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ARM Holdings, plc (ARMH)

- NASDAQ
  • Wed, Jul. 22, 2:22 PM
    • ARM (NASDAQ:ARMH) has slumped to its lowest levels since January after posting roughly in-line Q2 results and stating it expects 2015 results to match market expectations.
    • Tech licensing revenue only rose 3% Y/Y in Q2, while royalty revenue (based on Q1 shipments) rose 30% to $175.9M on the back of a 26% Y/Y increase in ARM-based chip shipments to 3.4B. Annual chip shipment growth slowed a bit from Q1's 31%.
    • A record 54 processor core licenses were inked, up from 30 in Q1 and 41 a year ago. 20 of the licenses were for low-power Cortex-M CPU cores (aimed at embedded/IoT devices), 15 were for the more powerful Cortex-A, 8 for the Cortex-R (used for real-time processing), and 9 for Mali GPU cores. 7 licenses were taken out for the 64-bit ARMv8-A architecture.
    • Weighing on license sales growth: No costly architectural licenses were taken out. ARM still expects "medium-term" license growth of 5%-10%.
    • Software/tool revenue rose 4% Y/Y to $13.7M, and services revenue 11% to $16.5M. Operating expenses rose 13% to £99.3M ($154.9M).
    • Canaccord's Matt Ramsay remains bullish: He notes backlog rose 2% Q/Q, and predicts royalty growth will remain strong thanks to "much broader contributions from higher-royalty-rate ARMv8 and big.LITTLE mobile processors and share gains in Mali graphics."
    • Apple and Linear Technology's calendar Q2 reports could be contributing to ARM's selloff - many chipmakers/ARM licensees are also posting steep losses.
    • Q2 results, PR, earnings slides (.pdf)
    | Comment!
  • Wed, Jul. 8, 11:37 AM
    • Chip stocks are underperforming as the Nasdaq registers a 1.2% decline. The Philadelphia Semi Index (SOXX -2.6%) is now down 13% from a June 1 peak of $101.80, and 4% YTD; it's still up 87% from a Nov. 2012 low of $47.58.
    • Plunging Chinese equity markets could be weighing on the group. With retail Chinese investors having set up brokerage accounts en masse over the last year, there are plenty of concerns about the reverse wealth effect of a crash. The Economist reccently downplayed those worries, noting a relatively modest 15% of Chinese household assets are invested in stocks.
    • Major decliners among chip developers include Skyworks (SWKS -4.9%), Qorvo (QRVO -5.6%), InvenSense (INVN -5.6%), NXP (NXPI -4.7%), Freescale (FSL -4%), MoSys (MOSY -9.4%), AppliedMicro (AMCC -5.1%), Cavium (CAVM -3.8%), and Silicon Motion (SIMO -6.4%). SIMO also fell yesterday after favorably adjusting its Q2 sales guidance. Skyworks and Qorvo sold off yesterday morning before rebounding in afternoon trading.
    • Other names tied to the industry that are seeing heavy selling pressure include ARM (ARMH -4%), TowerJazz (TSEM -5.1%), UMC (UMC -4.4%), Veeco (VECO -4.3%), and Axcelis (ACLS -4.6%).
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 6 Comments
  • Fri, Jun. 26, 10:26 AM
    • Bernstein's Pierre Ferragu has cut ARM (NASDAQ:ARMH) to Underperform.
    • The downgrade comes a day after the CPU core giant closed less than a dollar away from a 52-week high of $54.82. Shares remain up 12% YTD.
    | Comment!
  • Wed, May 27, 3:00 PM
    • Chip stocks are posting outsized gains (SOXX +4%) amid a 1.3% increase for the Nasdaq after the WSJ reported Avago and Broadcom are in advanced merger talks, sparking hopes for further M&A.
    • A Broadcom/Avago deal would be worth ~$67B at current valuations, easily making it the largest in the chip industry's breathless consolidation wave. It would also touch markets ranging from smartphones to set-tops to servers to switches/routers.
    • Notable gainers include Avago RF chip peers Skyworks (SWKS +4.3%), Qorvo (QRVO +3.2%), and Anadigics (ANAD +4.9%). Others include Micron (MU +3.8%), SanDisk (SNDK +4.3%), NXP (NXPI +3.5%), Silicon Motion (SIMO +8.3%), Cirrus Logic (CRUS +4.8%), STMicroelectronics, (STM +3.4%), Synaptics (SYNA +3.4%), Atmel (ATML +2.8%), Cavium (CAVM +4.5%), Intersil (ISIL +4.6%), Semtech (SMTC +3.9%), ON Semi (ON +3.8%), Microsemi (MSCC +4.4%), and IDT (IDTI +4.2%).
