SoftBank-backed chip designer Arm Holdings disclosed in its paperwork for a U.S. initial public offering (IPO) that is expected to be the largest listing of the year.
Manya Saini, Jaiveer Shekhawat, and Stephen Nellis for Reuters:
The British firm has survived the chip industry downturn better than most and is moving into segments that are still booming, such as cloud computing.
For the year ended March 31, Arm’s sales fell to $2.68 billion, hurt mainly by a slump in global smartphone shipments. Sales for the quarter ended June 30 dropped 2.5% to $675 million.
Arm said more than 50% of its royalty revenue for the most recent fiscal year came from smartphones and consumer electronics. The global smartphone market is on track to hit a decade low this year, according to Counterpoint Research.
Arm’s modest decline in revenue, despite heavy reliance on smartphones for royalties, suggests its per-chip rates have increased.
The company, whose chip technology powers most smartphones including iPhones, did not reveal the number of shares it was planning to sell and the valuation it would seek.
Reuters has previously reported that SoftBank was planning to sell about 10% of Arm’s shares in the IPO and seek a valuation of between $60 billion and $70 billion for the chip designer.
MacDailyNews Take: A $70 billion market value would put Arm at No.115 on the list of the largest public listed companies in the S&P 500 index ranked by market capitalization, just ahead of Northrop Grumman.
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