Arteris Q3 2023 Earnings Call Transcript

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November 7, 2023

There are 10 speakers on the call.

Operator

Afternoon, everyone, and welcome to the Arterus Third Quarter 2023 Earnings Call. Please note this call is being recorded and simultaneously webcast. All material contained in the webcast is sold property and copyright of Arteris Inc. With all rights reserved. For opening remarks and introductions, I will now turn the call over to Erica Mannion of Sapphire Investor Relations.

Operator

Please go ahead.

Speaker 1

Thank you, and good afternoon. With me today from Arteris are Charlie Janek, Chief Executive Officer and Nick Hawkins, Chief Financial Officer. Charlie will begin with a brief review of the results for the Q3 ended September 30, 2023. Nick will review the financial results for the Q3 followed by the company's outlook for the Q4 and full year of 2023. We will then open the call for questions.

Speaker 1

Before we begin, I'd like to remind you 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 actual results to differ appear in the press release Artarus issued today and in the documents and reports filed by Artarus 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.

Speaker 1

GAAP. The non GAAP measures are presented as we believe they provide investors with the means of evaluating and understanding standing of 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.

Speaker 1

A reconciliation of these non GAAP measures to the nearest GAAP measure can be found in the press release for the quarter ended September 30, 2023. In addition, for a definition of Certain of the key performance indicators used in this presentation, such as annual contract value, confirmed design starts, For active customers and remaining performance obligations, please see the press release for the quarter ended September 30, 2023. Listeners who do not have a copy of the press release for the quarter ended September 30, 2023, may obtain a copy by visiting the Investor Relations section on the company's website. I will now turn the call over to CEO, Charlie Janet.

Speaker 2

Thank you, Erica, And thanks to everyone for joining us on the call this afternoon. We're pleased to report a solid third quarter with annual contract value plus trailing 12 month royalties of $57,300,000 and the addition of 22 new customer chip design. We added 2 new customers and numerous license expansion deals from existing customers, 3 of which were with top 10 global technology companies. Our customers' design pipelines continue to be robust across enterprise computing, consumer electronics, Automotive, Industrial and Communications with many SoC projects incorporating machine learning or AI applications. As we have stated previously, we believe that SoC design complexity, including in the emerging chiplet markets, continues to grow, leading to increasing importance of commercial system IP.

Speaker 2

Several established companies who today develop the bulk of their system IP internally are looking to either augment those capabilities or improve their schedules and costs by outsourcing system IP connectivity to commercial vendors such as Arcadis. We are seeing an emerging confirmation of this trend in our customer base. 1 of the customers we added in the 3rd quarter is another top semiconductor company, securing a long term foundational relationship with yet another industry leader. Arterus is now engaged with the majority of the world's top semiconductor companies who have historically used internal system IP solution. Though some of these relationships are only initial engagements, these design wins demonstrate the willingness of major semiconductor companies to deploy commercial system IP products from leading and proven commercial vendors such as Arteris.

Speaker 2

Deals in the Q3 were characterized by strong demand across all our core market segments, led by design wins in Enterprise Computing, Consumer Electronics, Communications and Automotive. The growing wave of artificial intelligence and machine learning or AIML application is evidenced by our licensing activity as over half of our licensing deals in the Q3 are enabling AI ML design. As an example of our continuing AIML momentum, we recently announced the deployment of our Teris FlexDock interconnect used in new realities Inference Servers SoC. As part of this new inference server, Arcares provided connectivity for their NR1 SoC to support the movement of very large amounts of data in generative AI applications. The Challenges that NewReality was facing require addressing SoC density and latency performance to provide improved total cost of ownership.

Speaker 2

This new reality inference server connected by our tariffs is further proof that our system IP is an essential part of building and deploying such AI solutions. Another example is our partnership with Fraunhofer IESE, a leading research institute in the area of software and system engineering methods to accelerate the development of AI ML SoC. In very high bandwidth applications such as those used for generative AI and large language models, DRAM performance is critical piece of the puzzle to move the amounts of data needed with customer AI requirement. The performance of our TeriSystem IP coupled with Fraunhofer memory exploration framework is expected to enable mutual customers to improve performance, reduce costs and accelerate the development of AIML Electronics. We are also seeing continued success with leading semiconductor industry players across multiple verticals, including high performance computing, mobile handsets networking and more, as highlighted by the announcement of our partnership with Allchip, a top tier provider of silicon design in Production Services.

