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News Release

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1st Quarter Results
ARM Holdings PLC
19 April 2006


ARM HOLDINGS PLC - RESULTS FOR THE QUARTER ENDED 31 MARCH 2006

CAMBRIDGE, UK, 19 April 2006-ARM Holdings plc ((LSE: ARM); (Nasdaq: ARMHY))
announces its unaudited financial results for the first quarter ended 31 March
2006 with total sterling revenues up 17% and normalised EPS up 34% compared to
Q1 2005.

Financial Highlights - Q1 2006

   • Total revenues £64.6m (Q1 2005: £55.0m) up 17%
   • Record normalised operating margin 35.6% (Q1 2005: 32.4%)
   • Normalised income before tax £24.7m (Q1 2005: £18.9m) up 31%
   • Normalised EPS 1.27p (Q1 2005: 0.95p) up 34%
   • £7m returned to shareholders via rolling share buyback program

Operating Highlights - Q1 2006

   • Long-term technology agreement signed with TSMC for physical IP at
     leading-edge process nodes
   • Record 572 million ARM Powered(R) products shipped, up 47% on comparable
     period last year
   • Unit growth in non-mobile segments at 68% continues to outpace growth in
     mobile at 37%
   • Record underlying PIPD royalties of £4.5 million
   • 15 processor and 9 physical IP licenses signed in the quarter
   • Order backlog flat sequentially at quarter end
   • Order backlog today higher than at start of year following early Q2
     licensing activity
   • Development Systems revenues up 38%


Commenting on the first quarter, Warren East, Chief Executive Officer, said:

'We have seen encouraging activity in both licensing and royalties this quarter.
Interest in our new Cortex family of processors continues to grow with a further
license signed in Q1 and a number of licensing discussions in progress. Our
first license agreement for the most advanced (45nm) process technology has
further strengthened our position as a leading provider of physical IP. We
continued to extend our market penetration across the span of digital products
with royalty units increasing 47% compared to the same period last year. Q1's
result further underpins our confidence that ARM will achieve another strong
performance in 2006 in line with current market expectations.'



Tim Score, Chief Financial Officer, added:


'Year-on-year growth in revenue and earnings per share of 17% and 34%
respectively has again yielded strong cash generation in the quarter. With
royalty revenues continuing to grow as a proportion of total revenues, operating
margin and cash flow are expected to increase, leaving us well-placed both to
invest in the innovative technology that drives future growth in licensing
revenue and to continue the return of cash to shareholders through share
buybacks and dividends.'



Q1 2006 - Financial Summary

                                    Normalised*                   US GAAP
--------------------      -------------------------------  --------------------
£M                         Q1 2006    Q1 2005    % Change   Q1 2006    Q1 2005
--------------------      ---------  ---------  ---------  ---------  ---------
Revenue                       64.6       55.0        +17%      64.6       55.0
Income before income tax      24.7       18.9        +31%      16.1       12.5
Operating margin              35.6%      32.4%                 22.3%      20.9%
Earnings per share (pence)    1.27       0.95        +34%      0.84       0.64
                                                           ---------  ---------
Net cash generation**         17.3        3.8       +356%
--------------------       ---------  ---------  ---------


Q1 2006 - Revenue Summary

                            Revenue (£M)                  Revenue ($M)***
---------------- --------------------------------- ----------------------------
                  Q1 2006    Q1 2005     % Change   Q1 2006  Q1 2005  % Change
---------------- --------- -----------  ---------- -------- --------- ---------
Licensing
PD                   17.3       16.3           +6%    30.0     30.0         0%
PIPD                  7.9        8.4           -6%    13.7     16.2       -15%
Total Licensing      25.2       24.7           +2%    43.7     46.2        -5%
Royalties
PD                23.2(1)    16.8(1)          +38%    40.9     31.6       +29%
PIPD               4.9(1)     4.1(1)          +19%     8.4      7.8        +8%
Total Royalties      28.1       20.9          +35%    49.3     39.4       +25%
Development
Systems               7.9        5.8          +38%    13.9     11.0       +27%
Services              3.4        3.6           -7%     6.0      6.6        -9%
Total Revenue        64.6       55.0          +17%   112.9    103.2        +9%


(1)Includes catch-up royalties in Q1 2006 of £1.1m in PD (Q1 2005: nil) and
£0.4m in PIPD (Q1 2005: £0.4m).


