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ARM社が2008年第3四半期の業績速報を発表

28 October 2008

A conference call with the company will be audiocast today at 08:30 at www.arm.com/ir.

ARM Holdings plc社(本社:英国ケンブリッジ、日本法人:横浜市港北区、代表取締役社長:西嶋貴史)は、現地時間の10月28日に、2008年9月30日締めの2008会計年度第3四半期および9カ月通算(1月1日から9月30日まで)の業績(未監査)を発表しました。

決算ハイライト(明記のない限り、US GAAPベース)

  • 第3四半期の売上高は前年同期比7%増で、1四半期の売上高としては史上最高の134.4百万ドル
    • 営業利益率は33%(US GAAPベースで21%)
    • 税引き前利益(PBT)は17%増の24.9百万ポンド(US GAAPベースで36%増の16.3百万ポンド)
    • 1株当たり利益(EPS)は23%増の1.38ペンス(US GAAPベースで46%増の0.92ペンス)
  • プロセッサ部門(PD):強力なプラットフォームのライセンス供与により、ロイヤリティ収入が増加
    • 総売上高は前年比7%増の90.7百万ドル
      • ライセンス収益は前期比18%増の35.5百万ドル
      • ロイヤリティ収入は前年比30%増
        • 初めて1四半期で10億個出荷を計上
  • フィジカルIP部門(PIPD):IDMやファウンドリに最先端のテクノロジー・ノードをライセンス供与
    • 総売上高は前年比4%増の21.4百万ドル
      • ライセンス収益は前期比17%減の10.4百万ドル
      • ロイヤリティ収益は前年比38%増で史上最高の11百万ドルを記録
    • 最先端の技術開発が長期的な戦略契約をもたらす
      • STマイクロエレクトロニクスが40nmのプラットフォーム・ライセンスを購入
      • Common Platform テクノロジー パートナーシップで、32nmと28nmの共同開発
  • コスト削減に対する継続的な取り組み
    • 第3四半期の人員数は年初よりやや減少
    • 第3四半期の総経費は、主にドル高が原因でやや増加し、40.8百万ポンド(US GAAPベースで49.1百万ポンド)
    • 営業利益率と利益は、ドル高によってさらに増加の見込み 
  • 堅調なネット・キャッシュ・ジェネレーションが継続
    • 四半期で22.5百万ポンドのキャッシュ・ジェネレーション
    • 第3四半期の自社株買いは8.6百万ポンド
    • ネット・キャッシュは第3四半期末で66百万ポンド


業界の現状と展望
第3四半期にはPDのライセンス収益が前期より増加し、PIPDで重要な戦略契約が締結されました。これにより、第4四半期もライセンス供与につながるルートが確保されました。

世界のマクロ経済環境により、近い将来の半導体業界は不確定ですが、受注残高、安定したライセンス供与ルート、順調なロイヤリティ収益から、2008年第4四半期もグループのドル売上高は、少なくとも予想どおりと考えられます。また、ドル高ポンド安により、さらに収益と利益が増加すると期待しています。

最高経営責任者(CEO)のWarren Eastは、第3 四半期の業績について、次のように述べています。
「第3四半期、ARMは1四半期として史上最高の売上高を記録し、業界リーダー各社がARMのフィジカルIPに関して長期的な契約を結ぶなど、ARMのテクノロジーに対する堅調な需要が続いています。

PDとPIPDの両方でロイヤリティ収益が前年比30%以上増という成長ぶりは、ARMテクノロジーがコンシューマ・エレクトロニクス製品に急速に拡大しつつあることを裏付けています。

第3四半期、経営レバレッジの内在するARMのビジネス・モデルが、着実なコスト削減と最近のドル高ポンド安もあって、7%のドル売上高成長率を上回る20%という収益成長率に結びついたことを心強く思います。」



Q3 2008 – Revenue Analysis

 

Revenue ($m)***

Revenue (£m)

 

Q3 2008

Q3 2007

% Change

Q3 2008

Q3 2007

% Change

PD

 

