Chip designer ARM Holdings beat second-quarter expectations helped by demand for its latest processors and graphics technology.
In the first set of results since Simon Segars took over as chief executive from Warren East on July 1, the Cambridge-based company reported pre-tax profit of £86.6m on revenue up 26 per cent £171.2m, both ahead of forecasts.
ARM has outpaced the wider semiconductor market for the past five years or so, helped by the dominance of its processor architecture in smartphones and tablet computers.
There had been some signs of softness at the top end of the smartphone market, marked by weaker than expected sales of Samsung's flagship Galaxy S4 smartphone, but Apple came to the rescue comfortably beating forecasts for iPhone sales yesterday (see other story).
Finance Director Tim Score said today that he expects the smartphone market to remain strong, though the 50 per cent-plus growth rates of recent years are easing down.
But ARM does not rely on the top end of the market, Score said. "All smartphones contain more ARM technology than less sophisticated phones and therefore generate higher royalties."
ARM said its partners signed 25 licences for its technology in the quarter, including five for its latest Cortex-A designs and seven for its Mali graphics technology.
Processor design licensing revenue rose 34 per cent year on year to £56.9m, comfortably beating market expectations. Analysts at Liberum expected 18.7 per cent growth.
The company has been increasing its share of the graphics processing market, and yesterday Samsung said it had selected Mali for its latest high-end processor, ousting rival Imagination Technologies.
Royalties from chips shipped by partners, such as Qualcomm and Texas Instruments, reported a quarter in arrears, rose 26 per cent year-on-year to £77.7m, broadly in line with expectations.
ARM reiterated its guidance for full-year revenue to at least meet market expectations and Score said he expects analyst consensus to rise after the second-quarter results.
Analysts expected the company to report pre-tax profit of £82.5m on revenue of £165m for the quarter, according to a company-supplied consensus.