Progress on key growth drivers in Q4
Growth in adoption of ARM® processor technology
o 36 processor licenses signed for a broad range of applications, from smartphones and mobile computers to medical devices and microcontrollers
o Momentum continues in computing, servers and networking applications with the signing of two ARMv8 architecture licenses, six ARMv8 processor licenses and three ARM Cortex™-A15 processor licenses
Growth in shipments of chips based on ARM processor technology
o 2.5 billion chips shipped
o Processor royalty revenue grew 21% year-on-year, driven by strong growth in Cortex-A and Mali™-based chips
Growth in outsourcing of new technology
o 7 Mali graphics processor licenses signed
o 5 physical IP based POP™ IP products licensed
Warren East, Chief Executive Officer, said:
"ARM has seen good revenue and earnings growth throughout 2012. Customers are developing products to meet the needs of the post PC era and are driving demand for ARM's most advanced technology. In Q4 we again saw influential market-leaders demonstrating their commitment to ARM technology by licensing our latest products. Royalty revenue has also grown strongly during Q4 underpinned by ARM's market share gains and an increased royalty percentage from Cortex-A class processors being deployed into smartphones and tablets.
2013 brings exciting opportunities and challenges as ARM enters competitive new markets where we are well positioned to succeed with leading technology, an innovative business model and a thriving ecosystem of partners."
Outlook
ARM enters 2013 with a robust opportunity pipeline for licensing and a record order backlog. Market share gains in long-term growth sectors look set to continue as our partners introduce new chips based on ARM technology. The global macro-economic environment continues to be characterised by uncertainty and the prospect of low growth for some time. The ongoing influence on consumer and enterprise spending inevitably impacts semiconductor revenues and industry confidence. However, assuming the macroeconomic situation does not deteriorate significantly, we expect group dollar revenues for the full-year to be at least in line with current market expectations.
In recent quarters, the year-on-year growth of ARM's processor royalty revenues has outperformed the semiconductor industry by 15-20%. ARM's royalty revenues for Q1 2013 are based on shipments in Q4 2012. Relevant data for the fourth quarter of 2012 suggests that semiconductor revenues were marginally up year-on-year. Assuming year-on-year royalty growth based on similar trends and given the positive outlook for license revenues, total revenues in the first quarter of 2013 are expected to be around $250 million.
The directors recommend payment of a final dividend in respect of 2012 of 2.83 pence per share, up 35%, which taken together with the interim dividend of 1.67 pence per share paid in October 2012, gives a total dividend in respect of 2012 of 4.5 pence per share, an increase of 29% on the total dividend of 3.48 pence per share in 2011, continuing the steady growth in dividends in recent years through challenging economic cycles. Subject to shareholder approval, the final dividend will be paid on 17 May 2013 to shareholders on the register on 19 April 2013.
