Arm reports record revenue as parent SoftBank posts net loss of $23 billion
Arm is one of the few bright spots for the troubled Japanese tech investment bank
Chip designer Arm has reported record revenues for the first quarter, ending June 30, making it one of the bright spots for Japanese parent SoftBank Group which reported an unprecedented $23.5 billion loss for the same period.
Arm's strategy of expanding into sectors other than mobile, such as automotive and infrastructure, is paying off, according to the firm, as robust growth is being seen in all new target markets.
Arm announced record total revenue of $719 million for Q1 FY 2022, an increase of 6% from the previous quarter. Chip royalties were $453 million, a record high and a 22% increase over the same period in 2021.
Arm said that it has shipped more than 7 billion Arm-based processors in the last quarter.
"Arm continues to enable our ecosystem with compute performance and efficiency leadership through a transformed strategy," said Rene Haas, CEO, Arm.
Arm's revenue last year was $2.7 billion, up 35% from the previous year.
SoftBank is considering taking Arm public in both New York and London, after a $40 billion deal with US tech giant Nvidia failed earlier this year.
On Monday, the Japanese conglomerate reported a net loss of ¥3.16 trillion ($23.4 billion) for the quarter that ended in June, the biggest loss in SoftBank's history.
The SoftBank Group invests in businesses via its investment arm, Vision Fund, which suffered a net loss of ¥2.3 trillion ($17 billion) as stocks plunged throughout the world due to worries about inflation and interest rate increases.
Following a record loss on falling portfolio valuations and currency losses, SoftBank CEO Masayoshi Son plans to implement significant cost-cutting measures at his Japanese conglomerate and its Vision Fund investment arm, according to Bloomberg.
Son said at a news conference after the results that "the loss is the largest in our corporate history, and we take it very seriously."
He continued: "The cost-cutting efforts will have to include a reduction in head count - something I've made up my mind to do."
Numerous firms have received funding from the SoftBank Vision Fund, including well-known companies such as ByteDance, Uber and Swedish bank Klarna.
However, the decline of the world stock markets continues to impact SoftBank investments.
Three of SoftBank's largest portfolio firms, the robotics company AutoStore, the e-commerce firm Coupang and the AI company SenseTime Group, all saw a decline in share prices in the April-June period.
In an effort to bring its share price more closely in line with its net asset value, SoftBank said that it would buy back up to ¥400 billion of its own shares over the next year.
Discussions to sell asset manager Fortress Investment Group have also started. Fortress was acquired by SoftBank in 2017 for $3.3 billion, but it had to give up operational control of the business in exchange for US clearance of the deal.