    • Non-chipmakers tied to the industry are also doing well. Standouts include ARM (ARMH +4.4%), Amkor (AMKR +4.6%), ASML (ASML +3.1%), and Rambus (RMBS +3.3%).
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 41 Comments
  • Wed, Apr. 29, 1:26 PM
    • European tech firms Nokia (NOK -2.5%), Alcatel-Lucent (ALU -4.4%), ARM (ARMH -2.8%), and STMicroelectronics (STM -2.6%) have sold off following broad declines for continental exchanges.
    • The U.K.'s FTSE 100, France's CAC 40, and Germany's Deutsche Borse have respectively fallen 1.2%, 2.6% and 3.2%, and the EURO STOXX 50 index has dropped 2.7%. Over in the U.S., the Nasdaq is down 0.9%, and the S&P 0.7%.
    • The selloff has come amid a 1.5% gain for the euro against the dollar, continuing a recent rebound. The euro/dollar exchange rate is back up to 1.11. It has also coincided with sharp increases in European debt yields.
    • Nokia reports earnings tomorrow morning, and merger partner Alcatel-Lucent (past deal coverage) on May 7. ARM rallied last week in response to a Q1 revenue beat driven by strong royalty growth.
    | 11 Comments
  • Tue, Apr. 21, 2:49 PM
    • ARM (NASDAQ:ARMH) is less than $1 away from a 52-week high of $54.64 after beating Q1 revenue estimates on the back of a 31% Y/Y increase in processor royalty revenue (26% excluding a one-time year-ago event) to $167.5M, a sharp acceleration from Q4's 16% growth. Physical IP royalty revenue rose 5% to $23.9M.
    • Royalties were collected on the Q4 shipment of 3.8B ARM-based chips (+31% Y/Y). Both strong mobile chip sales (aided by smartphone growth and the end of an inventory correction) and a 40% increase in embedded shipments (microcontrollers and smart cards were "particularly strong") played a role.
    • Licensing revenue was softer, growing only 3% to $133.2M. Processor licensing fell 2% to £109.3M; physical IP licensing grew 31% to $23.9M. 30 processor licenses were signed (5 from new clients), down from 53 in Q4 and up from 26 a year ago. ARM still expects 5%-10% annual license revenue growth "in the medium term."
    • Software/tool revenue fell 9% to $14.7M; service revenue rose 6% to $15.6M. Operating expenses rose 19% Y/Y to £100M ($149M), with headcount rising 15% to 3,397. Free cash flow totaled £68.5M ($102M).
    • Mobile/connectivity products made up 46% of processor shipments, embedded 34%, enterprise 14%, and home products 6%. The high-end Cortex-A CPU core series accounted for 18% of shipments, and the low-power Cortex-M 43%. 8 Cortex-A and 16 Cortex-M licenses were respectively taken out, as were Mali GPU core licenses a 1 costly architectural license.
    • ARM expects Q2 revenue to be "in line with current market expectations." Royalties are expected to drop Q/Q due to seasonality.
    • Q1 results, PR (.pdf), slides (.pdf)
    | Comment!
  • Tue, Apr. 21, 6:16 AM
    • ARM Holdings (NASDAQ:ARMH): Q1 EPS of £0.07 in-line.
    • Revenue of $348.2M (+14.1% Y/Y) beats by $6.48M.
    • Shares +5.7% PM.
    • Press Release
    | Comment!
  • Wed, Mar. 25, 12:03 PM
    • Chip stocks are particularly hard-hit  (SOXX -3.6%) on a rough day for tech. The Nasdaq is down 1.3%, and the S&P 0.7%. Going into today, good earnings reports and ongoing M&A activity had led the Philadelphia Semi Index to rise 10% from its Jan. 30 close; the index remains up nearly 2x from its fall 2012 lows.
    • AMD (AMD -7.2%) is a major decliner following a UBS downgrade. AMD rival/GPU giant Nvidia (NVDA -5.2%) and memory giant Micron (MU -3.7%) are also selling off, as are merger partners NXP (NXPI -3.8%) and Freescale (FSL -3.4%), RF chipmakers Avago (AVGO -5.2%), Skyworks (SWKS -5.3%), and Qorvo (QRVO -7.1%), LED/RF chipmaker Cree (CREE -4.1%), and high-flying video processor developer Ambarella (AMBA -4.3%).
