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Arteris, Inc. (AIP)
:AIP
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Arteris (AIP) AI Stock Analysis

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AIP

Arteris

(NASDAQ:AIP)

Rating:41Neutral
Price Target:
$8.50
▼(-3.85% Downside)
Arteris faces significant financial challenges with negative profitability and solvency issues, leading to a low financial performance score. Technical indicators suggest bearish momentum, and the valuation is unattractive due to negative earnings. Despite positive highlights from the earnings call, such as revenue growth and strategic partnerships, the overall financial health remains a critical concern.
Positive Factors
Customer Wins
The expansion of customer wins, including but not limited to AMD, for AI/chiplet IP featuring higher ASPs is a promising indicator for future growth prospects.
Strategic Partnerships
Arteris announced a strategic win with AMD, which will utilize its FlexGen NoC IP to provide high-performance data transport in AMD chiplets.
Negative Factors
Economic Uncertainty
Wider full-year guidance has been given due to economic uncertainty, potentially seen as overly conservative.
Profitability Concerns
Near-term profitability will continue to be sacrificed for growth with the company's non-GAAP operating loss guidance worsening, partially due to FX.

Arteris (AIP) vs. SPDR S&P 500 ETF (SPY)

Arteris Business Overview & Revenue Model

Company DescriptionArteris, 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.
How the Company Makes MoneyArteris generates revenue primarily through the licensing of its intellectual property and software solutions to semiconductor companies and system designers. This includes upfront license fees and ongoing royalties based on the usage of its NoC technology and other design tools. Additionally, the company may offer professional services, including training and technical support, which contribute to its revenue. Significant partnerships with major semiconductor firms and participation in industry alliances enhance its market presence and lead to collaborative projects that further drive revenue growth.

Arteris Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with record contract values, a significant partnership with AMD, and strong revenue growth. However, the company reported operating losses and negative free cash flow, partially due to foreign exchange impacts.
Q2-2025 Updates
Positive Updates
Record Annual Contract Value and Royalties
Arteris achieved record annual contract value plus royalties of $69.1 million, highlighting strong performance and demand for their technology.
Significant Increase in Remaining Performance Obligations
The company exited the quarter with $99.3 million in remaining performance obligations, a 28% year-over-year increase.
Key Partnership with AMD
Arteris signed an agreement with AMD to utilize their FlexGen technology, marking a strategic win with a top 10 semiconductor company.
Awards and Recognition
Arteris' FlexGen technology won the AI Engineering Innovation Award at the 8th Annual AI Breakthrough Awards.
Positive Revenue Growth
Total revenue for the second quarter was $16.5 million, up 13% year-over-year, and at the top end of their guidance range.
Negative Updates
Operating Loss and Net Loss
Non-GAAP operating loss was $3.5 million, and GAAP net loss was $9.1 million for the quarter.
Impact of Foreign Exchange Rates
Operating expenses were higher than expected due to a weakening U.S. dollar, impacting non-GAAP operating loss guidance.
Negative Free Cash Flow
Free cash flow was negative $2.8 million for the second quarter.
Company Guidance
During the Arteris Second Quarter 2025 Earnings Call, the company reported a strong financial performance, with total revenue for the second quarter reaching $16.5 million, marking a 13% increase year-over-year and meeting the upper end of their guidance range. The annual contract value plus royalties hit a record high of $69.1 million, a 15% increase from the previous year. Remaining performance obligations stood at $99.3 million, reflecting a 28% year-over-year rise. Non-GAAP gross profit was $15 million, translating to a 91% gross margin, while GAAP gross profit was $14.8 million, with an 89% gross margin. The company guided for third-quarter revenue between $16.8 million and $17.2 million, with an expected non-GAAP operating loss of $3 million to $4 million. For the full year 2025, Arteris projected revenue ranging from $66 million to $70 million and a non-GAAP operating loss between $10.5 million and $15.5 million. The company highlighted a significant strategic win with AMD, leveraging their FlexGen technology, and noted strong interest from major customers in outsourcing system IP products, despite global economic uncertainties.

