Arteris Inc (AIP) 2023 Q4 法說會逐字稿

Good afternoon, everyone, and welcome to the Arteris Fourth Quarter and Year End 2020 earnings call. Please note, this call is being recorded and simultaneously webcast All material contained in the webcast is sole property and copyright of batteries, Inc. with all rights reserved for opening remarks and introductions, I will now turn the call over to Erica Mannion of Sapphire Investor Relations.

大家下午好，歡迎參加 Arteris 2020 年第四季和年終收益電話會議。請注意，本次電話會議正在錄音並同時進行網路直播，網路廣播中包含的所有資料均為Battery, Inc. 的專有財產和版權，保留開場白和介紹的所有權利，我現在將把電話會議轉交給Sapphire Investor 的Erica Mannion關係。

Please go ahead.

請繼續。

Thank you and good afternoon. With me today from Arteris are Charlie Janac, 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 full year ended December 31, 2023. Nick will review the financial results for the fourth quarter and full year followed by the company's outlook for the first quarter and full year of 2024. We will then open the call for questions.

謝謝你，下午好。今天與我一起來自 Arteris 的是執行長 Charlie Janac 和財務長 Nick Hawkins。Charlie 首先將簡要回顧截至 2023 年 12 月 31 日的第四季和全年的業務表現。尼克將回顧第四季和全年的財務業績，然後對公司 2024 年第一季和全年的前景進行展望。然後我們將開始提問。

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.

在我們開始之前，我想提醒您，管理層將在本次電話會議中發表聯邦證券法含義內的前瞻性聲明。這些陳述涉及重大風險和不確定性，可能導致實際結果或事件與預期有重大差異，而您不應過度依賴前瞻性陳述。

Additional information regarding these risks, uncertainties, and factors that could cause actual results to differ, appear in the press release Arteris issued today and in the documents and reports filed by Arteris from time to time with the Securities and Exchange Commission.

有關這些風險、不確定性以及可能導致實際結果出現差異的因素的更多信息，請參閱 Arteris 今天發布的新聞稿以及 Arteris 不時向美國證券交易委員會提交的文件和報告。

Now 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 US GAAP. The non-GAAP measures are presented as we believe they provide investors with the means of evaluating and understanding how the company's management evaluates the company's operating performance.

現在，在本次電話會議中，我們將引用某些非 GAAP 指標，包括非 GAAP 淨虧損、非 GAAP 每股淨虧損和自由現金流，這些指標不是根據美國 GAAP 制定的指標。提出非公認會計原則措施是因為我們相信它們為投資者提供了評估和理解公司管理階層如何評估公司經營績效的方法。

These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with US GAAP. A reconciliation of these non-GAAP measures to the nearest GAAP measure can be found in the press release for the quarter ended December 31, 2023.

這些非公認會計原則措施不應孤立地考慮、替代或優於根據美國公認會計原則制定的財務措施。這些非 GAAP 衡量標準與最接近的 GAAP 衡量標準的調整表可在截至 2023 年 12 月 31 日的季度新聞稿中找到。

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, 2023.

此外，有關本簡報中使用的某些關鍵績效指標的定義，例如年度合約價值、已確認的設計啟動、活躍客戶和剩餘履約義務，請參閱截至 2023 年 12 月 31 日的季度新聞稿。

Listeners who do not have a copy of the press release for the quarter ended December 31, 2023 may obtain a copy by visiting the Investor Relations section of the company's website. Now I will turn the call over to CEO, Charlie Janac.

沒有截至 2023 年 12 月 31 日的季度新聞稿副本的聽眾可以透過造訪本公司網站的投資者關係部分取得副本。現在我將把電話轉給執行長查理·賈納克 (Charlie Janac)。

Thank you, Erica, and thanks to everyone for joining us on the call this afternoon. We're excited to report a strong finish to 2023, with annual contract value plus trailing 12 month variable royalties of $56.1 million.

謝謝你，艾麗卡，也謝謝大家今天下午加入我們的電話會議。我們很高興地報告 2023 年的強勁業績，年度合約價值加上過去 12 個月的可變特許權使用費為 5,610 萬美元。

We added four new customers in the fourth quarter, totaling 23 new customers for the year. Our customer base continues to expand across all of our key verticals and regions with particular success in automotive, enterprise, consumer and communications.

我們在第四季新增了 4 家客戶，全年新增客戶總數為 23 家。我們的客戶群不斷擴大到所有關鍵垂直行業和地區，在汽車、企業、消費者和通訊領域取得了特別成功。

Our customer base has now delivered approximately 3.5 billion SOCs to their electronic systems customers. The continued growth of SOC design complexity and associated design costs increasingly drives our customer base toward commercial system IP. As we look back at 2023, this accelerating industry adoption of commercial system IP solutions is demonstrated by a record number of license deals, and record high customer chip design activity, with 29 confirmed design starts for the quarter and 95 for the year.

