Arm CEO says company is fully committed towards a market listing in this year

By Stephen Nellis

SAN FRANCISCO, (Reuters) – Arm, the chief executive of Softbank’s British chip technology company, said Tuesday to Reuters that the company is committed this year to a stock exchange float.

Rene Haas stated that the plans were “really quite well developed” and are being implemented now, after Arm’s corporate parent reported fourth consecutive quarter of losses. “We are doing all we can to make it happen and are determined to make it happen this year.”

Arm’s fiscal third quarter revenues were up 28% at $746 million. This is one of few growth areas Softbank has as its large portfolio of early-stage technology startup investments had a negative impact on its results.

Arm, the world’s largest supplier of chips design elements for smartphones, sells intellectual property rights to companies like Qualcomm Inc and Apple Inc. Arm makes its money through upfront licensing agreements with such companies, followed by a royalty on every chip it sells using its technology.

Haas has used Arm’s strategy to accelerate Arm’s expansion into new markets like data center servers. Companies such as Inc are using Arm-based chip technology in their cloud units.

These efforts contributed to an increase in upfront license revenue of 65% to $300,000,000 as Arm signed new cloud computing deals. However, company executives acknowledged that some of the growth was due to multiple deals landing simultaneously.

Arm stated that per-chip royalties increased by 12% to $446million in quarter one. These are higher than the company’s deal-making business. This growth was despite a slowdown at Apple and Qualcomm in smartphone sales.

Haas stated that Arm is not immune to the declining smartphone market, but that Arm has licensed more intellectual property into its chips than ever before. According to Haas, the most advanced phones chips now use 10 to 12 computing cores and Arm’s latest computing architecture. This means that each chip sold will receive higher royalties.

Haas explained that the diversification Haas has made and the fact that there is more technology in the chips in core markets means that they have been able withstand the downturn much better than others.

(Additional reporting by Muvija M. and Paul Sandle; Editing and editing by Alistair Smout, Bill Berkrot).

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