Current trading and prospects


During Q1, we have continued to see strong interest across the range of products
in our technology portfolio, including the new processor and physical IP
technology that ARM is bringing to market. As well as signing a strategically
important long-term technology license for 65nm and 45nm processes with TSMC, we
also signed a significant number of license agreements for a wide range of
processor cores. With a healthy sales pipeline for licensing across the
business, ongoing momentum in royalties and continued growth in development
systems sales, we remain confident in achieving another strong performance in
2006 in line with current market expectations.


CONTACTS:

Tom Buchanan/Fiona Laffan             Tim Score/Bruce Beckloff
Brunswick                             ARM Holdings plc
+44 (0) 207 404 5959                  +44 (0)1628 427800

* Normalised figures are before acquisition-related charges and other
share-based remuneration charges. For reconciliation of GAAP measures to
normalised non-GAAP measures detailed in this document, see notes 5.1 to 5.18.

** Before dividends, net cash inflow from share option exercises and share
buybacks and acquisition consideration - see notes 5.11 to 5.14.

*** Dollar revenues are based on the group's actual dollar invoicing, where
applicable, and using the rate of exchange applicable on the date of the
transaction for invoicing in currencies other than dollars. Approximately 95% of
invoicing is in dollars.

**** Each American Depositary Share (ADS) represents three shares.


Financial review
(US GAAP unless otherwise stated)

First quarter ended 31 March 2006

Total revenues

Total revenues for the first quarter of 2006 amounted to £64.6 million, up 17%
versus the same period in 2005. In US dollar terms***, first quarter revenues
were $112.9 million with an effective US dollar to sterling exchange rate in Q1
2006 of $1.75 compared to $1.88 in Q1 2005.

License revenues

Total license revenues in the first quarter were £25.2 million, representing 39%
of group revenues, compared to £24.7 million in Q1 2005. License revenues
comprised £17.3 million from the Processor Division ('PD') and £7.9 million from
the Physical IP Division ('PIPD').

Royalty revenues

Total royalty revenues in Q1 2006 were £28.1 million, representing 44% of total
group revenues, compared to £20.9 million in Q1 2005, an increase of 35%.
Royalty revenues comprised £23.2 million from PD and £4.9 million from PIPD.
Within the total of £23.2 million for PD royalties, there was approximately £1.1
million of catch-up royalties, giving underlying royalties of £22.1 million
(approximately $39 million). Total PIPD royalties of £4.9 million included £0.4
million of catch-up royalties.

Development Systems and Service revenues

Sales of development systems in Q1 2006 were £7.9 million, representing 12% of
total group revenue, compared to £5.8 million in Q1 2005, an uplift of 38%.
Service revenues in Q1 2006 were £3.4 million, representing 5% of total group
revenues, compared to £3.6 million in Q1 2005.

Gross margins

Gross margins for the first quarter, excluding the FAS123(R) charge of £0.2
million (see below), were 89.0% compared to 88.5% in Q1 2005. The positive
impact on gross margin arising from the higher proportion of total revenues made
up by royalties (44% in Q1 2006 compared to 38% in Q1 2005) is partially offset
by the higher proportion of revenues represented by development systems and by
the higher proportion of total PIPD costs charged to cost of revenues in Q1
2006.

Operating expenses and operating margin

Total operating expenses in Q1 2006 are £42.8 million compared to £37.2 million
in Q1 2005. Total operating expenses of £42.8 million in Q1 2006 include
amortisation of intangible assets of £4.6 million (Q1 2005: £4.0 million) and
£3.8 million in relation to the fair value of share-based remuneration in
accordance with FAS123(R) - 'Share-Based Payment'. As FAS123(R) is effective for
the first time in Q1 2006 and as ARM is applying the standard on the 'modified
prospective' basis, there is no directly equivalent charge in Q1 2005. Total
operating expenses of £37.2 million in Q1 2005 did, however, include a deferred
stock-based compensation charge of £2.4 million.

The total FAS123(R) charge of £4.0 million in Q1 2006 is included within cost of
revenues (£0.2 million), research and development (£2.3 million), sales and
marketing (£0.8 million) and general and administrative (£0.7 million). The
commentary on operating expenses below excludes amortisation and share-based
remuneration charges.

Operating expenses in Q1 2006 were £34.5 million compared to £35.0 million in Q4
2005 and £30.8 million in Q1 2005. The sequential reduction is partly due to a
net gain arising from foreign exchange impacts in Q1 2006 compared to a net loss
in Q4 2005.

Research and development expenses were £15.1 million in Q1 2006, representing
23% of revenues, compared to £14.7 million or 27% of revenues in Q1 2005. Sales
and marketing costs in Q1 2006 were £9.4 million, being 15% of revenues,
compared to £8.3 million or 15% of revenues in Q1 2005. General and
administrative expenses in Q1 2006 were £10.0 million, representing 15% of
revenues, compared to £7.8 million or 14% of revenues in Q1 2005.