我們的客戶群現已向其電子系統客戶交付了約 35 億個 SOC。SOC 設計複雜性和相關設計成本的持續成長日益推動我們的客戶群轉向商業系統 IP。回顧2023 年，創紀錄的許可交易數量和創紀錄的客戶晶片設計活動證明了商業系統IP 解決方案的行業採用加速，本季度確認的設計啟動數量為29 個，全年確認的設計啟動數量為95個。

I'm delighted to note that we added four new major semiconductor and system house companies as customers during the year. Not only are we seeing growth in a number of our customers, but we're also seeing further design penetration within our existing customer base.

我很高興地註意到，今年我們新增了四家主要半導體和系統公司作為客戶。我們不僅看到客戶數量的成長，而且還看到設計在現有客戶群中的進一步滲透。

License revenue was strong across all of our vertical markets and balanced across geographies. Notable achievements includes strong adoption of FlexNoC version 5 of the physically aware network-on-chip, which now represents majority of FlexNoC sales.

我們所有垂直市場的授權收入都很強勁，並且在各個地區保持平衡。顯著的成就包括實體感知片上網路 FlexNoC 第 5 版的大力採用，目前佔 FlexNoC 銷售額的大部分。

Customer design wins from the past years are developing into a growing royalty base for our tariffs, as we've seen a 32% year-over-year increase in royalties in 2023. Historically, our royalty revenue was primarily driven by leading-edge applications within the consumer space. But today, we see that our royalty stream is comprised of a broader mix across numerous customers in automotive, consumer electronics, and enterprise computing, and other applications.

過去幾年贏得的客戶設計正在發展成為我們關稅不斷增長的特許權使用費基礎，我們看到 2023 年特許權使用費同比增長 32%。從歷史上看，我們的特許權使用費收入主要由消費領域內的前沿應用程式驅動。但今天，我們看到我們的版稅流由汽車、消費電子、企業運算和其他應用領域眾多客戶的更廣泛組合組成。

Our continued momentum in artificial intelligence and machine learning, or AIML space, remains strong with AIML representing over 50% of our license deals in the quarter across a broad section of our verticals. For example, Rain AI, another innovative AI chip company, which recently selected the Arteris FlexNoC 5 physically aware network-on-chip IP for use in its Edge AI accelerator.

我們在人工智慧和機器學習（或 AIML 領域）領域的持續發展勢頭依然強勁，AIML 占我們本季在各個垂直領域的授權交易的 50% 以上。例如，另一家創新人工智慧晶片公司Rain AI最近選擇了Arteris FlexNoC 5物理感知片上網路IP用於其邊緣人工智慧加速器。

The low power, low latency, and high bandwidth capabilities of FlexNoC 5will be critical to helping Rain and its customers to process the large data requirements needed for generative AI applications.

FlexNoC 5 的低功耗、低延遲和高頻寬功能對於幫助 Rain 及其客戶處理生成式 AI 應用程式所需的大數據需求至關重要。

Communications where AI supports the globally accelerating transition to 5G is another vertical, where we saw strong adoption of Arteris products -- for the growing need for high bandwidth, low-power 5G chips that can only reach their performance goals by leveraging Arteris system IP.

人工智慧支援全球加速向5G 過渡的通訊是另一個垂直領域，我們看到Arteris 產品被廣泛採用，因為對高頻寬、低功耗5G 晶片的需求不斷增長，而這些晶片只能透過利用Arteris 系統IP來實現其性能目標。

As an example, EdgeQ, a leading innovator in 5G and AI technologies, has licensed Arteris FlexNoC for used in its comprehensive multimode 4G/5G base station. It is a risk cloud-based device that offers a scalable architecture, high throughput and low power consumption, effectively shrinking an entire base station onto a single SOC.

例如，5G 和人工智慧技術的領先創新者 EdgeQ 已獲得 Arteris FlexNoC 許可，用於其綜合多模 4G/5G 基地台。它是一種基於雲端的風險設備，提供可擴展架構、高吞吐量和低功耗，有效地將整個基地台縮小到單一 SOC 上。

Scalinx is another innovator in communications infrastructure, which has license both our Ncore and FlexNoC interconnect IPs for use in their next-generation modem SOC with the aims to provide telecom players with power to deliver ultra-high capacity multi-gigabit links over longer distances in an optimized total cost of ownership.

Scalinx 是通訊基礎設施領域的另一個創新者，它已獲得我們的Ncore 和FlexNoC 互連IP 的許可，用於其下一代調製解調器SOC，旨在為電信運營商提供遠距離傳輸超高容量多千兆位元鏈路的能力。優化的總擁有成本。

In automotive, we have seen an accelerating proliferation of AI-enabled advanced driver assistance systems -- ADAS -- and other advanced electronics to support electrification; automated driving; and electronic unit ECU consolidation, ensuring all electronics adhere to automotive, functional safety standards and other mission critical applications.

在汽車領域，我們看到人工智慧驅動的高級駕駛輔助系統（ADAS）和其他支援電氣化的先進電子產品正在加速普及；自動駕駛；和電子單元 ECU 整合，確保所有電子設備符合汽車、功能安全標準和其他關鍵任務應用。

To continue to expand our technology to better support this endeavor, in Q4, we announced that Ncore cache coherent interconnect IP has achieved ISO 26262 certification -- a key milestone to ensure safe technology is incorporated into modern vehicles and other autonomous systems.

