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Arm still strong despite SoftBank loss as shipments pass a quarter of a trillion

Meanwhile, parent company continues to bleed billions

Arm is claiming strong royalty and licensing growth for the last quarter of 2022, plus revenue growth in all its target markets, while parent SoftBank reports another quarterly loss due to the volatile tech sector.

The chip designer reported total revenue of $746 million for the third quarter of its financial 2022 to the end of December, up 28 percent against the same period last year and also up on the $655.85 million for the previous quarter.

This good fortune can perhaps be attributed to an uptick in licensing revenue to $300 million during the quarter, up 65 percent year-on-year and also up significantly over the $192.7 million reported for the second quarter.

Arm said that its licensing benefited from new strategic long-term agreements with four key customers. It did not identify these, but listed them as an automotive OEM, a cloud service provider, a leading microcontroller manufacturer, and a vendor of semiconductors for consumer electronics.

However, Arm also trumpeted recent wins including AWS introducing the Arm-based Graviton3E processor, so we can probably guess who that cloud service provider is.

Royalty revenues stood at $446 million, which Arm stated as being up 12 percent on the same period a year ago, but it was also down by nearly 4 percent from the $463.2 million the company reported during the previous quarter.

The chip designer claimed that revenue here was driven by strong demand for Arm-based server technology and Arm-based chips in the automotive sector, as well as Armv9 processor technology gaining traction in premium smartphones.

Arm CEO Rene Haas said that the results were "a testament to the hard work of every team across the business and their continued dedication to building the future on Arm."

Hard work that was rewarded by the company reportedly laying off around 20 percent of its UK workforce last year, as we covered at the time.

Haas claimed that the total number of Arm-based chips that have shipped globally has now passed more than 250 billion, or a quarter of a trillion, and said that the company was now poised to make an even greater impact.

"The world's datacenters, IoT systems, automobiles and next-generation consumer devices all need more and more power efficient computing capabilities, fueling the long-term demand for Arm technology and innovation," he claimed.

Meanwhile, The Guardian newspaper claimed that the UK's Financial Conduct Authority (FCA) has offered to relax some reporting rules in an attempt to persuade Arm's owner, SoftBank, to consider listing the company on the London Stock Exchange for its initial public offering (IPO) in addition to New York's Nasdaq.

According to the article, Arm was concerned that FCA rules on related party transactions would require it to report on any dealings it had with either SoftBank itself or the myriad other companies the Japanese investment outfit has a stake in.

This follows news last month that Prime Minister Rishi Sunak had met Arm CEO Rene Haas at Downing Street to discuss the matter, with SoftBank founder and CEO Masayoshi Son joining the meeting remotely.

SoftBank itself reported a $5.9 billion net loss for its Q3 FY2022, with its two Vision Fund investment vehicles alone losing about ¥653 billion ($5 billion), owing to a fall in the valuations of tech companies over recent months such as the hundreds of startups SoftBank has a stake in. ®

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