The company also achieved an exceptional increase in profit after tax. This increased to £122.3 million (about $160 million), up 18 percent on the profit after tax in 2Q15, partly on an effective tax rate of 6 percent. This compares with the typical effective tax rate ARM has been paying of about 16 percent.
On an annual basis, revenues from licensing climbed about 6 percent while revenues from royalties climbed about 12 percent.
Simon Segars, Chief Executive Officer, said: “Our royalty revenue growth continues to outperform the wider semiconductor industry, driven by market share gains and the increasing adoption of ARM’s latest technologies. With more end-users selecting ARM technology for products ranging from sensors to satellites to supercomputers, we expect this outperformance will continue.”
Segars highlighted ARM’s recent acquisition of Apical Ltd. (see ARM buys embedded vision firm for $350 million) as enhancing ARM’s expertise in visual computing. “As new technologies are created and new markets emerge, ARM will continue to evolve its products and business models to capture the opportunities ahead,” Segars said.
The acquisition of Apical also partly explains why ARM’s cash on hand declined from £903.8 million at the end of the 2Q15 to £805.2 million at the end of the second quarter 2016.
In light of SoftBank’s recommended offer to buy ARM Holdings plc no guidance was given for the rest of the year.
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