Record normalised operating margin was achieved in Q1 2006 at 35.6%(5.1)
compared to 32.4%(5.3) in Q1 2005.

Interest receivable

Interest receivable increased to £1.7 million in Q1 2006 compared to £1.0
million in Q1 2005, due to higher average cash balances.

Earnings and taxation

Income before income tax in Q1 2006 was £16.1 million compared to £12.5 million
in Q1 2005. Normalised income before income tax in Q1 2006 was £24.7 million
(5.5) compared to £18.9 million(5.7) in Q1 2005. The group's effective tax rate
under US GAAP in Q1 2006 was 25.7% reflecting the availability of research and
development tax credits and taking into account the benefits arising from the
structuring of the Artisan acquisition.

First quarter fully diluted earnings per share prepared under US GAAP were 0.8
pence (4.4 cents per ADS****) compared to earnings per share of 0.6 pence (3.6
cents per ADS****) in Q1 2005. Normalised earnings per fully diluted share in Q1
2006 were 1.27 pence(5.15) per share (6.6 cents per ADS****) compared to 0.95
pence(5.17) (5.4 cents per ADS****) in Q1 2005.

Balance sheet and cash flow

Intangible assets at 31 March 2006 were £448.6 million, comprising goodwill of
£381.7 million and other intangible assets of £66.9 million, compared to £385.6
million and £72.3 million respectively at 31 December 2005. Goodwill is no
longer amortised under US GAAP, but is subject to review for impairment on at
least an annual basis. The intangible assets from acquisition are being
amortised through the profit and loss account over a weighted average period of
five years.

Accounts receivable increased to £61.0 million at 31 March 2006 from £55.5
million at 31 December 2005. The allowance against receivables was £2.5 million
at 31 March 2006 compared to £2.2 million at 31 December 2005. Deferred revenues
were £25.2 million at 31 March 2006 compared to £20.4 million at 31 December
2005.

After net cash generation of £17.3 million(5.11) in Q1 2006, total cash, cash
equivalents, short-term investments and marketable securities amounted to £182.3
million(5.9) at 31 March 2006.

Share buyback program

In Q1 2006, the Company purchased 5,150,000 shares at a total cost of £7.0
million. It is anticipated that the buyback program will resume after the
announcement of these results.

Operating review

Backlog

At the end of Q1 2006, group order backlog was flat sequentially with the PIPD
portion of the backlog up again on the record level reported at the end of last
quarter. Due to licensing activity early in Q2, including an additional license
being signed for the Cortex-A8 product, group order backlog is now higher than
at the beginning of the year. Whilst a small proportion of the revenue from the
Cortex-A8 processor license will be recognisable in Q2, the majority will be
recognised in future quarters.

PD licensing

15 licenses for microprocessors were signed in Q1 2006 bringing the total
cumulative number of licenses signed to 413. The mix of licenses signed in the
quarter demonstrated a healthy demand for our technologies across the portfolio
of processor cores, from the ARM7(TM) family to our latest technology, the 
Cortex family. Of the 15 licenses, five new partners took one license each: one 
per-use license for the ARM7TDMI(R) processor, two per-use licenses for the 
ARM946E-S(TM) processor and two licenses for the ARM926EJ-S(TM) processor.

The remaining 10 licenses were signed with 8 of our existing partners,
comprising four upgrade licenses and six derivative licenses. The four upgrade
licenses comprised one per-use license for the ARM922T(TM) , one term license 
for the ARM968E-S(TM) processor, one license for the ARM1176JZ(F)-S(TM) 
processor, and one term license for our latest Cortex technology, code named 
'Serval-E'. The six derivative licenses consisted of one per-use license for the 
ARM7TDMI processor, one license for the ARM7TDMI-S(TM) processor, two term 
licenses for the ARM926EJ-S processor, one license for the ARM11(TM) MPCore(TM) 
processor and one license for the ARM1176JZ(F)-S processor.

During the quarter, two significant announcements were made by ARM partners
introducing new lines of products based on our Cortex family of processors.
Firstly, at 3GSM, Texas Instruments introduced their OMAP(TM) 3 line of
application processors that incorporate the Cortex-A8 processor (Texas
Instruments New OMAP(TM) 3 Architecture Will Spark Development of a New Class of
Mobile Phone, 14 Feb 2006). This represents the first announced product to use
the Cortex-A8 processor. It is expected to sample before the end of the year
with volume production commencing in 2007. Secondly, Luminary Micro's
announcement of their Stellaris(TM) family of 32-bit microcontrollers (Luminary
Micro Announces 32-bit Microcontrollers for $1 - First to Launch Products Based
on the ARM Cortex-M3 Processor, 27 Mar 2006), represents the first product to be
announced using the Cortex-M3 processor. Products within the Stellaris family
are available today and address the needs of low cost embedded applications
migrating to 32-bit technology.

