ARM goes from strength to strength


27-04-2011

ARM Holdings plc - which today announced its unaudited financial results for the first quarter ended 31 March 2011 - continues to see its technology chosen by leading companies for a broad range of end markets, helping to deliver its highest-ever revenues and profits.

 

Q1 2011 – Financial Summary

 

Normalised*

 

IFRS

Q1 2011

Q1 2010

% Change

 

Q1 2011

Q1 2010

Revenue ($m)

185.5

143.3

29%

 

185.5

143.3

Revenue (£m)

116.0

92.3

26%

 

116.0

92.3

Operating margin

42.5%

40.0%

 

 

25.0%

27.3%

Profit before tax (£m)

50.8

37.6

35%

 

30.5

25.9

Earnings per share (pence)

2.73

2.04

34%

 

1.57

1.47

Net cash generation**

62.9

43.8

 

 

 

 

Effective revenue fx rate ($/£)

1.60

1.55

 

 

 

 

Progress on key growth drivers in Q1

Growth in adoption of ARM® processor technology

-39 processor licenses signed for all target end markets

-Broadcom and LG Electronics both sign subscription licenses, enabling access to a wide range of ARM’s processors for use across multiple end markets

-Several major semiconductor companies developing chips for set-top-box and digital TV applications licensed ARM technology, for the first time in this application area

-Long-term strategic agreements deliver further growth in order backlog


Growth in mobile applications

-1.15 billion ARM-processor based chips shipped into mobile devices, including smartphones and tablets


Growth beyond mobile into consumer electronics and embedded products

-0.7 billion ARM-processor based chips shipped into a broad range of end applications, including digital TVs, disk drives and microcontrollers


Growth in outsourcing of new technology

-Physical IP: 3 Processor Optimization Packs licenses signed for Cortex™-A family processors, further increasing the royalty opportunity from high-value chips in mobile computers and smartphones

-Graphics: 7 licenses signed for Mali™, ARM’s advanced graphics processor family

Warren East, Chief Executive Officer, said:  “Influential market leaders are licensing ARM technology to gain access to a growing ecosystem of operating systems, software applications, tools and service providers. Many of these companies have been ARM licensees for many years, and are now deploying ARM technology across a multitude of applications; in mobile, consumer electronics and embedded devices.

"This licensing drives ARM’s long-term royalty opportunity. Shipments of ARM-processor based chips increased 33% on the same period last year driven by growth in smartphones, tablets, digital TVs and microcontrollers. ARM’s revenue growth enables us to continue to invest in innovative technology development at the same time as delivering strong increases in profits and cash flow.”

Outlook

ARM has made an encouraging start to 2011 with more leading companies choosing to deploy ARM technology in their products. Looking forward, we anticipate normal seasonality for royalty revenues in the second quarter and, notwithstanding the current uncertainty as to the economic impact of the Japanese earthquake on the semiconductor industry supply chain and end-product markets, we expect that group dollar revenues for the full-year 2011 will be at least in line with current market expectations.

Q1 2011 – Revenue Analysis

 

Revenue ($m)***

Revenue (£m)

 

Q1 2011

Q1 2010

% Change

Q1 2011

Q1 2010

% Change

PD

 

 

 

 

 

 

Licensing

51.3

34.2

50%

32.3

21.8

48%

Royalties

87.9

66.7

32%

54.6

43.2

26%

Total PD

139.2

100.9

38%

86.9

65.0

34%

PIPD

 

 

 

 

 

 

Licensing

12.6

8.8

43%

7.9

5.7

39%

Royalties1

10.7

10.8

-1%

6.6

6.9

-4%

Total PIPD

23.3

19.6

19%

14.5

12.6

15%

Development Systems

13.3

14.8

-10%

8.4

9.7

-13%

Services

9.7

8.0

21%

6.2

5.0

24%

Total Revenue

185.5

143.3

29%

116.0

92.3

26%

 

1 Includes catch-up royalties in Q1 2011 of $0.6m (£0.4m) and in Q1 2010 of $0.5m (£0.3m).

* Normalised figures are based on IFRS, adjusted for acquisition-related charges, share-based payment costs, restructuring charges, profit 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 4.1 to 4.12.

** Net cash generation is defined as movement on cash, cash equivalents, short-term investments and marketable securities, adding back share buybacks, dividend payments, investment and acquisition consideration, restructuring payments, other acquisition-related payments, share-based payroll taxes and Linaro-related charges, and deducting inflows from share option exercises and proceeds from investment disposals – see notes 4.7 to 4.10.

*** 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:

Daniel Thole/Dania Saidam
Brunswick
+44 (0)207 404 5959

Tim Score/Ian Thornton
ARM Holdings plc
+44 (0)1628 427800

For the full results, please see www.arm.com

 

 
 

 

ARM is at the heart of the world’s most advanced digital products. Our technology enables the creation of new markets and transformation of industries and society.

Arm Ltd