0001667011-23-000009 | 10-K | XBRL Viewer

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Cover - USD ($) $ in Millions	12 Months Ended
Cover - USD ($) $ in Millions	Dec. 31, 2022	Feb. 21, 2023	Jun. 30, 2022
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-40960
Entity Registrant Name	ARTERIS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-0117058
Entity Address, Address Line One	595 Millich Dr.
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Campbell
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95008
City Area Code	408
Local Phone Number	470-7300
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	AIP
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Public Float			$ 144.1
Entity Common Stock, Shares Outstanding		34,792,535
Documents Incorporated by Reference	Portions of the registrant's definitive Proxy Statement relating to the 2023 Annual Meeting of Stockholders are incorporated herein by references in Part III of this Annual Report on Form 10-K to the extent stated herein. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended December 31, 2022.
Entity Central Index Key	0001667011
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2022
Audit Information [Abstract]
Auditor Name	Moss Adams LLP
Auditor Location	San Francisco, CA
Auditor Firm ID	659

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 37,423	$ 85,825
Short-term investments	30,728	0
Accounts receivable, net	7,143	13,873
Prepaid expenses and other current assets	5,818	6,949
Total current assets	81,112	106,647
Property and equipment, net	3,617	2,438
Long-term investments	4,427	0
Equity method investment	11,897	0
Operating lease right-of-use assets	1,883	2,765
Intangibles, net	4,575	2,959
Goodwill	4,218	2,677
Other assets	3,787	2,957
TOTAL ASSETS	115,516	120,443
Current liabilities:
Accounts payable	572	1,722
Accrued expenses and other current liabilities	12,095	10,573
Operating lease liabilities, current	899	961
Deferred revenue, current	28,839	28,403
Vendor financing arrangements, current	1,264	833
Total current liabilities	43,669	42,492
Deferred revenue, noncurrent	21,840	20,773
Operating lease liabilities, noncurrent	1,009	1,851
Vendor financing arrangements, noncurrent	448	266
Deferred income, noncurrent	9,993	0
Other liabilities	1,022	2,157
Total liabilities	77,981	67,539
Commitments and contingencies (Note 12)
Stockholders’ equity:
Preferred stock, par value of $0.001—10,000,000 shares authorized and no shares issued and outstanding as of December 31, 2022 and 2021	$ 0	$ 0
Common stock, outstanding (in shares)	34,625,875	31,530,682
Common stock, issued (in shares)	34,625,875	31,530,682
Common stock, par value of $0.001—300,000,000 shares authorized at December 31, 2022 and 2021; 34,625,875 and 31,530,682 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively	$ 34	$ 31
Additional paid-in capital	103,778	91,945
Accumulated other comprehensive gain (loss)	101	(81)
Accumulated deficit	(66,378)	(38,991)
Total stockholders’ equity	37,535	52,904
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 115,516	$ 120,443

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Stockholders’ equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	300,000,000	300,000,000
Common stock, issued (in shares)	34,625,875	31,530,682
Common stock, outstanding (in shares)	34,625,875	31,530,682

Consolidated Statements of Loss - USD ($) $ in Thousands	12 Months Ended
Consolidated Statements of Loss - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Total revenue	$ 50,378	$ 37,864
Cost of revenue	4,281	3,731
Gross profit	46,097	34,133
Operating expenses:
Research and development	41,167	30,812
Sales and marketing	17,419	11,726
General and administrative	16,367	13,360
Total operating expenses	74,953	55,898
Loss from operations	(28,856)	(21,765)
Interest expense	(89)	(105)
Interest and other income (expense), net	1,425	(474)
Loss before provision for income taxes	(27,520)	(22,344)
Loss from equity method investment, net of tax	(284)	0
Provision for (benefit from) income taxes	(417)	1,040
Net loss	$ (27,387)	$ (23,384)
Net loss per share attributable to common stockholders, basic (in dollars per share)	$ (0.84)	$ (1.06)
Net loss per share attributable to common stockholders, diluted (in dollars per share)	$ (0.84)	$ (1.06)
Weighted average shares used in computing per share amounts, basic (in shares)	32,578,776	21,972,101
Weighted average shares used in computing per share amounts, diluted (in shares)	32,578,776	21,972,101
Licensing, support and maintenance
Total revenue	$ 46,012	$ 34,731
Variable royalties and other
Total revenue	$ 4,366	$ 3,133

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Statement of Comprehensive Income [Abstract]
Net loss	$ (27,387)	$ (23,384)
Other comprehensive loss
Unrealized loss on available-for-sale securities, net of tax	(53)	0
Unrealized pension actuarial gain (loss)	235	(50)
Comprehensive loss	$ (27,205)	$ (23,434)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) - USD ($) $ in Thousands	Total	IPO	Common Stock	Common Stock Restricted stock	Common Stock IPO	Additional Paid-In Capital	Additional Paid-In Capital IPO	Accumulated Other Comprehensive Gain (Loss)	Accumulated Deficit
Balance at beginning of period (in shares) at Dec. 31, 2020	4,471,316
Balance at beginning of period at Dec. 31, 2020	$ 5,712
Redeemable Convertible Preferred Stock
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares)	(4,471,316)
Conversion of redeemable convertible preferred stock to common stock upon initial public offering	$ (5,712)
Balance at end of period (in shares) at Dec. 31, 2021	0
Balance at end of period at Dec. 31, 2021	$ 0
Balance at beginning of period (in shares) at Dec. 31, 2020			18,486,989
Balance at beginning of period at Dec. 31, 2020	(12,008)		$ 18			$ 3,612		$ (31)	$ (15,607)
Stockholders’ Equity (Deficit)
Issuance of common stock (in shares)			1,250,000		5,750,000
Issuance of common stock	5,437	$ 71,088	$ 2		$ 6	5,435	$ 71,082
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares)			4,471,316
Conversion of redeemable convertible preferred stock to common stock upon initial public offering	5,712		$ 4			5,708
Issuance of common stock for cash upon exercise of stock options (in shares)			1,362,327
Issuance of common stock for cash upon exercise of stock options	599		$ 1			598
Issuance of common stock for settlement of restricted stock (in shares)			210,050
Stock-based compensation expense	5,510					5,510
Unrealized pension actuarial gain (loss)	(50)							(50)
Unrealized loss on available-for-sale securities, net of tax	0
Net loss	$ (23,384)								(23,384)
Balance at end of period (in shares) at Dec. 31, 2021	31,530,682		31,530,682
Balance at end of period at Dec. 31, 2021	$ 52,904		$ 31			91,945		(81)	(38,991)
Balance at end of period (in shares) at Dec. 31, 2022	0
Balance at end of period at Dec. 31, 2022	$ 0
Stockholders’ Equity (Deficit)
Conversion of redeemable convertible preferred stock to common stock upon initial public offering	$ 0		$ 1			(1)
Issuance of common stock for cash upon exercise of stock options (in shares)	1,451,784		1,451,784
Issuance of common stock for cash upon exercise of stock options	$ 876		$ 2			874
Issuance of common stock in connection with business combination (in shares)			331,569	331,574
Issuance of common stock in connection with business combination	1,333					1,333
Issuance of common stock for settlement of restricted stock (in shares)			1,223,312
Tax withholding on RSUs settlement (in shares)			(243,046)
Tax withholding on RSUs settlement	(2,065)					(2,065)
Stock-based compensation expense	11,692					11,692
Unrealized pension actuarial gain (loss)	235							235
Unrealized loss on available-for-sale securities, net of tax	(53)							(53)
Net loss	$ (27,387)								(27,387)
Balance at end of period (in shares) at Dec. 31, 2022	34,625,875		34,625,875
Balance at end of period at Dec. 31, 2022	$ 37,535		$ 34			$ 103,778		$ 101	$ (66,378)

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (27,387)	$ (23,384)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,099	1,492
Stock-based compensation	11,692	5,510
Pension plan expenses	136	109
Operating non-cash lease expense	(21)	(45)
Amortization of deferred income	(391)	0
Gain on deconsolidation of subsidiary	(149)	0
Loss from equity method investment	284	0
Net accretion of discounts on available-for-sale securities	(177)	0
Deferred income taxes	(484)	0
Other, net	14	(9)
Changes in operating assets and liabilities:
Accounts receivable, net	7,102	477
Prepaid expenses and other assets	202	(4,418)
Accounts payable	(1,034)	350
Accrued expenses and other liabilities	517	2,836
Deferred revenue	830	16,268
Net cash used in operating activities	(6,767)	(814)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(1,051)	(808)
Payments relating to investment in equity method investment	(519)	0
Purchases of available-for-sale securities	(35,031)	0
Proceeds from principal portion of related party loan	241	0
Payments for business combination, net of cash acquired	(1,121)	0
Payments of deferred consideration for business combination	0	(500)
Other	0	(51)
Net cash used in investing activities	(37,481)	(1,359)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of contingent consideration for business combination	(1,573)	0
Proceeds from issuance of common stock upon initial public offering, net of underwriting commissions	0	74,865
Proceeds from issuance of common stock	0	5,435
Payments to tax authorities for shares withheld from employees	(2,065)	0
Payments of principal portion of term loan	0	(550)
Principal payments under vendor financing arrangements	(1,136)	(574)
Proceeds from exercise of stock options	876	599
Payments of deferred offering costs	(256)	(3,521)
Net cash (used in) provided by financing activities	(4,154)	76,254
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(48,402)	74,081
CASH AND CASH EQUIVALENTS, beginning of period	85,825	11,744
CASH AND CASH EQUIVALENTS, end of period	37,423	85,825
Supplemental cash flow information:
Cash paid for interest	0	19
Cash paid for taxes	790	489
Noncash activities:
Equity obtained in equity method investment in exchange for contribution of license agreement (Note 15)	11,563	0
Purchase of property and equipment through vendor financing and accrued expenses and other current liabilities	2,088	1,099
Issuance of common stock for business combination	1,333	0
Contingent consideration for business combination	362	0
Operating lease right-of-use assets exchanged for lease liabilities	63	0
Unpaid deferred offering costs	0	256
Conversion of redeemable convertible preferred stock to common stock	0	5,712
Recognition of new right-of-use assets and lease liabilities for the lease modification/obligation	$ 0	$ 749

DESCRIPTION OF BUSINESS	12 Months Ended
DESCRIPTION OF BUSINESS	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
DESCRIPTION OF BUSINESS	DESCRIPTION OF BUSINESS Arteris, Inc. and its subsidiaries (collectively, the Company or Arteris) was incorporated in Delaware on April 12, 2004. The Company develops, licenses, and supports the on-chip interconnect fabric technology used in System-on-Chip (SoC) designs for a variety of devices and in the development and distribution of Network-on-Chip (NoC) interconnect intellectual property (IP). The Company also provides software and services to enable efficient deployment of NoC IP, IP support & maintenance services, professional services and training and on-site support services. The Company is headquartered in Campbell, California and has offices in the United States, France, Japan, South Korea and China. COVID-19 Pandemic While the duration and extent of the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the extent and effectiveness of containment actions and emergence of new variants, it has already had an adverse effect on the global economy and the lasting effects of the pandemic continue to be unknown. In response to the COVID-19 pandemic, the measures implemented by various authorities have caused us to change the Company’s business practices, including those related to where employees work, the distance between employees in the Company’s facilities, limitations on in-person meetings between employees and with customers, suppliers, service providers and stakeholders, as well as restrictions on business travel to domestic and international locations and to attend trade shows, technical conferences and other events. The Company is unable to accurately predict the full impact that COVID-19 will have on its future results of operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic and containment measures. The Company will continue to monitor health orders issued by applicable governments to ensure compliance with evolving domestic and global COVID-19 guidelines. Initial Public Offering In October, 2021, the Company completed its initial public offering (IPO), in which it issued and sold 5,750,000 shares of its common stock at the public offering price of $14.00 per share, including 750,000 shares of its common stock upon the full exercise of the underwriters’ option to purchase additional shares. The Company received net proceeds of $71.1 million after deducting underwriting discounts and commissions and offering expenses. In connection with the IPO, all of the shares of the Company’s outstanding redeemable convertible preferred stock prior to the IPO automatically converted into an aggregate of 4,471,316 shares of common stock. Deferred offering costs for the IPO were $3.8 million and consisted primarily of direct incremental accounting, legal and other fees related to the IPO. Prior to the IPO, all deferred offering costs were capitalized and included in other assets, non-current on the consolidated balance sheets. Upon completion of the IPO, deferred offering costs were reclassified into stockholders’ equity (deficit) as a reduction of the IPO proceeds.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

Principles of Consolidation

The consolidated financial statements include the accounts of Arteris, Inc. and its wholly-owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation.

Segment Information

The Company operates as a single operating segment. The chief operating decision maker is the Company’s Chief Executive Officer, who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis, accompanied by disaggregated revenue information. Accordingly, the Company has determined that it has a single reportable segment and operating segment.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates relate to, among others, revenue recognition, the useful lives of assets, assessment of recoverability of property, plant and equipment, fair value of investments, impairment of the equity method investment, fair values of goodwill and other intangible assets, including impairments, leases, allowances for doubtful accounts, deferred tax assets and related valuation allowance, stock-based compensation, potential reserves relating to litigation and tax matters, collectability of certain receivables, fair value and amortization of deferred income, as well as other accruals or reserves. Actual results could differ from those estimates and such differences may be material to the consolidated financial statements.

Foreign Currency

The Company and its foreign subsidiaries’ functional currency is the US dollar. Accordingly, monetary assets and liabilities of foreign subsidiaries are remeasured into US dollars at the exchange rates in effect at the balance sheet date, non-monetary assets and liabilities are recorded at historical rates, and revenue and expenses are remeasured at average rates during the period. Remeasurement adjustments are recognized as a component of interest and other income (expense), net within the consolidated statements of loss.

Comprehensive Loss

Comprehensive loss generally represents all changes in stockholders’ deficit during the period except those resulting from investments by, or distributions to, stockholders. For the years ended December 31, 2022 and 2021, the components of comprehensive loss consist of net loss and unrealized pension actuarial gain (loss). For the year ended December 31, 2022, comprehensive loss also consists of unrealized loss on available-for-sale securities, net of tax.

Net Loss per Share

Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock during the period, plus the dilutive effects of stock options, restricted stock units (RSU) and restricted stock awards (RSA). Dilutive shares of common stock are determined by applying the treasury stock method.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. The Company’s cash equivalents include deposits in money market accounts which were unrestricted as to withdrawal or use and are stated at fair value. As of December 31, 2022, cash and cash equivalents consisted primarily of checking, savings, money market accounts and highly liquid investments with original maturities of three months or less. As of December 31, 2021, cash consisted primarily of checking and savings deposits. Interest earned on cash and cash equivalents is included in interest and other income (expense), net in the consolidated statements of loss.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable, net consist of primarily billed and unbilled trade accounts receivable. Unbilled accounts receivable represents amounts recorded as royalty revenue which will be invoiced within a short period upon receipt of the royalty reports from the licensees. The Company records accounts receivable when it has an unconditional right to consideration. Trade accounts receivable are recorded at the invoiced amount. The Company maintains allowances for doubtful accounts to reduce its receivables to their estimated net realizable value. In general, the Company does not offer extended credit terms and also do not require any security or collateral to support its receivables. The Company performs ongoing credit evaluations of its customers and establishes allowances for potential credit losses by considering factors such as historical experience, credit quality, age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The Company’s allowance for doubtful accounts activity has historically not been significant. Probable losses are recorded in general and administrative expense in the consolidated statements of income (loss).

Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentration of credit risk consist of cash and cash equivalents, investments and accounts receivable. Cash is currently held in three financial institutions and, at times, may exceed federally insured limits.

The Company’s accounts receivable are derived principally from revenue earned from customers located in Americas, Europe, Middle East and Asia Pacific regions.

Accounts receivable from the Company’s major customers representing 10% or more of total accounts receivable was as follows:


	As of December 31,
	2022		2021
Customer A	32	%	33	%
Customer B	*		21	%
Customer C	*		12	%

* Customer accounted for less than 10% of total accounts receivable at period end.

Revenue from the Company’s major customers representing 10% or more of total revenue was as follows:


	Year Ended December 31,
	2022		2021
Customer A	24	%	23	%

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives, generally ranging from one to ten years. Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the remaining lease term.

Depreciation expenses are recorded in cost of revenue and operating expenses in the consolidated statements of loss. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recorded as a component of operating expenses. Repairs and maintenance costs are expensed as incurred.

The Company evaluates the recoverability of property and equipment for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by comparing their carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount is not recoverable, the carrying amount of such assets is reduced to fair value. No impairment was recognized during the years ended December 31, 2022 and 2021.

Business Combinations

The Company allocates the purchase price to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the purchase price over the fair value of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. These estimates are based on information obtained from management of the acquired companies, the Company’s assessment of this information, and historical experience. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customers, acquired technology, and trade names from a market participant perspective, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. In addition, unanticipated events and circumstances may occur that may affect the accuracy or validity of such estimates, and if such events occur, the Company may be required to adjust the value allocated to acquired assets or assumed liabilities. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of income (loss). Acquisition costs, such as legal and consulting fees, are expensed as incurred.

Goodwill and Intangible Assets

The Company performs its goodwill and other indefinite-lived intangible assets impairment tests annually or more frequently if events or changes in circumstances occur that would more likely than not reduce the fair value below its carrying value. For the years ended December 31, 2022 and 2021, the Company did not have any goodwill or other indefinite-lived intangible assets impairment.

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets, which range from five to eight years, unless the lives are determined to be indefinite. The Company routinely reviews the remaining estimated useful lives of finite-lived intangible assets. Amortization expenses are recorded in operating expenses on the consolidated statements of income (loss).

Right-of-use Assets (ROU) and Lease Liabilities

The Company recognizes leases in accordance with Accounting Standard Codification (ASC) Topic 842, Leases, and subsequently issued additional related Accounting Standard Updates (ASU) (Topic 842).

The Company leases its offices at various locations under noncancelable operating lease agreements expiring at various dates through 2027. Under the terms of these agreements, the Company also bears the costs for certain insurance, property tax, and maintenance. The terms of certain lease agreements provide for increasing rental payments at fixed intervals.