為了繼續擴展我們的技術以更好地支援這項努力，我們在第四季度宣布Ncore 快取一致性互連IP 已獲得ISO 26262 認證，這是確保安全技術融入現代車輛和其他自動系統的一個重要里程碑。

Similarly, our Magillem SOC integration automation software also received its ISO 26262 TCL1 functional safety certification, further expanding upon our tariff's ongoing commitment to support mission critical safety obligations.

同樣，我們的 Magillem SOC 整合自動化軟體也獲得了 ISO 26262 TCL1 功能安全認證，進一步擴展了我們對支援關鍵任務安全義務的持續承諾。

The strong focus on automotive was recognized in the fourth quarter with our Arteris being awarded the Autonomous Vehicle Technology of the Year Award by Autotech Breakthrough. Finally, in the fourth quarter, Arteris has achieved ISO 9001 quality management system certification, further supporting customer confidence in our commitment to product and process quality.

第四季度，我們對汽車的強烈關注得到了認可，我們的 Arteris 被 Autotech Breakthrough 授予年度自動駕駛汽車技術獎。最後，Arteris 在第四季度獲得了 ISO 9001 品質管理系統認證，進一步增強了客戶對我們對產品和流程品質的承諾的信心。

Currently, certain macroeconomic dynamics, including geopolitical uncertainties, and the USBIS restrictions with respect to China and US trade, continue to impact our business. While these dynamics do create near-term headwinds, we believe that the scale and scope of our long-term opportunity remains robust. This is illustrated by our robust product pipeline of new system technologies, and solid relationships with some of the largest electronics companies in the world who continue to innovate in exciting areas such as generative AI and autonomous driving.

目前，某些宏觀經濟動態，包括地緣政治不確定性以及USBIS對中美貿易的限制，繼續影響我們的業務。儘管這些動態確實造成了短期阻力，但我們相信，我們長期機會的規模和範圍仍然強勁。我們強大的新系統技術產品線以及與世界上一些最大的電子公司的牢固關係證明了這一點，這些公司在生成式人工智慧和自動駕駛等令人興奮的領域不斷創新。

With that, I'll turn it over to Nick to discuss our financial results in more detail.

接下來，我將把它交給尼克，更詳細地討論我們的財務表現。

Thank you, Charlie, and good afternoon, everyone. As I review our fourth quarter and full-year results today, please note that I'll be referring to non-GAAP metrics. A reconciliation of GAAP to non-GAAP financials is included in today's earnings release, which is available on our website.

謝謝你，查理，大家下午好。當我今天回顧我們的第四季和全年業績時，請注意，我將指的是非公認會計準則指標。今天的收益報告中包含了 GAAP 與非 GAAP 財務數據的調整表，可在我們的網站上查看。

Total revenue for the fourth quarter was $12.5 million, up 12% year-over-year and above the top end of our guidance range. At the end of the fourth quarter, annual contract value -- or ACV -- plus trailing-12-month variable royalties and other revenue was $56.1 million, also above the top end of our guidance range. Remaining performance obligations, or RPO, at the end of the fourth quarter was $72.7 million, representing 26% year-over-year growth, growing through its highest level on record for Arteris.

第四季總營收為 1,250 萬美元，年增 12%，高於我們指導範圍的上限。截至第四季末，年度合約價值（ACV）加上過去 12 個月的可變特許權使用費和其他收入為 5,610 萬美元，也高於我們指導範圍的上限。截至第四季末，剩餘履約義務 (RPO) 為 7,270 萬美元，年增 26%，增長至 Arteris 有記錄以來的最高水準。

GAAP gross profit for the quarter was $11.1 million, representing a gross margin of 88%. Non-GAAP gross profit for the quarter was $11.3 million, representing gross margin of 90%. Total GAAP operating expense for the fourth quarter was $20.3 million compared to $20.4 million in the third quarter, down 1% sequentially.

該季度 GAAP 毛利為 1,110 萬美元，毛利率為 88%。該季度非 GAAP 毛利為 1,130 萬美元，毛利率為 90%。第四季 GAAP 營運費用總額為 2,030 萬美元，較第三季的 2,040 萬美元下降 1%。

Non-GAAP operating expense in the quarter was $16.8 million flat sequentially. As we've done throughout 2023, we will continue to proactively and prudently manage operating expenses, limiting spending to strategically critical areas.

本季非 GAAP 營運費用為 1,680 萬美元，與上一季持平。正如我們在 2023 年所做的那樣，我們將繼續積極、審慎地管理營運支出，將支出限制在策略關鍵領域。

GAAP operating loss for the fourth quarter was $9.2 million compared to a loss of $9.1 million in the year-ago period. Non-GAAP operating loss was $5.5 million, or 44%, compared to a loss of $5.8 million in the year ago period.

第四季 GAAP 營運虧損為 920 萬美元，去年同期為 910 萬美元。非 GAAP 營運虧損為 550 萬美元，或 44%，去年同期虧損為 580 萬美元。

Net loss in the quarter was $10.5 million, or diluted net loss per share of $0.29. Non-GAAP net loss in the quarter was $6.8 million, or diluted net loss per share of $0.18 based on approximately 36.8 million weighted average diluted shares outstanding.