Arteris Financial Statement Overview

Summary
Arteris shows revenue growth but faces significant challenges in profitability and financial stability. The high gross profit margin is positive, yet negative net income and equity raise concerns about long-term viability. Cash flow management needs improvement to support financial stability.
Income Statement
45
Neutral
Arteris shows a consistent revenue growth trend, with a TTM revenue growth rate of 3.14%. However, the company is struggling with profitability, as evidenced by negative net profit margins and EBIT margins. The gross profit margin remains high at 89.21%, indicating efficient cost management relative to revenue. Overall, the income statement reflects growth potential but significant challenges in achieving profitability.
Balance Sheet
30
Negative
The balance sheet reveals a concerning financial structure with negative stockholders' equity, leading to a negative debt-to-equity ratio. The return on equity is also negative, indicating losses relative to equity. The equity ratio is not directly calculable due to negative equity, highlighting financial instability. These factors suggest a high-risk financial position with potential solvency issues.
Cash Flow
40
Negative
Cash flow analysis shows negative operating and free cash flows, with a significant decline in free cash flow growth. The operating cash flow to net income ratio is low, indicating challenges in converting income into cash. However, the free cash flow to net income ratio is relatively stable, suggesting some ability to manage cash relative to net losses. Overall, cash flow management needs improvement to support financial stability.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue63.24M57.72M53.67M50.38M37.86M31.81M
Gross Profit56.29M51.76M48.59M46.10M34.13M30.32M
EBITDA-24.45M-24.83M-28.52M-25.35M-20.27M-1.25M
Net Income-33.14M-33.64M-36.87M-27.10M-23.38M-3.26M
Balance Sheet
Total Assets106.88M106.14M102.80M115.52M120.44M42.74M
Cash, Cash Equivalents and Short-Term Investments38.05M43.84M41.17M68.15M85.83M11.74M
Total Debt7.36M5.99M7.75M3.62M3.91M4.77M
Total Liabilities114.41M107.32M87.70M77.98M67.54M54.74M
Stockholders Equity-7.53M-1.19M15.10M37.53M52.90M-12.01M
Cash Flow
Free Cash Flow-1.75M-1.04M-17.23M-7.82M-1.62M1.51M
Operating Cash Flow-1.13M-720.00K-15.73M-6.77M-814.00K2.16M
Investing Cash Flow-5.99M970.00K-4.69M-37.48M-1.36M-5.15M
Financing Cash Flow1.09M-262.00K-2.92M-4.15M76.25M790.00K

Arteris Technical Analysis

Technical Analysis Sentiment
Negative
Last Price8.84
Price Trends
50DMA
9.55
Negative
100DMA
8.45
Positive
200DMA
8.81
Positive
Market Momentum
MACD
-0.12
Positive
RSI
43.66
Neutral
STOCH
17.62
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIP, the sentiment is Negative. The current price of 8.84 is below the 20-day moving average (MA) of 9.43, below the 50-day MA of 9.55, and above the 200-day MA of 8.81, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 43.66 is Neutral, neither overbought nor oversold. The STOCH value of 17.62 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AIP.

Arteris Risk Analysis

Arteris disclosed 66 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$315.67M21.1023.09%6.13%-9.22%-13.57%
61
Neutral
$35.51B8.11-11.05%1.89%8.55%-8.72%
58
Neutral
$744.29M19.55-3.34%-10.95%-111.40%
55
Neutral
$942.52M-36.20%-7.49%-64.33%
49
Neutral
$320.17M-1405.64%-3299.52%
47
Neutral
$278.49M-0.92%-6.09%97.33%
41
Neutral
$377.03M-1369.57%18.64%16.54%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AIP
Arteris
8.84
1.79
25.39%
AEHR
Aehr Test Systems
26.29
12.77
94.45%
NVEC
NVE
65.26
-5.10
-7.25%
INDI
indie Semiconductor
4.28
0.77
21.94%
BZAI
Blaize Holdings
3.12
-8.16
-72.34%
XPER
Xperi Inc
6.02
-2.04
-25.31%

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.

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.Date of analysis: Sep 04, 2025