At lease commencement, the Company measures and records a lease liability equal to the present value of the remaining lease payments, generally discounted using incremental borrowing rate as the implicit rate is not readily determinable on many of its leases. When determining the incremental borrowing rates, the Company considers information including, but not limited to, the lease term, the interest rates on its collateralized debt and incremental borrowing rates for its peer group.

On the lease commencement date, the amount of the ROU assets consists of the following:

■The amount of the initial measurement of the lease liability;

■Any lease payments made at or before the commencement date, minus any lease incentives received; and

■Any initial direct costs incurred.

The Company assesses the option for lease extensions, renewals, or terminations on individual leases, and generally considers the base term to be the term of lease contracts, unless it is reasonably certain that the Company will exercise such options. Lease agreements may contain other variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred in the consolidated statements of income (loss). The Company does not include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and lease liabilities. The lease agreements generally do not contain any residual guarantees or restrictive covenants.

Operating leases are included in operating lease ROU assets, operating lease liabilities, current and operating lease liabilities, noncurrent in the consolidated balance sheets. Finance leases are included in property and equipment, accrued expenses and other current liabilities and other liabilities in the consolidated balance sheets.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, and subsequently issued additional related ASUs (Topic 606). The Company recognizes revenues as it transfers control of deliverables (software and services) to its customers in an amount reflecting the consideration to which it expects to be entitled. To recognize revenues, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. The Company accounts for a contract when it has approval and commitment from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company applies judgment in determining the customer’s ability and intention to pay based on a variety of factors including the customer’s historical payment experience.

Nature of Products and Services

The Company’s revenue is primarily derived from licensing intellectual property, licensing software, support and maintenance services, professional services, training services, and royalties.

Design Solutions

Interconnect Solutions product arrangements provide customers the right to software licenses, services, software updates and technical support. The Company enters into licensing arrangements with customers that typically range from two to three years and generally consist of delivery of a design license that grants the customer the right to use the IP to design a contractually defined number of products and stand-ready support services that provide the customer a significant benefit from its proprietary software tool (RTL) as well as ongoing access to Corporate Application Engineers (CAE) and Field Application Engineers (FAE) (collectively, application engineer support services) to perform certain verifications including benchmark performance, simulations and ultimately, through the RTL, instantiate designs into silicon over the design term.

The support services, including access to application engineering support services and the benefits of the RTL, are integral and fundamental to the customer’s ability to derive its intended benefit from the IP. CAEs are part of the product development team providing detailed requirements for engineering projects, working very closely with a customer’s chief technology officer and the marketing department, and performing quality assurance testing of customer products prior to shipment to their customers. FAEs provide assistance to the customer’s engineering team in translating their desired SoC architecture into inputs for NoC IP configuration, assistance in optimizing the NoC configuration, answer to customer questions by the online support system or phone, constructive reviews of the progress achieved by the customer’s development team and provision of advice on how to best use the licensed IP, performance of design reviews before customer project RTL freeze and tape-out to ensure the customer used the licensed IP configuration tooling as intended so that the RTL output meets customer requirements and expectations. FAE reviews of the customer’s design are mandatory and consist of an understanding of the customer requirements and analysis of the adequacy of the contemplated IP considering the customer’s desired architecture and design goals and objectives, taking into consideration bandwidth, coherence/non-coherence, latency, clock and timing, areas, and any and all constraints, as identified and specific to the design under review.

Besides application engineer support services, support and maintenance services also consist of a stand-ready obligation to provide technical support and software updates over the support term. Generally, the first-year of technical support and software updates are bundled with and into the license fee with a customer option to renew additional years of support throughout the license term. However, the Company continues to provide technical support and software updates throughout the license term even if the customer does not renew these services in subsequent years, making the license term and support and maintenance term co-terminus.

Considering the nature of the combined design tool and assisting the Company’s customers in applying its IP technology in its customers’ development environment and the relative significance thereof, the Company has concluded that its Interconnect Solutions IP licensing arrangements are not distinct from its obligation to provide the application engineering support services and benefits of the RTL. The Interconnect Solutions IP, RTL, and the application engineering support services serve to fulfill its commitment to the customer, as they represent inputs to a single, combined performance obligation that commences upon the later of the arrangement effective date or transfer of the software license. The design license and the regular two-way interaction between the design tool, RTL, and the application engineering support services give the customer the intended benefit from the arrangement, which is the ability to commercialize their design. Customers cannot benefit from the design license on its own or together with other readily available resources as no other RTL or application engineer support service provides exists in the marketplace that a customer could use with the design license. Consequently, the RTL and application engineer support service cannot be used on its own or together with any other design license as the Company does not allow the use of the RTL or provide application engineer support services separately from the design license. Further, although technical support and software updates is a distinct performance obligation, it is accounted for as if it were part of a single performance obligation that includes the licenses, RTL and application engineer support services because the technical support and updates are provided in practice for the same period of time and have the same time-based pattern of transfer to the customer as the combined design license, RTL, and application support services.

Revenues that are derived from the sale of a licensee’s products that incorporate the Company’s IP are classified as royalty revenues. Royalty revenues are recognized during the quarter in which the sale of the product incorporating the Company’s IP occurs. Royalties are calculated either as a percentage of the revenues received by a licensee’s sale of products incorporating the Company’s IP or on a per unit basis, as specified in the agreements with the licensees. For a majority of the Company’s royalty revenues, it receives the actual sales data from its customers after the quarter ends and accounts for it as unbilled receivables. When the Company does not receive actual sales data from the customer prior to the finalization of its financial statements, royalty revenues are recognized based on its estimation of the customer’s sales during the quarter.

Deployment Solutions

Deployment Solutions product and CSRCompiler product arrangements provide customers the right to software licenses, software updates and technical support. The software licenses are time-based licenses with terms generally ranging from one to three years. These arrangements generally have two distinct performance obligations that consist of transferring the licensed software and the support and maintenance service. Support and maintenance services consist of a stand-ready obligation to provide technical support and software updates over the support term. Revenue allocated to the software license is recognized at a point in time upon the later of the delivery date or the beginning of the license period, and revenue allocated to support services is recognized ratably over the support term.

A limited number of Deployment Solutions contracts include tokens, a mechanism used to both enable “peak” users to choose a combination of the software products on a monthly basis and restrict the number of users. The Company recognizes revenue related to these tokens at a point in time, upon delivery of monthly token license keys to the customer.

Professional Services

The Company’s agreements often include service elements (other than maintenance and support services). These services include training, design assistance, and consulting. Services performed on a time and materials basis are recognized over the period the services are provided either using an output method such as labor hours, or a method that is otherwise consistent with the way in which value is delivered to the customer. Services performed on a fixed price basis are recognized over time, generally using costs incurred or hours expended to measure progress.

Multiple Performance Obligations

Most of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis, which are estimated considering multiple factors including observable industry pricing practices and internal pricing strategies and objectives. Standalone selling prices of software license are typically estimated using the residual approach. Standalone selling prices of professional services are typically estimated based on observable transactions when these services are sold on a standalone basis.

Transaction price

Revenue is recognized when, or as, control of a promised product or service transfers to a client, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. If the consideration promised in a contract includes a variable amount, the Company estimates the amount to which it expects to be entitled using either the expected value or most likely amount method, to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur. Generally, the transaction price of the Company’s contracts is fixed at the inception of the contract, except for variable royalties. The Company’s contracts generally do not include terms that could cause variability in the transaction price.

The Company assesses the timing of the transfer of goods or services to the customer as compared to the timing of payments to determine whether a significant financing component exists. As a practical expedient, the Company does not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is a year or less. If the difference in timing arises for reasons other than the provision of finance to either the customer or the Company, no financing component is deemed to exist. When contracts involve a significant financing component, the Company adjusts the promised amount of consideration for the effects of the time value of money if the timing of payments agreed to by the parties to the contract (either explicitly or implicitly) provide the customer with a significant benefit of financing.

The Company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions.

In instances where foreign licensees withhold and remit taxes to local authorities in accordance with local laws and regulations, the Company recognizes and presents revenue on a gross basis, and includes the withholding tax in income tax expense.

Flexible Spending Accounts

Some customers enter into a non-cancelable flexible spending account agreements (FSA Agreements) whereby the customer commits to a fixed dollar amount over a specified period of time that can be used to purchase from a list of the Company’s products or services. These agreements do not meet the definition of a revenue contract until the customer executes a separate order to identify the required products and services that they are purchasing. The combination of the FSA agreement and the subsequent order creates enforceable rights and obligations, thus meeting the definition of a revenue contract. Each separate order under the agreement is treated as an individual contract and accounted for based on the respective performance obligations included within the FSA agreements.

Contract modifications

The Company’s contracts may be modified to add, remove or change existing performance obligations. The accounting for modifications to the Company’s contracts involves assessing whether the products and services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Products and services added that are not distinct are accounted for on a cumulative catch-up basis, while those that are distinct are accounted for prospectively, either as a separate contract if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price. The Company’s more significant contract modifications include extensions of the design license term and the purchase of additional years of support and maintenance.

Judgments

The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together requires significant judgment. Judgment is also required to determine the standalone selling price for each distinct performance obligation.

Contract Balances

The timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in receivables (billed or unbilled), contract assets, or contract liabilities (deferred revenue) on the Company’s consolidated balance sheets. The Company records a contract asset when revenue is recognized prior to the right to invoice. The Company records deferred revenue when it invoices customers and revenue is not yet recognized. For time-based software agreements, customers are generally invoiced in single or annual amounts, although some customers are invoiced more frequently over time. The Company records an unbilled receivable when revenue is recognized and it has an unconditional right to invoice and receive payment.

The Company capitalizes sales commission as costs of obtaining a contract when they are incremental and, if they are expected to be recovered, amortized in a manner consistent with the pattern of transfer of the good or service to which the asset relates.

Cost of Revenue

Cost of Revenues relates to costs associated with the Company’s IP licensing arrangements, deployment solution software and support activities, including applicable personnel related costs, travel, and overhead.

Research and Development

Research and development costs that do not meet the criteria for capitalization are expensed as incurred. Research and development costs consist primarily of compensation, stock-based compensation, and employee benefits of engineering and product development personnel, consulting services, and other direct expenses.

Software Development Costs

Software development costs are capitalized beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. Arteris has not capitalized any software development costs as of and for the years ended December 31, 2022 and 2021 as the period between establishing technological feasibility and general customer release has historically been short and therefore capitalizable costs have been insignificant.

The Company has not capitalized any internal-use software development costs as these costs have historically been insignificant.

Sales and Marketing

Sales and marketing expenses consist of compensation and employee benefits of marketing and sales personnel and related support teams, and stock-based compensation, as well as travel, trade show sponsorships and events, conferences, and internet advertising costs. Advertising costs, included in sales and marketing expenses, are expensed as incurred. The Company incurred advertising costs of $0.1 million and $0.4 million for the years ended December 31, 2022 and 2021, respectively.

General and Administrative

General and administrative expenses include executive and administrative compensation and employee benefits, depreciation, professional services fees, insurance costs, bad debt, other allocated costs, such as facility-related expenses, supplies, other fixed costs, and stock-based compensation.

Stock-based Compensation

The Company measures equity classified stock-based awards, including stock options, RSUs, and RSAs granted to employees, directors, and non-employees based on the estimated fair values of the awards on the date of the grant. Stock-based compensation expense for awards with service-based vesting only is recognized on a straight-line basis over the requisite service period which is generally the vesting period of such awards, as a component of operating expenses within the consolidated statements of income (loss). For awards that include performance conditions stock-based compensation expense is recognized on a graded vesting basis over the requisite service period. Compensation expense is not recognized until the performance condition becomes probable. The Company accounts for forfeitures related to these awards as they occur.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. This valuation model for stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation including the expected term, the volatility of the Company’s common stock, and an assumed risk-free interest rate. As a result, if the Company revises its assumptions and estimates, the Company’s stock-based compensation expense could change.

The fair value of RSUs and RSAs granted is measured as the fair value per share of the Company’s common stock on the date of grant.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company provides for a valuation allowance when it is more likely than not that some portion, or all of its deferred tax assets will not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. As of December 31, 2022 and 2021, the Company recorded a full valuation allowance against its U.S. federal, state, and certain foreign jurisdiction net deferred tax assets.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were $2.6 million and $3.1 million unrecognized tax benefits as of December 31, 2022 and 2021, respectively. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of December 31, 2022 and 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

Fair value of financials instruments

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal market or the most advantageous market in which it would transact.

The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Observable inputs are inputs that reflect the assumptions market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the factors that market participants would use in valuing the asset or liability developed based on the best information available in the circumstances.

The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value by requiring that the most observable inputs be used when available. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows:

■Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

■Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets).

■Level 3 applies to assets or liabilities for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including the Company’s own assumptions.

The Company determined the estimated fair value of financial instruments using available market information and valuation methodologies considered to be appropriate. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to their short maturities. The Company’s investments are recorded at fair value and vendor financing arrangements are recorded at net carrying value.

Investments

All investments in debt securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its investments in debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. Short-term investments have original maturities of greater than three months but one year or less as of the consolidated balance sheet dates. Long-term investments have maturities greater than one year as of the consolidated balance sheet dates. If the Company expects to sell a debt security within one year, it will classify the investment as a short-term investment regardless of its stated maturity date.

The available-for-sale securities are reported at fair value with unrealized gains and losses included in accumulated other comprehensive income (loss). A decline in the fair value of the available-for-sale securities is recognized directly to net income (loss) if judged to be other than temporary. Interest earned on investments in debt securities, realized gains and losses and impairment losses, if any, on investments in debt securities are included in interest and other income (expense), net in the consolidated statements of loss. The cost of securities sold is based on the specific-identification method.

Equity Method Investments

The Company uses the equity method to account for its investments in companies which the Company does not control but is deemed to have the ability to exercise significant influence over operating and financial decisions of the investee.

The Company generally measures an investment in the common stock of an investee initially at cost. The carrying value of the Company’s equity method investments is reported in equity method investment on the consolidated balance sheets. The Company records its proportionate share of the income or loss in its equity method investments on a one-quarter lag. The cost is adjusted to recognize the Company's proportionate share of the investee’s net income or loss after the date of investment. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.

Distributions received from an investee reduce the carrying value of an investment and are recorded in the consolidated statements of cash flows using the nature of distribution approach.

Government Assistance

The Company's government assistance during the year ended December 31, 2022 and 2021 primarily consists of R&D tax credits granted to the Company’s subsidiary in France. These R&D tax credits are granted to encourage companies to conduct technical and scientific research. For accounting purposes, the foreign R&D tax credits are recorded as an offset to research and development expenses in the Company’s consolidated statements of loss. The Company recorded $1.8 million and $2.4 million of foreign R&D tax credit during the years ended December 31, 2022 and 2021, respectively.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This standard requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with Topic 606 as if the acquirer had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those years and early adoption is permitted. The Company early adopted ASU 2021-08 for the year ended December 31, 2022. The adoption of the new guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832), which requires business entities to disclose information about certain government assistance they receive. Such disclosure requirements include the nature of the transactions and the related accounting policy used, the line items on the balance sheet and income statement that are affected and the amounts applicable to each financial statement line item and significant terms and conditions of the transactions. ASU 2021-10 is effective for annual periods beginning after December 15, 2021. The Company adopted ASU 2021-10 for the year ended December 31, 2022. The adoption of the new guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and in May 2019 issued ASU No. 2019-05, Credit Losses (Topic 326): Targeted Transition Relief (collectively referred to as Topic 326), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. Topic 326 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model which will result in earlier recognition of credit losses. Topic 326 is effective for the Company for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures.

In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which requires a buyer in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. To achieve that objective, the buyer should disclose qualitative and quantitative information about its supplier finance programs. The amendments in this update do not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance program. The guidance is effective for fiscal years beginning after December 15, 2022, except for the amendment on rollforward information which is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures.

REVENUE

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

REVENUE

Disaggregated Revenue

The following table shows revenue by product and services groups (in thousands):


	Year Ended December 31,
	2022		2021
Licensing, support and maintenance	$	46,012	$	34,731
Variable royalties	3,140		2,647
Other	1,226		486
Total	$	50,378	$	37,864

Contract Balances

The following table provides information about accounts receivable, contract assets and deferred revenue (in thousands):


	As of December 31,
	2022		2021
Accounts receivable—net	$	7,143	$	13,873
Contract assets	$	1,180	$	1,486
Deferred revenue	$	50,679	$	49,176

During the years ended December 31, 2022 and 2021, the Company recognized revenue of $28.2 million and $19.1 million, respectively, that was included in the deferred revenue balance at the beginning of the fiscal year.

Contracted but unsatisfied performance obligations were $50.7 million and $49.3 million at the end of fiscal years 2022 and 2021, respectively, and include unearned revenue and non-cancelable FSA commitments from customers where actual product selection and quantities of specific products are to be determined by customers at a future period. FSA commitments amounted to nil and $0.2 million at the end of fiscal years 2022 and 2021, respectively. The Company has elected to exclude the potential future royalty receipts from the remaining performance obligations. The contracted but unsatisfied or partially unsatisfied performance obligations, excluding non-cancelable FSA, expected to be recognized in revenue over the next 12 months at the end of fiscal year 2022 are $30.9 million, with the remainder recognized thereafter.