 

 

 

 

 

Licensing

35.5

42.4

-16%

19.2

21.5

-10%

Royalties

55.2

42.6

30%

29.2

21.1

38%

Total PD

90.7

85.0

7%

48.4

42.6

14%

PIPD

 

 

 

 

 

 

Licensing

10.4

12.7

-18%

5.6

6.2

-10%

Royalties1

11.0

8.0

38%

5.9

4.0

49%

Total PIPD

21.4

20.7

4%

11.5

10.2

13%

Development Systems

14.6

12.3

18%

7.8

6.1

27%

Services

7.7

7.6

1%

4.0

3.9

3%

Total Revenue

134.4

125.6

7%

71.7

62.8

14%

1 Includes catch-up royalties in Q3 2008 of $1.7m (£0.9m) and in Q3 2007 of $0.3m (£0.1m).


YTD 2008 – Revenue Analysis

 

Revenue ($m)***

Revenue (£m)

 

YTD 2008

YTD 2007

% Change

YTD 2008

YTD 2007

% Change

PD

 

 

 

 

 

 

Licensing

102.1

125.1

-18%

52.8

64.1

-18%

Royalties

161.0

127.7

26%

83.1

64.3

29%

Total PD

263.1

252.8

4%

135.9

128.4

6%

PIPD

 

 

 

 

 

 

Licensing

34.8

43.6

-20%

17.9

21.9

-19%

Royalties1

29.7

23.6

26%

15.4

11.9

30%

Total PIPD

64.5

67.2

-4%

33.3

33.8

-1%

Development Systems

44.9

40.0

12%

23.1

20.2

14%

Services

24.3

24.0

1%

12.3

12.4

-1%

Total Revenue

396.8

384.0

3%

204.6

194.8

5%

1 Includes catch-up royalties in YTD 2008 of $3.6m (£1.9m) and in YTD 2007 of $2.4m (£1.2m).


Q3 2008 – Financial Summary

 

£M

Normalised*

US GAAP

Q3 2008

Q3 2007

% Change

Q3 2008

Q3 2007

Revenue

71.7

62.8

14%

71.7

62.8

Income before income tax

24.9

21.3

17%

16.3

12.0

Operating margin

33.0%

31.8%

 

21.0%

16.9%

Earnings per share (pence)

1.38

1.12

23%

0.92

0.63

Net cash generation**

22.5

21.1

7%

 

 

Effective fx rate  ($/£)

1.88

2.00

 

 

 



YTD 2008 – Financial Summary

 

£M

Normalised*

US GAAP

YTD 2008

YTD 2007

% Change

YTD 2008

YTD 2007

Revenue

204.6

194.8

5%

       204.6

194.8

Income before income tax

67.4

65.4

3%

        41.1

36.7

Operating margin

31.7%

31.3%

 

       18.9%

16.6%

Earnings per share (pence)

3.71

3.43

8%

        2.31

1.97

Net cash generation**

62.7

46.6

35%

 

 

Effective fx rate  ($/£)

1.94

1.97

 

 

 



*

Normalised figures are based on US GAAP, adjusted for acquisition-related, share-based compensation and restructuring charges. For reconciliation of GAAP measures to normalised non-GAAP measures detailed in this document, see notes 6.1 to 6.27.

**

Before dividends and share buybacks, net cash flows from share option exercises, disposals of available-for-sale investments and acquisition consideration – see notes 6.14 to 6.18.

***

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/Pavla Shaw Tim Score/Ian Thornton
Brunswick ARM Holdings plc
+44 (0)207 404 5959 +44 (0)1628 427800

Financial review

(US GAAP unless otherwise stated)

Total revenues

Total dollar revenues in Q3 2008 were $134.4 million, up 7% on Q3 2007.  Sterling revenues of £71.7 million, up 14% on Q3 2007.

Year-to-date dollar revenues in 2008 amounted to $396.8 million, up 3% on 2007.

