Arteris, Inc.AIP

Arteris, Inc. Fair Value Disclosure

10-KFiled Feb 12, 20262 min read
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, 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 $1.6 million and $2.1 million as of December 31, 2025, and 2024, 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 the Company’s incremental borrowing rate. 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, 2025
Level 1Level 2Level 3Fair Value
Assets:
Cash equivalents:
Money market funds$30,661 $— $— $30,661 
Total cash equivalents30,661 — — 30,661 
Short-term investments:
Corporate bonds— 14,524 — 14,524 
U.S. government agency securities— 2,969 — 2,969 
U.S. treasury securities— 3,205 — 3,205 
Total short-term investments— 20,698 — 20,698 
Long-term investments:
Corporate bonds— 3,821 — 3,821 
U.S. treasury securities— 625 — 625 
U.S. government agency securities— 500 — 500 
Total long-term investments— 4,946 — 4,946 
Total financial assets
$30,661 $25,644 $— $56,305 
As of December 31, 2024
Level 1Level 2Level 3Fair Value
Assets:
Cash equivalents:
Money market funds$10,410 $— $— $10,410 
Total cash equivalents10,410 — — 10,410 
Short-term investments:
Corporate bonds— 5,542 — 5,542 
U.S. government agency securities— 14,850 — 14,850 
U.S. treasury securities— 9,765 — 9,765 
Total short-term investments— 30,157 — 30,157 
Long-term investments:
Corporate bonds— 2,620 — 2,620 
U.S. treasury securities
— 1,988 — 1,988 
U.S. government agency securities— 3,896 — 3,896 
Total long-term investments— 8,504 — 8,504 
Total financial assets
$10,410 $38,661 $— $49,071 
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 periods presented.

Historical Timeline

Fiscal YearFiled
2025Feb 12, 2026Showing above
2024Feb 18, 2025
2023Feb 20, 2024
2022Mar 1, 2023
2021Mar 7, 2022

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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