本季淨虧損為 1,050 萬美元，攤薄後每股淨虧損 0.29 美元。本季非 GAAP 淨虧損為 680 萬美元，或基於約 3,680 萬股加權平均稀釋後每股攤薄淨虧損為 0.18 美元。

Turning up the balance sheet and cash flow, we ended the quarter with $53 million in cash, cash equivalents, and investments. Cash flow used in operations was approximately $3 million in the quarter. Free cash flow, which includes capital expenditure, was approximately negative $3.4 million, coming in better than the top end of our guidance range.

調整資產負債表和現金流，本季末我們的現金、現金等價物和投資為 5,300 萬美元。本季營運使用的現金流量約為 300 萬美元。包括資本支出在內的自由現金流約為負 340 萬美元，優於我們指導範圍的上限。

Moving on to our annual results, total revenue for 2023 was $53.7 million, up 7% year over year, reflecting our switch to a fully ratable revenue model at the end of the second quarter. Total operating expenses were $83.7 million compared to $75.7 million in the year-ago period, while non-GAAP operating expenses were $69.1 million compared to $62.8 million in the year-ago period. Net loss in 2023 was $36.9 million, or net loss per share basic and diluted of $1.3.

接下來是我們的年度業績，2023 年的總收入為 5,370 萬美元，年增 7%，反映出我們在第二季末轉向完全可評級收入模式。總營運費用為 8,370 萬美元，去年同期為 7,570 萬美元；非 GAAP 營運費用為 6,910 萬美元，去年同期為 6,280 萬美元。2023 年淨虧損為 3,690 萬美元，即每股基本虧損和稀釋後淨虧損為 1.3 美元。

Non-GAAP net loss was $21.6 million, or net loss per share basic and diluted of $0.60 based on approximately 35.7 million weighted average shares outstanding. Cash flow used in operations was $15.7 million in 2023, while free cash flow, which includes capital expenditure, was negative $17.2 million or 32% of revenue.

非 GAAP 淨虧損為 2,160 萬美元，或根據約 3,570 萬股加權平均計算，每股基本虧損和稀釋淨虧損為 0.60 美元。2023 年，營運中使用的現金流為 1,570 萬美元，而包括資本支出在內的自由現金流為負 1,720 萬美元，佔收入的 32%。

I would now like to turn to our outlook for the first quarter and full year of 2024. For the first quarter, we expect ACV plus trailing 12 month variable royalties $55 million to $59 million and revenue of $12.1 million to $13.1 million, with non-GAAP operating loss margin of 41% to 61%, and non-GAAP free cash flow margin of negative 9% to positive 11%, reflecting strong sales in the prior quarter.

我現在想談談我們對 2024 年第一季和全年的展望。對於第一季度，我們預計ACV 加上過去12 個月可變特許權使用費為5,500 萬至5,900 萬美元，收入為1,210 萬美元至1,310 萬美元，非GAAP 營運虧損率為41% 至61%，非GAAP 自由現金流利潤率從負 9% 變為正 11%，反映了上一季的強勁銷售。

For the full year 2024, our guidance is as follows. ACV plus trailing 12-month variable royalties to exit 2024 at $62 million to $68 million, up 16% year-over-year at the midpoint. Revenue of $54.5 million to $57.5 million. Non-GAAP operating loss margin of 33% to 43%, and non-GAAP free cash flow margin of negative 5% to positive 5%.

對於 2024 年全年，我們的指導如下。到 2024 年，ACV 加上過去 12 個月的可變特許權使用費將達到 6,200 萬至 6,800 萬美元，中點年增 16%。收入為 5,450 萬美元至 5,750 萬美元。非 GAAP 營運虧損率為 33% 至 43%，非 GAAP 自由現金流率為負 5% 至正 5%。

We are encouraged by the above guidance performance and strong deal activity in the prior quarter. While we expect some quarter-to-quarter cash flow fluctuations throughout the year due to the timing of deals, we expect that with the actions we have taken in 2023, we will become a free cash flow positive in 2024.

我們對上一季的上述指導表現和強勁的交易活動感到鼓舞。雖然我們預計由於交易時間表，全年現金流量會出現一些季度波動，但我們預計，透過 2023 年採取的行動，我們將在 2024 年實現自由現金流為正。

With that, I will turn the call over the operator to open it up for questions. Operator?

這樣，我將把電話轉給接線員，以便提問。操作員？

Thank you. Ladies and gentlemen, we will now begin the question and answer session. (Operator Instructions)

謝謝。女士們、先生們，我們現在開始問答環節。（操作員說明）

Matt Ramsay, Cowen.

馬特拉姆齊，考恩。

Thank you very much, gentlemen. Good afternoon.

非常感謝你們，先生們。午安.

I guess one thing I wanted to get an update on, Charlie, and you mentioned some of it in your script, but over the last couple of quarters, just on a run rate basis, licensing in China was a fairly material headwind. And I'm just trying to get an idea of if the environment has improved at all? Has the headwind, has it at least sort of stabilized, and the run rate going forward? And if there's been any real change in China versus 90 days ago when we had this chat? Thanks.