Speaker 2

Through this partnership with Arteris, All Chip can deliver to its customers highly optimized SoCs, taking full advantage of the efficiency, scalability and configurability of our NOC technology, with particular focused on AI, autonomous driving, vision systems and consumer electronic products. We are seeing a growing number of different processor IPs deployed ranging from those provided by Arm to various RISC V providers and internal architectures often connected together on the same SoC. Arterus is working closely with ARM and several RISC V providers, including a recently announced partnership with Semi Dynamics, We provide customizable RISC V Processor IP and specializes in high bandwidth, high performance cores. The partnership aims to provide a better joint solution for data center oriented AI ML applications. I'm proud to mention Arcaria's continuous innovation was recognized with 2 awards granted during the quarter.

Speaker 2

The first, Technical Innovation of the Year was given in the 20th Annual International Business Awards for our FlexNox 5 Physically Aware Nox. Arterus was chosen among over 3,700 nominations from organizations in over 60 countries. The second award, Autonomous Vehicle Technology of the Year, was given by Autotech Breakthrough for Arcadia's fundamental role in building advanced Driver Systems Systems, ADAS and Autonomous Driving SoCs, which combine AI and functional safety. OTTO Tech Breakthrough analyzes the industry's automotive and transportation technology innovation and our turns was chosen among over 1600 technology innovations from 15 different countries. Moreover, I'd like to provide an update on the momentum of our recent product release, which we believe is the industry's 1st and only commercially available physically aware FlexNOC 5 NOC IP, which we launched at the end of the Q2.

Speaker 2

Given the growing need for effective physical closure for all SoCs gold 60 nanometer, We are seeing strong customer interest. We have now shipped FlexNOC 5 to 9 customers, including several top technology companies. In addition, we are seeing growing customer interest in FlexNOC 5 adoption in the Q4 of 2023 and out into 2024 and subsequent years. Finally, I'm pleased to announce that we achieved an important milestone with the ISO 9,001 Quality Management System Certification, setting the solid foundation for further growth as we continue to and our product portfolio and silicon deployment, which has already reached 3,500,000,000 devices. Currently, certain macroeconomic headwinds, including geopolitical uncertainties and global recessionary concerns remain in place.

Speaker 2

We continue to be impacted by U. S. CIS restrictions with respect to China U. S. Trade as well as tightening credit conditions globally, which is impacting the ability of our smaller customers to raise capital.

Speaker 2

Notably in the Q3, we saw increasing softness in the China market as well as further lengthening of sales cycles globally. While these dynamics may create near term headwinds, we believe that the scale and the scope of our long term opportunity remains robust. The Q4 has historically been our strongest quarter. We're encouraged by what we're seeing in the current Q4. We have robust product pipeline of new system IP technologies and solid relationships with some of the largest electronics companies in the world We continue to innovate in exciting areas such as generative AI and autonomous driving.

Speaker 2

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

Speaker 3

Thank you, Charlie, and good afternoon, everyone. As I review our Q1 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. Total revenue for the Q3 was $13,300,000 up 5% year over year and exceeding the midpoint of our guidance range.

Speaker 4

At the end of the Q3, annual contract value or ACV Australian 12 month royalties and other revenue was $57,300,000 As Charlie mentioned, in the Q3, we began to see increasing softness in the China market that resulted in ACV plus 20 12 month royalties coming in below the midpoint

Speaker 3

of our guidance range. So far

Speaker 4

this quarter, we have not seen any improvement in the Chinese market.

Speaker 3

GAAP gross profit in the quarter was $12,000,000 representing a gross margin of 90%. Non GAAP gross profit in the quarter was $12,200,000 representing a gross margin of 92%. Total GAAP operating expenses for the Q3 was $20,400,000 compared to $19,400,000 in the prior year period. Non GAAP operating expense in the quarter was $16,800,000 compared to $16,000,000 in the prior year period and to $17,900,000 in the 2nd quarter, representing a sequential OpEx decrease of $1,100,000 or 6%, benefiting from tight cost control, coupled with some limited one time credits. The year over year increase was primarily driven by continued R and D investment in next generation NOC IP and SoC integration automation software products.

