The Arm Ltd logo and a U.S. flag can be seen in this illustration, taken on March 6, 2023 (REUTERS/Dado Ruvic/Illustration/File photo). Amid a slowdown in smartphone sales, Arm Holdings Ltd, owned by SoftBank Group Corp, reported a 1-percent decline in annual revenue. The company’s initial public offering (IPO), expected to be the largest of the year, aims to revive a lackluster IPO market. Arm has been resilient in the chip industry downturn and is expanding into thriving segments like cloud computing. In the fiscal year ending March 31, Arm’s sales decreased to $2.68 billion due to a slump in global smartphone shipments. For the quarter ending June 30, sales fell 2.5 percent to $675 million. More than 50 percent of Arm’s royalty revenue in the last fiscal year came from smartphones and consumer electronics. Despite this, Arm’s revenue decline suggests an increase in its per-chip rates. The company has not disclosed the number of shares it plans to sell or the sought-after valuation. Previous reports suggest that SoftBank intends to sell around 10% of Arm’s shares and seek a valuation between $60 billion and $70 billion. Arm initially aimed to raise $8 billion to $10 billion from the IPO but is now expected to raise less capital after SoftBank acquired the remaining 25-percent stake in Arm from its Saudi-backed Vision Fund. Arm, based in the UK, was publicly listed until SoftBank took it private in 2016 for $32 billion. This IPO attempt follows the collapse of a deal to sell Arm to Nvidia Corp for $40 billion. Arm generates revenue from licensing fees and royalties on each chip sold by its customers. The company has been growing its royalty revenues, with potential for further growth in the newest version of its technology. Arm’s chip designs dominate the smartphone industry and are utilized in Apple laptops and some Windows machines. Arm is also gaining market share in cloud computing, with 10 percent of the market. However, it has yet to make significant progress in the artificial intelligence (AI) market, which is dominated by Nvidia. Arm does offer an Arm-based processor as part of Nvidia’s “superchip” that combines AI and traditional central processing. Arm revealed that 24 percent of its revenue came from China in the past fiscal year. The company expects declining royalty and licensing revenues from China due to export controls and a downturn in the Chinese economy. SoftBank has held talks with several tech companies, including Amazon.com and Nvidia, about potential investment in Arm’s IPO. Arm’s listing is expected to energize the IPO market, with other companies such as Instacart, Klaviyo, and Birkenstock preparing to go public. Arm plans to list on the Nasdaq under the ticker symbol ‘ARM‘, with Barclays, Goldman Sachs, JPMorgan Chase, and Mizuho Financial Group serving as lead underwriters. Arm has not chosen a traditional “lead left” bank and will evenly distribute underwriter fees among the top four banks.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
