ARM share price: Group updates on first-quarter performance

ARM Holdings (LON:ARM) has this morning posted its first-quarter results.

**Highlights from the company statement:**
Group revenues in US$ up 14% year-on-year (£ revenues up 22% year-on-year)
· Processor royalty revenues in US$ up 15% year-on-year, outperforming the industry by 18pp1
· Normalised operating expenses were impacted by weaker sterling; at constant exchange rate normalised operating expenses were 2% higher than Q4 2015, and around the top end of the guidance range2

· Normalised PBT and EPS up 14% and 15% year-on-year respectively
Outlook
At the start of 2016, ARM has seen its current technology gaining share in target end-markets, and strong demand for our next generation of products from a wide range of companies. The licensing pipeline for the rest of the year is robust, with leading companies looking to license ARM technology for their next generation products. We expect that ARMv8-A technology will continue to penetrate in mobile and enterprise markets, and the higher royalty rate earned on these products will underpin future royalty revenues.

Macroeconomic uncertainty remains, and could influence consumer and enterprise spending in 2016, potentially impacting semiconductor sales and industry confidence. Based on current conditions in the semiconductor industry, we expect Group dollar revenues for the full year to be in line with market expectations.
Simon Segars, Chief Executive Officer, said:
“Devices are increasingly being improved by first becoming digital, and then smart, and then connected. This is generating huge amounts of data that needs to be protected, transmitted, managed and stored across the internet. These trends are creating fantastic opportunities for ARM and our Partners. They are driving our licensing, as more companies need access to smart processors to build intelligence into more products, and they will drive future royalty revenue as more consumers and enterprises choose to buy smarter and more connected products.

At our Capital Markets Day in September, we announced a step-up in our investment plans to accelerate share gains in markets such as networking infrastructure and servers, and to create new products that will take advantage of opportunities in the Internet of Things (IoT). In line with those plans we have increased investment in R&D as we develop the next generation of processor, physical IP and on-chip systems technologies. We have also increased investment in support of our ecosystem partners; and we are assisting OEMs and end-users to test and build ARM-based systems, especially in new markets. The future returns on these investments remain in line with our expectations. They will drive our future royalty and license revenue growth, and enable us to extend our opportunities and to create new revenue streams.”
As of 07:06 BST, Wednesday, 20 April, ARM Holdings plc share price is 964.00p.