The following table is a roll forward of contract balances as of December 31, 2022 and 2021 (in thousands):


	As of December 31,
	2022		2021
Deferred revenue licensing, support and maintenance—beginning balance	$	49,176	$	32,908
Additions	48,741		51,485
Revenue recognized	(47,238)		(35,217)
Deferred revenue licensing, support and maintenance—ending balance	$	50,679	$	49,176

Costs of Obtaining a Contract with a Customer

Incremental costs of obtaining a contract with a customer consist primarily of direct sales commissions incurred upon execution of the contract. These costs are required to be capitalized under ASC 340-40, Other Assets and Deferred Costs—Contracts With Customers, and amortized over the license term. As direct sales commissions paid for term extensions are commensurate with the amounts paid for initial contracts, the deferred incremental costs for initial contracts and for term extensions are recognized over the respective contract terms. Total capitalized direct commission costs were as follows (in thousands):


	As of December 31,
	2022		2021
Short-term commission capitalized in prepaid expenses and other current assets	$	2,636	$	2,289
Long-term commission capitalized in other assets	1,535		1,719
Total	$	4,171	$	4,008

Amortization of capitalized sales commissions were $3.5 million and $2.3 million during fiscal 2022 and 2021, respectively, and are included in sales and marketing expense in the consolidated statements of loss.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Subparagraph (e)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

NET LOSS PER SHARE

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

NET LOSS PER SHARE

The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data):


	Year Ended December 31,
	2022		2021
Numerator:
Net loss	$	(27,387)	$	(23,384)
Denominator:
Weighted-average shares outstanding—Basic and diluted	32,578,776		21,972,101

Net loss per share, basic and diluted	$	(0.84)	$	(1.06)

Since the Company was in a loss position for the years ended December 31, 2022 and 2021, the diluted earnings per share is equal to the basic earnings per share as the effect of potentially dilutive securities would have been antidilutive.

The following table summarizes the potentially dilutive securities that were excluded from the calculation of diluted earnings per share because they would be anti-dilutive:


	As of December 31,
	2022	2021
Stock options	3,542,836	5,407,170
Restricted stock units	5,619,013	3,925,097
Restricted common shares issued for business combination (see Note 9)	331,574	—
Total	9,493,423	9,332,267

INVESTMENTS

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

The following tables summarize the fair value and amortized cost of the Company’s cash equivalents and available-for-sale securities by major security type (in thousands):


	As of December 31, 2022
	Amortized Cost		Unrealized Losses		Aggregate Fair Value
Assets:
Money market funds	$	30,428	$	—	$	30,428
Commercial paper	2,604		(1)		2,603
Corporate bonds	5,717		(10)		5,707
U.S. government agency securities	18,508		(40)		18,468
U.S. treasury securities	8,379		(2)		8,377
Total financial assets	$	65,636	$	(53)	$	65,583

The maturity dates of the Company’s investments are as follows (in thousands):


	December 31, 2022
Less than one year	$	61,156
1-2 years	4,427
Total	$	65,583

There were no impairments of available-for-sale securities during the year ended December 31, 2022.

The Company did not invest in any available-for-sale securities during the year ended December 31, 2021 and did not have any available-for-sale securities as of December 31, 2021.

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

Assets Measured and Recorded at Fair Value on a Non-Recurring Basis

Equity method investments, and certain non-financial assets, such as intangible assets and property, plant and equipment, are remeasured at fair value only if an impairment or observable price adjustment is recognized in the current period.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

Financial instruments not recorded at fair value on a recurring basis include vendor financing arrangements. The carrying value of the vendor financing agreements was $1.7 million and $1.1 million as of December 31, 2022 and 2021, respectively. The Company’s vendor financing arrangements are classified within Level 2 because these borrowings are not actively traded and have a variable interest rate structure based upon market rates currently available to the Company for debt with similar terms and maturities. The estimated fair values of these financial instruments approximate their carrying values.

Financial Instruments Recorded at Fair Value on a Recurring Basis

The following tables summarize the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):


	As of December 31, 2022
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market funds	$	30,428	$	—	$	—	$	30,428
Total cash equivalents	30,428		—		—		30,428
Short-term investments:
Commercial paper	—		2,603		—		2,603
Corporate bonds	—		3,971		—		3,971
U.S. government agency securities	—		15,777		—		15,777
U.S. treasury securities	—		8,377		—		8,377
Total short-term investments	—		30,728		—		30,728
Long-term investments:
Corporate bonds	—		1,736		—		1,736
U.S. government agency securities	—		2,691		—		2,691
Total long-term investments	—		4,427		—		4,427
Total financial assets	$	30,428	$	35,155	$	—	$	65,583

Money market funds are highly liquid investments and are actively traded. The fair value is based on quoted prices for identical assets in active markets and therefore classified as Level 1 of the fair value hierarchy.

The Company’s other investments are considered Level 2 financial instruments as their fair values are determined using inputs that are directly or indirectly observable in active or less active markets. There were no transfers between levels during the year ended December 31, 2022.

The Company did not have any investments in available-for-sale securities as of December 31, 2021.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS AND GOODWILL

Intangible assets, net

Intangible assets, net consisted of the following as of December 31, 2022 (in thousands):


	Gross Fair Value		Accumulated Amortization		Net Book Value
Developed technology	$	3,090	$	(708)	$	2,382
Customer relationships	1,830		(287)		1,543
IPR&D	500		—		500
Trade name and other	150		—		150
Total intangibles	$	5,570	$	(995)	$	4,575

Intangible assets, net consisted of the following as of December 31, 2021 (in thousands):


	Gross Fair Value		Accumulated Amortization		Net Book Value
Developed technology	$	1,700	$	(368)	$	1,332
Customer relationships	1,100		(149)		951
IPR&D	500		—		500
Trade name and other	176		—		176
Total intangibles	$	3,476	$	(517)	$	2,959

Amortization expense of intangible assets was $0.5 million for both the years ended December 31, 2022 and 2021.

The expected future amortization expense of these intangible assets as of December 31, 2022 is as follows (in thousands):


2023	$	767
2024	767
2025	739
2026	427
2027 and thereafter	1,225
Total future amortization expense	$	3,925

Goodwill

As of December 31, 2022 and 2021, goodwill was $4.2 million and $2.7 million, respectively. No goodwill impairments were recorded during the years ended December 31, 2022 and 2021.

BALANCE SHEET COMPONENTS

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BALANCE SHEET COMPONENTS

Accounts Receivable, net

The following table presents the components of accounts receivable, net, (in thousands):


	As of December 31,
	2022		2021
Accounts receivable	$	6,631	$	13,674
Unbilled accounts receivable	762		509
Total accounts receivable	7,393		14,183
Less: allowance for doubtful accounts	(250)		(310)
Total accounts receivable, net	$	7,143	$	13,873

The allowance for doubtful accounts was $0.3 million as of both December 31, 2022 and 2021.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	As of December 31,
	2022		2021
Capitalized commissions asset, net	$	2,636	$	2,289
Insurance	1,372		74
Software & subscriptions	691		388
Contract assets	669		634
Foreign R&D tax credit receivable	—		2,828
Other	450		736
Total prepaid expenses and other current assets	$	5,818	$	6,949

Property and Equipment, net

Property and equipment consisted of the following (in thousands):


	As of December 31,
	2022		2021
Software and technology equipment	$	6,131	$	4,067
Office furniture and hardware equipment	395		305
Leasehold improvements	299		295
Construction in progress	282		—
Vehicles	7		7
Total property and equipment	7,114		4,674
Less: accumulated depreciation and amortization	(3,497)		(2,236)
Total property and equipment—net	$	3,617	$	2,438

Depreciation and amortization expenses related to property and equipment for the years ended December 31, 2022 and 2021, was $1.6 million and $1.0 million, respectively.

Other Assets

Other assets consisted of the following (in thousands):


	As of December 31,
	2022		2021
Foreign R&D tax credit receivable	$	1,565	$	—
Capitalized commissions asset, net	1,392		1,576
Contract assets	511		852
Capitalized third party commissions asset, net	143		143
Security deposits	118		190
Other	58		196
Total other assets	$	3,787	$	2,957

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	As of December 31,
	2022		2021
Payroll and related benefits	$	8,182	$	6,616
Deferred and contingent consideration	1,696		1,668
Deferred income	1,179		—
Accrued professional fees	851		1,292
Other accrued liabilities	187		997
Total accrued expenses and other current liabilities	$	12,095	$	10,573

Other Liabilities

Other liabilities consist of the following (in thousands):


	As of December 31,
	2022		2021
Pension accrual	$	676	$	820
Retirement benefit liability	346		68
Contingent consideration	—		1,269
Total other liabilities	$	1,022	$	2,157

ACQUISITION

12 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

ACQUISITION

Semifore Acquisition

On December 27, 2022, the Company acquired 100% of the issued and outstanding equity securities (the Acquisition) of Semifore, Inc. (Semifore). Prior to the acquisition, Semifore was a privately held provider of hardware, software interface (HSI) technology. Semifore technologies are used to effectively design, verify, document, and help in the validation of the hardware-software integration that is used in the SoC complex chip market. The addition of Semifore technologies and team expertise augments Arteris System IP and IP deployment automation to further enhance software control of the IP and SoC hardware. The Acquisition closed on December 27, 2022 and has been accounted for in accordance with the acquisition method of accounting for business combinations with the Company as the accounting acquirer.

The consideration transferred for the acquisition is as follows (in thousands):


	DECEMBER 27, 2022
Cash consideration paid at closing	$	1,388
Stock consideration (331,569 shares of the Company’s common stock)	1,333
Contingent consideration	362
Total consideration	$	3,083

In connection with the acquisition, key employees and former owners of Semifore were issued a total of 663,143 shares of the Company’s common stock and obtained the right to additional cash payment totaling $1.8 million. Out of the 663,143 shares issued, 331,569 shares of common stock vested as of the closing date and the remaining 331,574 shares and $1.8 million cash payment will vest on the first and third anniversary of the closing date if certain key employees continue to be employed by the Company. These contingent cash payments and equity awards have been accounted for separately from the business combination and will be recognized by the Company as compensation costs in the subsequent periods as related services are provided. Refer to Note 14 for additional information about the equity awards.

The Company incurred acquisition-related expenses associated with the Semifore transaction in a total amount of $0.5 million, which were expensed as incurred and included in general and administrative expenses in the consolidated statements of income (loss) for the year ended December 31, 2022. These acquisition-related costs included legal, accounting, and other professional and consulting fees.

Under the acquisition method of accounting, the purchase price is allocated to identifiable assets acquired and liabilities assumed based on their fair values on the acquisition date. The following table provides the estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):


	FAIR VALUE
Cash	$	267
Accounts receivable	372
Prepaid expenses and other current assets	63
Contract assets	15
Intangibles	2,120
Accounts payable	(139)
Deferred revenue	(672)
Deferred tax liability	(484)
Total identifiable net assets	1,542
Goodwill	1,541
Total purchase price	$	3,083

The following table summarizes the fair value of the identifiable intangible assets acquired (in thousands) and weighted-average useful life:


	2022		WEIGHTED AVERAGE USEFUL LIFE
Developed technology	$	1,390	7 years
Customer relationships	730		8 years
Estimated fair value of intangible assets	$	2,120

Goodwill generated from this business combination is attributed to synergies between the Company’s and Semifore’s respective products and services and is housed within the Company’s single operating segment. The Company recorded $0.5 million deferred tax liability as a result of the Acquisition. The Company does not have any tax basis in the total goodwill of $1.5 million and the goodwill is non-deductible for income tax purposes. The revenue and earnings of the acquired business have been included in the Company’s results since the acquisition date and are not material to the Company’s consolidated financial results.

Pro forma results of operations for the acquisition have not been presented because they are not material to the Company's consolidated results of operations.

Magillem Acquisition

On November 30, 2020, the Company, through Arteris IP SAS, its wholly owned subsidiary, completed the acquisition of Magillem Design Services SA (Magillem), by acquiring certain assets and assumed liabilities of Magillem in an all-cash transaction to expand the Company’s IP deployment technology. Magillem is a leading provider of complex design flow and content management software solutions.

The total purchase consideration was $7.8 million, of which $2.8 million was the estimated contingent consideration which represents the fair value of additional consideration payable to the seller upon (a) the achievement of specified milestones, estimated using the income approach and (b) in relation to potential indemnity claims. The contingent consideration payments are tied to a number of metrics, including claims received by the Company and certain product development, customer and revenue metrics in the next one to three years. As of December 31, 2022, the estimated contingent consideration relating to Magillem was $1.3 million after the settlement of $1.5 million liability in 2022, recorded as part of accrued expenses and other current liabilities on the Company’s consolidated balance sheets.

LEASES

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

LEASES

The Company leases its offices and data center hosting space at various locations under noncancelable operating lease agreements expiring at various dates through 2027. Under the terms of these agreements, the Company also bears the costs for certain insurance, property tax, and maintenance. The terms of certain lease agreements provide for increasing rental payments at fixed intervals.

Total operating lease related costs were as follows (in thousands):


	Year Ended December 31,
	2022		2021
Operating lease cost	$	1,059	$	1,096
Short-term lease cost	309		134
Total lease cost	$	1,368	$	1,230

The weighted-average remaining term of the Company’s operating leases was 3.1 years and 3.6 years as of December 31, 2022 and 2021, respectively, and the weighted-average discount rate used to measure the present value of the operating lease liabilities was 7.5% as of December 31, 2022 and 2021.

Maturities of operating lease liabilities as of December 31, 2022 were as follows (in thousands):


Fiscal year ending December 31,
2023	$	990
2024	449
2025	278
2026	212
2026 and thereafter	212
Total undiscounted cash flows	2,141
Less: Imputed interest	(233)
Present value of lease liabilities	$	1,908

Lease liabilities, current	$	899
Lease liabilities, noncurrent	1,009
Total lease liabilities	$	1,908

BORROWINGS

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

BORROWINGS

Term loans—In November 2018, the Company entered into a business financing agreement (2018 Term Loan) of $1.5 million with Western Alliance Bank. The 2018 Term Loan was fully repaid in November 2021 and was not renewed.

Vendor financing arrangements—The Company has various vendor financing arrangements with extended payment terms on the purchase of software licenses and equipment. In order to determine the present value of the commitments, the Company used an imputed interest rate ranging from 7.5% to 10.0%, which is reflective of its collateralized borrowing rate with similar terms to that of the software licenses and equipment transactions.

Vendor financing arrangements as of December 31, 2022 were as follows (in thousands):


2023	$	1,264
2024	556

Total undiscounted cash flows	1,820
Less: Imputed interest	(108)
Present value of vendor financing arrangements	$	1,712
Vendor financing arrangements, current	$	1,264
Vendor financing arrangements, noncurrent	448
	$	1,712

Interest expense from Vendor financing arrangements was $0.1 million for the year ended December 31, 2022.

Interest expense from Term Loan and Vendor financing arrangements was $0.1 million for the year ended December 31, 2021.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Paragraph 1I
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

COMMITMENTS AND CONTINGENCIES	12 Months Ended
COMMITMENTS AND CONTINGENCIES	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Indemnifications—The Company often enters into limited indemnification provisions in license agreements in the ordinary course of the Company’s licensing business. Pursuant to these provisions, which are often inserted into license agreements in the semiconductor IP and software licensing industries, the Company agrees to indemnify, hold harmless, and reimburse the indemnified parties up to a capped amount for losses suffered or incurred by such indemnified parties due to third party claims if such claims are determined to be caused by the Company. The term of these indemnification provisions is generally either for a term of years or perpetual, in each case beginning on the execution date of the agreement. The Company has also agreed to indemnify under indemnity agreements with its directors and officers, to the extent legally permissible, against liabilities incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or officer, other than certain liabilities arising from willful misconduct of the individual. The Company has incurred no actual payment obligations from these above-noted indemnification provisions and director and officer indemnity agreements during 2022 and 2021, and the consolidated financial statements do not include liabilities for any potential indemnity-related obligations as of December 31, 2022 and 2021. Legal—The Company has been and will continue to be subject to legal proceedings and claims. In the normal course of business, the Company may receive inquiries or become involved in legal disputes regarding such litigation matters. Pursuant to ASC 450, Contingencies, the Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred, and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. In December 2022, the Company received notice of a complaint filed against the Company and two other defendants that are entities in the semiconductor industry by Network System Technologies, LLC in the United States District Court for the Western District of Texas, and two additional complaints were filed in the Eastern District of Texas against certain companies, including some customers of the Company, asserting among other things patent infringement relating to the Company’s technology and seeking damages and injunctive relief. The Company intends to vigorously defend itself in respect to these complaints, and anticipates an increase in legal expenses to do so. Due to the inherent uncertainties and complex technical issues arising from such intellectual property litigation, the Company cannot predict or guarantee any result of such intellectual property litigation. As with any such litigation at its initial stages, the Company cannot comment on the possible final litigation results of ongoing litigation or the risk whether the Company may not prevail in such intellectual property litigation. In addition, such litigation may make it necessary to support or defend the Company or the Company’s customers relating to the claims in the litigation. Further, the ultimate outcome of the litigation, like any litigation, is uncertain and, regardless of outcome, litigation can have an adverse impact on the Company because of defense costs, potential negative publicity, diversion of management resources and other factors, which in turn may have a material adverse impact on the Company’s business, consolidated financial position, results of operations, or cash flows. As intellectual property claims are inherently unpredictable, the Company is currently evaluating whether such matters may have a material adverse effect on the Company’s financial position, results of operations, or cash flows. In addition, significant judgement is required in both the determination of probability and determination as to whether a loss is reasonably estimable. Future revisions to such estimates could materially impact the Company’s results. Accordingly, there can be no assurance that existing or any future legal proceedings for liability estimates arising in the ordinary course of business or otherwise will not have a material adverse effect on the Company’s business, consolidated financial position, results of operations or cash flows. The Company has no other material contractual noncancelable commitments as of December 31, 2022 and December 31, 2021.

REDEEMABLE CONVERTIBLE PREFERRED STOCK, PREFERRED STOCK AND COMMON STOCK	12 Months Ended
	Dec. 31, 2022
Equity [Abstract]
REDEEMABLE CONVERTIBLE PREFERRED STOCK, PREFERRED STOCK AND COMMON STOCK	REDEEMABLE CONVERTIBLE PREFERRED STOCK, PREFERRED STOCK AND COMMON STOCK Redeemable Convertible Preferred Stock Immediately prior to the closing of the IPO, all shares of the Company’s redeemable convertible preferred stock outstanding, totaling 4,471,316, were automatically converted into an equal number of shares of common stock and their carrying value of $5.7 million was reclassified into stockholders’ equity. As of both December 31, 2022 and 2021, there were zero shares of redeemable convertible preferred stock issued and outstanding. Preferred Stock In connection with the IPO, the Company amended and restated its certificate of incorporation to authorize 10,000,000 shares of preferred stock with a par value of $0.001, which shares of preferred stock are currently undesignated. Common Stock Holders of common stock are entitled to one vote per share and to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to common stockholders. The common stock has no preemptive or other subscription rights and there are no redemption or sinking fund provisions with respect to such shares. Common stock is subordinate to the preferred stock with respect to dividend rights and rights upon liquidation, winding-up, and dissolution of the Company. In connection with the IPO, the Company amended and restated its certificate of incorporation to authorize 300,000,000 shares of common stock. During the year ended December 31, 2021, 1,250,000 shares of the Company’s common stock were sold to third-party investors for an aggregate amount of $5.4 million. Stock Repurchases There were no repurchased shares for the years ended December 31, 2022 and 2021.

STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2022

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

2016 Stock Plan

On October 10, 2016, the Company amended and restated the 2013 Equity Incentive Plan and changed the name of the plan to Arteris, Inc. 2016 Incentive Plan (the 2016 Plan). Adoption of the 2016 Plan provides for participation by foreign nationals or those employed outside of the United States.

The 2016 Plan provides for the granting of the following types of stock awards: incentive stock options, non-statutory stock options, stock appreciation rights (SARs), restricted stock awards, restricted stock unit awards (RSUs) and other stock awards. The number of shares authorized for award was 20,803,838. The Company granted awards of common stock in the form of 14,142,208 shares as of December 31, 2021. Following the Company’s IPO in October 2021, all future grants will be made under the 2021 Plan (as defined below), with none remaining available for future grant under the 2016 Plan.

2021 Stock Plan

The Company adopted the 2021 Incentive Award Plan (the 2021 Plan) effective October 26, 2021. The 2021 Plan provides for a variety of stock-based compensation awards, including stock options, SARs, restricted stock awards, restricted stock unit awards, performance bonus awards, performance stock unit awards, dividend equivalents, or other stock or cash based awards.

Following the effectiveness of the 2021 Plan, the Company will not make any further grants under the 2016 Plan. However, the 2016 Plan will continue to govern the terms and conditions of the outstanding awards granted under this plan. Shares of common stock subject to awards granted under the 2016 Plan that are forfeited or lapse unexercised and withheld to cover taxes which following the effective date of the 2021 Plan are not issued under the 2016 Plan will be available for issuance under the 2021 Plan.

2021 Employee stock purchase plan

The Company adopted the 2021 Employee Stock Purchase Plan (the 2021 ESPP) effective on October 26, 2021. The 2021 ESPP will enable eligible employees of the Company to purchase shares of common stock at a discount to fair market value. As of December 31, 2022, there had been no offering period under the ESPP.

2022 Employment Inducement Incentive Plan

The Company adopted the 2022 Employment Inducement Incentive Plan (the 2022 Plan) effective November 3, 2022. The 2022 Plan provides for a variety of stock-based compensation awards, including stock options, SARs, restricted stock awards, restricted stock unit awards, performance bonus awards, performance stock unit awards, dividend equivalents, or other stock or cash based awards. Awards under the 2022 Plan can only be made to newly hired employees.

Shares Available for Future Grant

Shares available for future grant consisted of the following:


	As of December 31,
	2022	2021
Shares available for future grant under the 2021 Plan	3,318,979	3,493,240
Shares available for future grant under the 2021 ESPP	922,306	607,000
Shares available for future grant under the 2022 Plan	1,489,163	—

The Company issues new shares upon a share option exercise or release of restricted stock units.

Stock Options

The following table summarizes the stock option activities under the Company’s 2016 Plan:


	Options Outstanding
	Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Values ($‘000s)




Balances—December 31, 2021	5,407,170	$	0.96	7.16	$	108,964
Granted	—	—
Exercised	(1,451,784)	0.60
Canceled	(412,550)	1.18
Balance—December 31, 2022	3,542,836	$	1.08	6.17	$	11,416
Options vested and exercisable—December 31, 2022	2,752,055	$	0.96	5.80	$	9,200
Options vested and exercisable—December 31, 2021	3,209,726	$	0.62	6.36	$	65,752

The aggregate intrinsic value of the options exercised for the years ended December 31, 2022 and 2021 was $11.7 million and $9.0 million, respectively. The total grant-date fair value of options vested was $0.3 million and $0.5 million for the years ended December 31, 2022 and 2021, respectively.

The amount of cash received by the Company for the exercise of stock options was $0.9 million and $0.6 million for the years ended December 31, 2022 and 2021, respectively.

As of December 31, 2022, there was $0.4 million of unamortized stock-based compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.8 years.

Stock options granted generally have a maximum term of ten years from the grant date and generally vest over a period of four years with 25% vesting after one year and then monthly thereafter for three years.

The fair value of each stock option granted is estimated using the Black-Scholes option-pricing model. The Company determines valuation assumptions for Black-Scholes as follows:

Risk-Free Interest Rate—The Company bases the risk-free interest rate used in the Black-Scholes option-pricing model on the implied yield available on US Treasury zero coupon issues with an equivalent expected term of the options for each option group.

Expected Term—The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. The expected term assumption is based on the simplified method. The Company expects to continue using the simplified method until sufficient information about the Company’s historical behavior is available.

Volatility—The Company determines the price volatility factor based on the historical volatilities of the Company’s peer group as the Company does not have sufficient trading history for its common stock.

Dividend Yield—The Company has never declared or paid any cash dividend and does not currently plan to pay a cash dividend in the foreseeable future. Consequently, the Company used an expected dividend yield of zero.

The Company had no stock option grants during the years ended December 31, 2022 and 2021.

Restricted Stock Units and Awards

The following table summarizes the restricted stock unit activities under the Company’s 2016 Plan, 2021 Plan and 2022 Plan:


	Restricted Stock Units
	Number of Shares	Weighted-Average Grant Date Fair Value Per Share




Unvested—December 31, 2021	3,925,097	$	5.60
Granted	3,419,030	$	9.10
Vested	(1,223,312)	$	6.05
Canceled	(501,802)	$	10.04
Unvested—December 31, 2022	5,619,013	$	7.24

The total grant-date fair value of restricted stock units vested was $7.4 million and $0.4 million during the years ended December 31, 2022 and 2021.

As of December 31, 2022, there was $32.3 million of unamortized stock-based compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 3.1 years.

For RSUs granted under the 2016 Stock Plan, it contains both a service-based vesting condition and a performance-based vesting condition. The service-based vesting condition for these awards is generally satisfied by rendering continuous service for approximately four years, during which time the grants will vest periodically. The performance-based vesting condition of certain awards is satisfied in connection with the Company becoming a publicly listed company or a change in control.

For RSUs granted under the 2021 Stock Plan and 2022 Plan, they contain the service-based vesting condition for these awards and it is generally satisfied by rendering continuous service typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter.

Restricted Common Stock

In connection with the Semifore Acquisition (refer to Note 9), the Company issued 331,574 shares of common stock that will vest on the first and third anniversary of the closing of the Acquisition contingent on the continued employment of certain key employees. As of December 31, 2022, 331,574 shares of common stock remain unvested. These shares had a grant date fair value of $1.3 million based on the closing stock price on the acquisition date. The Company will recognize total compensation cost of $1.3 million to be amortized on a straight-line basis over the total vesting period of three years. As of December 31, 2022, the total unamortized compensation cost was $1.3 million.

Stock-based Compensation

Stock-based compensation expense is recorded on a departmental basis, based on the classification of the award holder. The following table presents the amount of stock-based compensation related to stock-based awards to employees on the Company’s consolidated statements of loss (in thousands):


	Year Ended December 31,
	2022		2021
Cost of revenue	$	562	$	218
Research and development	5,865		3,495
Sales and marketing	2,123		579
General and administrative	3,142		1,218
Total stock-based compensation	$	11,692	$	5,510

EQUITY METHOD INVESTMENT	12 Months Ended
EQUITY METHOD INVESTMENT	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
EQUITY METHOD INVESTMENT	EQUITY METHOD INVESTMENT On February 21, 2022, Arteris IP (Hong Kong) Ltd. (AHK), a wholly-owned subsidiary of the Company, entered into a Share Purchase and Shareholders Agreement (the SPA) with certain investors and Ningbo Transchip Information Consulting Partnership (Limited Partnership) (Management Co). The transaction closed on June 20, 2022. The Company, the investors and Management Co, pursuant to the SPA, subscribed to the registered capital of Transchip Technology (Nanjing) Co., Ltd. (Transchip), a formerly wholly-owned subsidiary of the Company. As a result, the registered capital of Transchip increased to $29.4 million. The Company subscribed for the registered capital of approximately $11.9 million, of which $11.6 million of the contribution was contributed in-kind by way of an interconnect solutions technology license by the Company pursuant to a five-year technology license and services agreement which can be extended automatically for another five-year term, and the remaining was paid in cash. The license agreement provides Transchip the right to software licenses, services, software updates and technical support. On the closing date, the license agreement including the support and maintenance services to be provided to Transchip was valued to be $11.6 million, which was recorded as deferred income and will be recognized as interest and other income (expense), net over a period of ten years on a straight line basis after delivery of the license. The license was delivered to Transchip on September 2, 2022. For the year ended December 31, 2022, the Company recognized income of $0.4 million for the license agreement. Deconsolidation of Transchip as a subsidiary Before the closing of the transaction, Transchip was a wholly-owned subsidiary of the Company with limited operations. Upon closing of the transaction, the Company no longer has control, and therefore deconsolidated Transchip. Accordingly, upon closing of the transaction, the Company derecognized all the assets and liabilities of Transchip and recognized a disposal gain of $0.1 million, included in interest and other income (expense), net in the consolidated statements of loss for the year ended December 31, 2022. Upon deconsolidation, the Company also recorded a nine-month related party loan to Transchip of $0.3 million, in prepaid expenses and other current assets within its consolidated balance sheet, which was previously eliminated as an intercompany loan in the Company’s consolidated financial statements. This loan carries an annual interest rate of 4% and expired on August 31, 2022. The Company received the payment of principal and interest of $0.3 million on September 2, 2022. Investment of Transchip as an equity investee Following the consummation of the foregoing transactions, the Company held 40.3% common stock of Transchip on a fully diluted basis. The Company accounts for its common stock investment in Transchip as an equity method investment as it does not control but has significant influence over operating and financing policies of Transchip. Transchip is the Company’s only equity method investment. The Company invested $12.2 million, including transaction costs of $0.3 million in Transchip. On September 15, 2022, Transchip completed a second funding with additional investors. The Company did not provide additional investments in the second funding. As a result, the Company’s ownership interest in Transchip was diluted to 35.0% of the common stock of Transchip on a fully diluted basis. The impact to the Company’s consolidated statements of loss was immaterial. As of December 31, 2022, the carrying value of the investment in Transchip was $11.9 million. There was no significant difference between the Company’s carrying value of the investment in Transchip and its share of underlying equity in net assets of Transchip. The Company’s loss from its proportionate share of its equity method investment in Transchip was $0.3 million for the year ended December 31, 2022. The Company concluded that there were no indicators of impairment related to the Company’s equity method investment in Transchip as of December 31, 2022.

INCOME TAXES

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

For financial reporting purposes, loss before provision for income taxes, includes the following components (in thousands):


	Year Ended December 31,
	2022		2021
Domestic	$	(21,522)	$	(11,253)
Foreign	(6,282)		(11,091)
Loss before provision for income taxes	$	(27,804)	$	(22,344)

Provision for (benefit from) Income Taxes

The provision for (benefit from) income taxes consists of the following (in thousands):


	Year Ended December 31,
	2022		2021
Current:
Federal	$	1	$	13
State	25		17
Foreign	40		904
Total current	66		934
Deferred:
Federal	(435)		—
State	(48)		—
Foreign	—		106
Total Deferred tax	(483)		106
Provision for (benefit from) income taxes	$	(417)	$	1,040

Income tax provision (benefit) related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 21% to pretax loss as follows:


	Year Ended December 31,
	2022		2021
U.S. Federal (provision) benefit
At Statutory Rate	21.0	%	21.0	%
State Taxes	3.9	%	0.6	%
Valuation Allowance	(28.3)	%	(33.1)	%
Foreign Tax Differential	0.1	%	6.0	%
Tax Credits	6.3	%	2.0	%
Stock Based Compensation	(0.9)	%	(1.0)	%
M&A Transaction Costs	(0.4)	%	0.0	%
Foreign Earnings and Adjustments	(3.2)	%	(0.2)	%
Foreign Withholding Tax	(0.1)	%	(0.8)	%
Other	3.1	%	0.8	%
Total	1.5	%	(4.7)	%

Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):


	Year Ended December 31,
	2022		2021
Deferred Tax Assets:
Federal & State NOL carryforward	$	1,419	$	853
Research & Other credits	8,318		5,598
Capitalized R&D	3,812		—
Deferred revenue	9,148		8,380
Reserves and accruals	1,162		1,000
Stock-based compensation	1,481		953
Other intangibles	427		327
Lease liabilities	137		279
Total Gross Deferred tax asset	25,904		17,390
Less: Valuation allowance	(24,631)		(16,390)
Total Deferred tax assets	$	1,273	$	1,000
Deferred Tax Liabilities:
Other intangibles	$	(494)	$	—
Property and equipment	(517)		(290)
Prepaid expenses	(135)		(447)
Right-of-use assets	(127)		(263)
Total Gross Deferred tax liabilities	$	(1,273)	$	(1,000)
Net Deferred tax assets	$	—	$	—

The provisions of ASC Topic 740, Accounting for Income Taxes (ASC 740), require an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. For the years ended December 31, 2022 and 2021, based on all available objective evidence, including the existence of cumulative losses, the Company determined that it was not more likely than not that the net deferred tax assets were fully realizable. Accordingly, the Company determined that a full valuation allowance against its U.S. (federal and state), French and China deferred tax assets is appropriate. The Company intends to maintain a full valuation allowance on net deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance. During the years ended December 31, 2022 and 2021, the valuation allowance was $24.6 million and $16.4 million, respectively.

The valuation allowance increased by $8.2 million and $7.4 million during the years ended December 31, 2022 and 2021, respectively, primarily due to changes in the U.S. research and development tax credits, stock compensation deferred tax assets, and capitalized research and experimental expenses. The Company recorded an income tax benefit as a result of release of a portion of its valuation allowance for the year ended December 31, 2022 related to the acquisition of Semifore.

Net Operating Loss and Tax Credit Carryforwards

As of December 31, 2022, the Company had $2.9 million net operating loss carryforward for federal income tax purposes, all of which have an indefinite carryforward. The Company had a total state net operating loss carryforward of approximately $8.3 million, which will begin to expire in 2030. Utilization of some of the federal and state net operating loss and credit carryforwards are subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization.

The Company has federal research and development tax credits of approximately $4.9 million, which will begin to expire in 2035 and California research and development tax credits of approximately $3.4 million which can be carried forward indefinitely. These tax credits are subject to the same limitations discussed above.

Unrecognized Tax Benefits

The Company adopted the provisions of ASC 740, which requires companies to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any tax benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement, classification and interest and penalties related to uncertain tax positions.

The Company has the following activity relating to unrecognized tax benefits (in thousands):


	Year Ended December 31,
	2022		2021
Beginning balance	$	3,111	$	2,522
Gross decreases—Tax Positions in Prior Periods	(921)		(25)
Gross increases—Tax Positions in Current Period	405		614
Ending balance	$	2,595	$	3,111

The unrecognized tax benefits, if recognized, would not affect the effective income tax rate due to the valuation allowance that currently offsets deferred tax assets. There were no interest or penalties. The Company does not expect the unrecognized tax benefits to change significantly over the next twelve months.

The Company files federal and state income tax returns. For U.S. federal and state income tax purposes, the statute of limitations currently remains open for the years ending December 31, 2019 to present and December 31, 2018 to present, respectively. In addition, all of the net operating losses and research and development credit carryforwards since inception that could be utilized in future years may be subject to examination.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

DEFINED CONTRIBUTION PLAN AND BENEFIT PLANS

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

DEFINED CONTRIBUTION PLAN AND BENEFIT PLANS

The Company has a 401(k) plan to provide defined contribution retirement benefits for all of its US based employees. Employees may elect to contribute a portion of their pretax compensation to the 401(k) plan, subject to the U.S. Internal Revenue Service annual contribution limit. Employee contributions are fully vested at all times. For the years ended December 31, 2022 and 2021, the Company contributed $0.8 million and $0.4 million to the 401(k) plan, respectively.

The Company has two defined benefit pension plans (the Plans), and both Plans are outside the United States. One of the defined benefit plans was assumed as a result of the acquisition of Magillem during the year ended December 31, 2020. The Plans cover all employees of the Company’s French subsidiary in accordance with French regulations. The Plans are unfunded and accounted for under the credit method and is subject to an actuarial measurement of what the Company needs at the present time to cover the future pension liabilities, including expected future salary increases.

Components of the net periodic pension costs and changes in benefit obligations under the Plan were as follows (in thousands):


	Year Ended December 31,
	2022		2021
Service costs	$	128	$	106
Interest costs	8		3
Total net periodic pension cost	$	136	$	109


	As of December 31,
	2022		2021
Benefit obligation, beginning of year	$	820	$	717
Service costs	128		106
Interest costs	8		3
Net actuarial (gain) loss	(235)		50
Foreign exchange gain	(45)		(56)
Benefit obligation, end of year, included as part of other liabilities	$	676	$	820

Weighted-average assumptions used to determine benefit obligations were as follows:


	As of December 31,
	2022		2021
Discount rate	3.70	%	0.98	%
Rate of compensation increase	3.00	%	3.00	%

RELATED PARTY TRANSACTIONS	12 Months Ended
RELATED PARTY TRANSACTIONS	Dec. 31, 2022
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONS The Company defines related parties as directors, executive officers, nominees for director, stockholders that have significant influence over the Company, or are a greater than 10% beneficial owner of the Company’s capital and their affiliates or immediate family members. In November 2020, the Company entered into a lease agreement with Isabelle Geday, a member of the Board of Directors. The lease payments were $0.2 million for both the years ended December 31, 2022 and 2021, respectively. In addition, the Company signed a consulting agreement with Ms. Geday on December 1, 2021, which was subsequently assigned to Magillem Design Services S.A., effective January 10, 2022. Prior to signing the consulting agreement, Ms. Geday was paid as an executive employee of the Company from December 1, 2020 through November 30, 2021. As a consultant, Ms. Geday will provide services for an initial three-year term and is eligible to receive $26,445 per month for the first 12 months of the consulting term and $19,445 per month for the remaining 24 months of the consulting term. For the years ended December 31, 2022 and 2021, the Company paid Ms. Geday $0.3 million and less than $0.1 million for consulting services, respectively. Lastly, the 455,000 stock options and 62,200 RSUs granted in connection with Ms. Geday’s prior employment and 6,250 RSUs granted as a member of the Board of Directors of the Company continue to vest. In December 2022, the Company entered into a three-month non-exclusive evaluation license agreement with Transchip. Under the agreement, the Company licensed certain technology products for no licensing fee. Refer to Note 15 for additional discussion on the Company’s transactions with Transchip.

