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 Click on, or paste the following link into your web browser, to view the associated PDF document. http://www.rns-pdf.londonstockexchange.com/rns/4044B_1-2009-10-26.pdf This information is provided by RNS The company news service from the London Stock Exchange END
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