MA) of 8.71, above the 50-day MA of 7.84, and above the 200-day MA of 8.34, indicating a bullish trend. The MACD of 0.44 indicates Negative momentum. The RSI at 60.08 is Neutral, neither overbought nor oversold. The STOCH value of 50.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AIP.
Arteris Risk Analysis
Arteris disclosed 63 risk factors in its most recent earnings report. Arteris reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Arteris Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $464.43M | 20.10 | 21.69% | ― | -14.48% | 46.79% | |
74 Outperform | $370.04M | 24.57 | 23.57% | 5.23% | -13.18% | -12.06% | |
64 Neutral | $371.89M | ― | -4.71% | ― | -4.77% | 84.82% | |
62 Neutral | $387.45M | ― | -1369.57% | ― | 14.68% | 20.20% | |
56 Neutral | $794.80M | ― | -32.43% | ― | -7.09% | -53.23% | |
51 Neutral | $286.75M | ― | -375.37% | ― | ― | -10774.57% | |
49 Neutral | C$2.96B | 2.13 | -80.92% | 2.67% | 12.55% | -24.47% |
* Technology Sector Average
Performance Comparison
AIP
Arteris
9.23
1.61
21.13%
AEHR
Aehr Test Systems
15.60
2.80
21.87%
NVEC
NVE
76.50
7.77
11.31%
INDI
indie Semiconductor
3.74
-2.63
-41.29%
BZAI
Blaize Holdings
2.82
-8.32
-74.69%
XPER
Xperi Inc
8.14
0.21
2.65%
Arteris Corporate Events
Executive/Board ChangesShareholder Meetings
Arteris Holds Annual Stockholders Meeting, Elects Directors
Neutral
Jun 6, 2025
On June 3, 2025, Arteris, Inc. held its Annual Meeting of Stockholders where two key proposals were voted upon. The stockholders elected two Class I directors, K. Charles Janac and S. Atiq Raza, to serve until the 2028 annual meeting, and ratified Deloitte & Touche, LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
The most recent analyst rating on (AIP) stock is a Buy with a $15.00 price target. To see the full list of analyst forecasts on Arteris stock, see the AIP Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.