SEGMENT AND GEOGRAPHIC INFORMATION

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

SEGMENT AND GEOGRAPHIC INFORMATION

The Company’s CODM, reviews operating results on an aggregate basis and manages the Company’s operations as a whole for the purpose of evaluating financial performance and allocating resources. The Company thus operates in one reportable segment which, as more fully described in Note 2, provides NoC interconnect semiconductor IP and IP deployment technology for a wide range of applications.

Refer to Note 2 for information about customers which account for more than 10% of total revenue. Refer to Note 3 for a summary of revenue by major product and service group.

The following table summarizes revenues by geographic area based on customer location (in thousands):


	Year Ended December 31,
	2022					2021
Americas	$	20,697	41.1	%	(1)	$	16,433	43.4	%	(1)
Asia Pacific	23,133		45.9		(2)	16,748		44.2		(2)
Europe, Middle East	6,548		13.0			4,683		12.4
	$	50,378	100.0	%		$	37,864	100.0	%
(1) United States	$	20,489	40.7	%		$	16,311	43.1	%
(1) Other Americas *	208		0.4	%		122		0.3	%
(2) China	14,522		28.8	%		10,257		27.1	%
(2) Other Asia Pacific*	8,611		17.1	%		6,491		17.1	%

*Other countries individually less than 10%

The following table summarizes property and equipment, net by geographic area (in thousands):


	As of December 31,
	2022				2021
United States	$	2,746	75.9	%	$	1,626	66.7	%
France	857		23.7	%	803		32.9	%
Other	14		0.4	%	9		0.4	%
	$	3,617	100.0	%	$	2,438	100.0	%

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of PresentationThe accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of Arteris, Inc. and its wholly-owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation.
Segment Information	Segment Information The Company operates as a single operating segment. The chief operating decision maker is the Company’s Chief Executive Officer, who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis, accompanied by disaggregated revenue information. Accordingly, the Company has determined that it has a single reportable segment and operating segment.
Use of Estimates	Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates relate to, among others, revenue recognition, the useful lives of assets, assessment of recoverability of property, plant and equipment, fair value of investments, impairment of the equity method investment, fair values of goodwill and other intangible assets, including impairments, leases, allowances for doubtful accounts, deferred tax assets and related valuation allowance, stock-based compensation, potential reserves relating to litigation and tax matters, collectability of certain receivables, fair value and amortization of deferred income, as well as other accruals or reserves. Actual results could differ from those estimates and such differences may be material to the consolidated financial statements.
Foreign Currency	Foreign Currency The Company and its foreign subsidiaries’ functional currency is the US dollar. Accordingly, monetary assets and liabilities of foreign subsidiaries are remeasured into US dollars at the exchange rates in effect at the balance sheet date, non-monetary assets and liabilities are recorded at historical rates, and revenue and expenses are remeasured at average rates during the period. Remeasurement adjustments are recognized as a component of interest and other income (expense), net within the consolidated statements of loss.
Comprehensive Loss	Comprehensive Loss Comprehensive loss generally represents all changes in stockholders’ deficit during the period except those resulting from investments by, or distributions to, stockholders. For the years ended December 31, 2022 and 2021, the components of comprehensive loss consist of net loss and unrealized pension actuarial gain (loss). For the year ended December 31, 2022, comprehensive loss also consists of unrealized loss on available-for-sale securities, net of tax.
Net Loss per Share	Net Loss per Share Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock during the period, plus the dilutive effects of stock options, restricted stock units (RSU) and restricted stock awards (RSA). Dilutive shares of common stock are determined by applying the treasury stock method.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. The Company’s cash equivalents include deposits in money market accounts which were unrestricted as to withdrawal or use and are stated at fair value. As of December 31, 2022, cash and cash equivalents consisted primarily of checking, savings, money market accounts and highly liquid investments with original maturities of three months or less. As of December 31, 2021, cash consisted primarily of checking and savings deposits. Interest earned on cash and cash equivalents is included in interest and other income (expense), net in the consolidated statements of loss.
Accounts Receivable and Allowance for Doubtful Accounts	Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable, net consist of primarily billed and unbilled trade accounts receivable. Unbilled accounts receivable represents amounts recorded as royalty revenue which will be invoiced within a short period upon receipt of the royalty reports from the licensees. The Company records accounts receivable when it has an unconditional right to consideration. Trade accounts receivable are recorded at the invoiced amount. The Company maintains allowances for doubtful accounts to reduce its receivables to their estimated net realizable value. In general, the Company does not offer extended credit terms and also do not require any security or collateral to support its receivables. The Company performs ongoing credit evaluations of its customers and establishes allowances for potential credit losses by considering factors such as historical experience, credit quality, age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The Company’s allowance for doubtful accounts activity has historically not been significant. Probable losses are recorded in general and administrative expense in the consolidated statements of income (loss). Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
Concentrations of Credit Risk	Concentrations of Credit Risk Financial instruments that potentially subject us to concentration of credit risk consist of cash and cash equivalents, investments and accounts receivable. Cash is currently held in three financial institutions and, at times, may exceed federally insured limits. The Company’s accounts receivable are derived principally from revenue earned from customers located in Americas, Europe, Middle East and Asia Pacific regions.
Property and Equipment	Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives, generally ranging from one to ten years. Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the remaining lease term. Depreciation expenses are recorded in cost of revenue and operating expenses in the consolidated statements of loss. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recorded as a component of operating expenses. Repairs and maintenance costs are expensed as incurred. The Company evaluates the recoverability of property and equipment for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by comparing their carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount is not recoverable, the carrying amount of such assets is reduced to fair value.
Business Combinations	Business Combinations The Company allocates the purchase price to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the purchase price over the fair value of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. These estimates are based on information obtained from management of the acquired companies, the Company’s assessment of this information, and historical experience. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customers, acquired technology, and trade names from a market participant perspective, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. In addition, unanticipated events and circumstances may occur that may affect the accuracy or validity of such estimates, and if such events occur, the Company may be required to adjust the value allocated to acquired assets or assumed liabilities. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of income (loss). Acquisition costs, such as legal and consulting fees, are expensed as incurred.
Goodwill and Intangible Assets	Goodwill and Intangible Assets The Company performs its goodwill and other indefinite-lived intangible assets impairment tests annually or more frequently if events or changes in circumstances occur that would more likely than not reduce the fair value below its carrying value. For the years ended December 31, 2022 and 2021, the Company did not have any goodwill or other indefinite-lived intangible assets impairment. Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets, which range from five to eight years, unless the lives are determined to be indefinite. The Company routinely reviews the remaining estimated useful lives of finite-lived intangible assets. Amortization expenses are recorded in operating expenses on the consolidated statements of income (loss).
Right-of-use Assets ("ROU") and Lease Liabilities	Right-of-use Assets (ROU) and Lease Liabilities The Company recognizes leases in accordance with Accounting Standard Codification (ASC) Topic 842, Leases, and subsequently issued additional related Accounting Standard Updates (ASU) (Topic 842). The Company leases its offices at various locations under noncancelable operating lease agreements expiring at various dates through 2027. Under the terms of these agreements, the Company also bears the costs for certain insurance, property tax, and maintenance. The terms of certain lease agreements provide for increasing rental payments at fixed intervals. At lease commencement, the Company measures and records a lease liability equal to the present value of the remaining lease payments, generally discounted using incremental borrowing rate as the implicit rate is not readily determinable on many of its leases. When determining the incremental borrowing rates, the Company considers information including, but not limited to, the lease term, the interest rates on its collateralized debt and incremental borrowing rates for its peer group. On the lease commencement date, the amount of the ROU assets consists of the following: ■The amount of the initial measurement of the lease liability; ■Any lease payments made at or before the commencement date, minus any lease incentives received; and ■Any initial direct costs incurred. The Company assesses the option for lease extensions, renewals, or terminations on individual leases, and generally considers the base term to be the term of lease contracts, unless it is reasonably certain that the Company will exercise such options. Lease agreements may contain other variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred in the consolidated statements of income (loss). The Company does not include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and lease liabilities. The lease agreements generally do not contain any residual guarantees or restrictive covenants. Operating leases are included in operating lease ROU assets, operating lease liabilities, current and operating lease liabilities, noncurrent in the consolidated balance sheets. Finance leases are included in property and equipment, accrued expenses and other current liabilities and other liabilities in the consolidated balance sheets.
Revenue Recognition and Nature of Products and Services	Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, and subsequently issued additional related ASUs (Topic 606). The Company recognizes revenues as it transfers control of deliverables (software and services) to its customers in an amount reflecting the consideration to which it expects to be entitled. To recognize revenues, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. The Company accounts for a contract when it has approval and commitment from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company applies judgment in determining the customer’s ability and intention to pay based on a variety of factors including the customer’s historical payment experience. Nature of Products and Services The Company’s revenue is primarily derived from licensing intellectual property, licensing software, support and maintenance services, professional services, training services, and royalties. Design Solutions Interconnect Solutions product arrangements provide customers the right to software licenses, services, software updates and technical support. The Company enters into licensing arrangements with customers that typically range from two to three years and generally consist of delivery of a design license that grants the customer the right to use the IP to design a contractually defined number of products and stand-ready support services that provide the customer a significant benefit from its proprietary software tool (RTL) as well as ongoing access to Corporate Application Engineers (CAE) and Field Application Engineers (FAE) (collectively, application engineer support services) to perform certain verifications including benchmark performance, simulations and ultimately, through the RTL, instantiate designs into silicon over the design term. The support services, including access to application engineering support services and the benefits of the RTL, are integral and fundamental to the customer’s ability to derive its intended benefit from the IP. CAEs are part of the product development team providing detailed requirements for engineering projects, working very closely with a customer’s chief technology officer and the marketing department, and performing quality assurance testing of customer products prior to shipment to their customers. FAEs provide assistance to the customer’s engineering team in translating their desired SoC architecture into inputs for NoC IP configuration, assistance in optimizing the NoC configuration, answer to customer questions by the online support system or phone, constructive reviews of the progress achieved by the customer’s development team and provision of advice on how to best use the licensed IP, performance of design reviews before customer project RTL freeze and tape-out to ensure the customer used the licensed IP configuration tooling as intended so that the RTL output meets customer requirements and expectations. FAE reviews of the customer’s design are mandatory and consist of an understanding of the customer requirements and analysis of the adequacy of the contemplated IP considering the customer’s desired architecture and design goals and objectives, taking into consideration bandwidth, coherence/non-coherence, latency, clock and timing, areas, and any and all constraints, as identified and specific to the design under review. Besides application engineer support services, support and maintenance services also consist of a stand-ready obligation to provide technical support and software updates over the support term. Generally, the first-year of technical support and software updates are bundled with and into the license fee with a customer option to renew additional years of support throughout the license term. However, the Company continues to provide technical support and software updates throughout the license term even if the customer does not renew these services in subsequent years, making the license term and support and maintenance term co-terminus. Considering the nature of the combined design tool and assisting the Company’s customers in applying its IP technology in its customers’ development environment and the relative significance thereof, the Company has concluded that its Interconnect Solutions IP licensing arrangements are not distinct from its obligation to provide the application engineering support services and benefits of the RTL. The Interconnect Solutions IP, RTL, and the application engineering support services serve to fulfill its commitment to the customer, as they represent inputs to a single, combined performance obligation that commences upon the later of the arrangement effective date or transfer of the software license. The design license and the regular two-way interaction between the design tool, RTL, and the application engineering support services give the customer the intended benefit from the arrangement, which is the ability to commercialize their design. Customers cannot benefit from the design license on its own or together with other readily available resources as no other RTL or application engineer support service provides exists in the marketplace that a customer could use with the design license. Consequently, the RTL and application engineer support service cannot be used on its own or together with any other design license as the Company does not allow the use of the RTL or provide application engineer support services separately from the design license. Further, although technical support and software updates is a distinct performance obligation, it is accounted for as if it were part of a single performance obligation that includes the licenses, RTL and application engineer support services because the technical support and updates are provided in practice for the same period of time and have the same time-based pattern of transfer to the customer as the combined design license, RTL, and application support services. Revenues that are derived from the sale of a licensee’s products that incorporate the Company’s IP are classified as royalty revenues. Royalty revenues are recognized during the quarter in which the sale of the product incorporating the Company’s IP occurs. Royalties are calculated either as a percentage of the revenues received by a licensee’s sale of products incorporating the Company’s IP or on a per unit basis, as specified in the agreements with the licensees. For a majority of the Company’s royalty revenues, it receives the actual sales data from its customers after the quarter ends and accounts for it as unbilled receivables. When the Company does not receive actual sales data from the customer prior to the finalization of its financial statements, royalty revenues are recognized based on its estimation of the customer’s sales during the quarter. Deployment Solutions Deployment Solutions product and CSRCompiler product arrangements provide customers the right to software licenses, software updates and technical support. The software licenses are time-based licenses with terms generally ranging from one to three years. These arrangements generally have two distinct performance obligations that consist of transferring the licensed software and the support and maintenance service. Support and maintenance services consist of a stand-ready obligation to provide technical support and software updates over the support term. Revenue allocated to the software license is recognized at a point in time upon the later of the delivery date or the beginning of the license period, and revenue allocated to support services is recognized ratably over the support term. A limited number of Deployment Solutions contracts include tokens, a mechanism used to both enable “peak” users to choose a combination of the software products on a monthly basis and restrict the number of users. The Company recognizes revenue related to these tokens at a point in time, upon delivery of monthly token license keys to the customer. Professional Services The Company’s agreements often include service elements (other than maintenance and support services). These services include training, design assistance, and consulting. Services performed on a time and materials basis are recognized over the period the services are provided either using an output method such as labor hours, or a method that is otherwise consistent with the way in which value is delivered to the customer. Services performed on a fixed price basis are recognized over time, generally using costs incurred or hours expended to measure progress. Multiple Performance Obligations Most of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis, which are estimated considering multiple factors including observable industry pricing practices and internal pricing strategies and objectives. Standalone selling prices of software license are typically estimated using the residual approach. Standalone selling prices of professional services are typically estimated based on observable transactions when these services are sold on a standalone basis. Transaction price Revenue is recognized when, or as, control of a promised product or service transfers to a client, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. If the consideration promised in a contract includes a variable amount, the Company estimates the amount to which it expects to be entitled using either the expected value or most likely amount method, to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur. Generally, the transaction price of the Company’s contracts is fixed at the inception of the contract, except for variable royalties. The Company’s contracts generally do not include terms that could cause variability in the transaction price. The Company assesses the timing of the transfer of goods or services to the customer as compared to the timing of payments to determine whether a significant financing component exists. As a practical expedient, the Company does not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is a year or less. If the difference in timing arises for reasons other than the provision of finance to either the customer or the Company, no financing component is deemed to exist. When contracts involve a significant financing component, the Company adjusts the promised amount of consideration for the effects of the time value of money if the timing of payments agreed to by the parties to the contract (either explicitly or implicitly) provide the customer with a significant benefit of financing. The Company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. In instances where foreign licensees withhold and remit taxes to local authorities in accordance with local laws and regulations, the Company recognizes and presents revenue on a gross basis, and includes the withholding tax in income tax expense. Flexible Spending Accounts Some customers enter into a non-cancelable flexible spending account agreements (FSA Agreements) whereby the customer commits to a fixed dollar amount over a specified period of time that can be used to purchase from a list of the Company’s products or services. These agreements do not meet the definition of a revenue contract until the customer executes a separate order to identify the required products and services that they are purchasing. The combination of the FSA agreement and the subsequent order creates enforceable rights and obligations, thus meeting the definition of a revenue contract. Each separate order under the agreement is treated as an individual contract and accounted for based on the respective performance obligations included within the FSA agreements. Contract modifications The Company’s contracts may be modified to add, remove or change existing performance obligations. The accounting for modifications to the Company’s contracts involves assessing whether the products and services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Products and services added that are not distinct are accounted for on a cumulative catch-up basis, while those that are distinct are accounted for prospectively, either as a separate contract if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price. The Company’s more significant contract modifications include extensions of the design license term and the purchase of additional years of support and maintenance. Judgments The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together requires significant judgment. Judgment is also required to determine the standalone selling price for each distinct performance obligation. Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in receivables (billed or unbilled), contract assets, or contract liabilities (deferred revenue) on the Company’s consolidated balance sheets. The Company records a contract asset when revenue is recognized prior to the right to invoice. The Company records deferred revenue when it invoices customers and revenue is not yet recognized. For time-based software agreements, customers are generally invoiced in single or annual amounts, although some customers are invoiced more frequently over time. The Company records an unbilled receivable when revenue is recognized and it has an unconditional right to invoice and receive payment. The Company capitalizes sales commission as costs of obtaining a contract when they are incremental and, if they are expected to be recovered, amortized in a manner consistent with the pattern of transfer of the good or service to which the asset relates. Incremental costs of obtaining a contract with a customer consist primarily of direct sales commissions incurred upon execution of the contract. These costs are required to be capitalized under ASC 340-40, Other Assets and Deferred Costs—Contracts With Customers, and amortized over the license term. As direct sales commissions paid for term extensions are commensurate with the amounts paid for initial contracts, the deferred incremental costs for initial contracts and for term extensions are recognized over the respective contract terms.
Cost of Revenue	Cost of Revenue Cost of Revenues relates to costs associated with the Company’s IP licensing arrangements, deployment solution software and support activities, including applicable personnel related costs, travel, and overhead.
Research and Development	Research and Development Research and development costs that do not meet the criteria for capitalization are expensed as incurred. Research and development costs consist primarily of compensation, stock-based compensation, and employee benefits of engineering and product development personnel, consulting services, and other direct expenses.
Software Development Costs	Software Development Costs Software development costs are capitalized beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. Arteris has not capitalized any software development costs as of and for the years ended December 31, 2022 and 2021 as the period between establishing technological feasibility and general customer release has historically been short and therefore capitalizable costs have been insignificant. The Company has not capitalized any internal-use software development costs as these costs have historically been insignificant.
Sales and Marketing	Sales and MarketingSales and marketing expenses consist of compensation and employee benefits of marketing and sales personnel and related support teams, and stock-based compensation, as well as travel, trade show sponsorships and events, conferences, and internet advertising costs. Advertising costs, included in sales and marketing expenses, are expensed as incurred.
General and Administrative	General and Administrative General and administrative expenses include executive and administrative compensation and employee benefits, depreciation, professional services fees, insurance costs, bad debt, other allocated costs, such as facility-related expenses, supplies, other fixed costs, and stock-based compensation.
Stock-based Compensation	Stock-based Compensation The Company measures equity classified stock-based awards, including stock options, RSUs, and RSAs granted to employees, directors, and non-employees based on the estimated fair values of the awards on the date of the grant. Stock-based compensation expense for awards with service-based vesting only is recognized on a straight-line basis over the requisite service period which is generally the vesting period of such awards, as a component of operating expenses within the consolidated statements of income (loss). For awards that include performance conditions stock-based compensation expense is recognized on a graded vesting basis over the requisite service period. Compensation expense is not recognized until the performance condition becomes probable. The Company accounts for forfeitures related to these awards as they occur. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. This valuation model for stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation including the expected term, the volatility of the Company’s common stock, and an assumed risk-free interest rate. As a result, if the Company revises its assumptions and estimates, the Company’s stock-based compensation expense could change. The fair value of RSUs and RSAs granted is measured as the fair value per share of the Company’s common stock on the date of grant.
Income Taxes	Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company provides for a valuation allowance when it is more likely than not that some portion, or all of its deferred tax assets will not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. As of December 31, 2022 and 2021, the Company recorded a full valuation allowance against its U.S. federal, state, and certain foreign jurisdiction net deferred tax assets. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were $2.6 million and $3.1 million unrecognized tax benefits as of December 31, 2022 and 2021, respectively. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
Fair Value of Financial Instruments	Fair value of financials instruments The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal market or the most advantageous market in which it would transact. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Observable inputs are inputs that reflect the assumptions market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the factors that market participants would use in valuing the asset or liability developed based on the best information available in the circumstances. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value by requiring that the most observable inputs be used when available. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: ■Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. ■Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets). ■Level 3 applies to assets or liabilities for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including the Company’s own assumptions. The Company determined the estimated fair value of financial instruments using available market information and valuation methodologies considered to be appropriate. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to their short maturities. The Company’s investments are recorded at fair value and vendor financing arrangements are recorded at net carrying value. Assets Measured and Recorded at Fair Value on a Non-Recurring Basis Equity method investments, and certain non-financial assets, such as intangible assets and property, plant and equipment, are remeasured at fair value only if an impairment or observable price adjustment is recognized in the current period. Financial Instruments Not Recorded at Fair Value on a Recurring Basis Financial instruments not recorded at fair value on a recurring basis include vendor financing arrangements. The carrying value of the vendor financing agreements was $1.7 million and $1.1 million as of December 31, 2022 and 2021, respectively. The Company’s vendor financing arrangements are classified within Level 2 because these borrowings are not actively traded and have a variable interest rate structure based upon market rates currently available to the Company for debt with similar terms and maturities. The estimated fair values of these financial instruments approximate their carrying values. Money market funds are highly liquid investments and are actively traded. The fair value is based on quoted prices for identical assets in active markets and therefore classified as Level 1 of the fair value hierarchy. The Company’s other investments are considered Level 2 financial instruments as their fair values are determined using inputs that are directly or indirectly observable in active or less active markets. There were no transfers between levels during the year ended December 31, 2022.
Investments	Investments All investments in debt securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its investments in debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. Short-term investments have original maturities of greater than three months but one year or less as of the consolidated balance sheet dates. Long-term investments have maturities greater than one year as of the consolidated balance sheet dates. If the Company expects to sell a debt security within one year, it will classify the investment as a short-term investment regardless of its stated maturity date. The available-for-sale securities are reported at fair value with unrealized gains and losses included in accumulated other comprehensive income (loss). A decline in the fair value of the available-for-sale securities is recognized directly to net income (loss) if judged to be other than temporary. Interest earned on investments in debt securities, realized gains and losses and impairment losses, if any, on investments in debt securities are included in interest and other income (expense), net in the consolidated statements of loss. The cost of securities sold is based on the specific-identification method.
Equity Method Investments	Equity Method Investments The Company uses the equity method to account for its investments in companies which the Company does not control but is deemed to have the ability to exercise significant influence over operating and financial decisions of the investee. The Company generally measures an investment in the common stock of an investee initially at cost. The carrying value of the Company’s equity method investments is reported in equity method investment on the consolidated balance sheets. The Company records its proportionate share of the income or loss in its equity method investments on a one-quarter lag. The cost is adjusted to recognize the Company's proportionate share of the investee’s net income or loss after the date of investment. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. Distributions received from an investee reduce the carrying value of an investment and are recorded in the consolidated statements of cash flows using the nature of distribution approach.
Government Assistance	Government Assistance The Company's government assistance during the year ended December 31, 2022 and 2021 primarily consists of R&D tax credits granted to the Company’s subsidiary in France. These R&D tax credits are granted to encourage companies to conduct technical and scientific research. For accounting purposes, the foreign R&D tax credits are recorded as an offset to research and development expenses in the Company’s consolidated statements of loss. The Company recorded $1.8 million and $2.4 million of foreign R&D tax credit during the years ended December 31, 2022 and 2021, respectively.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This standard requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with Topic 606 as if the acquirer had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those years and early adoption is permitted. The Company early adopted ASU 2021-08 for the year ended December 31, 2022. The adoption of the new guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832), which requires business entities to disclose information about certain government assistance they receive. Such disclosure requirements include the nature of the transactions and the related accounting policy used, the line items on the balance sheet and income statement that are affected and the amounts applicable to each financial statement line item and significant terms and conditions of the transactions. ASU 2021-10 is effective for annual periods beginning after December 15, 2021. The Company adopted ASU 2021-10 for the year ended December 31, 2022. The adoption of the new guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and in May 2019 issued ASU No. 2019-05, Credit Losses (Topic 326): Targeted Transition Relief (collectively referred to as Topic 326), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. Topic 326 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model which will result in earlier recognition of credit losses. Topic 326 is effective for the Company for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures. In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which requires a buyer in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. To achieve that objective, the buyer should disclose qualitative and quantitative information about its supplier finance programs. The amendments in this update do not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance program. The guidance is effective for fiscal years beginning after December 15, 2022, except for the amendment on rollforward information which is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures.
Indemnifications	The Company often enters into limited indemnification provisions in license agreements in the ordinary course of the Company’s licensing business. Pursuant to these provisions, which are often inserted into license agreements in the semiconductor IP and software licensing industries, the Company agrees to indemnify, hold harmless, and reimburse the indemnified parties up to a capped amount for losses suffered or incurred by such indemnified parties due to third party claims if such claims are determined to be caused by the Company. The term of these indemnification provisions is generally either for a term of years or perpetual, in each case beginning on the execution date of the agreement. The Company has also agreed to indemnify under indemnity agreements with its directors and officers, to the extent legally permissible, against liabilities incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or officer, other than certain liabilities arising from willful misconduct of the individual.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Schedules of Concentration of Risk

