| Q1 2012 – Financial Summary | Normalised* | IFRS | |||
| Q1 2012 | Q1 2011 | % Change | Q1 2012 | Q1 2011 | |
| Revenue ($m) | 209.4 | 185.5 | 13% | 209.4 | 185.5 |
| Revenue (£m) | 132.5 | 116.0 | 14% | 132.5 | 116.0 |
| Operating margin | 44.5% | 42.5% | 36.5% | 25.0% | |
| Profit before tax (£m) | 61.9 | 50.7 | 22% | 51.3 | 30.4 |
| Earnings per share (pence) | 3.36 | 2.73 | 23% | 2.71 | 1.57 |
| Net cash generation** | 58.3 | 62.9 | |||
| Effective revenue fx rate ($/£) | 1.58 | 1.60 |
Progress on key growth drivers in Q1
• Growth in adoption of ARM® processor technology
- 22 processor licenses signed across all target end markets
- 8 Cortex™-A licenses signed, including licenses for Atlas and Cortex-A15 for use in servers
- 10 Cortex-M class licenses, including a further license for ARM’s smallest and lowest power Cortex-M0+ processor for use in next generation Internet of Things devices
• Growth in shipments of chips based on ARM processor technology
- 1.1 billion chips shipped into mobile phones and mobile computers, similar to a year ago
- 0.8 billion chips shipped into consumer and embedded digital devices, up 15% year-on-year
• Growth in outsourcing of new technology
- Physical IP: 3 Processor Optimization Pack licenses signed for Cortex-A family processors, further increasing the royalty opportunity from high-value chips in mobile computers, smartphones and automotive infotainment
- Graphics: 2 licenses signed for Mali™, taking advanced 3D graphics into low-cost smartphones
Warren East, Chief Executive Officer, said: "As many aspects of our lives become digital, we continue to see an increase in the demand for ARM’s smarter and lower power technology, which is driving both our licensing and royalty revenues.
"In the first quarter of 2012 we saw continuing demand for technology licenses driven by a remarkable variety of end markets from highly efficient servers to energy-sipping sensors. ARM’s royalty revenues continued to outperform the overall semiconductor industry as our customers launch their products into new markets and gain market share within existing markets.
"With more customers choosing to deploy ARM technology in their products, this has been another quarter that underpins the long-term growth opportunity of the business. This growth enables us to invest in future innovative technology as well as delivering increases in profit and cash flow.”
Outlook
Whilst Q1 industry shipments declined sequentially, most analysts expect the industry to recover in the second half. In that context, ARM expects that group dollar revenues for the full-year 2012 will be in line with current market expectations.
Q1 2012 – Revenue Analysis
| Revenue ($m)*** | Revenue (£m) | |||||
| Q1 2012 | Q1 2011 | % Change | Q1 2012 | Q1 2011 | % Change | |
| PD | ||||||
|
Licensing |
65.2 | 51.3 | 27% | 41.1 | 32.3 | 27% |
|
Royalties |
92.9 | 87.9 | 6% | 58.9 | 54.6 | 8% |
| Total PD | 158.1 | 139.2 | 14% | 100.0 | 86.9 | 15% |
| PIPD | ||||||
|
Licensing |
11.6 | 12.6 | -8% | 7.4 | 7.9 | -6% |
|
Royalties1 |
13.1 | 10.7 | 22% | 8.3 | 6.6 | 26% |
| Total PIPD | 24.7 | 23.3 | 6% | 15.7 | 14.5 | 8% |
| Development Systems | 15.5 | 13.3 | 17% | 9.8 | 8.4 | 17% |
| Services | 11.1 | 9.7 | 14% | 7.0 | 6.2 | 13% |
| Total Revenue | 209.4 | 185.5 | 13% | 132.5 | 116.0 | 14% |
1Includes catch-up royalties in Q1 2012 of $2.1m (£1.3m) and in Q1 2011 of $0.6m (£0.4m).
* Normalised figures are based on IFRS, adjusted for acquisition-related charges, share-based payment costs, restructuring charges, profit or loss on disposal and impairment of available-for-sale investments and Linaro™-related charges. For reconciliation of IFRS measures to normalised non-IFRS measures detailed in this document, see notes 5.1 to 5.12.
** Net cash generation is defined as movement on cash, cash equivalents, short-term and long-term deposits, adding back dividend payments, investment and acquisition consideration, restructuring payments, other acquisition-related payments, share-based payroll taxes and Linaro-related payments, and deducting inflows from share option exercises and investment disposal proceeds – see notes 5.7 to 5.10.
*** Dollar revenues are based on the group’s actual dollar invoicing, where applicable, and using the rate of exchange applicable on the date of the transaction for invoicing in currencies other than dollars. Approximately 95% of invoicing is in dollars.
CONTACTS:
| Sarah West/Anne Bark | Tim Score/Ian Thornton |
| Brunswick | ARM Holdings plc |
| +44 (0)207 404 5959 | +44 (0)1628 427800 |
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