ARM has announced a 9% rise in its second-quarter profits, pinning its growth on processor licensing despite a slowdown in smartphone sales.
ARM sells blueprints for processor designs, in turn receiving royalties for every chip sold. It announced that 41 processor licenses had been signed across its markets of mobile computing, consumer electronics and embedded intelligent devices, taking the cumulative number of licences signed to more than 1,100.
Simon Segars, CEO, said: "Our continued strong licensing performance reflects the intent of existing and new customers to base more of their future products on ARM technology. The 41 processor licences signed in Q2 were driven by demand for ARM technology in smart mobile devices, consumer electronics and embedded computing chips for the Internet of Things, and include further licences for ARMv8-A and Mali processor technology. This bodes well for growth in ARM’s medium and long term royalty revenues.
"As expected, our royalty revenue in Q2 2014 has been impacted by seasonal trends and inventory management in parts of the electronics supply chain. An improving market environment in the second half gives us confidence in strengthening royalty revenue in H2 2014."
ARM had a net cash generation of £86.7m. Net cash at 30 June 2014 was £746.4m compared to £706.3m at 31 December 2013.
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