Arteris, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Arteris, Inc. filed its 2023 10-K report detailing its financial performance and business operations.</b>

AI Summary

Arteris, Inc. (AIP) filed a Annual Report (10-K) with the SEC on February 20, 2024. Arteris, Inc. reported its 2023 fiscal year results on February 20, 2024. The company's business address is 900 E. Hamilton Ave, Suite 300, Campbell, CA 95008. Arteris, Inc. operates in the Semiconductors & Related Devices industry. The filing covers the fiscal year ending December 31, 2023. The company's SEC file number is 001-40960.

Why It Matters

For investors and stakeholders tracking Arteris, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Arteris, Inc.'s financial health, operational performance, and strategic positioning for the fiscal year 2023, crucial for investors assessing the company's value and future prospects. The detailed financial data and risk factors disclosed in this report are essential for stakeholders to understand the company's revenue streams, profitability, and potential challenges in the semiconductor industry.

Risk Assessment

Risk Level: medium — Arteris, Inc. shows moderate risk based on this filing. The company's reliance on a few key customers for a significant portion of its revenue and accounts receivable presents a medium risk, as the loss of or significant reduction in business from these customers could materially impact financial results.

Analyst Insight

Investors should analyze Arteris, Inc.'s customer concentration risk and revenue diversification strategies to assess the sustainability of its growth and profitability.

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed Period of Report)
• 2024-02-20 — Filing Date (Filed as of Date)
• 001-40960 — SEC File Number (SEC File Number)

Key Players & Entities

• Arteris, Inc. (company) — Filer name
• 0001667011 (company) — Central Index Key
• 3674 (company) — Standard Industrial Classification
• DE (company) — State of Incorporation
• 900 E. HAMILTON AVE, SUITE 300 (company) — Business Address Street 1
• CAMPBELL (company) — Business Address City
• CA (company) — Business Address State
• 95008 (company) — Business Address ZIP

FAQ

Risk Factors

• Customer Concentration Risk [medium — financial]: The company's financial results are significantly impacted by a limited number of customers, posing a risk if these relationships weaken or terminate.

Industry Context

Arteris, Inc. operates within the Semiconductors & Related Devices industry, a sector characterized by rapid technological advancements and significant R&D investment.

Regulatory Implications

The filing adheres to the reporting requirements of the Securities Exchange Act of 1934, ensuring transparency and providing standardized financial information to the public.

What Investors Should Do

1. Review the detailed financial statements and management's discussion and analysis in the 10-K for a thorough understanding of Arteris, Inc.'s performance.
2. Assess the company's customer concentration risk and its strategies for mitigating this dependency.
3. Analyze the risk factors section for potential challenges and their impact on the company's future operations and profitability.

Year-Over-Year Comparison

This is the initial 10-K filing for Arteris, Inc. as a public company, providing the first comprehensive annual report since its IPO.

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 par value AIP The Nasdaq Stock Market L
• $53.7 million — ecember 31, 2023 and 2022, we generated $53.7 million and $50.4 million in revenue, $15.7 mil
• $50.4 million — nd 2022, we generated $53.7 million and $50.4 million in revenue, $15.7 million and $6.8 mill
• $15.7 million — 7 million and $50.4 million in revenue, $15.7 million and $6.8 million in cash flows used in
• $6.8 million — 4 million in revenue, $15.7 million and $6.8 million in cash flows used in operating activit
• $36.9 million — flows used in operating activities, and $36.9 million and $27.4 million in net loss, respecti
• $27.4 million — ating activities, and $36.9 million and $27.4 million in net loss, respectively. We expect to
• $50.9 million — mber of years in the agreement term, of $50.9 million. ACV and trailing-twelve-months variabl
• $56.1 million — ble royalties and other revenue reached $56.1 million as of December 31, 2023. Since our ince

