Strong ARM results show growing revenues and profits


ARM Holdings plc has announced its unaudited financial results for the third quarter and nine months ended 30 September 2013.

Q3 revenues are up to £184m, compared to £144.6m for the same period last year, with pre-tax profits for the quarter at £92.6m, up from £68.1m in Q3 2012.

Year to date revenues are 27% ahead at £525.5m (£412.7m YTD 2012), with profit before tax increasing 37% from £196.6m to £268.6m.

Simon Segars, Chief Executive Officer, said: "As the products we use every day become more connected, and as new categories of smart devices are introduced, there are increasing opportunities for ARM’s high-performance, low-power technology, which drive both licence and long-term royalty revenues.

"In the third quarter of 2013 we saw strong demand for our processor technology with a record 48 licences signed by 24 companies, 11 of whom were licensing ARM technology for the first time. ARM’s technology was licensed for an extensive range of end-markets including the Internet-of-Things, wired and wireless communications, and mobile computing. This quarter ARM also signed four large licensing deals with thought-leading technology companies, which included MediaTek signing a broad licence for ARM’s latest ARMv8-A processor technology and next generation Mali graphics.

"With more customers choosing to deploy ARM technology in their products and ARM’s royalty revenues outperforming the overall semiconductor industry, this has been another quarter that underpins ARM’s long-term growth opportunity.”

Q3 Financial Highlights

  •         Group revenues in US$ up 26% year-on-year (£ revenues up 27% year-on-year)
  •         PD Licensing revenue in US$ up 52% year-on-year. Order backlog up 3% sequentially
  •         PD Royalty revenue in US$ up 14% year-on-year (relevant industry revenues down 2% year-on-year1)
  •         Normalised operating expenses of £85.6m (including a £5.5m charge relating to the foreign exchange revaluation of monetary items)
  •         Normalised profit before tax and earnings per share up 36% and 38% year-on-year respectively (IFRS PBT and EPS up 24% and 16% year-on-year)
  •         Net cash generation of £111.6 million

Progress on key growth drivers in Q3

Growth in adoption of ARM® technology

        o 48 processor licenses signed, driven by new technology, new markets and new customers

        o Advanced technology enables a higher royalty percentage per chip

            o 15 Cortex®-A processor licenses signed, including 3 Cortex-A50 series processors

            o 5 Mali™ graphics processor licenses signed

            o POP™ IP helps optimise ARM processor implementations. 4 POP IP licenses signed in Q3

Growth in shipments of chips based on ARM processor technology

        o 2.5 billion ARM-based chips shipped

        o Continued penetration of processors containing both Cortex-A and Mali graphics processors


ARM enters the final quarter of 2013 with a record order backlog and a robust opportunity pipeline. This combination points to another strong quarter for licensing revenue in Q4. ARM’s Q4 royalty revenue is generated from third quarter chip shipments. Relevant customer and industry data suggests a sequential increase in ARM’s royalty revenue of similar dollar value to previous years. Assuming the macroeconomic situation does not deteriorate significantly in the remainder of the quarter, we expect group dollar revenues for the fourth quarter to be in-line with current market expectations of approximately $290m.

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