Arm results shine bright in SoftBank mire

Business news | February 7, 2023

By Peter Clarke

MPUs/MCUs EDA & CAD tools

Processor IP licensor Arm Ltd. (Cambridge, England) achieved sales revenue of $746 million in its 3QF22, ended on December 31, 2022, up 28 percent compared with a year before.

Arm made a profit before tax and depreciation of $450 million. Arm’s licensees shipped 8 billion Arm-based chips, taking the total to more than 250 billion to date. For the nine months to the calendar year end Arm achieved a 3.7 percent increase in sales.

As such Arm fared far better than its parent SoftBank Group, which made a loss of ¥783.42 billion (about US$5.9 billion) in the three months to December 31, compared to a profit of about ¥29 billion a year before. These loses were mainly due to poor investments by its Vision Funds subsidiary and other venture capital efforts.

It was SoftBank’s fourth red quarter in a row and notable that it was the first earnings report without founder Masayoshi Son being present leaving his CFO to face analysts questions.

Four strategic wins

Arm’s licensing revenue was US$300 million, up 65 percent year-on-year. The company said it had signed strategic long-term agreements with four customers – an automotive OEM, a cloud service provider, a leading microcontroller vendor, and a vendor of semiconductors for consumer electronics.

The company’s royalty revenue was $446 million, up 12 percent year-on-year. Arm-based chips going into servers and automobiles were partly responsible, along with Armv9 architecture processors being adopted in premium smartphones and cloud server applications.

“The world’s data centers, IoT systems, automobiles and next-generation consumer devices all need more and more power efficient computing capabilities, fueling the long-term demand for Arm technology and innovation,” said Rene Haas, CEO of Arm, in a statement.

SoftBank said it was still working towards the staging of an initial public offering of shares in Arm sometime in calendar or fiscal 2023. Such an IPO could value Arm at about US$60 billion and as such is central to refinancing SoftBank which has struggled during the recent downturn.