I used to hold ARM for many years and it was my first 20 bagger. I have a soft spot in my heart for ARM as they were the ultimate little company that could.
When it was brought back to the public market I didn’t buy into the story as I saw revenue as being flat to single digit growth but that was entirely driven by price increases and actually masking volume declines. This doesn’t correlate with the revenue growth picture this latest quarter is suggesting so maybe I have to go back and re-evaluate. Or maybe they have raised prices again.
Whatever the story is I urge you to look at not just revenues with ARM as they are a very different model to other semiconductor companies as they are a fabless IP company.
Firstly you have to look at license vs royalties. Licence revenues are one off, royalties are indefinite.
Secondly you have to track the underlying volume growth rather than top line revenue growth as that represents the real state of the business.
Third you have to look at the cents/unit as this is important to see whether their innovation is producing more value or whether they are achieving volumes in low value commoditised sections of the market place.
Will go back and take a look to see if there is more to this story when I can.
Cheers
Ant