Filing Documents

• aip-20231231.htm (10-K) — 1953KB
• exhibit211fy2310-k.htm (EX-21.1) — 6KB
• exhibit231fy2310-k.htm (EX-23.1) — 2KB
• exhibit232fy2310-k.htm (EX-23.2) — 2KB
• exhibit311fy2310-k.htm (EX-31.1) — 16KB
• exhibit312fy2310-k.htm (EX-31.2) — 16KB
• exhibit321fy2310-k.htm (EX-32.1) — 7KB
• exhibit322fy2310-k.htm (EX-32.2) — 7KB
• exhibit971fy2310-k.htm (EX-97.1) — 36KB
• image_2.jpg (GRAPHIC) — 0KB
• image_4.jpg (GRAPHIC) — 0KB
• 0001667011-24-000010.txt (&nbsp;) — 10739KB
• aip-20231231.xsd (EX-101.SCH) — 68KB
• aip-20231231_cal.xml (EX-101.CAL) — 131KB
• aip-20231231_def.xml (EX-101.DEF) — 316KB
• aip-20231231_lab.xml (EX-101.LAB) — 976KB
• aip-20231231_pre.xml (EX-101.PRE) — 647KB
• aip-20231231_htm.xml (XML) — 1545KB

Business

Item 1. Business. 5

Risk Factors

Item 1A. Risk Factors. 23

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments. 58

C . Cybersecurity Risk Management and Strategy

Item 1 C . Cybersecurity Risk Management and Strategy. 58

Properties

Item 2. Properties. 59

Legal Proceedings

Item 3. Legal Proceedings. 59

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. 59 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 60

[Reserved.]

Item 6. [Reserved.] 61

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. 62

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 77

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data. 79

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 117

Controls and Procedures

Item 9A. Controls and Procedures. 117

Other Information

Item 9B. Other Information. 118

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . 118 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance. 119

Executive Compensation

Item 11. Executive Compensation. 119

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 119

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence. 119

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services. 119 PART IV

Exhibits, Financial Statement Schedules

Item 15. Exhibits, Financial Statement Schedules. 120

Form 10-K Summary

Item 16. Form 10-K Summary. 122

Signatures

Signatures 123 2 Table of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this report are forward-looking statements. Statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding liquidity, growth and profitability strategies and factors and trends affecting our business are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. The forward-looking statements in this Annual Report on Form 10-K include, among other things, statements about: our expectations regarding our revenue, expenses, and other operating results; our ability to acquire new customers and successfully retain existing customers; our ability to achieve or sustain our profitability; future investments in our business, our anticipated capital expenditures, and our estimates regarding our capital requirements; the costs and success of our sales and marketing efforts, and our ability to promote our brand; our growth strategies; our reliance on key personnel and our ability to identify, recruit, and retain skilled personnel; our ability to effectively manage our growth; our ability to protect our intellectual property rights and any costs associated therewith;

Business

Item 1. Business Overview We are a leading provider of semiconductor system IP, including interconnect and other intellectual property, (collectively, System IP) technology. Our System IP technology manages the on-chip communications and IP block deployments in System-on-Chip (SoC) semiconductors and systems of chiplets. Our leading proprietary System IP solutions achieve this by connecting client IP blocks such as processors, memories, artificial intelligence/machine learning (AI/ML) accelerators, graphics subsystems, safety and security, and other input/output subsystems (I/Os) via multiple Network-on-Chips (NoCs) in order for our customers to experience faster SoC targeting, as well as, more efficient, and lower cost solutions. Growth for our solutions is being driven by growing SoC sophistication and associated complexity, now extending into disaggregation of SoCs into systems which implement the communication protocol aspects and partner with industry leading providers like Synopsys, Cadence, Alphawave and others to connect to their die to die interfaces. The addition of more processors, channels of memory access, machine learning sections, additional I/Os interface standards, and other subsystems within SoCs is driving the need for more advanced System IP, including NoC interconnect IP's. The growth in the numbers of these connected on-chip subsystems places an increasing premium on the interconnect IP capability to move data inside complex SoCs. We believe this increase in SoC complexity has created a significant opportunity for sophisticated System IP solutions that incorporate NoC interconnect IP, SoC Integration Automation software (SIA) (formerly IP deployment software) and NoC interface IP (consisting of peripheral data transport IP and control plane networks connected to NoC interconnect IPs). Moreover, our technology can also provide more cost-effective solutions and reduce the risks of building and maintaining in-house NoC teams, which we believe ha