ARM wants to go public and sends positive news: Sales grew by 6 percent year-on-year, 7.4 billion chips with ARM cores were sold.
The British chipmaker ARM is still owned by the Japanese group SoftBank and wants to go public in 2023 after the sale to Nvidia failed. Therefore, ARM is now publishing selected financial data. They are not so easy to assess because the SoftBank subsidiary has not disclosed any or only little data for years.
According to its own statements, ARM achieved record sales of $719 million and EBITDA of $414 million in the first quarter of fiscal 2022, i.e. a 58 percent profit margin. Sales grew by 6 percent compared to the same period last year, while the number of chips with ARM cores delivered by ARM licensees increased by 7 percent to 7.4 billion pieces. Projected over a year, more than 28 billion ARM chips will be sold.
Royalty sales soar
ARM earns most of its money from royalties, which are prorated payments for each ARM Intellectual Property Core chip sold. That royalty revenue rose 22 percent year-over-year to $453 billion, exceeding $400 million for the quarter for the first time.
ARM does not provide any information on the composition of the remaining 266 million US dollars in sales. However, ARM also earns money from license fees that customers pay for the individual IP cores. ARM also issues so-called architecture licenses to companies such as Apple and Nvidia, which develop proprietary but ARM-compatible cores.
According to ARM, the current strategy of serving new markets beyond smartphones and tablets is paying off, especially with stronger CPU and GPU cores and AI accelerators, each of which brings higher revenues. Specifically, ARM CEO Rene Haas, who previously worked for Nvidia, names chips for cars and “infrastructure”, which means (cloud) server processors, among other things. However, such expensive chips do not reach billions, but at most millions of units.
In addition to an ARM IPO, the option of a consortium of several ARM licensees taking over the majority of ARM in order to ensure fair access to ARM technology is also being discussed. ARM also plans layoffs to cut costs.
