Arm reports record royalties but total revenues slide

Chip designer Arm reported record revenues for its latest quarterly trading update as it continues to diversify the business beyond licensing. For its second quarter ending 30 September - Arm’s 2022 financial year ends in March 2023 somewhat counterintuitively - royalty revenues jumped to $463.2 million from $378.2 million in …

[John Smith 19]

So what does that actually mean?

Baffled.

[pimppetgaeghsr]

Re: So what does that actually mean?

It means many licenses were sold to so customers could decouple themselves from an NVIDIA owned ARM who would likely scalp the price and lock you into goodness knows what else.

It also means hardware sales are good up until at least this quarter. Who knows going forward. Likely a glut of hardware soon.

[Justthefacts]

Re: So what does that actually mean?

Licenses are earned when customers design-in ARM cores, when they *start* new products/projects. But Royalties are earned as the companies sell chips in ongoing product lines.

Compared to this time last year, two things happened: the exuberance of the chip-sector turned over, hence fewer design starts, fewer licenses. But also, the supply chain issues have eased, more chips actually shipped, royalties increase.

Predictable consequences of known market-data rather than ARM-specific, so the share price didn’t move much on the news. If you want something specific, you could argue that maybe this years new ARM cores didn’t give enough performance boost to tempt anyone to buy new licenses for design upgrades. But AFAIK, this quarter there were very few design starts, so no special explanations needed.