Speaker 3

In the 4th quarter And going into next year, we will continue to proactively manage operating expenses, limiting investments to strategic areas. GAAP operating loss for the 3rd quarter was $8,500,000 compared to a loss of $7,800,000 in the year ago period. Non GAAP operating loss was $4,600,000 or 34 percent compared to a loss of $4,200,000 in the year ago period. Net loss for the quarter was $8,200,000 or diluted Net loss per share of $0.23 Non GAAP net loss for the quarter was $4,200,000 or diluted net loss per share of $0.12 based on approximately 36,000,000 weighted average diluted shares outstanding. Turning to the balance sheet and cash flow.

Speaker 3

We ended the quarter with $56,600,000 in cash, cash equivalents and investments. Cash flows in operations was approximately $2,800,000 in the quarter. Free cash flow, which includes capital expenditure, was approximately negative $3,100,000 in line with our guidance. I would now like to turn to outlook for the Q4 and the full year 2023. For the Q4, we expect ACV plus trailing 12 month royalties of $52,000,000 to $56,000,000 and revenue of $11,300,000 to $12,300,000 with non GAAP operating loss margin of 56.1% to 76.1 percent and non GAAP free cash flow margin of negative 32.4 percent to negative 52.4 percent.

Speaker 3

Incorporated into this guidance are 2 recent trends. 1st, due to the dynamics within China, We anticipate continued softness in demand in the Q4. 2nd, as Charlie alluded to, we are encouraged by the deal activity in the 4th quarter, But at the same time, we are seeing customers take a closer look at project pipelines given the macroeconomic environment, which impacts the timing, Duration and volume of deals bind in what is traditionally our strongest quarter. Given the fluidity of the macro situation, we are seeing interest from some customers to extend the duration of deals as their own design cycles lengthen. While our near term impact ACV, we broadly view this as a favorable dynamic as it demonstrates the importance and stickiness of our technology.

Speaker 3

It is no longer a question of whether to use Arteris. At this stage, it's more tactical on how they can align their development costs with their revised design cycle timelines. For the full year 2023, our guidance is as follows. Revenue of $52,500,000 to $53,500,000 reflecting the slowdown in the Chinese economy. While we do expect a seasonally strong 4th quarter in terms of new licenses and additions to RPO, These will have a relatively muted impact on 4th quarter revenue as a result of our fully ratable revenue recognition.

Speaker 3

ACB plus trailing 12 months royalties to exit 2023 at $52,000,000 to $56,000,000 non GAAP operating loss margin of 39% to 44% better than prior guidance as a result of reduced operating expenses. We are continuing to actively control operating expenses with the goal of achieving meaningful savings in 2024 when compared to previous plans. Non GAAP free cash flow margin of negative 33.1 percent to negative 38.1 percent, primarily driven by the expected change in working capital in 2023 and to a lesser extent the industry dynamics I referenced earlier. Gains 2024, we are committed to keeping our collections and costs in alignment. As a result, we do not expect any meaningful degradation of our cash position next year.

Speaker 3

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

Operator

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Followed by 1 on your touch tone phone. You will hear a 3 tone prompt acknowledging our request and your questions will be pulled in the order they are received. One moment please for your first question.

Operator

Your first question comes from Matt Ramsay, TD Cowen. Matt, please go ahead.

Speaker 5

Thank you very much. Good afternoon, everybody. So guys, It makes sense that in the guidance you talked about some slower deal flow in China, just given what's going on and the economic situation. Charlie, I wonder if you might expand on that a little bit. Is it Do you see it as maybe slowness to bring in new customers in China?

Speaker 5

Is it programs at existing customers or maybe a combination of both, if you just give us a little bit more detail there. And then I guess the second part of the question on China. If And I think this is a big if they can get supply of all the different components. It seems like Huawei is inclined to ship some more smartphones again. Would your old license deals that would then pay royalties on high silicon parts still be in effect?

Speaker 5

Or Given all the political turmoil, are those different than they were back when HiSilicon was a material customer? Thanks.

