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ARM announces 44 per cent jump in profits

ARM announces 44 per cent jump in profits

ARM doesn't actually make processors; it just licenses its architectures to third parties.

Cambridge-based processor designer ARM Holdings has reported a large jump in profits in the third quarter of the year.

The upturn in fortunes comes off the back of strong licensing performance, with ARM architectures powering many of the processors in today’s mobile devices, including Apple's iPad 2 and iPhone 4S.

The continued demand has enabled ARM to rake in £55.8 million in pre-tax profits, 44 per cent ahead of the figures from the same time last year and well ahead of market expectations. The company also grew its overall revenue, which was up 20 per cent to £120.2 million.

The third quarter of 2011 saw a continued high level of design activity with many new customers licensing ARM technology for the first time,’ said CEO Warren East. ‘Demand for our technology has come from a broad range of applications, from sensors to computers.

In addition to processors for mobile phones, ARM has also seen a 50 per cent increase in shipments to non-mobile markets; a segment that includes TVs, remote controls and networking devices.

The company also revealed that it has signed 28 new processor licensing agreements in this quarter alone, creating a historically high order backlog, so the current run of good fortune isn’t likely to end anytime soon.

Is now a good time to invest in ARM shares? Let us know your thoughts on ARM's recent success in the forums.

20 Comments

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.//TuNdRa 25th October 2011, 11:59 Quote
Bloody Hellfire. Intel move over, there's a newcomer after your throne.
greigaitken 25th October 2011, 12:12 Quote
55.8 million profits ha! (while thats more than i have) thats what intel spends just on staff booze
Landy_Ed 25th October 2011, 12:13 Quote
Yep. £55.8 mill, that's crumbs from the top table. But good luck to them, if that's mainly from licensing then it's like money for old rope, hope they use it well. And I'm sure they will.
TheStockBroker 25th October 2011, 12:17 Quote
Not really.
£55m, pre-tax no less, is a pittance. Simon Cowell paid close to that in income tax last year...

Compare that to the (American) net billions Intel made last year... There's no comparison.

If Intel really wanted to; they could easily do what ARM do better, cheaper. - There's just no incentive with such low margins...
kosch 25th October 2011, 12:17 Quote
go ARM go!
Xir 25th October 2011, 12:22 Quote
Quote:
Originally Posted by .//TuNdRa
Bloody Hellfire. Intel move over, there's a newcomer after your throne.

Intel made ~2.2 billion in the same timeframe... ;)
I'm sure they're shaking in their boots
warejon9 25th October 2011, 12:56 Quote
Yea but if you look at what ARM is worth compared to intel, as its a 44% increase that if i remember rightly is 20% more than Intel? Yea intel is still raking more money in but ARM is growing more. Also interestingly ARM is worth nearly twice AMD, and almost as much as Nvidia.
Woodspoon 25th October 2011, 13:03 Quote
Nice to hear of a British tech company doing well for a change, especially in these crappy financial times.
leeroy 25th October 2011, 13:40 Quote
Quote:
Originally Posted by warejon9
Yea but if you look at what ARM is worth compared to intel, as its a 44% increase that if i remember rightly is 20% more than Intel? Yea intel is still raking more money in but ARM is growing more. Also interestingly ARM is worth nearly twice AMD, and almost as much as Nvidia.

listen to this man, for he is no fool
MaverickWill 25th October 2011, 13:45 Quote
I'm not sure I'm getting all the scepticism for ARM's profits increasing here. Allow me to elaborate:

ARM are experiencing massive growth of the company, in a world where electronics are seen as a luxury.

ARM have no way to get in to the traditional desktop/server market for now. They're managing this growth without selling a single PC component.

Windows 8 is ARM-compatible. That's the goal-post that ARM is aiming for right now.

ARM processors are scalable. Very much so. The SpiNNaker project aims to be using a MILLION ARM cores by end 2012. If these bad boys can be used in such a manner to simulate the human brain, they'll probably be just fine for any server work that can be thrown at their tiny low-power selves.

These are very exciting times for the boys at ARM.
.//TuNdRa 25th October 2011, 13:47 Quote
It's the single core versus Multi-core argument all over again. For some workloads (Most desktop workloads); Single cores are better. In the server sector; Massively scalar workloads across something as power efficient as a million ARM based processors would trounce the typical processor quite well. (Assuming workloads that are 100% balanced across all cores, It's a bit of an ideal scenario, but you hopefully get the point.)

With more and more being optimized for RISC; It's possible that ARM could edge into the server market, and from there; grow rapidly. The foundation in mobile devices is also a boon in server stacks, as it means the processors should have some very good efficiency figures in that kind of an environment.
sandys 25th October 2011, 14:34 Quote
Not a lot of profit considering the wide scale adoption of ARM in mobile devices and set tops etc, I guess their license model means they don't make a lot of money and there share value is over valued as they can't really make money as well as the people who build the devices,

I'm sure Qualcomm make more from their ARM cores than ARM do.
l3v1ck 25th October 2011, 15:35 Quote
Yeah the profit might be huge by Intel/Apple standards, but you forget they have a very low cost base. The don't physically make and chips at all. The don't have to spend R&D on FAB's etc, they have no risk on any individual products sucess etc. They have very little to lose, so over a million pounds per week profit for them is good.
Star*Dagger 25th October 2011, 18:19 Quote
Id love to have a few thousand share of this company
jimmyjj 25th October 2011, 22:26 Quote
Quote:
Originally Posted by Woodspoon
Nice to hear of a British tech company doing well for a change, especially in these crappy financial times.

qft
Star*Dagger 26th October 2011, 04:37 Quote
Oh that is great, an EU company!
fluxtatic 26th October 2011, 07:28 Quote
It's coming to servers - Canonical showed off an ARM server running Ubuntu just a couple weeks ago.

If nothing else, I'd rather have ARM shares now - not a dog like AMD (sadly) and I just can't feel good about throwing money at Intel (not that I've got a dime to invest, anyway.)

Let me admit up front that I'm pulling this entirely out of my ass, but dig: We already know Win8 will run on ARM. We also know that the past few cycles, MS' desktop and server OS run on the same kernel. Ergo, I think it's plain to see that there will be a MS Server OS running on ARM, no later than mid-2013.

Has any mention been made of what will succeed Server 2008? All the hype and BS around 8 and the Metro UI, I don't think I've heard a word about the next Server version.
rollo 26th October 2011, 12:05 Quote
good to see them make a profit

AMD might be shaking as there profit margins are surely not in any better shape

intel could buy arm and still have change outta there profit they make
RichCreedy 26th October 2011, 21:55 Quote
windows server 8 in developement
BLC 27th October 2011, 11:22 Quote
Sure they're not exactly on the same scale as Intel, but they don't need to be. Intel supplies chips for the traditional desktop and server - ARM are not aiming for the same market. To see such a massive increase in the company's revenue - a company that does not even manufacture any processors themselves - is quite heartening.

I've been a fan of ARM for a long time - a quick multiprocessor/multi-core ARM chip could easily replace the traditional desktop for the vast majority of people. I don't really need a 2.4GHz dual core chip to run some spreadsheets and type up emails/word documents at work, and the average home user doesn't need that power to check their emails and do some web-browsing.

Microsoft needs to start supporting ARM properly - I don't just mean the "Metro and Windows app store only" version of Win8. They need a proper, traditional desktop environment (as in, something that people will be familiar with) that runs on ARM. For the time being, Linux - and a limited set of distros at that - is all we're going to get; that's a severely limiting factor, as there is comparitively very little pre-compiled binary software available for ARM. Not many people are prepared to cross-compile their own source code...
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