License revenues

Total dollar license revenues in Q3 2008 fell by 17% to $45.9 million, representing 34% of group revenues, compared to $55.1 million in Q3 2007. License revenues comprised $35.5 million from PD, up 18% sequentially, and $10.4 million from PIPD.

Year-to-date dollar license revenues amounted to $136.9 million, down 19% on 2007.

Backlog at 30 September 2008, whilst lower than at the half year, was approximately 30% higher compared to backlog at 30 September 2007.

Royalty revenues

Year-on-year, total dollar royalty revenues in Q3 2008 were up 31% at $66.2 million, representing 49% of group revenues, compared to $50.6 million in Q3 2007.   Royalty revenues comprised $55.2 million from PD and $11.0 million from PIPD (including $1.7 million of “catch-up” royalties).

Underlying royalties of $9.3 million for PIPD were up 21% year-on-year.

Year-to-date dollar royalty revenues amounted to $190.7 million, up 26% on 2007.

Development Systems and Service revenues

Sales of development systems in Q3 2008 were up 18% to $14.6 million, representing 11% of group revenues, compared to $12.3 million in Q3 2007.   Consistent with previous years, development system revenues decreased sequentially in the third quarter due to seasonality.

Service revenues in Q3 2008 were up 1% year-on-year at $7.7 million, representing 6% of group revenues, compared to $7.6 million in Q3 2007.

Year-to-date development systems dollar revenues were $44.9 million, up 12% on 2007. Service dollar revenues were up by 1% to $24.3 million.

Gross margins

Gross margins in Q3 2008, excluding share-based compensation charges of £0.2 million (see below), were 89.9 % compared to 89.8% in Q3 2007.

Year-to-date gross margins, excluding share-based compensation charges of £0.8 million, were 89.3% compared to 89.7% in 2007.

Operating expenses and operating margin

Total operating expenses in Q3 2008 were £49.1 million (Q3 2007: £45.5 million) including amortisation of intangible assets and other acquisition-related charges of £4.6 million (Q3 2007: £4.8 million), £3.3 million (Q3 2007: £4.2 million) in relation to share-based compensation charges and related payroll taxes and restructuring charges of £0.4 million (Q3 2007: £0.1 million).  The total share-based compensation charges of £3.5 million in Q3 2008 are included within cost of revenues (£0.2 million), research and development (£2.4 million), sales and marketing (£0.5 million) and general and administrative (£0.4 million).  Normalised Q3 and year-to-date income statements for 2008 and 2007 are included in notes 6.24 to 6.27 below which reconcile US GAAP to the normalised non-GAAP measures referred to in this earnings release.

Operating expenses (excluding acquisition-related, share-based compensation and restructuring charges) in Q3 2008 were £40.8 million compared to £37.5 million in Q2 2008 and £36.5 million in Q3 2007. The sequential increase in operating expenses this quarter is due primarily to the strengthening of the dollar against sterling which has had two effects: firstly, an increase in the sterling value of the group’s US dollar denominated costs (which account for about half of total costs) and secondly, the impact of accounting for derivative instruments is a net charge in Q3 2008 compared to a net credit in Q2 2008. Costs continue to be carefully managed with group headcount at the end of Q3 marginally lower than at the start of the year (see People section below).

Normalised research and development expenses were £15.7 million in Q3 2008, representing 22% of revenues, compared to £15.3 million in Q2 2008 and £14.8 million in Q3 2007. Normalised sales and marketing costs in Q3 2008 were £11.4 million, representing 16% of revenues, compared to £10.9 million in Q2 2008 and £10.3 million in Q3 2007. Normalised general and administrative expenses in Q3 2008 were £13.7 million, representing 19% of revenues, compared to £11.3 million in Q2 2008 and £11.4 million in Q3 2007. The increase in operating expenses due to the strengthening dollar explained above is reported for the most part within general and administrative expenses.

Normalised operating margin in Q3 2008 was 33.0%(6.1)  compared to 31.5% (6.2)   in Q2 2008 and 31.8% (6.3)  in Q3 2007.