Speaker 6

Yes. So we're seeing 2 things happening in China. One is that the BIS actions and particularly the one that happened in the second half of Q3 has had a fairly major impact on sort of the smaller companies in China. Now as we mentioned before, we're fairly well diversified in terms of export controls because a number of our Products are from France and so subject to French export rules. So but the problem is that Some of the Chinese companies can't get the other components exactly as you've implied.

Speaker 6

So that has caused the slowdown that we're seeing. The other thing is that there is A capital shortage in China, and so some of the smaller companies now have a very difficult access to capital. So between BIS and the capital shortage in China, you're looking at a fairly difficult situation. Now the big companies I think are okay. So Huawei would be okay.

Speaker 6

People like Tencent, Alibaba, Baidu, they will figure out how to get access to what they need. But for the smaller companies, it's much more difficult. As far as the old HiSilicon contract, it would still be in place if It is a current processor. If it's not a current processor, it would not be in place.

Speaker 3

Got it. Does that answer your question?

Speaker 5

Yes, it does. Thank you, Charlie. Thanks for the color. I guess my Follow-up question is sort of unrelated and it's more to the long term with Blexnot 5. Maybe you could Give a little bit more detail on the breadth of the traction, the early traction that you're seeing.

Speaker 5

And just from A license monetization standpoint and then eventual royalty monetization standpoint, like what kind of an uplift are we looking at here versus the prior generation? Thanks.

Speaker 3

[SPEAKER MIHAEL POLYMEROPOULOS:]

Speaker 6

Right. So FlexNOG 5 has a major innovation, which has physical awareness, which essentially allows customers to estimate physical effects of their architectures very early in the design process. So That essentially allows them to turn over physically verified architecture and RTL to the Place and Route team, which Essentially would reduce the number of place throughout iterations and the number of time and effort that has to be placed in during physical design. So the obviously we charge a bit more for this. And so this is about a 33% uptick in terms of ASP And that's kind of what we're seeing in the market.

Speaker 6

Now we have shipped this we started shipping towards the very end of Q2 in June. We shipped some few licenses immediately in Q2. But we also shipped a significant number of licenses in Q3. So it was basically 17 FlexNOC 5 licenses to 9 unique customers. And so that's a pretty satisfactory uptake.

Speaker 6

And the evaluation pipeline for FlexNOC 5 continues to be robust And the product seems to be of great interest. And so we think that this is Something that people are going to keep buying on an ongoing basis this quarter, in the Q4 and also in 2024 2025.

Speaker 4

Hey, Matt. This is Nick. Just a little bit of extra color on that as far as your royalties question goes on FlexNOC 5. I mean, it's still early days. We only had 9 licenses at the end of Q3, and we're seeing a lot more now.

Speaker 4

We've seen Some upgrades from 4 to 5 already. And we have a very robust pipeline of FlexNOC 5 New deals that we expect to land. The use cases for those licenses Predominantly at the moment in automotive, which is a very rich royalty stream as you know, and also communications, Interestingly, which is also a very rich royalty scene, it's also being used in GenAI. Now that of course is a very nascent product stream as far as royalty is We wouldn't expect that to turn into royalties for a while. We are actually seeing a little bit of AI traction, but it's very, very early days.

Speaker 4

But we think in the long, long term AI chips will Start to yield some decent qualities, but that's a ways out.

Speaker 5

Thank you both for that. Appreciate it.

Operator

Thank you. Your next question comes from Hans Mosesmann, Rosenblatt. Hans, please go ahead.

Speaker 7

Thanks. Hey, guys. You guys have indicated in the past that based on automotive Licensing engagements that the number of SoCs by platform over the next several years could be 20, maybe as much as 25. Has that dynamic changed at all? Is it getting pushed out, so specific to automotive?

Speaker 6

Yes. So automotive continues to be robust. There is a continued number of projects. The interesting dynamic is going to be whether the OEMs are going to do their own ADAS solutions, Both short term and long term are whether it's going to coagulate down to the few major players such as Mobileye and NXP. And so, but we don't know the answers to that, but we keep Every single automotive opportunity there is, we keep having pretty good success there.

