Simon Segars, the CEO of Cambridge UK superchip architect ARM Holdings, announced a fresh surge in revenue and profits for the first quarter of 2016 and predicted a new era of “fantastic opportunities” for the business.
ARM Q1 revenues were 22 per cent ahead to £276.4 million with pre-tax profit was 14 per cent higher at £137.5m.
Processor royalty revenues were up 15 per cent year-on-year, outperforming the industry by some distance. Segars reported strong demand and robust order books which would keep ARM on course to hit financial targets throughout 2016 despite record investment in global growth from its rapidly expanding Cambridge HQ.
He said 4.1 billion ARM-based chips were shipped in the quarter – up 10 per cent on Q1 2015. ARM-based microcontrollers and smartcards were up 20 per cent year-on-year.
ARM has seen its current technology gaining share in target end-markets, and strong demand for next generation of products from a wide range of companies.
It says the licensing pipeline for the rest of the year is robust, with leading companies looking to license ARM technology for their next generation products.
“We expect that ARMv8-A technology will continue to penetrate in mobile and enterprise markets, and the higher royalty rate earned on these products will underpin future royalty revenues,” the company reported.
Segars said: “Devices are increasingly being improved by first becoming digital, and then smart, and then connected. This is generating huge amounts of data that needs to be protected, transmitted, managed and stored across the internet.
“These trends are creating fantastic opportunities for ARM and our partners. They are driving our licensing, as more companies need access to smart processors to build intelligence into more products, and they will drive future royalty revenue as more consumers and enterprises choose to buy smarter and more connected products.
“At our Capital Markets Day in September, we announced a step-up in our investment plans to accelerate share gains in markets such as networking infrastructure and servers, and to create new products that will take advantage of opportunities in the Internet of Things.
“In line with those plans we have increased investment in R & D as we develop the next generation of processor, physical IP and on-chip systems technologies.
“We have also increased investment in support of our ecosystem partners; and we are assisting OEMs and end-users to test and build ARM-based systems, especially in new markets.
“The future returns on these investments remain in line with our expectations. They will drive our future royalty and licence revenue growth, and enable us to extend our opportunities and create new revenue streams.”
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