我想我想了解一件事的最新情況，查理，你在劇本中提到了其中的一些內容，但在過去的幾個季度中，僅從運行率來看，中國的許可是一個相當大的逆風。我只是想知道環境是否有改善？逆風是否已至少穩定下來，以及未來的運行速度？與 90 天前我們進行這次談話時相比，中國是否有任何真正的變化？謝謝。

Yes, Matt. So, yes, we saw a significant decline in the middle of Q3 but things that have not gotten -- I think things are stable at the moment. I don't think the economy in China has improved. I think there's some other cockroaches to be revealed, but there is a significant deal flow coming from China, and we do not see things getting any worse.

是的，馬特。所以，是的，我們在第三季中期看到了顯著下降，但事情還沒有發生——我認為目前情況是穩定的。我不認為中國的經濟有改善。我認為還有其他一些問題需要揭露，但有大量交易來自中國，我們認為事情不會變得更糟。

Where -- our strategy in response to this has been as the capital has gotten tight for the smaller companies in China, we have shifted our attention to larger companies that are designing SOCs, and so we anticipate that the we'll know the situation in China will be stable going forward.

我們對此的應對策略是，隨著中國小公司的資本變得緊張，我們已將注意力轉向正在設計 SOC 的大公司，因此我們預計我們會了解中國的情況中國未來將保持穩定。

It might get better, but we're planning on stability.

它可能會變得更好，但我們正在計劃穩定性。

Hey, Matt, this is Nick. Just a couple of bits of color to Charlie's excellent commentary. When we come to looking at the numbers side, and I'm just looking at revenue here, I'm not looking at ACV, which is obviously a separate piece, but just the impact on ratable revenue -- GAAP revenue -- the impact that we felt in 2023 from the China headwind was approximately $2 million. That was only obviously representing third and fourth quarter. The impact in 2024, and this is assuming nothing gets better -- I also assume that only gets worse, obviously -- that impact would be approximately double that, at $4 million headwind.

嘿，馬特，這是尼克。只是為查理的精彩評論增添了一些色彩。當我們看數字方面時，我只看這裡的收入，我不看 ACV，這顯然是一個單獨的部分，而只是對應納稅收入的影響 - GAAP 收入 - 影響我們認為2023 年中國逆風帶來的損失約為200 萬美元。這顯然只代表第三和第四季。2024 年的影響，這是假設一切都沒有好轉的情況下——我還假設情況只會變得更糟，顯然——這種影響將大約是這一數字的兩倍，即400 萬美元的逆風。

Thank you both for that, and thanks, Nick, for the numbers.

謝謝你們倆，也謝謝尼克提供的數字。

I guess -- since I have you, Nick -- I noticed in the full year 2024 outlook, I mean, you have to squint a little at the numbers, but the midpoint is roughly free cash flow breakeven. I think our team had been assuming sort of free cash flow breakeven second half of '24 and maybe non-GAAP breakeven second half of '25.

我想，尼克，既​​有你，我注意到 2024 年全年展望中，我的意思是，你必須仔細觀察這些數字，但中點大致是自由現金流盈虧平衡點。我認為我們的團隊一直假設自由現金流在 24 年下半年達到損益兩平，也可能在 25 年下半年達到非 GAAP 損益兩平。

Things seem a little bit ahead of that schedule. If you're able to guide that for the full year on free cash flow, so maybe you could walk us through what's changed there?

事情似乎有點提前了。如果您能夠指導全年的自由現金流，那麼也許您可以向我們介紹那裡發生了什麼變化？

Is it lower OpEx? Is it more visibility on revenue? I'm just trying to figure out because it seems at first look that things seem like things have been pulled in a little bit on free cash flow breakeven, which is great to see. Thanks.

營運支出是否較低？收入是否更加可見？我只是想弄清楚，因為乍一看，自由現金流盈虧平衡點似乎有所下降，這是很高興看到的。謝謝。

Yes, it's always -- free cash flow is always going to be a bit of a variable [fees], Matt. I mean, the first and fourth quarters, you probably saw in our commentary, that we benefited again from a kind of a present from customers in Q4 of '23 to the tune of a few small number of millions of dollars, where they paid early again, and I don't know why that is, but they do.

是的，它總是——自由現金流總是會有點變化[費用]，馬特。我的意思是，您可能在我們的評論中看到，第一季和第四季度，我們再次受益於客戶在23 年第四季度提供的一種禮物，金額為數百萬美元，他們提前付款了。再次，我不知道為什麼會這樣，但他們確實如此。

Nevertheless, we're still gunning for free cash flow-neutral slightly to slightly positive for FY '24. You've obviously also noticed that we're gunning for or we're guiding for free cash flow neutral in first quarter, but not all quarters are created equally.

儘管如此，我們仍希望 24 財年的自由現金流呈現中性至小幅正值。您顯然還注意到，我們正在努力或正在指導第一季的自由現金流保持中性，但並非所有季度的創造都是平等的。

The second quarter and third quarter tend to be weaker from a free cash flow perspective. The fourth quarter and then sometimes the first quarter, depending on deals, tend to be a positive. So it's really a moment where at that stage where we might still see it a softer sawtooth of free cash flow in the quarters, but if you look at the overall trajectory of the year, we're looking at free cash flow neutral positive.

