ARM under pressure from currency conversion -

ARM under pressure from currency conversion


Cambridge, UK — In the twelve months ended 31 December 2003 revenues at ARM Holdings fell to of £128.1million, compared to £150.9 million in 2002. Profit before taxation fell to £28.4million from £45.4million in 2002.

Warren East, Chief Executive Officer of ARM, said: “After resetting our cost base at the start of Q4 2002, 2003 has been a year of operational stability and gradually improving financial performance. Our decision to maintain high levels of research and development expenditure during the protracted industry downturn has enabled us to introduce a number of new products in the year based on the innovative technologies we have developed. These are already driving license revenue and underpin our confidence for revenue growth during 2004.”

In the fourth quarter, revenues at £34.0million, were up from £31.7million in Q3 2003. Sixteen licenses for microprocessor cores were signed in the quarter, following 16 in Q3. Nine new partners signed licenses in the quarter

Royalty revenues were £12.8million with record unit shipments of 236million units, up from £11.0million and 188million units in Q3 2003.

So during the last quarter of 200 3, ARM maintained the higher level of licensing activity seen in the third quarter and achieved record royalty results, both in terms of revenues and unit shipments. As a consequence of the stronger licensing performance in the second half, the backlog (defined as the aggregate value of contracted business not yet recognised in the profit and loss account) at the end of 2003 was higher than at the start of the year and at a similar level to the end of Q3 2003.

With approximately 90% of ARM's revenues being earned in US dollars and costs being predominantly sterling denominated, the ongoing weakness of the US dollar continues to impact its results.

A total of 51 licenses for microprocessor cores were signed in 2003, comprising 25 multi-use licenses and 26 per-use licenses. 26 new companies joined the ARM partnership in the year, bringing the total number of semiconductor partners at the end of 2003 to 128.

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