OK, so ARM is the largest European semi designer. And they had a nice quarter last time. My question is, who are their American competitors? I wonder how much of their revenue is coming from American vs. others. LSI recently licensed some of their designs.
Other than their European dominance and the fact that they will run with the industry, what factors make you think they'll be a real winner?
Broke their previous low today. Regardless, this will be an interesting play to watch.
Here's some nice stuff from their previous quarter.
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Commenting on the first quarter's results, Robin Saxby, Chairman and Chief Executive Officer, said:
``As an intellectual property licensing business, we have not been directly exposed to the inventory corrections seen by many technology companies in the last few months and have experienced a strong quarter, with 20 licenses signed. Development systems, a leading indicator of design wins, continued their upward trend, almost trebling their revenues compared to the corresponding period for last year, and rising 39% compared to the previous quarter. The announcements we are making this week at the Embedded Systems Conference in San Francisco demonstrate the momentum that is building in our business.''
Jonathan Brooks, Chief Financial Officer, added:
``Given the high increase in our headcount during last year and the difficulties reported by other technology companies, we decided early in the quarter that it would be prudent to moderate our headcount growth plans for the year until market conditions improve. This has resulted in slightly lower costs for the quarter allowing operating margins to rise to 32% compared to 30% in the fourth quarter of 2000. With continuing strong demand for our products and services, we remain confident about the outlook for the next two quarters.''
Financial Review
Review of First Quarter ended March 31, 2001 Total revenues for the first quarter ended March 31, 2001 amounted to 32.5 million pounds, representing a 9% increase from 29.8 million pounds in the fourth quarter of 2000, and a 52% increase over first quarter 2000 revenues of 21.4 million pounds.
License revenues amounted to 13.9 million pounds representing 43% of revenues with 20 licenses signed in the period, six from new licensees and 14 from existing partners. Of the six new licensees, one took a license to the ARM7TDMI® core; one took a license to the ARM946E-S(TM) solution and four 'per use' licenses were signed, two for the ARM7TDMI core and two for the ARM922T(TM) core. Two existing partners, Philips and ST Microelectronics, signed 'broad' agreements giving them access to a wide range of cores over the next few years. Three further existing partners upgraded to cores from the ARM9(TM) family, one took a license to the ARM7TDMI core having previously taken a core in the ARM9 family and eight took licenses to products within the same microprocessor core families that they had previously licensed. Toppan, a company based in Japan, joined our ATAP(TM) technology access program which enables design houses to undertake ARM core-based designs for third parties. This brings the total number of ATAP design houses to eleven.
Royalty revenues were 8.3 million pounds accounting for 26% of revenues compared to 8.1 million pounds or 27% of revenues for the fourth quarter of 2000 and 4.7 million pounds or 22% of revenues in the first quarter of 2000. Sales of development systems, a leading indicator of design activity, amounted to 6.1 million pounds, representing 19% of total revenues compared to 4.4 million pounds or 15% of revenues in the fourth quarter of 2000 and 2.1 million pounds or 10% of revenues in the first quarter of 2000. Service revenues, which comprise revenues from consulting fees and support, maintenance and training amounted to 4.2 million pounds compared to 3.0 million pounds in the first quarter of 2000. This figure was slightly down from the 4.4 million pounds of service revenues in the fourth quarter of 2000, reflecting the conscious shift away from consulting services to higher margin IP generation.
Gross margins for the first quarter of 2001 remained at 88%, the same level as in the fourth quarter of 2000, and slightly up on the 87% for the first quarter of 2000. |