從自由現金流的角度來看，第二季和第三季往往較弱。第四季度，有時甚至第一季度，取決於交易情況，往往是正面的。因此，在這個階段，我們可能仍會看到各季度自由現金流呈現較軟的鋸齒狀，但如果你看看今年的整體軌跡，我們會看到自由現金流呈現中性正值。

Got it. That's helpful. Just my last follow up there. And kind of piggybacks on that prior question is the second half '25, we're still thinking about non-GAAP breakeven. Then second half of '26, the plan would still be for GAAP breakeven. Is that still on track or is that move moved up maybe a hair as well?

知道了。這很有幫助。這只是我最後一次跟進。與先前的問題有關的是 25 年下半年，我們仍在考慮非 GAAP 損益平衡。然後到 26 年下半年，該計劃仍將實現 GAAP 收支平衡。是否仍在正軌上，或者這項舉措也向上移動了一點點？

No. So I think on the non-GAAP OpEx, that we're fully ratable. It's harder to change -- to shift the needle -- on revenue. We do expect to break the sale on non-GAAP profitability as we exit '25 and enter '26. So the full year '25. We don't think at this stage, although we're not guiding it clearly, we don't think that is feasible to be non-GAAP operating positive -- operating profit positive.

不。因此，我認為就非公認會計準則營運支出而言，我們完全可以評級。改變收入——改變方向——更困難。我們確實預計，當我們退出“25 年”並進入“26 年”時，將打破非 GAAP 盈利能力的銷售。所以25年全年。我們認為，在現階段，雖然我們沒有明確指導，但我們認為非公認會計原則的營運利潤為正是不可行的。

But we'd expect to see the exit of that year as being the pivot point as to where we go into non-GAAP profitability. And then we see we enjoy the benefits of that through 2026. Does that make any sense around your question?

但我們預期當年的退出將成為我們實現非公認會計原則獲利的關鍵點。然後我們看到，到 2026 年，我們都可以享受這項好處。這對你的問題有意義嗎？

No, that Nick, that's obviously we're we're looking at decent ways out here given the macro. So I appreciate that color. And yes, it does answer the question, but thank you very much, guys. Congrats and I'll jump back in queue.

不，尼克，顯然我們正在考慮宏觀因素，尋找合適的出路。所以我很欣賞這種顏色。是的，它確實回答了這個問題，但非常感謝你們，夥計們。恭喜，我會插回隊列。

Thanks, Matt.

謝謝，馬特。

Hans Mosesmann, Rosenblatt.

漢斯·摩西曼，羅森布拉特。

Hey thanks. Hey, guys, Good evening and congrats on the execution.

嘿謝謝。嘿，夥計們，晚上好，祝賀執行。

Hey, Charlie or Nick -- ASPs for licensing. What is that trend? How is that looking as we go into 2024?

嘿，查理或尼克——用於許可的 ASP。那個趨勢是什麼？進入 2024 年，情況如何？

So we've we've announced FlexNoC 5, or we started shipping it in the beginning of June of 2023. So we have a whole year of delivering it. FlexNoc 5 is now over half of FlexNoc sales. So the ASP of that is about 33% higher because of the second-generation physical awareness. So the ASP is tracking to kind of to our projections -- it's going up every year.

因此，我們已經宣布推出 FlexNoC 5，或者我們已在 2023 年 6 月初開始出貨。所以我們有一整年的時間來交付它。FlexNoc 5 目前佔 FlexNoc 銷售額的一半以上。因此，由於第二代物理意識，平均售價提高了約 33%。因此，平均售價在某種程度上符合我們的預測——每年都在上漲。

And we said, on the IPO, that we're going to be at something like 1 million average share of project deal size by 2026. And I think we're still we're tracking to that. So the ASPs are rising well driven by essentially new functionality that we're delivering into the marketplace to address the complexity of some of the stuff, the generative AI and the automotive SOCs.

我們在 IPO 時表示，到 2026 年，我們的專案交易規模平均將達到 100 萬左右。我認為我們仍在追蹤這一點。因此，ASP 的成長受到我們向市場提供的本質上新功能的良好推動，這些新功能是為了解決某些內容、生成式​​ AI 和汽車 SOC 的複雜性。

Great. And you may have mentioned this, I apologize, I have been traveling. What were royalties as a percentage of revenues?

偉大的。您可能已經提到過這一點，我很抱歉，我一直在旅行。特許權使用費佔收入的百分比是多少？

Yes, so let me take that. Let me take that one, Matt. So if I give you the numbers, it's probably easier.

是的，所以讓我接受。讓我拿那個，馬特。所以如果我給你數字，事情可能會更容易。

I mean, royalties come in at around sort of 10% of total. But if you look at '22, for example, we had total royalties and other of 4.3. But if you strip out the other, which is really just -- it has nothing to do with royalties. It's things like training, SOWs and various other things, the company recognize that license revenue.