Total operating expenses for the first nine months of 2008 were £143.3 million, including acquisition-related, share-based compensation and restructuring charges of £13.6 million, £10.3 million and £1.6 million respectively. Excluding these charges, operating expenses for the first nine months were £117.8 million, compared to £113.6 million in 2007, an increase of 4%.

Normalised operating margin in the first nine months of 2008 was 31.7%(6.4)  compared to 31.3% (6.5)  in 2007.

Earnings and taxation

Income before income tax in Q3 2008 was £16.3 million compared to £12.0 million in Q3 2007. After adjusting for acquisition-related, share-based compensation and restructuring charges, normalised income before income tax in Q3 2008 was £24.9 million (6.6) compared to £21.3 million (6.8) in Q3 2007.

The group’s effective tax rate under US GAAP for the full-year 2008 is expected to be in the range 27-28%, reflecting the availability of research and development tax credits and taking into account the benefits arising from the structuring of the Artisan® acquisition.

In Q3 2008, fully diluted earnings per share prepared under US GAAP were 0.92 pence (4.9 cents per ADS****) compared to earnings per share of 0.63 pence (3.8 cents per ADS****) in Q3 2007. Normalised fully diluted earnings per share in Q3 2008 were 1.38 pence (6.19) per share (7.4 cents per ADS****) compared to 1.12 pence (6.21)   (6.8 cents per ADS****) in Q3 2007.

Balance sheet

Intangible assets at 30 September 2008 were £410.8 million, comprising goodwill of £382.7 million and other intangible assets of £28.1 million, compared to £344.7 million and £30.6 million respectively at 30 June 2008. The increase in goodwill at the end of Q3 arises from the stronger dollar at the end of Q3 compared to the end of Q2.

Total accounts receivable were £66.2 million at 30 September 2008, comprising £48.8 million of trade receivables and £17.4 million of amounts recoverable on contracts, compared to £60.3 million at 30 June 2008, comprising £42.9 million of trade receivables and £17.4 million of amounts recoverable on contracts. Days sales outstanding (DSOs) were 55 at 30 September 2008 compared to 45 at 30 June 2008.

Cash flow and share buyback programme

Net cash at 30 September 2008 was £66.0 million (6.11) compared to £50.6 million (6.12) at 30 June 2008. Normalised cash generation in Q3 2008 was £22.5 million (6.14).

During the quarter, £8.6 million of cash was returned to shareholders through the purchase of 7.8 million own shares.

Operating review

Backlog

At the end of Q3 2008, backlog was lower than at the end of Q2 2008 but approximately 30% higher than a year ago.  We enter Q4 with a robust opportunity pipeline for licensing.

PD Licensing

ARM signed 13 processor licenses in Q3.  The quarter was characterised by licensing of ARM® technologies across the portfolio, with licenses being signed for the ARM7™, ARM9™, ARM11™ and Cortex™ processor families, as well as for the Mali™ graphics processor, including with STMicroelectronics who licensed ARM’s latest graphics processor, the Mali 400MP GPU.

Non-mobile applications continue to be the driver for a high proportion of processor licenses, including graphics processors.  Approximately, 75% of licenses are expected to be used initially in applications such as digital TV, microcontrollers, robotics and passive optical networking (PON).

Mobile applications drive approximately 25% of licenses, with ARM processors and graphics processors being designed into a widening range of mobile technology such as chips for Bluetooth, gaming, mobile computing and mobile TV.

Two new companies licensed ARM processor technology for the first time.

