ARM continues to outperform semicon industry

CAMBRIDGE, UK: ARM Holdings plc announced its unaudited financial results for the third quarter and nine months ended 30 September 2009.

Key highlights
* ARM has continued to outperform the semiconductor industry and gain market share.
* Strong processor licensing for applications such as smartphones, mobile computing and microcontrollers.
* ARM’s advanced physical IP at 28nm was licensed to a major foundry and a fabless semiconductor company.
* Sequentially improving operating margin to 31.7 percent and strong quarterly net cash generation of £28.2m.
* Reiterating guidance: ARM’s full-year 2009 dollar revenues to be at least in line with current market expectations.

Progress on key growth drivers

Growth in mobile applications
* 13 new processor licenses signed for high-performance mobile computers and smartphones.
* ARM licenses 2GHz dual Cortex-A9 processor for mobile computing applications.

Growth beyond mobile
* 15 new processor licenses signed, including four next-generation processors, for a broad range of markets including digital TV, microcontrollers, hard disk drives and networking applications.
* Strong sequential growth in all target markets including 75% sequential increase in shipments of ARM-technology based microcontrollers due to market share gains and inventory restocking.

Growth in new technology outsourcing
* First leading fabless semiconductor company licenses ARM’s 28nm physical IP and, shortly after the quarter end, GLOBALFOUNDRIES also licenses 28nm physical IP

Warren East, Chief Executive Officer, said: “Q3 was a good quarter for ARM. Despite pressure on customers’ R&D budgets we are pleased that continuing strong demand from industry leaders, combined with our broadest range of products and effective use of licensing models, has delivered a record number of processor licenses.

"We are particularly encouraged by the licensing of ARM’s next generation processor technology, and by the first license to a leading fabless semiconductor company of ARM's advanced 28nm physical IP. Such agreements are the drivers of ARM’s long-term royalty growth, and as ARM becomes the technology of choice in smart, connected and low-power consumer electronic devices we continue to gain market share.

"Once again we have demonstrated the resilience in the ARM business model; our improving revenue and disciplined cost control has delivered a sequential improvement in margins and profitability, as well as a high level of cash generation.”

Outlook
Going into the final quarter of 2009, ARM is encouraged by the improving confidence in our customer-base, and we reiterate guidance that we expect group dollar revenues for the full year to be at least in line with current market expectations.

Although, in the short term, the trajectory of consumer demand for electronic devices remains unclear, looking ahead through 2010, ARM is well-positioned to take advantage of the generally anticipated improvements in the semiconductor industry.