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Strong demand lifts profits for smartphone chip designer ARM Holdings

Published 20/04/2016

The Cambridge-based firm supplies technology for the iPhone
The Cambridge-based firm supplies technology for the iPhone

Smartphone chip designer ARM Holdings has cheered rising profits as it outpaced the market thanks to a strong demand for its products.

The Cambridge-based firm's results came in ahead of expectations as pre-tax profits lifted 14% to £137.5 million in the first quarter year-on-year, while revenues also stepped up 22% to £276.4 million over the period.

The company, which supplies technology for the iPhone, said its performance was buoyed by a 15% jump in processor royalty revenues despite the wider market reporting a 3% slip in industry revenues.

It said its licensing pipeline for the rest of the year was "robust", but warned that if "m acroeconomic uncertainty remains" it could impact "consumer and enterprise spending in 2016", hitting semiconductor sales and industry confidence.

Shares in ARM lifted more than 2%, as the firm said it expects full-year revenues to be in line with expectations.

The update comes after technology giant Apple shipped 42 million iPhones in the first quarter, down 43.8% on the fourth quarter of 2015, according to a report on Monday by analysts TrendForce.

ARM chief executive Simon 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."

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