Q4 2014 Financial Highlights
Group revenues in US$ up 18% year-on-year (£ revenues up 19% year-on-year)
Processor licensing revenue in US$ up 30% year-on-year
Order backlog up about 5% sequentially
Processor royalty revenue in US$ up 16% year-on-year (relevant industry revenues up 5% year-on-year1)
Normalised PBT and EPS up 25% and 36% year-on-year respectively
Record net cash generation of £122m
Directors recommend final dividend increase of 25% to 4.5p giving full year 2014 dividend of 7.02p, up 23%
Progress on key growth drivers in Q4 2014
Growth in adoption of ARM® processor technology
o 53 processor licences signed for a broad range of applications including smartphones and mobile computers, enterprise infrastructure and high performance computing, and microcontrollers and chips for sensor hubs
Advanced technology enables a higher royalty percentage per chip in mobile devices, consumer electronics and enterprise infrastructure markets. In Q4, ARM maintained its licensing momentum for future royalty growth:
o 9 ARMv8-A processor licences signed, including an architecture licence for high performance computing
o 10 Mali™ multimedia processor licences signed, including one subscription license for the family of Mali graphics processors
o 5 POP IP licences signed, including three for Cortex-A53 processors on 28nm processes
Growth in shipments of chips based on ARM processor technology
o 3.5 billion ARM-based chips shipped, up 20% year-on-year
o Strong growth in shipments of microcontrollers and chips for mobile devices
Outlook
2014 finished strongly, with a record number of licences being signed in Q4 which generated a particularly high revenue contribution in the quarter.
We expect licence revenue growth in full-year 2015 to be consistent with our medium-term guidance. Following the acceleration in royalty revenue growth in the second half of 2014, and with a wide range of OEMs introducing products based on the ARMv8-A architecture this year, the outlook for royalty revenues in 2015 is encouraging. With full year 2015 licence and royalty revenues both anticipated to be consistent with market expectations, we expect total Group dollar revenues to be in line. We anticipate that total Group dollar revenues for Q1 will be up about 10% year on year, based on strengthening royalty revenue growth, and our expectation of the profile of licence revenue through the year.
Simon Segars, Chief Executive Officer, said:
"In Q4 and throughout 2014 ARM has seen strong licence revenue growth, driven by market-leading semiconductor companies increasing their commitment to use ARM technology, and a broadening range of new customers choosing ARM technology for the first time. As expected, ARM's royalty revenue growth rate increased in the fourth quarter. As the ARM Partnership continues to gain share, and as chips based on ARMv8-A processors and Mali graphics IP start shipping in higher volumes, the outlook for royalty revenues in 2015 and beyond is encouraging.
"2015 will bring exciting opportunities and challenges as ARM invests in new products and technologies, and continues to establish itself in competitive new markets."
