UK-based chip designer ARM saw a 22 percent jump in profits during Q3. It saw profits for the quarter at $109.2 million (before taxes.)
That’s more than what was predicted by industry analysts.
ARM is used by both Apple and Samsung in their tablet computers and smartphones. CNBC also reported that ARM has made “inroads into markets like digital TVs and microcontrollers.”
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"ARM is sensitive to some strong growth areas, like smartphones and tablets, and those of course are the parts of the industry that are growing much faster than the average," ARM Chief Financial Officer Tim Score said.
The company also highlighted sales of Cortex-A designs, “which can handle the demands of multiple applications running on smartphones and tablets,” Reuters said. In fact, Cortex-A represented 35 percent of royalties.
"ARM has delivered another quarter of strong revenue and earnings growth,” Warren East, ARM’s CEO said in a statement.“As we move into an ever more connected world of mobile computing, cloud-based networks and the Internet-of-Things, ARM is seeing increased demand for its high performance and low power technology. This demand is helping to drive ARM’s licensing revenues and this quarter we saw market leaders license ARM’s advanced processor technology for next generation super smartphones, tablets, and mobile and embedded computing applications.”
It is noteworthy that analysts at Morgan Stanley said ARM “was seeing royalty revenues accelerate when the rest of the industry was slowing down,” Reuters adds.
“ARM’s royalty revenues outpaced the industry with continued market share gains in key end markets including digital TVs and microcontrollers,” East added in a company statement. “The increasing penetration of Cortex-A class technology and adoption of Mali graphics in consumer electronics also helped increase ARM’s overall royalty revenue per chip. This strong growth in licensing and royalty revenue allows ARM to keep investing for the future and deliver increased profits and cash generation."
Looking ahead to the next quarter, ARM has “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. Data from customers suggests a moderate sequential increase in ARM’s royalty revenue in Q4.”
Edited by Brooke Neuman