SOURCE: ARM Holdings PLC

October 27, 2009 03:14 ET

ARM Holdings PLC announces 3rd Quarter Results

CAMBRIDGE, UK--(Marketwire - October 27, 2009) -


EMBARGOED until 7.00am GMT 27 October 2009

ARM HOLDINGS PLC REPORTS RESULTS FOR THE THIRD QUARTER AND NINE
MONTHS ENDED 30 SEPTEMBER 2009

A conference call discussing these results will be webcast today at
8:30 GMT at www.arm.com/ir


CAMBRIDGE, UK, 27 October 2009-ARM Holdings plc ((LSE: ARM); (NASDAQ: ARMH)), the world's leading semiconductor intellectual property
supplier, announces 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% and strong quarterly
  net cash generation of GBP28.2m

. Reiterating guidance: ARM's full-year 2009 dollar revenues to be at
  least in line with current market expectations 


Q3 Financial Summary               Normalised*             IFRS         
                           Q3 2009  Q3 2008  %Change   Q3 2009  Q3 2008
Revenue (USDm)               123.0   134.4      -8%      123.0   134.4 
Revenue (GBPm)                75.2    71.7      +5%       75.2    71.7  
Operating margin             31.7%   33.0%                9.6%    20.3% 
Profit before tax (GBPm)      24.3    24.9      -2%        7.7    15.8  
Earnings per share (pence)    1.34    1.38      -3%       0.53    0.88  
Net cash generation (GBPm)**  28.2    22.5    
Effective revenue fx         
rate (USD/GBP)                1.64    1.88
YTD Financial Summary              Normalised*             IFRS         
                               YTD     YTD   %Change       YTD     YTD
                              2009    2008                2009    2008
Revenue (USDm)               349.4   396.8     -12%      349.4   396.8 
Revenue (GBPm)               219.8   204.6      +7%      219.8   204.6 
Operating margin             28.8%   31.8%               11.8%   18.3% 
Profit before tax (GBPm)      64.5    67.5      -5%       27.1    40.0  
Earnings per share (pence)    3.66    3.73      -2%       1.79    2.05  
Net cash generation (GBPm)**  53.3    62.7  
Effective revenue fx          
rate (USD/GBP)                1.59    1.94    



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.  


Q3 2009 - Revenue     Revenue (USDm)***         Revenue (GBPm)        
Analysis                                                    

                       Q3     Q3      %          Q3     Q3     %     
                     2009   2008   Change      2009   2008   Change
PD                        
Licensing            30.9   35.5     -13%      18.5   19.2      -4%   
Royalties            53.1   55.2      -4%      32.3   29.2      11%   
Total PD             84.0   90.7      -7%      50.8   48.4       5%    
PIPD                
Licensing             8.8   10.4     -16%       5.6    5.6       1%    
Royalties(1)          9.2   11.0     -16%       5.7    5.9      -4%  
Total PIPD           18.0   21.4     -16%      11.3   11.5      -2%   
Development Systems  14.0   14.6      -4%       8.7    7.8      11%   
Services              7.0    7.7      -9%       4.4    4.0      11%   
Total Revenue       123.0  134.4      -8%      75.2   71.7       5%    

(1) Includes catch-up royalties in Q3 2009 of USDnil million and in Q3
2008 of USD1.7m (GBP0.9m).


YTD 2009 - Revenue      Revenue (USDm)***        Revenue (GBPm)         
Analysis                                                  

                      YTD    YTD        %       YTD    YTD        %     
                     2009   2008   Change      2009   2008   Change
PD                 
Licensing            92.4  102.1      -9%      55.0   52.8       4%    
Royalties           144.7  161.0     -10%      94.1   83.1      13%   
Total PD            237.1  263.1     -10%     149.1  135.9      10%   
PIPD                     
Licensing            26.7   34.8     -23%      16.2   17.9      -9%   
Royalties(1)         25.1   29.7     -15%      16.1   15.4       5%    
Total PIPD           51.8   64.5     -20%      32.3   33.3      -3%   
Development Systems  38.8   44.9     -14%      25.1   23.1       9%    
Services             21.7   24.3     -11%      13.3   12.3       8%    
Total Revenue       349.4  396.8     -12%     219.8  204.6       7%    
(1) Includes catch-up royalties in YTD 2009 of USD4.2m (GBP2.6m) and
in YTD 2008 of USD3.6m (GBP1.9m).


*    Normalised figures are based on IFRS, adjusted for
     acquisition-related, share-based compensation and restructuring
     charges and profit on disposal and impairment of
     available-for-sale investments. For reconciliations of IFRS
     measures to normalised non-IFRS measures detailed in this
     document, see notes 4.1 to 4.27.

**   Before dividends and share buybacks, net cash flows from share
     option exercises, disposals of available-for-sale investments and
     acquisition consideration - see notes 4.14 to 4.18.

***  Dollar revenues are based on the group's actual dollar invoicing,
     where applicable, and using the rate of exchange applicable on the
     date of the transaction for invoicing in currencies other than
     dollars. Approximately 95% of invoicing is in dollars.

**** Each American Depositary Share (ADS) represents three shares.



CONTACTS:    


Sarah West/Daniel Thole   Tim Score/Ian Thornton  

Brunswick                 ARM Holdings plc  

+44 (0)207 404 5959       +44 (0)1223 400400


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