Speaker 6

And we We think that automotive continues to be a very, very one of the biggest opportunities in high-tech over the next 20 years.

Speaker 4

Hey, Vans. This is Nick. In terms of your other question, which is about sort of concentration, the concentration Of automotive chips per vehicle, which is I think the other part, which is we think longer term is up to sort of 25 plus. That is unchanged and really is impacted as whether the OEMs do their own designs or whether they look for somebody else to do their designs for them.

Speaker 7

Okay. That's helpful. And then One last question. If we look at outside of China, how is that The non China business doing in terms of licensing engagements or are there some delays there as well?

Speaker 6

So obviously, people are looking at their roadmaps. So that's I would say, people are looking at what projects they will do. At the same time, What we're seeing is that some of the larger companies are now sort of looking at, okay, do we want to build The next generation system IP for our products or do we want to outsource that and we're having I would say significant amount of success in being selected for some of these projects where before they would do everything internally. The other sort of issue is that there's also a capital difficulty in the smaller U. S.

Speaker 6

Companies, But the larger companies are unaffected. And so I would sort of note that the number of design starts In Q3, which was 2022, is basically the same as we had in Q2. While there is some shifts in the non China market, I think overall the effects are, I would say neutral.

Speaker 4

Yes. Essentially, it's a pivot away from the startup community to the Larger guys. So as John said, the number of new customers is a lot less. We used to get most of our new customers actually from China. But the as Charlie said, the number of design starts is the same.

Speaker 4

But one of the other dynamics that was kind of following on from your question And is really driving the reduction in guide on ACV for the Q4 Customers are generally having a look at that. They're aligning their product roadmaps to their design to the expenditure cycles. And in some cases that's pushing out design or Engagements into Q1 from Q4 and same kind of things we saw at the end of 2022 if you remember. And so there's a number of different vectors going on. And in addition, there is a tendency among some of the majors, not many, but there's a tendency among some to take longer to do their designs.

Speaker 4

And that actually that hasn't direct impact on ACV and revenue intensity. It just lasts for longer. So it's we're okay with that because it demonstrates the stickiness and the importance of our technology to the customer if they're prepared to engage for longer. But in terms of ACV, obviously, annual at the A word means So the TCV is divided over a longer period.

Speaker 7

Okay. That's helpful. Thank you, guys.

Operator

Thank you. Your next question comes from Kevin Garrigan, Westpark Capital. Kevin, please go ahead.

Speaker 8

Yes. Hey, guys. Thanks for taking my question. Your 22 design starts, I know you had noted that 12 were for AI Technologies. Can you give us some color on what markets these design starts were in?

Speaker 8

And to Hans' question, you had noted automotive was still robust. Any kind of markets that were weaker that surprised you?

Speaker 6

Outside of China, not really. There is a huge amounts of investment in generative AI. As we discussed earlier, The query costs are quite high with the existing GPU technologies. And so People are investing extensively in essentially ASICs that are Lower power and lower query costs for generative AI. So That's a big tailwind.

Speaker 6

I think one of those designs that we've talked about is the new reality design in Israel, which is a data center design. So there's a lot of generative AI Inference work being done in a data center, but we eventually see generative AI being expanded to the edge and to the endpoints, even into things like portable devices like smartphones and things like this. So generative Is a strong, I would say, strong tailwind for new designs. And I think we said On the earnings call that about half of the designs of the 22 were at least this quarter were related to machine learning.

Speaker 4

A bit over half. A bit more than half. I mean, if you look at it, I mean, the complexity is obviously that The AIML is actually a horizontal. So we kind of get a bit mixed up in terms of horizontals or verticals sometimes. But If you look at the verticals where we sold the most intensity of design starts in Q3, The enterprise compute actually, which is obviously where a lot of these designs end up popping up in the vertical sense, That was the 2nd highest quarter on record in terms of design starts.

Speaker 4

So that's a good indication. The second was actually automotive, but that's Fairly typical and there's a lot of machine learning applications within automotive anyway.

Speaker 8

Okay, got it. Got it. That's very helpful. And then just as a quick follow-up, can you at a high level, can you kind of give us A sense of your royalty rates and then the opportunities that you kind of see to increase these rates in the future and how do you kind of go about having those conversations to basically increase the rates?

