UK Edition
Arm profits halve under Softbank ownship
British chip designer Arm has seen its annual profits almost halve under Japanese ownership following a wave of expansion under the telecoms giant Softbank Group.
Cambridge-headquartered Arm reported profits after adjustments of £325m, down from £604m last year as the company increased headcount and R&D investments under its new owners. For the financial year ending in March 2018, Arm said revenues had increased to £1.37bn from £1.27bn last year, up around 8pc.
The results represent the company’s second year under Softbank since it was acquired for £24bn in 2016, joining the rapidly expanding empire controlled by Softbank chief executive Masayoshi Son.
In the three months to March 2018, Arm reported costs increased by a third to £253m. Headcount at Arm increased by 21pc over the year, raising the number of employees by 1,000 to more than 5,800 people.
Arm said close to 80pc of its new hires were engineers, significantly expanding its research capacity.
The company’s revenues from royalties in semiconductors grew around 12pc, although Arm said this would be subject in future to movements in the global semiconductor market, which analysts believe to be slowing.
Arm’s future could see the company rejoin the public markets, according to Mr Son. In Softbank Group’s earnings call, Mr Son said: “Five years later or seven years later, maybe from that timing we will consider relisting this company again.
“In that moment, Arm will be reborn and also they will become an even higher profitable company.”
Simon Segars, Arm chief executive, said last month: "Arm may be owned by a Japanese parent company now but we’re still a large employer in tech in the UK.”
In Softbank’s results for its consolidated group, the company reported Arm fell to a loss, reported in Japanese yen, in earnings before interest, taxes and amortisation.
An Arm spokesman said this was due to a charge in Softbank’s results relating to the acquisition of it.