我的意思是，版稅大約佔總收入的 10%。但如果你看看 22 年，我們的特許權使用費和其他費用總計為 4.3。但如果你剔除另一個，這其實與版稅無關。諸如培訓、SOW 和其他各種事情，公司都承認許可證收入。

If you just look at the variable royalties that we reported was $3.1 million in 2022. If you look at '23, it was $5.1 million. So that's obviously a pretty big increase. Bear in mind that to be fair, there's some audit stuff in there.

如果你看看我們報告的 2022 年可變特許權使用費為 310 萬美元。如果你看看 23 年，它是 510 萬美元。所以這顯然是一個相當大的成長。請記住，公平地說，其中有一些審計內容。

There was an audit. We had some really successful audits thanks to our for our audit [guru]. So we have as I say very low, big tailwind from [royalty] audit. If you strip out those, and you just get back to pure pure variable royalties, then we're up around 45%, 50% year-over-year.

有一個審計。感謝我們的審計，我們進行了一些非常成功的審計[大師]。因此，正如我所說，我們從[特許權使用費]審計中獲得了非常低的、巨大的推動力。如果你去掉這些，你就回到純粹的可變特許權使用費，那麼我們同比增長了 45%、50% 左右。

And in our guidance, we don't actually guide royalties, but you can look for a similar kind of growth on royalties into '24. And there's no reason why that shouldn't continue in the end. We don't actually project any and sort of other revenue.

在我們的指導中，我們實際上並沒有指導特許權使用費，但您可以在 24 世紀尋找類似的特許權使用費增長。而這種情況最終沒有理由不繼續下去。我們實際上並沒有預測任何其他收入。

We don't project or include in our guidance any audit benefits and the audit pickups, even though they may well happen. So we're probably seeing at least maintain the same base of both royalties and maybe increasing.

我們不會在我們的指南中預測或包含任何審計收益和審計收益，即使它們很可能會發生。因此，我們可能會看到至少兩種版稅保持相同的基數，甚至可能會增加。

So looking at your $5 million pipeline at $5.3 million, total total versus $53 million. So it's about 10% of total revenue. It's a very roundabout way of answering the question, we're getting some color in the middle, I hope you don't mind.

因此，請看看您的 500 萬美元管道，總金額為 530 萬美元，而總金額為 5300 萬美元。所以它大約佔總收入的10%。這是回答問題的一種非常迂迴的方式，我們在中間得到了一些顏色，我希望你不介意。

Right. And so to kind of summarize that, so this year, it would probably grow as a percentage of total revenues by a few points, is that right? Kind of hard to (inaudible)

正確的。總結一下，今年它佔總收入的百分比可能會成長幾個百分點，對嗎？有點難（聽不清楚）

Yes, you you'd expect it to be growing this year. Albeit we will not have the audits. The audit benefits we had this year, we will not get next year. Or we -- sorry, we may, in '24, we're not expecting, we're not predicting or forecasting that we'll get them in our guidance. But in reality, yes, we may well get those again. (multiple speakers)

是的，你預計今年它會成長。儘管我們不會進行審計。今年我們享受到的審計福利，明年我們將得不到。或者我們 - 抱歉，我們可能會在 24 年，我們不會期望，我們不會預測或預測我們會將它們納入我們的指導中。但實際上，是的，我們很可能會再次得到​​這些。（多個發言者）

Okay. Perfect. And then last question and I'll let somebody else ask a question. You guys have been kind of sharing with investors that in the automotive space, SOCs per vehicle could be over 20 over, say, like 2026 to 2027 timeframe. Is that still kind of like a good number to talk about with investors the number of SOCs per vehicle?

好的。完美的。最後一個問題，我會讓其他人問一個問題。你們一直在與投資者分享，在汽車領域，每輛車的 SOC 可能會超過 20 個，例如 2026 年到 2027 年的時間範圍內。每輛車的 SOC 數量仍然是一個適合與投資者討論的數字嗎？

Yes. The numbers are still good but for example, this is public information. If you were to pay attention, for example, Mobileye booth at CES in January, they were showing basically automated driving control boards that not only had two SOCs in there, but also three and four, right?

是的。這些數字仍然不錯，但例如，這是公開資訊。例如，如果你留意一下，例如 1 月 CES 上的 Mobileye 展位，他們展示的基本上是自動駕駛控制板，其中不僅有兩個 SOC，還有三個和四個，對吧？

So we feel pretty comfortable with the projected 23 SOCs per car number, but it could be more. And on the other hand, there are some SOC consolidation where people are trying to consolidate the drop, which meant the dashboard control and things like this.

因此，我們對預計每輛車 23 個 SOC 感到非常滿意，但實際上還可以更多。另一方面，有一些 SOC 整合，人們試圖整合下降，這意味著儀表板控制和類似的東西。

So I think the the low to mid 20s number, it remains to be good.

所以我認為 20 多歲左右的數字仍然不錯。

Excellent. Thank you very much.

出色的。非常感謝。

Thank you. (Operator Instructions)

謝謝。（操作員說明）

Kevin Garrigan, WestPark Capital.

