The quarter landed modestly above the standing bar on revenue. The prior company outlook called for Q2 revenue of $23–$24 million, while the published consensus was roughly $23.5 million; reported revenue was $24.1 million, a narrow beat.
| Metric | Q2 2026 | Q2 2025 / prior expectation | Read |
|---|---|---|---|
| Revenue | $24.1M | $16.5M; prior guide $23–$24M | Above guide midpoint (Income Statement; Financial Guidance) |
| Non-GAAP operating loss | $(4.6)M | $(3.5)M | Loss widened year over year and was worse than the prior $2–$3M guide (Non-GAAP Reconciliation) |
| Non-GAAP EPS | $(0.10) | $(0.11); published consensus about $(0.04) | Improved year over year, but below consensus (Non-GAAP EPS Reconciliation) |
| Non-GAAP gross margin | 87% | 91% | Down 4 percentage points (Non-GAAP Reconciliation) |
| Free cash flow | $8.6M | $(2.8)M | Sharp improvement (Free Cash Flow Reconciliation) |
The more important forward signal was a revenue-guidance raise. Full-year revenue guidance moved to $95–$98 million from the previous $91–$95 million range, while ACV plus royalties guidance was set at $102–$106 million; Q3 revenue is guided to $24–$25 million. That is a meaningful improvement in the top-line outlook, not merely a confirmation of the prior plan (Financial Guidance).
Profitability was the clear offset. Revenue grew 46% year over year, but GAAP operating expenses rose 50%, including $2.2 million of acquisition-related costs, while non-GAAP operating loss increased to $4.6 million from $3.5 million. Gross margin also fell to 85% GAAP and 87% non-GAAP from 89% and 91%, respectively, suggesting the growth came with weaker near-term economics (Income Statement; Non-GAAP Reconciliation).
Liquidity improved, but largely because of equity financing rather than operations. Arteris ended June with $93.3 million of cash and $28.8 million of short-term investments, versus $33.9 million and $20.7 million at year-end. However, $72.5 million of that cash increase came from the at-the-market stock offering, and shares outstanding rose to 49.1 million from 44.3 million (Balance Sheet; Cash Flow statement). Operating cash flow was positive at $9.2 million in Q2, but dilution materially changes the quality of the balance-sheet improvement.
Net: a narrow positive versus expectations. The revenue beat, stronger design activity, and higher full-year revenue outlook outweigh the weaker margin and operating-loss performance, but the result is not a clean beat: the company raised growth expectations while falling short on earnings quality and relying heavily on new equity capital.
Read the original 8-K on SEC EDGAR ↗