Accounts receivable from the Company’s major customers representing 10% or more of total accounts receivable was as follows:


	As of December 31,
	2022		2021
Customer A	32	%	33	%
Customer B	*		21	%
Customer C	*		12	%

* Customer accounted for less than 10% of total accounts receivable at period end.

Revenue from the Company’s major customers representing 10% or more of total revenue was as follows:


	Year Ended December 31,
	2022		2021
Customer A	24	%	23	%

REVENUE (Tables)

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table shows revenue by product and services groups (in thousands):


	Year Ended December 31,
	2022		2021
Licensing, support and maintenance	$	46,012	$	34,731
Variable royalties	3,140		2,647
Other	1,226		486
Total	$	50,378	$	37,864

Contract Balances on Condensed Consolidated Balance Sheet

The following table provides information about accounts receivable, contract assets and deferred revenue (in thousands):


	As of December 31,
	2022		2021
Accounts receivable—net	$	7,143	$	13,873
Contract assets	$	1,180	$	1,486
Deferred revenue	$	50,679	$	49,176

The following table is a roll forward of contract balances as of December 31, 2022 and 2021 (in thousands):


	As of December 31,
	2022		2021
Deferred revenue licensing, support and maintenance—beginning balance	$	49,176	$	32,908
Additions	48,741		51,485
Revenue recognized	(47,238)		(35,217)
Deferred revenue licensing, support and maintenance—ending balance	$	50,679	$	49,176

Capitalized Direct Commission Costs

Total capitalized direct commission costs were as follows (in thousands):


	As of December 31,
	2022		2021
Short-term commission capitalized in prepaid expenses and other current assets	$	2,636	$	2,289
Long-term commission capitalized in other assets	1,535		1,719
Total	$	4,171	$	4,008

NET LOSS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Schedule of Net Income (Loss) Per Share

The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data):


	Year Ended December 31,
	2022		2021
Numerator:
Net loss	$	(27,387)	$	(23,384)
Denominator:
Weighted-average shares outstanding—Basic and diluted	32,578,776		21,972,101

Net loss per share, basic and diluted	$	(0.84)	$	(1.06)

Schedule of Potentially Dilutive Securities Excluded from the Calculation of Diluted Earnings Per Share

The following table summarizes the potentially dilutive securities that were excluded from the calculation of diluted earnings per share because they would be anti-dilutive:


	As of December 31,
	2022	2021
Stock options	3,542,836	5,407,170
Restricted stock units	5,619,013	3,925,097
Restricted common shares issued for business combination (see Note 9)	331,574	—
Total	9,493,423	9,332,267

Investments, Debt and Equity Securities (Tables)

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Debt Securities, Available-for-sale

The following tables summarize the fair value and amortized cost of the Company’s cash equivalents and available-for-sale securities by major security type (in thousands):


	As of December 31, 2022
	Amortized Cost		Unrealized Losses		Aggregate Fair Value
Assets:
Money market funds	$	30,428	$	—	$	30,428
Commercial paper	2,604		(1)		2,603
Corporate bonds	5,717		(10)		5,707
U.S. government agency securities	18,508		(40)		18,468
U.S. treasury securities	8,379		(2)		8,377
Total financial assets	$	65,636	$	(53)	$	65,583

Investments, Maturity Schedule

The maturity dates of the Company’s investments are as follows (in thousands):


	December 31, 2022
Less than one year	$	61,156
1-2 years	4,427
Total	$	65,583

FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value, Assets Measured on Recurring Basis

The following tables summarize the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):


	As of December 31, 2022
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market funds	$	30,428	$	—	$	—	$	30,428
Total cash equivalents	30,428		—		—		30,428
Short-term investments:
Commercial paper	—		2,603		—		2,603
Corporate bonds	—		3,971		—		3,971
U.S. government agency securities	—		15,777		—		15,777
U.S. treasury securities	—		8,377		—		8,377
Total short-term investments	—		30,728		—		30,728
Long-term investments:
Corporate bonds	—		1,736		—		1,736
U.S. government agency securities	—		2,691		—		2,691
Total long-term investments	—		4,427		—		4,427
Total financial assets	$	30,428	$	35,155	$	—	$	65,583

INTANGIBLE ASSETS AND GOODWILL (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets, net consisted of the following as of December 31, 2022 (in thousands):


	Gross Fair Value		Accumulated Amortization		Net Book Value
Developed technology	$	3,090	$	(708)	$	2,382
Customer relationships	1,830		(287)		1,543
IPR&D	500		—		500
Trade name and other	150		—		150
Total intangibles	$	5,570	$	(995)	$	4,575

Intangible assets, net consisted of the following as of December 31, 2021 (in thousands):


	Gross Fair Value		Accumulated Amortization		Net Book Value
Developed technology	$	1,700	$	(368)	$	1,332
Customer relationships	1,100		(149)		951
IPR&D	500		—		500
Trade name and other	176		—		176
Total intangibles	$	3,476	$	(517)	$	2,959

Schedule of Indefinite-Lived Intangible Assets

Intangible assets, net consisted of the following as of December 31, 2022 (in thousands):


	Gross Fair Value		Accumulated Amortization		Net Book Value
Developed technology	$	3,090	$	(708)	$	2,382
Customer relationships	1,830		(287)		1,543
IPR&D	500		—		500
Trade name and other	150		—		150
Total intangibles	$	5,570	$	(995)	$	4,575

Intangible assets, net consisted of the following as of December 31, 2021 (in thousands):


	Gross Fair Value		Accumulated Amortization		Net Book Value
Developed technology	$	1,700	$	(368)	$	1,332
Customer relationships	1,100		(149)		951
IPR&D	500		—		500
Trade name and other	176		—		176
Total intangibles	$	3,476	$	(517)	$	2,959

Schedule of Future Amortization Expense

The expected future amortization expense of these intangible assets as of December 31, 2022 is as follows (in thousands):


2023	$	767
2024	767
2025	739
2026	427
2027 and thereafter	1,225
Total future amortization expense	$	3,925

BALANCE SHEET COMPONENTS (Tables)

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Accounts Receivable, net

The following table presents the components of accounts receivable, net, (in thousands):


	As of December 31,
	2022		2021
Accounts receivable	$	6,631	$	13,674
Unbilled accounts receivable	762		509
Total accounts receivable	7,393		14,183
Less: allowance for doubtful accounts	(250)		(310)
Total accounts receivable, net	$	7,143	$	13,873

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	As of December 31,
	2022		2021
Capitalized commissions asset, net	$	2,636	$	2,289
Insurance	1,372		74
Software & subscriptions	691		388
Contract assets	669		634
Foreign R&D tax credit receivable	—		2,828
Other	450		736
Total prepaid expenses and other current assets	$	5,818	$	6,949

Property and Equipment, net

Property and equipment consisted of the following (in thousands):


	As of December 31,
	2022		2021
Software and technology equipment	$	6,131	$	4,067
Office furniture and hardware equipment	395		305
Leasehold improvements	299		295
Construction in progress	282		—
Vehicles	7		7
Total property and equipment	7,114		4,674
Less: accumulated depreciation and amortization	(3,497)		(2,236)
Total property and equipment—net	$	3,617	$	2,438

Other Assets

Other assets consisted of the following (in thousands):


	As of December 31,
	2022		2021
Foreign R&D tax credit receivable	$	1,565	$	—
Capitalized commissions asset, net	1,392		1,576
Contract assets	511		852
Capitalized third party commissions asset, net	143		143
Security deposits	118		190
Other	58		196
Total other assets	$	3,787	$	2,957

Accrued Expenses and Other Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	As of December 31,
	2022		2021
Payroll and related benefits	$	8,182	$	6,616
Deferred and contingent consideration	1,696		1,668
Deferred income	1,179		—
Accrued professional fees	851		1,292
Other accrued liabilities	187		997
Total accrued expenses and other current liabilities	$	12,095	$	10,573

Other Liabilities

Other liabilities consist of the following (in thousands):


	As of December 31,
	2022		2021
Pension accrual	$	676	$	820
Retirement benefit liability	346		68
Contingent consideration	—		1,269
Total other liabilities	$	1,022	$	2,157

ACQUISITION (Tables)

12 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Consideration Transferred for the Acquisition

The consideration transferred for the acquisition is as follows (in thousands):


	DECEMBER 27, 2022
Cash consideration paid at closing	$	1,388
Stock consideration (331,569 shares of the Company’s common stock)	1,333
Contingent consideration	362
Total consideration	$	3,083

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table provides the estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):


	FAIR VALUE
Cash	$	267
Accounts receivable	372
Prepaid expenses and other current assets	63
Contract assets	15
Intangibles	2,120
Accounts payable	(139)
Deferred revenue	(672)
Deferred tax liability	(484)
Total identifiable net assets	1,542
Goodwill	1,541
Total purchase price	$	3,083

The following table summarizes the fair value of the identifiable intangible assets acquired (in thousands) and weighted-average useful life:


	2022		WEIGHTED AVERAGE USEFUL LIFE
Developed technology	$	1,390	7 years
Customer relationships	730		8 years
Estimated fair value of intangible assets	$	2,120

LEASES (Tables)

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Operating Lease Costs

Total operating lease related costs were as follows (in thousands):


	Year Ended December 31,
	2022		2021
Operating lease cost	$	1,059	$	1,096
Short-term lease cost	309		134
Total lease cost	$	1,368	$	1,230

Maturities of Operating Lease Liabilities

Maturities of operating lease liabilities as of December 31, 2022 were as follows (in thousands):


Fiscal year ending December 31,
2023	$	990
2024	449
2025	278
2026	212
2026 and thereafter	212
Total undiscounted cash flows	2,141
Less: Imputed interest	(233)
Present value of lease liabilities	$	1,908

Lease liabilities, current	$	899
Lease liabilities, noncurrent	1,009
Total lease liabilities	$	1,908

BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Schedule of Vendor Financing Arrangements

Vendor financing arrangements as of December 31, 2022 were as follows (in thousands):


2023	$	1,264
2024	556

Total undiscounted cash flows	1,820
Less: Imputed interest	(108)
Present value of vendor financing arrangements	$	1,712
Vendor financing arrangements, current	$	1,264
Vendor financing arrangements, noncurrent	448
	$	1,712

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2022

Share-based Payment Arrangement [Abstract]

Shares Available for Future Grant

Shares available for future grant consisted of the following:


	As of December 31,
	2022	2021
Shares available for future grant under the 2021 Plan	3,318,979	3,493,240
Shares available for future grant under the 2021 ESPP	922,306	607,000
Shares available for future grant under the 2022 Plan	1,489,163	—