Q3 2008 and Cumulative PD Licensing Analysis

 

Multi-use

Term

Per-use

 

Cumulative

 

U

D

N

U

D

N

U

D

N

Total

Total

ARM7

1

1

 

 

 

 

 

 

1

3

158

ARM9

 

 

1

1

 

 

 

 

 

2

249

ARM11

1

 

1

1

 

 

1

 

 

4

70

Cortex-M3

1

 

 

 

 

 

 

 

 

1

22

Cortex-R4

 

 

 

 

1

 

 

 

 

1

12

Cortex-A8

 

 

 

 

 

 

 

 

 

 

10

Cortex-A9

 

 

 

 

 

 

 

 

 

 

5

Mali

1

1

 

 

 

 

 

 

 

2

10

Other

 

 

 

 

 

 

 

 

 

 

30

 

 

 

 

 

 

 

 

 

Total

13

566

U: Upgrade     D: Derivative     N: New


PD Royalties

Year-on-year, reported PD unit shipments grew strongly in Q3 2008 (our partners report royalties one quarter in arrears) buoyed by growth in automotive, Bluetooth, digital consumer, microcontrollers, storage (HDD and Flash) and Wi-Fi. Reported processor unit shipments were 1 billion in the quarter, up 44% compared to Q3 2007.

The ARM7, ARM9 and ARM11 families now represent 53%, 44% and 3% of total shipments respectively. There are now six partners shipping Cortex processor-based products into a broad range of applications including consumer electronics, microcontrollers, mobile computers, networking and Wi-Fi applications.

In Q3 2008, shipments of ARM technology-based chips in mobile devices grew approximately 40% compared to Q3 2007.  For the quarter, an ARM technology-based mobile phone contained an average of 1.8 ARM microprocessors, the same as in the prior quarter.  As well as smartphones containing multiple ARM technology-based chips, more feature phones are now being shipped with multiple ARM processors.

In Q3 2008, shipments of ARM technology-based chips in embedded devices continued to grow strongly with microcontroller shipments up approximately 50% compared with Q3 2007. Units shipped into enterprise applications grew by approximately 60% driven by increased use of ARM in networking and storage devices; whilst units shipped into the home products market grew approximately 50% driven by increased market share in consumer electronics products such as DVD, set-top boxes and digital TV.

PIPD Licensing

ARM signed 14 physical IP licenses in Q3 for technologies at all process nodes from 180nm to 28nm; and for a wide range of ARM products including platforms of physical IP for new process nodes; memories, standard cells and PHYs for mature nodes; and power-optimised components for use with ARM processors.

Major semiconductor manufacturers continued the trend for outsourcing physical IP as demonstrated by STMicroelectronics buying a license to a 40nm physical IP platform; a tier-1 IDM buying four physical IP licenses in four consecutive quarters; and another tier-1 fabless manufacturer buying their first significant physical IP license, part of a synergistic deal with an ARM processor.  In all, there were four synergy deals signed within the quarter, where optimised physical IP was licensed for use with an ARM processor.  These included high-speed 65nm physical IP for use with the Cortex-A8 processor in a mobile computing application and very low power 180nm physical IP for use with the Cortex-M3 processor in a microcontroller application.

In addition, demand for leading edge physical IP continues as ARM has signed agreements with Chartered, IBM and Samsung to develop and license 32nm and 28nm physical IP for the Common Platform

Q3 2008 and Cumulative PIPD Licensing Analysis

 

Process Node

(nm)

Total

Platform Licenses

 

 

Advantage

32/28

2

Advantage

45

1

Standard Cell Libraries

 

 

Advantage

65

2

Metro

180/130

1

Memory Compilers

 

 

Metro

180/65

2

Classic

180/130

2

Velocity PHYs

90/65

4

Quarter Total

 

14

Cumulative Total

 

393

PIPD Royalties

PIPD royalty revenue grew 38% year-on-year and 14% sequentially to a record $11.0m, including $1.7m of catch-up royalties.  Underlying royalties grew by 21% year-on-year and 7% sequentially, demonstrating a higher growth rate than the 5% growth that foundries reported[1] in the related period (PIPD royalties are reported one quarter in arrears).    More than 25 companies are now reporting physical IP royalties.

People

At 30 September 2008, ARM had 1,724 full-time employees, a net decrease of 4 since the start of the year. Year-to-date headcount has increased by 19 in India and China and decreased by 23 in ROW. At the end of Q3, the group had 635 employees based in the UK, 509 in the US, 196 in Continental Europe, 305 in India and 79 in the Asia Pacific region.