    • Other decliners include telecom chipmakers/ARM server CPU vendors Cavium (CAVM -4.8%) and AppliedMicro (AMCC -4.4%), microcontroller vendors Atmel (ATML -3.5%), Cypress (CY -5.5%), and STMicroelectronics (STM -3.5%), voice processor developer Audience (ADNC -3.7%), analog/mixed-signal chipmakers Linear (LLTC -3.7%), Maxim (MXIM -3%), and Intersil (ISIL -3.5%), FPGA maker Lattice (LSCC -3.9%), and mixed-signal/wireless charging IC developer IDT (IDTI -5.4%).
    • Chip equipment, IP, and foundry providers are also underperforming. Big decliners include ARM (ARMH -4.4%), KLA-Tencor (KLAC -4.2%), Lam Research (LRCX -5.4%), ASML (ASML -4.1%), TowerJazz (TSEM -4.3%), Mattson (MTSN -4.5%), Ultratech (UTEK -4.7%), and Tessera (TSRA -6.1%). ASML has been downgraded to Hold by Banco Santander.
    • TSMC (TSM -4.6%) is among the decliners in spite of a Digitimes report stating the foundry giant's sales are expected to rise 0%-5% Q/Q in Q2 - consensus is for a 2% drop - with strong Apple A8 CPU orders offsetting soft Qualcomm Snapdragon 810 orders.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 19 Comments
  • Wed, Feb. 18, 1:35 PM
    • Fresh off acquiring IBM's x86 server unit, Lenovo (OTCPK:LNVGY) plans to create an ARM (NASDAQ:ARMH) server prototype for its IBM-developed NeXtScale high-density server line (used in scale-out data centers running Web/cloud, HPC, and analytics workloads). The effort is part of a collaboration with a U.K. HPC R&D lab.
    • Lenovo's server will run on Cavium's (NASDAQ:CAVM) ThunderX ARM server CPU line, which supports up to 48 cores per chip and clock speeds of up to 2.5GHz. Lenovo asserts 12 of its ARM servers will support up to 1,152 CPU cores and occupy a modest 6U of rack space.
    • The deal gives Cavium a high-profile client as it battles against AppliedMicro, AMD, Qualcomm, and others in the budding ARM server CPU market. Cavium has tried to differentiate itself from rivals in part by creating ThunderX CPUs optimized for storage, networking, and security appliances, as well as by providing high levels of I/O bandwidth. Shares have made new highs.
    | Comment!
  • Wed, Feb. 11, 4:29 AM
    • "License revenue momentum has continued throughout the year," said ARM Holdings' (NASDAQ:ARMH) CFO Tim Score, as the company posted strong Q4 results.
    • With processor royalty revenue up 16% Y/Y, net profit came in at £72.8M ($111M), compared to a loss of £6.2M a year earlier.
    • The semiconductor giant also said it expects revenue to be up 10% Y/Y in Q1, reflecting revenue stemming from robust sales of Apple's iPhone 6.
    • ARMH +3.5% premarket
    | Comment!
  • Wed, Jan. 21, 12:12 PM
    • Citi's Amit Harchandani has upgraded ARM (ARMH +1.9%) ahead of its Feb. 11 Q4 report, and upped his target by £3.50 to £12 (shares currently go for £10.43 in London).
    • Harchandani thinks ARM's CPU cores will maintain a 75%+ tablet share and a 90%+ smartphone share in the face of Intel's efforts to gain ground, and forecasts a ~33% free cash flow CAGR from 2014-2017. He also sees room for ARM to "optimize the balance sheet and enhance capital allocation."
    • ARM, long afforded steep multiples on account of its near-monopoly position in the CPU core IP space, currently trades for 33x 2015E EPS. The 2015 revenue growth consensus is at 16.9%.
    | 1 Comment
  • Tue, Jan. 6, 1:36 PM
    • Up 30% in 2014, the Philadelphia Semi Index (SOXX -2.2%) has fallen over 4% thus far in 2015. Today's decline comes as the Nasdaq drops 1.6%.
    • Many names are posting 3%+ losses. SWKS -4.2%. QRVO -5.8%. AMAT -3.4%. KLAC -3.1%. SYNA -5.4%. IPHI -9%. ARMH -5.4%. SIMO -4.5%. MCRL -3.9%. AMCC -3.9%. CODE -5.1%. CY -4.6%. QUIK -7.9%.
    • This morning, Gartner estimated global chip sales rose 7.9% in 2014 to $339.8B, a little less than the 9.4% recently estimated by IHS. Sell-side firms have forecast industry growth will fall to the ~5% range in 2015.