Summary of Stock Options Activity

The following table summarizes the stock option activities under the Company’s 2016 Plan:


	Options Outstanding
	Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Values ($‘000s)




Balances—December 31, 2021	5,407,170	$	0.96	7.16	$	108,964
Granted	—	—
Exercised	(1,451,784)	0.60
Canceled	(412,550)	1.18
Balance—December 31, 2022	3,542,836	$	1.08	6.17	$	11,416
Options vested and exercisable—December 31, 2022	2,752,055	$	0.96	5.80	$	9,200
Options vested and exercisable—December 31, 2021	3,209,726	$	0.62	6.36	$	65,752

Summary of Restricted Stock Units and Awards Activity

The following table summarizes the restricted stock unit activities under the Company’s 2016 Plan, 2021 Plan and 2022 Plan:


	Restricted Stock Units
	Number of Shares	Weighted-Average Grant Date Fair Value Per Share




Unvested—December 31, 2021	3,925,097	$	5.60
Granted	3,419,030	$	9.10
Vested	(1,223,312)	$	6.05
Canceled	(501,802)	$	10.04
Unvested—December 31, 2022	5,619,013	$	7.24

Stock-Based Compensation Related to Stock-Based Awards to Employees


	Year Ended December 31,
	2022		2021
Cost of revenue	$	562	$	218
Research and development	5,865		3,495
Sales and marketing	2,123		579
General and administrative	3,142		1,218
Total stock-based compensation	$	11,692	$	5,510

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Income (Loss) Before Provision for Income Taxes

For financial reporting purposes, loss before provision for income taxes, includes the following components (in thousands):


	Year Ended December 31,
	2022		2021
Domestic	$	(21,522)	$	(11,253)
Foreign	(6,282)		(11,091)
Loss before provision for income taxes	$	(27,804)	$	(22,344)

Schedule of Provision for Income Taxes

The provision for (benefit from) income taxes consists of the following (in thousands):


	Year Ended December 31,
	2022		2021
Current:
Federal	$	1	$	13
State	25		17
Foreign	40		904
Total current	66		934
Deferred:
Federal	(435)		—
State	(48)		—
Foreign	—		106
Total Deferred tax	(483)		106
Provision for (benefit from) income taxes	$	(417)	$	1,040

Schedule of Effective Income Tax Rate Reconciliation

Income tax provision (benefit) related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 21% to pretax loss as follows:


	Year Ended December 31,
	2022		2021
U.S. Federal (provision) benefit
At Statutory Rate	21.0	%	21.0	%
State Taxes	3.9	%	0.6	%
Valuation Allowance	(28.3)	%	(33.1)	%
Foreign Tax Differential	0.1	%	6.0	%
Tax Credits	6.3	%	2.0	%
Stock Based Compensation	(0.9)	%	(1.0)	%
M&A Transaction Costs	(0.4)	%	0.0	%
Foreign Earnings and Adjustments	(3.2)	%	(0.2)	%
Foreign Withholding Tax	(0.1)	%	(0.8)	%
Other	3.1	%	0.8	%
Total	1.5	%	(4.7)	%

Schedule of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):


	Year Ended December 31,
	2022		2021
Deferred Tax Assets:
Federal & State NOL carryforward	$	1,419	$	853
Research & Other credits	8,318		5,598
Capitalized R&D	3,812		—
Deferred revenue	9,148		8,380
Reserves and accruals	1,162		1,000
Stock-based compensation	1,481		953
Other intangibles	427		327
Lease liabilities	137		279
Total Gross Deferred tax asset	25,904		17,390
Less: Valuation allowance	(24,631)		(16,390)
Total Deferred tax assets	$	1,273	$	1,000
Deferred Tax Liabilities:
Other intangibles	$	(494)	$	—
Property and equipment	(517)		(290)
Prepaid expenses	(135)		(447)
Right-of-use assets	(127)		(263)
Total Gross Deferred tax liabilities	$	(1,273)	$	(1,000)
Net Deferred tax assets	$	—	$	—

Schedule of Unrecognized Tax Benefits

The Company has the following activity relating to unrecognized tax benefits (in thousands):


	Year Ended December 31,
	2022		2021
Beginning balance	$	3,111	$	2,522
Gross decreases—Tax Positions in Prior Periods	(921)		(25)
Gross increases—Tax Positions in Current Period	405		614
Ending balance	$	2,595	$	3,111

DEFINED CONTRIBUTION PLAN AND BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

Schedule of Net Periodic Pension Costs

Components of the net periodic pension costs and changes in benefit obligations under the Plan were as follows (in thousands):


	Year Ended December 31,
	2022		2021
Service costs	$	128	$	106
Interest costs	8		3
Total net periodic pension cost	$	136	$	109

Schedule of Changes in Benefit Obligations


	As of December 31,
	2022		2021
Benefit obligation, beginning of year	$	820	$	717
Service costs	128		106
Interest costs	8		3
Net actuarial (gain) loss	(235)		50
Foreign exchange gain	(45)		(56)
Benefit obligation, end of year, included as part of other liabilities	$	676	$	820

Schedule of Weighted-Average Assumptions

Weighted-average assumptions used to determine benefit obligations were as follows:


	As of December 31,
	2022		2021
Discount rate	3.70	%	0.98	%
Rate of compensation increase	3.00	%	3.00	%

SEGMENT AND GEOGRAPHIC INFORMATION (Tables)

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Summary of Revenue by Geographic Area

The following table summarizes revenues by geographic area based on customer location (in thousands):


	Year Ended December 31,
	2022					2021
Americas	$	20,697	41.1	%	(1)	$	16,433	43.4	%	(1)
Asia Pacific	23,133		45.9		(2)	16,748		44.2		(2)
Europe, Middle East	6,548		13.0			4,683		12.4
	$	50,378	100.0	%		$	37,864	100.0	%
(1) United States	$	20,489	40.7	%		$	16,311	43.1	%
(1) Other Americas *	208		0.4	%		122		0.3	%
(2) China	14,522		28.8	%		10,257		27.1	%
(2) Other Asia Pacific*	8,611		17.1	%		6,491		17.1	%

*Other countries individually less than 10%

Summary of Property and Equipment by Geographic Areas

The following table summarizes property and equipment, net by geographic area (in thousands):


	As of December 31,
	2022				2021
United States	$	2,746	75.9	%	$	1,626	66.7	%
France	857		23.7	%	803		32.9	%
Other	14		0.4	%	9		0.4	%
	$	3,617	100.0	%	$	2,438	100.0	%

DESCRIPTION OF BUSINESS (Details) $ / shares in Units, $ in Millions	1 Months Ended
	Oct. 31, 2021 USD ($) $ / shares shares
IPO
Subsidiary, Sale of Stock [Line Items]
Sale of stock, number of shares issued in transaction (in shares)	5,750,000
Sale of stock (in dollars per share) \| $ / shares	$ 14.00
Sale of stock, consideration received on transaction \| $	$ 71.1
Common shares issued upon conversion (in shares)	4,471,316
Deferred offering costs \| $	$ 3.8
Over-Allotment Option
Subsidiary, Sale of Stock [Line Items]
Sale of stock, number of shares issued in transaction (in shares)	750,000

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable Concentration Risk (Details) - Customer Concentration Risk	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Customer A \| Accounts Receivable
Concentration Risk [Line Items]
Concentration risk, percentage	32.00%	33.00%
Customer A \| Revenue from Contract with Customer Benchmark
Concentration Risk [Line Items]
Concentration risk, percentage	24.00%	23.00%
Customer B \| Accounts Receivable
Concentration Risk [Line Items]
Concentration risk, percentage		21.00%
Customer C \| Accounts Receivable
Concentration Risk [Line Items]
Concentration risk, percentage		12.00%

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Impairment of property and equipment	$ 0	$ 0
Goodwill and intangible asset impairment	0	0
Capitalized software development costs	0	0
Advertising costs	100,000	400,000
Unrecognized tax benefits	2,595,000	3,111,000	$ 2,522,000
Income tax penalties and interest accrued	0	0
Foreign R&D tax credit receivable	$ 1,800,000	$ 2,400,000
Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	1 year
Finite-lived intangible asset, useful life	5 years
Licensing arrangement, period	2 years
Software license, period	1 year
Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	10 years
Finite-lived intangible asset, useful life	8 years
Licensing arrangement, period	3 years
Software license, period	3 years

REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Disaggregation of Revenue [Line Items]
Total revenue	$ 50,378	$ 37,864
Licensing, support and maintenance
Disaggregation of Revenue [Line Items]
Total revenue	46,012	34,731
Variable royalties
Disaggregation of Revenue [Line Items]
Total revenue	3,140	2,647
Other
Disaggregation of Revenue [Line Items]
Total revenue	$ 1,226	$ 486

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

REVENUE - Contract Balances on Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Accounts receivable, net	$ 7,143	$ 13,873
Contract assets	1,180	1,486
Deferred revenue	$ 50,679	$ 49,176	$ 32,908

REVENUE - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
REVENUE - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Disaggregation of Revenue [Line Items]
Revenue recognized	$ 28.2	$ 19.1
Unsatisfied performance obligations	50.7	49.3
Flexible spending account commitment	0.0	0.2
Amortization of capitalized sales commissions	$ 3.5	$ 2.3
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Disaggregation of Revenue [Line Items]
Remaining performance obligation, expected timing of satisfaction, excluding flexible spending account	12 months
Unsatisfied performance obligations, excluding flexible spending account commitment	$ 30.9

REVENUE - Roll Forward of Deferred Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Change in Contract with Customer, Liability [Roll Forward]
Balance at beginning of period	$ 49,176	$ 32,908
Additions	48,741	51,485
Revenue recognized	(47,238)	(35,217)
Balance at end of period	$ 50,679	$ 49,176

REVENUE - Capitalized Direct Commission Costs (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Short-term commission capitalized in prepaid expenses and other current assets	$ 2,636	$ 2,289
Long-term commission capitalized in other assets	1,535	1,719
Total	$ 4,171	$ 4,008

NET LOSS PER SHARE - Schedule of Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Numerator:
Net loss	$ (27,387)	$ (23,384)
Denominator:
Weighted-average shares outstanding—Basic (in shares)	32,578,776	21,972,101
Weighted-average shares outstanding—Diluted (in shares)	32,578,776	21,972,101
Net loss per share, basic (in dollars per share)	$ (0.84)	$ (1.06)
Net loss per share, diluted (in dollars per share)	$ (0.84)	$ (1.06)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

NET LOSS PER SHARE - Schedule of Potentially Dilutive Securities Excluded from the Calculation of Diluted Earnings Per Share (Details) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	9,493,423	9,332,267
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	3,542,836	5,407,170
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	5,619,013	3,925,097
Restricted common shares issued for business combination (see Note 9)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	331,574	0

INVESTMENTS - Debt Securities, Available-for-sale (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 65,636
Unrealized Losses	(53)
Aggregate Fair Value	65,583
Money market funds
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	30,428
Unrealized Losses	0
Aggregate Fair Value	30,428
Commercial paper
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	2,604
Unrealized Losses	(1)
Aggregate Fair Value	2,603
Corporate bonds
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	5,717
Unrealized Losses	(10)
Aggregate Fair Value	5,707
U.S. government agency securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	18,508
Unrealized Losses	(40)
Aggregate Fair Value	18,468
U.S. treasury securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	8,379
Unrealized Losses	(2)
Aggregate Fair Value	$ 8,377

INVESTMENTS - Investments, Maturity Schedule (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Investments, Debt and Equity Securities [Abstract]
Less than one year	$ 61,156
1-2 years	4,427
Total	$ 65,583

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Reported Value Measurement
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Carrying value of term loan and vendor financing agreements	$ 1.7	$ 1.1

FAIR VALUE MEASUREMENTS - Fair Value, Assets Measured on Recurring Basis (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Cash equivalents:	$ 30,428
Short-term investments:	30,728
Long-term investments:	4,427
Total financial assets	65,583
Level 1
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Cash equivalents:	30,428
Short-term investments:	0
Long-term investments:	0
Total financial assets	30,428
Level 2
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Cash equivalents:	0
Short-term investments:	30,728
Long-term investments:	4,427
Total financial assets	35,155
Level 3
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Cash equivalents:	0
Short-term investments:	0
Long-term investments:	0
Total financial assets	0
Money market funds
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Cash equivalents:	30,428
Money market funds \| Level 1
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Cash equivalents:	30,428
Money market funds \| Level 2
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Cash equivalents:	0
Money market funds \| Level 3
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Cash equivalents:	0
Commercial paper
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	2,603
Commercial paper \| Level 1
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	0
Commercial paper \| Level 2
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	2,603
Commercial paper \| Level 3
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	0
Corporate bonds
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	3,971
Long-term investments:	1,736
Corporate bonds \| Level 1
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	0
Long-term investments:	0
Corporate bonds \| Level 2
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	3,971
Long-term investments:	1,736
Corporate bonds \| Level 3
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	0
Long-term investments:	0
U.S. government agency securities
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	15,777
Long-term investments:	2,691
U.S. government agency securities \| Level 1
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	0
Long-term investments:	0
U.S. government agency securities \| Level 2
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	15,777
Long-term investments:	2,691
U.S. government agency securities \| Level 3
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	0
Long-term investments:	0
U.S. treasury securities
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	8,377
U.S. treasury securities \| Level 1
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	0
U.S. treasury securities \| Level 2
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	8,377
U.S. treasury securities \| Level 3
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Short-term investments:	$ 0

INTANGIBLE ASSETS AND GOODWILL - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 5,570	$ 3,476
Finite-lived intangible assets, accumulated amortization	(995)	(517)
Total future amortization expense	3,925
Intangible assets, net	4,575	2,959
IPR&D
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets, gross	500	500
Trade name and other
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets, gross	150	176
Developed technology
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	3,090	1,700
Finite-lived intangible assets, accumulated amortization	(708)	(368)
Total future amortization expense	2,382	1,332
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	1,830	1,100
Finite-lived intangible assets, accumulated amortization	(287)	(149)
Total future amortization expense	$ 1,543	$ 951

INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 500,000	$ 500,000
Goodwill	4,218,000	2,677,000
Goodwill impairments	$ 0	$ 0

INTANGIBLE ASSETS AND GOODWILL - Schedule of Future Amortization Expense (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2023	$ 767
2024	767
2025	739
2026	427
2027 and thereafter	1,225
Total future amortization expense	$ 3,925

BALANCE SHEET COMPONENTS - Accounts Receivable, net (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	$ 7,393	$ 14,183
Less: allowance for doubtful accounts	(250)	(310)
Total accounts receivable, net	7,143	13,873
Accounts receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	6,631	13,674
Unbilled accounts receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	$ 762	$ 509

BALANCE SHEET COMPONENTS - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Capitalized commissions asset, net	$ 2,636	$ 2,289
Insurance	1,372	74
Software & subscriptions	691	388
Contract assets	669	634
Foreign R&D tax credit receivable	0	2,828
Other	450	736
Prepaid expenses and other current assets	$ 5,818	$ 6,949

BALANCE SHEET COMPONENTS - Property and Equipment, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 7,114	$ 4,674
Less: accumulated depreciation and amortization	(3,497)	(2,236)
Total property and equipment—net	3,617	2,438
Depreciation	1,600	1,000
Software and technology equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	6,131	4,067
Office furniture and hardware equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	395	305
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	299	295
Construction in progress
Property, Plant and Equipment [Line Items]
Property and equipment, gross	282	0
Vehicles
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 7	$ 7

BALANCE SHEET COMPONENTS - Other Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Foreign R&D tax credit receivable	$ 1,565	$ 0
Capitalized commissions asset, net	1,392	1,576
Contract assets	511	852
Capitalized third party commissions asset, net	143	143
Security deposits	118	190
Other	58	196
Other assets	$ 3,787	$ 2,957

BALANCE SHEET COMPONENTS - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Payroll and related benefits	$ 8,182	$ 6,616
Deferred and contingent consideration	1,696	1,668
Deferred income	1,179	0
Accrued professional fees	851	1,292
Other accrued liabilities	187	997
Accrued expenses and other current liabilities	$ 12,095	$ 10,573

BALANCE SHEET COMPONENTS - Other Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Pension accrual	$ 676	$ 820
Retirement benefit liability	346	68
Contingent consideration	0	1,269
Other liabilities	$ 1,022	$ 2,157

ACQUISITION - Schedule of Consideration Transferred for the Acquisition (Details) - Semifore $ in Thousands	Dec. 27, 2022 USD ($)
Business Acquisition [Line Items]
Cash consideration paid at closing	$ 1,388
Stock consideration (331,569 shares of the Company’s common stock)	1,333
Contingent consideration	362
Total purchase price	$ 3,083

ACQUISITION - Narrative (Details) - USD ($) $ in Thousands			12 Months Ended
ACQUISITION - Narrative (Details) - USD ($) $ in Thousands	Dec. 27, 2022	Nov. 30, 2020	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Options, grants in period, gross (in shares)			0
Deferred tax liability			$ 484	$ 0
Goodwill			$ 4,218	$ 2,677
Restricted stock units
Business Acquisition [Line Items]
Equity instrument other than options, grants in period (in shares)			3,419,030
Equity instruments other than options, vested in period (in shares)			1,223,312
Semifore
Business Acquisition [Line Items]
Percentage of voting interests acquired	100.00%
Equity instrument other than options, grants in period (in shares)	663,143
Business combination, acquisition related costs			$ 500
Equity instruments other than options, vested in period (in shares)	331,569
Deferred tax liability			(500)
Total identifiable net assets	$ 1,542
Goodwill	1,541		1,500
Consideration purchase	3,083
Estimated contingent consideration	1,333
Semifore \| Restricted stock units
Business Acquisition [Line Items]
Business combination, acquisition related costs	$ 1,800
Semifore \| Restricted stock
Business Acquisition [Line Items]
Options, grants in period, gross (in shares)	331,574
Magillem
Business Acquisition [Line Items]
Consideration purchase		$ 7,800
Estimated contingent consideration		$ 2,800	1,300
Settlement liability			$ 1,500
Magillem \| Minimum
Business Acquisition [Line Items]
Contingent consideration, period of recognition		1 year
Magillem \| Maximum
Business Acquisition [Line Items]
Contingent consideration, period of recognition		3 years

