ARM Holdings PLC said its net profit rose 20 percent in the first quarter while revenue on a dollar basis increased 16 percent on surging demand for its semiconductor IP from a wide range of vendors.
The Cambridge, UK-based IP licensing company reported revenue of £186.7 million ($305.2 million) for the first quarter, up from £170.3 million in the comparable quarter of 2013 on a surge in processor and physical IP sales. Profits for the recent quarter were £62.3 million, compared with £51.9 million for the first quarter of 2013.
ARM (NASDAQ: ARMH) continues to be the top choice of semiconductor companies in various market segments, especially in the consumer electronics section where it has a lock on mobile devices such as smartphones and tablets. The company said it also continues to secure the patronage of manufacturers of digital TV and embedded computing applications. ARM said it signed eleven licenses in the first quarter for its Cortex-M class “processors for use in microcontrollers, smart sensors and the Internet of Things and wearable technology.”
The company said 2.9 billion chips based on its IP were shipped during the quarter, up 11 percent from the prior year, adding it has seen strong growth from the enterprise networking and microcontroller markets. Based on current shipment and orders, ARM is forecasting revenue for the second half of the year would benefit from improving market conditions, the company said.
“Q1 was a good start to the year for ARM, with more customers choosing to license ARM technology for their future products, which helped drive ARM’s revenues,” said CEO Simon Segars, in a statement. “Licenses are a precursor to future royalty revenues. Our customers are signing licenses with a view to designing ARM technology into an increasingly wide range of markets from servers and supercomputers to embedded sensors and enterprise networking applications and thereby underpinning ARM’s future royalty opportunity.”