    • Gartner thinks memory sales rose 16.9%, fueled by a 31.7% increase in DRAM sales. All other chip markets rose by 5.4%, a marked improvement from 2013's 0.8%. Intel (15% share) and Samsung (10.4%) claimed over a quarter of industry sales between them. Qualcomm (5.6%), Micron (4.9%), and SK Hynix (4.7%) rounded out the top-5.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 3 Comments
  • Dec. 3, 2014, 1:48 PM
    • The Philadelphia Semi Index (SOXX +1.7%) is making fresh highs after Microchip (MCHP +4.1%) slightly upped its calendar Q4 guidance, and stated it continues to "see an improvement in our bookings and billings since our earnings call on October 30, 2014."
    • Chip stocks had also jumped following that earnings call, during which Microchip said it believed the inventory correction that triggered an Oct. 9 warning (and a major chip stock selloff) was mostly over. While a slew of chipmakers provided soft Q4 guidance after Microchip's warning, fears of a major correction didn't pan out.
    • The group outperformed a bit yesterday after Cypress (CY +2.9%) announced it's merging with Spansion (CODE +2.5%), continuing the chip industry's consolidation wave. Several firms have upgraded Cypress and/or Spansion in response, praising the deal's cost synergies.
    • Notable gainers include not only chipmakers, but also chip equipment, test/assembly, and IP licensing firms: ARMH +3.8%. AMBA +3%. MX +9%. MXIM +4.2%. AMCC +3.5%. ADI +3.1%. SIMG +3.7%. AMKR +4.2%. SPIL +3.3%. SYNA +2.7%. ATML +3.7%. ENTR +3.8%. AMAT +2.7%. KLAC +2.5%.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    • Last week: Chip stocks rally after ADI's earnings
    | 10 Comments
  • Oct. 31, 2014, 11:31 AM
    • Three weeks after providing a calendar Q3 warning that triggered a massive chip stock rout, Microchip (MCHP +7.3%) has provided Q4 guidance that's in-line with lowered estimates. The microcontroller vendor, which has often seen trends emerge ahead of peers, also said it saw most of its inventory correction in Q3, and expects Q4 sales to be just "slightly below typical seasonal levels."
    • Chip stocks are up strongly (SOXX +4%) on a day the Nasdaq is up 1.4%. Since Microchip's warning, a slew of analog chipmakers and microcontroller firms (e.g. Atmel, Freescale, STMicro, Intersil, Linear) have offered light Q4 guidance, and other firms have reported seeing high-end Android weakness (e.g. Synaptics, Cirrus Logic, Amkor).
    • On the other hand, several mobile chipmakers (Skyworks, RF Micro, TriQuint, Silicon Motion), some of which have decent iPhone exposure, have provided strong results and/or guidance. Other chipmakers, such as Broadcom, Texas Instruments, and Xilinx, have rallied after delivering in-line guidance.
    • Susquehanna's Chris Caso: "By now, we think it’s clear that the weakness MCHP saw in September is not company specific ... The question now is if the full extent of the weakness has been dialed into estimates. If it has, then this would be among the shortest and mildest downturns in many years."
    • Notable gainers: SNDK +3.9%. MU +4.1%. AMAT +3.9%. TXN +4.7%. NXPI +3.9%. NVDA +3.5%. MXIM +4.7%. LLTC +5.1%. FCS +9.6%. FSL +8.8%ADI +6.5%. TQNT +6.8%. RFMD +6.5%. ATML +5.9%. AVGO +5.1%. MRVL +4.7%. AMCC +8.9%. BRCM +3.6%. TSM +4.4%. ARMH +3.3%.
    • Intel (INTC +3.5%) has recovered most of the losses it saw yesterday due to Intesil's (ISIL +3.3%) results and guidance, and related comments about a PC chip inventory correction.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 17 Comments
  • Oct. 21, 2014, 9:14 AM
    | 3 Comments
  • Oct. 21, 2014, 5:57 AM
    • ARM Holding's (NASDAQ:ARMH) Q4 guidance is "underwhelming," SocGen says, given previous expectations of a strong H2.
    • The drop in value per new license sold implies that most of ARM's larger deals have been completed, firm says.
    • Any positive aura from Apple's iPhone strength is "more than offset" by ARM's weakness in the broader smartphone market.
    • SocGen maintains Sell rating with implied 18% downside.
    • Shares -3.7% in London.
    | Comment!
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Company Description
ARM Holdings PLC designs microprocessors, physical IP and related technology and software, and sells development tools to enhance the performance and energy-efficiency of high-volume embedded applications.