ACQUISITION - Summary of Preliminary Estimated Fair Values of the Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Dec. 27, 2022	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Goodwill		$ 4,218	$ 2,677
Semifore
Business Acquisition [Line Items]
Cash	$ 267
Accounts receivable	372
Prepaid expenses and other current assets	63	2,120
Contract assets	15
Intangibles	2,120
Accounts payable	(139)
Deferred revenue	(672)
Deferred tax liability	(484)
Total identifiable net assets	1,542
Goodwill	1,541	$ 1,500
Total purchase price	$ 3,083

ACQUISITION - Summary of Fair Value of the Identifiable Intangible Assets Acquired (Details) - Semifore - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 27, 2022
Business Acquisition [Line Items]
Prepaid expenses and other current assets	$ 2,120	$ 63
Developed technology
Business Acquisition [Line Items]
Finite-lived intangible assets	$ 1,390
Weighted average useful life	7 years
Customer relationships
Business Acquisition [Line Items]
Finite-lived intangible assets	$ 730
Weighted average useful life	8 years

LEASES - Operating Lease Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Leases [Abstract]
Operating lease cost	$ 1,059	$ 1,096
Short-term lease cost	309	134
Total lease cost	$ 1,368	$ 1,230

LEASES - Narrative (Details)	Dec. 31, 2022	Dec. 31, 2021
Leases [Abstract]
Weighted average remaining lease term, operating lease	3 years 1 month 6 days	3 years 7 months 6 days
Weighted average discount rate, operating lease	7.50%	7.50%

LEASES - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Leases [Abstract]
2023	$ 990
2024	449
2025	278
2026	212
2026 and thereafter	212
Total undiscounted cash flows	2,141
Less: Imputed interest	(233)
Present value of lease liabilities	1,908
Lease liabilities, current	899	$ 961
Lease liabilities, noncurrent	$ 1,009	$ 1,851

BORROWINGS - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
BORROWINGS - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Interest expense	$ 0.1	$ 0.1
2018 Term Loan
Debt Instrument [Line Items]
Debt instrument, face amount	$ 1.5
Vendor Financing Arrangements \| Minimum
Debt Instrument [Line Items]
Interest rate, effective percentage	7.50%
Vendor Financing Arrangements \| Maximum
Debt Instrument [Line Items]
Interest rate, effective percentage	10.00%

BORROWINGS - Schedule of Vendor Financing Arrangements (Details) - Vendor Financing Arrangements $ in Thousands	Dec. 31, 2022 USD ($)
Debt Instrument [Line Items]
2023	$ 1,264
2024	556
Total undiscounted cash flows	1,820
Less: Imputed interest	(108)
Present value of vendor financing arrangements	1,712
Vendor financing arrangements, current	1,264
Vendor financing arrangements, noncurrent	$ 448

- Definition

Amount, after unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but not limited to, notes payable, bonds payable, debentures, mortgage loans and commercial paper. Excludes capital lease obligations.

+ References + Details

REDEEMABLE CONVERTIBLE PREFERRED STOCK, PREFERRED STOCK AND COMMON STOCK (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) vote $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Oct. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) shares
Temporary Equity [Line Items]
Common stock carrying value reclassified into stockholders' equity \| $	$ 0	$ 0	$ 5,700	$ 5,712
Redeemable convertible preferred stock, issued (in shares)	0	0
Redeemable convertible preferred stock, outstanding (in shares)	0	0		4,471,316
Preferred stock, authorized (in shares)	10,000,000	10,000,000	10,000,000
Preferred stock, par value (in dollars per share) \| $ / shares	$ 0.001	$ 0.001	$ 0.001
Number of votes per common share \| vote	1
Common stock, authorized (in shares)	300,000,000	300,000,000
Common stock, sale to third party investor (in shares)		1,250,000
Common stock, sale to third party investor \| $		$ 5,400
Stock repurchased during period (in shares)	0	0
IPO
Temporary Equity [Line Items]
Common shares issued upon conversion (in shares)			4,471,316
Common stock, authorized (in shares)	300,000,000

STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercises in period, intrinsic value		$ 11,700	$ 9,000
Aggregate intrinsic value, vested		300	500
Proceeds from exercise of stock options		876	599
Option, cost not yet recognized	$ 400	$ 400
Nonvested award, unrecognized, period for recognition		1 year 9 months 18 days
Dividend yield		0.00%
Granted (in shares)		0
Award requisite service period		4 years
Total stock-based compensation		$ 11,692	$ 5,510
2016 Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for award (in shares)	20,803,838	20,803,838
Employee stock, shares granted (in shares)		14,142,208
Shares available for future grant (in shares)	0	0
Shares available for future grant under the 2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant (in shares)	3,318,979	3,318,979	3,493,240
Shares available for future grant under the 2021 ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant (in shares)	922,306	922,306	607,000
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested award, unrecognized, period for recognition		3 years 1 month 6 days
Vesting period		1 year
Grants in period, vested, grant date fair value		$ 7,400	$ 400
Nonvested award, excluding options, unrecognized	$ 32,300	$ 32,300
Award requisite service period		4 years
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options expiration period		10 years
Award vesting period		4 years
Stock options \| Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period		1 year
Award vesting rights, percentage		25.00%
Stock options \| Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period		3 years
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period		3 years
Grant date fair value	$ 1,300
Total stock-based compensation		$ 1,300

STOCK-BASED COMPENSATION - Shares Available for Future Grant (Details) - shares	Dec. 31, 2022	Dec. 31, 2021
Shares available for future grant under the 2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant (in shares)	3,318,979	3,493,240
Shares available for future grant under the 2022 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant (in shares)	1,489,163	0
Shares available for future grant under the 2021 ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant (in shares)	922,306	607,000

STOCK-BASED COMPENSATION - Summary of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Number of Shares
Balance at beginning of period (in shares)	5,407,170
Granted (in shares)	0
Exercised (in shares)	(1,451,784)
Canceled (in shares)	(412,550)
Balance at end of period (in shares)	3,542,836	5,407,170
Number of shares, options vested and exercisable (in shares)	2,752,055	3,209,726
Weighted-Average Exercise Price
Balance at beginning of period (in dollars per share)	$ 0.96
Granted (in dollars per share)	0
Exercised (in dollars per share)	0.60
Canceled (in dollars per share)	1.18
Balance at end of period (in dollars per share)	1.08	$ 0.96
Weighted-average exercise price, options vested and exercisable (in dollars per share)	$ 0.96	$ 0.62
Stock Options Additional Disclosures
Weighted-average remaining contractual term, balance	6 years 2 months 1 day	7 years 1 month 28 days
Weighted-average remaining contractual term, options vested and exercisable	5 years 9 months 18 days	6 years 4 months 9 days
Aggregate intrinsic value, balance	$ 11,416	$ 108,964
Aggregate intrinsic value, options vested and exercisable	$ 9,200	$ 65,752

STOCK-BASED COMPENSATION - Summary of Restricted Stock Units and Awards Activity (Details) - Restricted Stock Units	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Number of Shares
Unvested, Balance at beginning of period (in shares) \| shares	3,925,097
Granted (in shares) \| shares	3,419,030
Vested (in shares) \| shares	(1,223,312)
Cancelled (in shares) \| shares	(501,802)
Unvested, Balance at end of period (in shares) \| shares	5,619,013
Weighted-Average Grant Date Fair Value Per Share
Unvested, Balance at beginning of period (in dollars per share) \| $ / shares	$ 5.60
Granted (in dollars per share) \| $ / shares	9.10
Vested (in dollars per share) \| $ / shares	6.05
Cancelled (in dollars per share) \| $ / shares	10.04
Unvested, Balance at end of period (in dollars per share) \| $ / shares	$ 7.24

STOCK-BASED COMPENSATION - Stock-Based Compensation Related to Stock-Based Awards to Employees (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 11,692	$ 5,510
Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	562	218
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	5,865	3,495
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	2,123	579
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 3,142	$ 1,218

EQUITY METHOD INVESTMENT (Details) - USD ($) $ in Thousands		12 Months Ended
EQUITY METHOD INVESTMENT (Details) - USD ($) $ in Thousands	Jun. 20, 2022	Dec. 31, 2022	Dec. 31, 2021	Sep. 16, 2022
Subsidiary or Equity Method Investee [Line Items]
Equity method investment		$ 11,897	$ 0
Amortization of deferred income		391	0
Deconsolidation, gain (loss) amount		149	$ 0
Loans and leases receivable, related parties		$ 300
Related party loan, annual interest rate		4.00%
TransChip
Subsidiary or Equity Method Investee [Line Items]
Equity method investment, transaction costs	$ 300	$ 300
TransChip
Subsidiary or Equity Method Investee [Line Items]
Equity method investment	$ 12,200	11,900
AHK \| TransChip
Subsidiary or Equity Method Investee [Line Items]
Percentage of voting interests acquired	40.30%			35.00%
The Investors \| The Investors
Subsidiary or Equity Method Investee [Line Items]
Equity method investment		11,600
The Investors \| AHK
Subsidiary or Equity Method Investee [Line Items]
Share purchase agreement, registered capital		29,400
Share purchase agreement, increase in registered capital		$ 11,900
Share purchase agreement, agreement term		5 years
Amortization of deferred income		$ (400)
Share purchase agreement, deferred income, recognition period		10 years

INCOME TAXES - Schedule of Income (Loss) Before Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Domestic	$ (21,522)	$ (11,253)
Foreign	(6,282)	(11,091)
Loss before income taxes and loss from equity method investment	$ (27,804)	$ (22,344)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
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+ Details

INCOME TAXES - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Current:
Federal	$ 1	$ 13
State	25	17
Foreign	40	904
Total current	66	934
Deferred:
Federal	(435)	0
State	(48)	0
Foreign	0	106
Total Deferred tax	(483)	106
Provision for (benefit from) income taxes	$ (417)	$ 1,040

INCOME TAXES - Schedule of Effective Income Tax Rate Reconciliation (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
At Statutory Rate	21.00%	21.00%
State Taxes	3.90%	0.60%
Valuation Allowance	(28.30%)	(33.10%)
Foreign Tax Differential	0.10%	6.00%
Tax Credits	6.30%	2.00%
Stock Based Compensation	(0.90%)	(1.00%)
M&A Transaction Costs	(0.40%)	0.00%
Foreign Earnings and Adjustments	(3.20%)	(0.20%)
Foreign Withholding Tax	(0.10%)	(0.80%)
Other	3.10%	0.80%
Total	1.50%	(4.70%)

INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred Tax Assets:
Federal & State NOL carryforward	$ 1,419	$ 853
Research & Other credits	8,318	5,598
Capitalized R&D	3,812	0
Deferred revenue	9,148	8,380
Reserves and accruals	1,162	1,000
Stock-based compensation	1,481	953
Other intangibles	427	327
Lease liabilities	137	279
Total Gross Deferred tax asset	25,904	17,390
Less: Valuation allowance	(24,631)	(16,390)
Total Deferred tax assets	1,273	1,000
Deferred Tax Liabilities:
Other intangibles	(494)	0
Property and equipment	(517)	(290)
Prepaid expenses	(135)	(447)
Right-of-use assets	(127)	(263)
Total Gross Deferred tax liabilities	(1,273)	(1,000)
Net Deferred tax assets	$ 0	$ 0

INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Valuation Allowance [Line Items]
Valuation allowance	$ 24,631	$ 16,390
Valuation allowance, increase (decrease)	8,200	$ 7,400
Operating loss carryforwards, federal	2,900
Operating loss carryforwards, state	8,300
Research Tax Credit Carryforward \| Domestic Tax Authority
Valuation Allowance [Line Items]
Tax credit carryforward, amount	4,900
Research Tax Credit Carryforward \| State and Local Jurisdiction
Valuation Allowance [Line Items]
Tax credit carryforward, amount	$ 3,400

INCOME TAXES - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Beginning balance	$ 3,111	$ 2,522
Gross decreases—Tax Positions in Prior Periods	(921)	(25)
Gross increases—Tax Positions in Current Period	405	614
Ending balance	$ 2,595	$ 3,111

DEFINED CONTRIBUTION PLAN AND BENEFIT PLANS - Narrative (Details) $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($) plan	Dec. 31, 2021 USD ($)
Retirement Benefits [Abstract]
Contributions to 401(k) plan \| $	$ 0.8	$ 0.4
Number of defined benefit pension plans \| plan	2

DEFINED CONTRIBUTION PLAN AND BENEFIT PLANS - Schedule of Net Periodic Pension Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Retirement Benefits [Abstract]
Service costs	$ 128	$ 106
Interest costs	8	3
Total net periodic pension cost	$ 136	$ 109

DEFINED CONTRIBUTION PLAN AND BENEFIT PLANS - Schedule of Changes in Benefit Obligations (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Balance at beginning of period	$ 820	$ 717
Service costs	128	106
Interest costs	8	3
Net actuarial (gain) loss	(235)	50
Foreign exchange gain	(45)	(56)
Balance at end of period	$ 676	$ 820

DEFINED CONTRIBUTION PLAN AND BENEFIT PLANS - Schedule of Weighted-Average Assumptions (Details)	Dec. 31, 2022	Dec. 31, 2021
Retirement Benefits [Abstract]
Discount rate	3.70%	0.98%
Rate of compensation increase	3.00%	3.00%

RELATED PARTY TRANSACTIONS (Details) - USD ($)	1 Months Ended	12 Months Ended
RELATED PARTY TRANSACTIONS (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Related Party Transaction [Line Items]
Granted (in shares)		0
Restricted stock units
Related Party Transaction [Line Items]
Granted (in shares)		3,419,030
Non-Exclusive Evaluation License Agreement
Related Party Transaction [Line Items]
Consulting agreement, term	3 months
Isabelle Geday \| Affiliated Entity \| Restricted stock units
Related Party Transaction [Line Items]
Granted (in shares)		6,250
Isabelle Geday \| Consulting Agreement \| Affiliated Entity
Related Party Transaction [Line Items]
Consulting agreement, term		3 years
Expenses from transactions with related party		$ 300,000	$ 100,000
Isabelle Geday \| Consulting Agreement \| Affiliated Entity \| Tranche One
Related Party Transaction [Line Items]
Consulting agreement, term		12 months
Due to related parties, monthly amount	$ 26,445	$ 26,445
Isabelle Geday \| Consulting Agreement \| Affiliated Entity \| Tranche Two
Related Party Transaction [Line Items]
Consulting agreement, term		24 months
Due to related parties, monthly amount	$ 19,445	$ 19,445
Isabelle Geday \| Prior Employment \| Affiliated Entity
Related Party Transaction [Line Items]
Granted (in shares)		455,000
Isabelle Geday \| Prior Employment \| Affiliated Entity \| Restricted stock units
Related Party Transaction [Line Items]
Lease payment due to related party		$ 200,000	$ 200,000
Granted (in shares)		62,200

SEGMENT AND GEOGRAPHIC INFORMATION - Narrative (Details)	12 Months Ended
	Dec. 31, 2022 segment
Segment Reporting [Abstract]
Number of reportable segments	1

SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Revenue by Geographic Area (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Revenue, Major Customer [Line Items]
Revenue	$ 50,378	$ 37,864
Americas
Revenue, Major Customer [Line Items]
Revenue	$ 20,697	$ 16,433
Americas \| Revenue from Contract with Customer Benchmark \| Geographic Concentration Risk
Revenue, Major Customer [Line Items]
Concentration risk, percentage	41.10%	43.40%
Asia Pacific
Revenue, Major Customer [Line Items]
Revenue	$ 23,133	$ 16,748
Asia Pacific \| Revenue from Contract with Customer Benchmark \| Geographic Concentration Risk
Revenue, Major Customer [Line Items]
Concentration risk, percentage	45.90%	44.20%
Europe, Middle East
Revenue, Major Customer [Line Items]
Revenue	$ 6,548	$ 4,683
Europe, Middle East \| Revenue from Contract with Customer Benchmark \| Geographic Concentration Risk
Revenue, Major Customer [Line Items]
Concentration risk, percentage	13.00%	12.40%
United States
Revenue, Major Customer [Line Items]
Revenue	$ 20,489	$ 16,311
United States \| Revenue from Contract with Customer Benchmark \| Geographic Concentration Risk
Revenue, Major Customer [Line Items]
Concentration risk, percentage	40.70%	43.10%
Other Americas
Revenue, Major Customer [Line Items]
Revenue	$ 208	$ 122
Other Americas \| Revenue from Contract with Customer Benchmark \| Geographic Concentration Risk
Revenue, Major Customer [Line Items]
Concentration risk, percentage	0.40%	0.30%
China
Revenue, Major Customer [Line Items]
Revenue	$ 14,522	$ 10,257
China \| Revenue from Contract with Customer Benchmark \| Geographic Concentration Risk
Revenue, Major Customer [Line Items]
Concentration risk, percentage	28.80%	27.10%
Other Asia
Revenue, Major Customer [Line Items]
Revenue	$ 8,611	$ 6,491
Other Asia \| Revenue from Contract with Customer Benchmark \| Geographic Concentration Risk
Revenue, Major Customer [Line Items]
Concentration risk, percentage	17.10%	17.10%

SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Property and Equipment by Geographic Area (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Revenue, Major Customer [Line Items]
Total property and equipment—net	$ 3,617	$ 2,438
United States
Revenue, Major Customer [Line Items]
Total property and equipment—net	$ 2,746	$ 1,626
United States \| Property, Plant and Equipment \| Geographic Concentration Risk
Revenue, Major Customer [Line Items]
Concentration risk, percentage	75.90%	66.70%
France
Revenue, Major Customer [Line Items]
Total property and equipment—net	$ 857	$ 803
France \| Property, Plant and Equipment \| Geographic Concentration Risk
Revenue, Major Customer [Line Items]
Concentration risk, percentage	23.70%	32.90%
Other
Revenue, Major Customer [Line Items]
Total property and equipment—net	$ 14	$ 9
Other \| Property, Plant and Equipment \| Geographic Concentration Risk
Revenue, Major Customer [Line Items]
Concentration risk, percentage	0.40%	0.40%