Principal risks and uncertainties

The principal risks and uncertainties faced by the group that could affect the results for the fourth quarter of 2008 and beyond are noted within the Annual Report on Form 20-F for the fiscal year ended 31 December 2007.  There have been no changes to these risks that would materially impact the group in the foreseeable future.  These include but are not limited to: ARM's quarterly results may fluctuate significantly and be unpredictable which could adversely affect the market price of ARM ordinary shares; general economic conditions may reduce ARM's revenues and harm its business; ARM competes in the intensely competitive semiconductor market and ARM may not operate systems which comply fully with the requirements of the Sarbanes-Oxley Act.

ARM Holdings plc Financial Results Detail [Download the 57KB PDF PDF icon] for the Third Quarter and Nine Months Ended 30 September 2008

Notes

The results shown for Q3 2008, Q2 2008, Q3 2007, 9M 2008 and 9M 2007 are unaudited. The results shown for FY 2007 are audited. The condensed consolidated interim financial information contained in this announcement does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. Statutory accounts of the Company in respect of the financial year ended 31 December 2007 were approved by the Board of directors on 3 April 2008 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain an emphasis of matter paragraph nor any statement under Section 237 of the Companies Act 1985.

The results for ARM for Q3 2008 and previous quarters as shown reflect the accounting policies as stated in Note 1 to the US GAAP financial statements in the Annual Report and Accounts filed with Companies House in the UK for the fiscal year ended 31 December 2007 and in the Annual Report on Form 20-F for the fiscal year ended 31 December 2007.

This document contains forward-looking statements as defined in section 102 of the Private Securities Litigation Reform Act of 1995. These statements are subject to risk factors associated with the semiconductor and intellectual property businesses. When used in this document, the words “anticipates”, “may”, “can”, “believes”, “expects”, “projects”, “intends”, “likely”, similar expressions and any other statements that are not historical facts, in each case as they relate to ARM, its management or its businesses and financial performance and condition are intended to identify those assertions as forward-looking statements. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables, many of which are beyond our control. These variables could cause actual results or trends to differ materially and include, but are not limited to: failure to realize the benefits of our recent acquisitions, unforeseen liabilities arising from our recent acquisitions, price fluctuations, actual demand, the availability of software and operating systems compatible with our intellectual property, the continued demand for products including ARM’s intellectual property, delays in the design process or delays in a customer’s project that uses ARM’s technology, the success of our semiconductor partners, loss of market and industry competition, exchange and currency fluctuations, any future strategic investments or acquisitions, rapid technological change, regulatory developments, ARM’s ability to negotiate, structure, monitor and enforce agreements for the determination and payment of royalties, actual or potential litigation, changes in tax laws, interest rates and access to capital markets, political, economic and financial market conditions in various countries and regions and capital expenditure requirements.

More information about potential factors that could affect ARM’s business and financial results is included in ARM’s Annual Report on Form 20-F for the fiscal year ended 31 December 2007 including (without limitation) under the captions, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which is on file with the Securities and Exchange Commission (the “SEC”) and available at the SEC’s website at www.sec.gov.

ARM社概要
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※ARMはARM社の登録商標です。ARM7、ARM9、ARM11、CortexとMaliはARM社の商標です。その他のブランドあるいは製品名は全て、それぞれのホールダーの所有物です。「ARM」とは、ARM Holdings plc、その事業会社であるARM Limited、各地域の子会社であるARM Inc.、ARM KK、ARM Korea Ltd.、ARM Taiwan Limited、ARM France SAS、ARM Consulting (Shanghai) Co.Ltd.、ARM Belgium N.V.、ARM Germany GmbH、ARM Embedded Technologies Pvt. Ltd.およびARM Norway, AS の全部または一部を意味します。



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秋澤 知子、上野 素子
TEL:03-5210-1981     FAX:03-5210-2005