ARM flexes muscles with strong full-year earnings

The little Cambridge chip that could, ARM, has announced its fourth quarter and full year 2010 results – and of course, they’re looking sharp.

Capitalising on a market that Intel, AMD and others ignored for too long, as well as lucrative contracts flying in from all sides, has seen its Q4 results strengthen 28 percent year on year at $179.6 million. Total full year revenues were similarly high, reaching $613.3 million or a 29 percent increase on 2009. Licence revenues rose 46 percent from 2009 to $65.4 million, or 35 percent of group revenues.

Licences are a tidy earner for ARM, with server and smartphone contracts bringing in the moolah. 35 were signed in Q4 alone, including Nvidia licensing the Cortex-A15 for use in mobile computing, and an architecture licence to develop chips for PCs and workstations. A “major semiconductor company” signed a subscription licence for a legion of ARM processors, which will be rolled out across the unnamed giant’s portfolio.

CSR signed the dotted line for Cortex-A9 and Cortex-A5, for in vehicle and navigation devices, while three other unnamed semiconductor companies signed agreements to get their hands on a range of ARM processors. Royalty revenues were strong too: total dollar royalty revenues in the fourth quarter increased 26 percent to $93.9 million – or 52 percent of group revenues.

Profit was $56.2 million (£34.9 million) in Q4 compared to $32.3 million (£20.1 million) the year before. Adjusting for share-based payments and restructuring charges ARM found its normalised profit, pre-tax at $76.7 million (£47.6 million) in the quarter – up from $52 million (£32.3 million) for the same quarter in 2009.

Fully diluted earnings per share in 2010 were, under IFRS, 6.36 pence – up from 3.11 pence for full-year 2009. The normalised fully diluted earnings per share for the year hit 9.34 pence over 2009’s 5.45 pence per share.