Arteris, Inc.

Good afternoon, everyone, and welcome to the Arteries fourth quarter and full year 2024 earnings call. Please note this call is being recorded and simultaneously webcast. All material contained in the webcast is sole property and copyright of Arteries Incorporated with all rights reserved. For opening remarks and introductions, I will now turn the call over to Erica Mannion of Sapphire Investor Relations. Please go ahead.

Thank you and good afternoon. With me today from our terrace are Charlie Janik, Chief Executive Officer, and Nick Hawkins, Chief Financial Officer. Charlie will begin with a brief review of the business results for the fourth quarter and year ended December 31st, 2024. Nick will review the financial results for the fourth quarter, followed by the company's outlook for the first quarter and full year of 2025. We will then open the call for questions. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements. Additional information regarding these risks, uncertainties, and factors that could cause results to differ appear in the press release Artiris issued today and in the documents and reports filed by Artiris from time to time with the Securities and Exchange Commission. Please note, during this call, we will cite certain non-GAAP measures, including non-GAAP net loss, non-GAAP net loss per share, and free cash flow, which are not measures prepared in accordance with U.S. GAAP. The non-GAAP measures are presented as we believe that they provide investors with a means of evaluating and understanding how the company's management evaluates the company's operating performance. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with U.S. GAAP. A reconciliation of the non-GAAP measures to the nearest GAAP measure can be found in the press release for the quarter ended December 31, 2024. In addition, for a definition of certain of the key performance indicators used in this presentation, such as annual contract value, confirmed design starts, active customers, and remaining performance obligations, please see the press release for the quarter ended December 31, 2024. Listeners who do not have a copy of the press release for the quarter ended December 31, 2024 may obtain a copy by visiting the investor relations section of the company's website. In addition, management will be referring to the fourth quarter 2024 earnings presentation, which can be found in the investor relations section of the company's website under the events and presentations tab. Now I will turn the call over to Charlie.

Thank you, Erica, and thanks to everyone for joining us on our call today. In the fourth quarter of 2024, we achieved a record annual contract value plus royalties of $65.1 million as demand for commercial semiconductor system IP products continues to grow. Our success during the quarter was fueled by increased adoption of AI-driven enterprise computing and automotive SOCs. We also continue to generate growing momentum in other key verticals, including microcontrollers or MCUs. Business in the fourth quarter was driven by a mix of the addition of new customers, including several market leaders, as well as increased penetration in our current customer base, demonstrating the success of our land and expense strategic approach. For example, The largest win in the quarter came from a global top five technology company that expanded its use of the Arteris product portfolio, complementing previous NOC IP orders with the addition of Magilem and CSR compiler SOC integration automation software for their high-end AI SOCs for enterprise computing applications. Also, a major automotive OEM, and a top five automotive semiconductor company expanded their use of Arteris products for several additional SOCs given the combination of superior performance, power, and area efficiency, as well as functional safety for their mission-critical applications. Last quarter, we shared that we are strategically expanding into the microcontroller or MCU space where designs have grown in complexity in recent years to benefit from low latency, flexible power, and area-efficient commercial NOC IPs. We are pleased to report the strategic expansion has already started to bear fruit, with Infineon, the leading microcontroller manufacturer, becoming a new customer, standardizing on our terrace NOCs for automotive MCUs, which serves many of the world's top automotive Tier 1 vendors and OEMs. We believe this strategic MCU win will help to accelerate our growing royalty stream. Another key customer win was GigaDevice, where Arteris was selected by the microcontroller business unit as a result of our optimization in interconnect area and power consumption while ensuring functional safety. We're also seeing increased adoption of Arteris technology for chiplets, particularly for high-performance enterprise computing applications, sophisticated autonomous driving, and smart edge devices across market-leading companies, mid-sized players, and innovative startups. These customers are increasingly pursuing a multi-die strategy to expand compute power with Arteris as the core interconnect IP for each chiplet due to our technology's superior power performance and area, or BPA. One such example was 10storrent, which expanded the deployment of Arteris Knox for their next generation of chiplet-based AI solutions for high-performance, energy-efficient RISC-V computing for AI and HPC data centers. Similarly, Menta deployed Arteris for their Edge IP chiplet to ensure better performance and area efficiency for Edge AI and IoT computing. As we look back on 2024, we witnessed accelerating industry demand for a terrorist technology, which we believe was fueled by increased penetration of AI into not only high-end data centers and autonomous driving, but a wide range of new products, including edge devices. Complexity has, and we believe will continue to impact high-end compute and traditional low-end technologies, including MCUs, driving demand for efficiency that is enabled by Arteris network on chip technology. This has resulted in additional 14 new customers and increased wallet share of Arteris products in customers ranging from top five technology companies down to new innovative startups with our technology now being part of nearly 850 designs to date. Last year, we also saw increased adoption of the physically aware FlexNOC 5 which leverages advanced node and placement information to enable up to 5x faster physical coverage while supporting best-in-class PPA. We are happy to highlight that in the fourth quarter, over 75% of FlexNoc Interconnect IP customers chose this more advanced version, which was introduced just a year and a half ago. Also noteworthy, last year's addition of tiling and expanding mesh technology in FlexNoc and NCore product lines along with ARMv9 support, helped to advance Arteris as the right partner to support the most innovative chip designs. Moreover, I'm very excited to announce today our FlexGen Smart Knock IP, which has the potential to revolutionize semiconductor designs by delivering up to 10x engineering productivity and lowering power consumption and improving overall PPA. FlexGen builds upon the silicon-proven and physically aware FlexKnock 5 IP to automate the creation of high-performance network-on-chip knock designs. Supported by AI-driven automation, FlexGen reduces manual iteration by over 90%, providing expert-level knock topologies in hours or days instead of weeks, as demonstrated by DreamChip on their ADAS SoC, as well as multiple other designs. FlexGen is now ready for production deployments and has been delivered for evaluations to over 10 companies, some of which have been working with this technology for more than six months. FlexGen is the culmination of years of groundbreaking innovation and multiple patents with a goal of boosting productivity while improving quality of results to overcome extreme design challenges semiconductor and system companies face when creating today's chips or chiplets, which often contain 5 to 20 NOx each. We expect FlexGen to have a positive impact on our customers and on our business going forward. Lastly, our longstanding position as a neutral IP provider was illustrated in our continued success with ARM-based designs, customers using RISC-V, and x86 CPU IP architectures. To further support this expanding processor IP ecosystem, last quarter we announced a partnership with MIPS, to provide a pre-verified RISC-V reference platform to support mutual customers. The goal is to improve interoperability and shorten SOC integration for chip designs for automotive, enterprise computing, and edge AI applications using Arteris as their essential connectivity backbone. We believe that the scale and scope of our long-term opportunity remain robust and is supported by our current products and strong product pipeline of new system IP technologies, as well as growing relationships with some of the largest and most advanced electronics companies in the world. Our customers continue to innovate in exciting high-growth areas, such as generative AI and autonomous driving, using Arteris technologies and global support. With that, I'll turn it over to Nick to discuss our financial results in more detail.