凱文·加里根，西園資本。

Yes, hey, good afternoon all, and thanks for letting me ask a question. So just kind of going up on this question, Charlie, in your in your script, you noted that you're seeing an acceleration in AI and automotive, and then you kind of mentioned Mobileye going ahead with now having multiple SOCs to their chip designs.

是的，嘿，大家下午好，謝謝你讓我問問題。所以，查理，在你的劇本中，就這個問題而言，你注意到人工智慧和汽車領域正在加速發展，然後你提到 Mobileye 正在繼續在其晶片設計中使用多個 SOC 。

Are automotive OEMs and automotive related companies still continuing with with new chip designs? Are you seeing any push outs there? And then just kind of wondering how you're viewing the automotive market in 2024?

汽車原始設備製造商和汽車相關公司是否仍在繼續新的晶片設計？你看到那裡有任何推出嗎？然後想知道您如何看待 2024 年的汽車市場？

Yes. So there's a increasing number of car OEMs building chips, so I think out of 35 OEMs, I think we have 9 as customers. Ultimately, it's not clear to me that all those projects are going to go to production because I think all the car companies need to understand architectures and the cost structures of automated driving.

是的。因此，越來越多的汽車原始設備製造商製造晶片，所以我認為在 35 家原始設備製造商中，我認為我們有 9 家作為客戶。最終，我不清楚所有這些項目是否都會投入生產，因為我認為所有汽車公司都需要了解自動駕駛的架構和成本結構。

But at the end, some of the people like Mobileye have just a huge momentum and huge critical mass in actually getting it and mission critical solution like that into the market.

但最終，像 Mobileye 這樣的一些人擁有巨大的動力和巨大的臨界質量，能夠真正將其和類似的關鍵任務解決方案推向市場。

But clearly, all the car OEMs, in order to be competitive, are doing some electronic design work, which provides an opportunity for Arteris. And yes, our design win rate in automotive continues to be quite positive.

但顯然，所有汽車OEM廠商為了保持競爭力，都在做一些電子設計工作，這為Arteris提供了機會。是的，我們在汽車領域的設計獲勝率仍然非常樂觀。

Okay, perfect. Perfect. And then just as a quick follow-up, just a clarification. The four active customers in the quarter -- were these all new customers and customers that were using internal solutions that shifted to using Arteris?

好的，完美。完美的。然後作為快速跟進，只是進行澄清。本季的四個活躍客戶 - 這些都是新客戶和使用內部解決方案轉向使用 Arteris 的客戶嗎？

So there's actually two numbers. They just happened to be the same. So yes, in the fourth quarter, we added four new net new customers, right? And those -- some of those were startups, some were big companies. We also added in the year, we have a list of basically top 20 semiconductor companies, and top 20 system houses.

所以其實有兩個數字。他們只是碰巧是一樣的。所以，是的，在第四季度，我們增加了四個新的淨新客戶，對吧？其中一些是初創公司，一些是大公司。今年我們還補充說，我們有一份基本上排名前 20 的半導體公司和排名前 20 的系統公司的名單。

And all of those were mainly internally focused. So they made their own internal system IP, and four of those companies have decided to go with Arteris. So the whole thesis of this of this system IP market is that you have maybe 30% of the market be commercial, and two-thirds being internal.

所有這些都主要集中在內部。因此他們製作了自己的內部系統 IP，其中四家公司決定與 Arteris 合作。因此，這個系統 IP 市場的整個論點是，你可能有 30% 的市場是商業的，三分之二是內部的。

And the thesis is that over the next four or five years, the market will go two-thirds commercial and one-third internal, and that provides a major opportunity for people like Arteris, but a lot of these companies are starting slowly, right?

論文的主題是，在未來四、五年內，市場將三分之二商業化，三分之一內部化，這為像Arteris 這樣的人提供了一個重大機會，但許多這樣的公司起步緩慢，對嗎？

So where we're getting sort of beachhead deals. We're getting to know those large customers. We're getting to negotiate contracts with them. And we're wanting to do a good job so that they feel comfortable ordering more based on the success of the initial projects.

所以我們在哪裡獲得了灘頭陣地交易。我們正在了解那些大客戶。我們正在與他們談判合約。我們希望做好工作，以便他們在初始專案成功的基礎上放心訂購更多產品。

Okay. Perfect.I appreciate that. Thanks, guys.

好的。完美。我很欣賞。多謝你們。

Thank you. That concludes our question-and-answer session. I will now turn the call over to Charlie Janac for closing comments.

謝謝。我們的問答環節到此結束。我現在將把電話轉給查理·賈納克（Charlie Janac）徵求結束意見。

Yes. So thank you for your time and interest in Arteris. We look forward to meet with you at the upcoming investor conferences that we are participating in during the next couple of weeks and months. And we look forward to updating you on our business progress in the quarters to come. So thank you very much for your attention.

是的。感謝您花時間關注 Arteris。我們期待在接下來的幾週和幾個月內參加的即將舉行的投資者會議上與您見面。我們期待向您通報我們未來幾季的業務進展。非常感謝您的關注。

Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect.

謝謝。我們今天的會議到此結束。感謝大家的參與。你們都可以斷開連線。