Speaker 4

Yes, I'll take that one, Kevin. So the Directionally, royalties are always upwards. We don't take lower royalty deals. They royalties any increase in royalty rates can only really follow Increased functionality, you don't get a sort of increased royalty rate just because the customer likes you. So it has we have to actually give them something in terms of functionality.

Speaker 4

And so over time, you will see more higher rate of royalties for the newer products. And if you remember, automotive is actually this automotive is the richest or certainly a lot richer than say consumer or the old consumer communications like cell phones, smartphones. So and automotive is where we're having Probably the biggest success and it now represents about 55%, 60% of the total royalty stream, followed interestingly by Communications and Industrial.

Speaker 3

A lot of units in industrial.

Speaker 8

Okay. Yes, that makes sense. Okay, perfect. Thank you.

Operator

Your next question comes from Mark Lipacis, Jefferies. Mark, please go ahead.

Speaker 9

Hi. Thanks for taking my question. I just want to make sure I understood. I had the same question as the previous Caller, so was it 50% of the licenses over the last year were enabling AI? Is that Was that the right This quarter.

Speaker 9

This quarter.

Speaker 3

Yes. This quarter. Q3. Q3.

Speaker 9

And of all the kind of AI design wins you have, I think, Charlie, you started to answer this, but I don't know if You qualified it. I appreciate that at the end of the day, this is going to come to the endpoints. But are the design wins that you have, are they for endpoint AI applications or are these mostly data centers? I'm just trying to understand what like, what you saw in the last quarter, what you've seen recently, to what extent is AI workload or application manifesting in the big data center chips versus the maybe the smaller chips that would go into IoT devices or cars or something closer to the endpoint? Thank you.

Speaker 6

Yes. So the early generated designs that we've seen are data center designs. There's a lot of activity in the hyperscaler community for those designs. So those are going into the data center. The new reality one that we are allowed to talk about is going into data center, but there's others.

Speaker 6

So those would be high priced, low volume chips. But we think that generative AI is going to expand to the edge and it's going to expand to the endpoints and we're gaining valuable experience working with our customers to be able to provide a high performance System IP that allow people to move incredible amounts of data in these designs. And One of the things that we did was we created kind of an Excel package for because some of these generative AI Things need buses or NOx that are 20 bit 2,048 bit wide because of the amount of data that has to be moved. And so that again provides us the ability to slightly increase the ASP for these kinds of very demanding applications. But generative AI is evolving very, very quickly right now and People are actually starting to move on from the transformer architectures into some other types of implementations And so we're just following that and we're providing the data transport for those projects.

Speaker 9

Got you. Okay. That's very helpful. And then and I apologize if I'm asking you to repeat Yes, my line dropped. I think you started to talk about how the larger customers are starting to shift to your solution from internal.

Speaker 9

And I think this has been part of the Artis story longer term anyway. But Can you play that back? Is there was there is there something about the current macro environment that gives you higher conviction or you're seeing an acceleration of that trend? If you could play that back again, I'd appreciate it. Thank you.

Speaker 6

Yes. I mean, if you look at the investment that it takes To do the next generation system IP, it is tens and tens of 1,000,000 of dollars, right? And so the CFOs of those companies are basically asking, okay, do we want to make that kind of an investment for the number of projects that we do Or, we want to stick with what we have for existing projects, but for the new technologies, do we want to go to someone like Artarus? And that's starting to play out. We have, I think, a very nice penetration of some of the companies that I've had we're 100 percent internal before.

Speaker 6

We added 1. We talked about 3 of them last quarter And those were kind of beachhead deals. We got one of the ones that we did In Q3, it was fairly large. That's for a company that was almost 100% internal. And That's one of the tailwinds, right, is that people in this macro environment are more willing to outsource to system IP to proven commercial vendors such as Arteris.

Speaker 6

And we're seeing evidence of that.

Speaker 9

Great. That's very helpful. Thank you.

Operator

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

Speaker 6

Well, thank you for joining us on the Q3 Arteris earnings call and we look forward to updating you in for our future quarters. Thank you very much.

Operator

Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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Arteris Q3 2023
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