PD royalties

ARM partners shipped 572 million units in Q4 2005 (we report royalties one
quarter in arrears), up 47% on the comparable period last year. Of those unit
shipments, 35% related to units based on ARM9(TM) family technology and 2% 
related to products based on the SecurCore(TM) family of processors. Shipments of 
ARM926 processor-based product accounted for 9% of total shipments. By the end 
of Q4 2005 more than 2 million ARM11-based products had been shipped, 
representing the newest ARM technology to ship in any meaningful volume. 
Shipments of ARM11 family-based products are expected to increase gradually 
throughout 2006. One new partner commenced shipping ARM technology-based 
products in Q4 2005 bringing the total number of shippers to 69.

The mobile and non-mobile segments accounted for 63% and 37% of total shipments
respectively in Q1 2006, compared to 67% and 33% in Q1 2005. Non-mobile growth
of 68% versus the same period in 2005 continues to outpace the growth of mobile
shipments due primarily to increased shipments of applications such as hard disk
drives, home networking devices, printers, smartcards and microcontrollers. The
average royalty rate ('ARR') of 7.2 cents was marginally down on the 7.3 cents
reported in Q4 2005 due to strong growth in certain lower cost product
categories including low cost mobile handsets and Bluetooth products as well as
smartcards and microcontrollers.

PIPD licensing

In Q1, ARM signed a further nine licenses for Physical IP bringing the total
number of licenses to 219. Of the nine licenses, three were for platform
licenses to two foundries consisting of a 130nm Classic Platform and a long-term
technology agreement for physical IP on the leading edge 65nm and 45nm processes
with Taiwan Semiconductor Manufacturing Company (TSMC). This represents a
significant milestone, being the first announcement of a foundry planning to
offer ARM Physical IP for the 45nm processor node. It also serves to enhance the
long term commercial relationship between ARM and TSMC. This brings the total
number of physical IP platforms licensed to foundries and IDMs to 70.

The remaining six licenses were end-user licenses consisting of one 250nm
Classic memory compiler, one 180nm Metro(TM) cell library, two 130nm Metro(TM) 
cell libraries and two 90nm Velocity high speed PHYs. This brings the total 
number of end-user licensees for these technologies to 149.

PIPD royalties

Record underlying royalties of £4.5 million (approximately $7.8 million) were up
22% sequentially (Q4 2005: £3.7m). This further sequential growth in underlying
royalty revenues results both from the strengthening trend in wafer pricing and
capacity in Q4 2005 and the growing number of designs being manufactured by our
foundry partners.

Development Systems

In Q1 2006, we introduced the first synergistic product combining the technology
acquired with Keil in Q4 2005 with our existing tools technology. The ARM
RealView(R) Microcontroller Development Kit (RVMDK) was launched to facilitate
the migration of microcontroller development from 8-bit to ARM technology-based
32-bit microcontrollers. In the quarter, there were approximately 10,000
downloads of the free trial version of the product, giving us confidence that
incremental sales will accrue in future quarters.

Further, at the end of Q1, we introduced the next generation of our
market-leading tools technology, the ARM RealView Development Suite version 3.0
for end-to-end pre-silicon development. Version 3.0 incorporates many
enhancements which we expect to serve as a catalyst for both existing ARM
customers to upgrade their ARM development tools and for new customers to engage
with ARM. We have also seen increasing traction for our Electronic System Level
('ESL') design tools illustrated by the announcement in Q1 that Renesas has
adopted ARM ESL tools for system-on-chip ('SoC') development.

People

At 31 March 2006 we had 1,371 full time employees compared to 1,324 at the end
of 2005. Of the net increase in headcount of 47 in Q1, 20 occurred in our
Bangalore Design Centre. At 31 March 2006, the group had 588 employees based in
the UK, 499 in the US, 101 in Continental Europe, 136 in India and 47 in the
Asia Pacific Region.


Legal matters

In May 2002, Nazomi Communications, Inc. ('Nazomi') filed suit against ARM
alleging willful infringement of Nazomi's US Patent No. 6,332,215. ARM answered
Nazomi's complaint in July 2002 denying infringement. ARM moved for summary
judgment and a ruling that the technology does not infringe Nazomi's patent. The
United States District Court for the Northern District of California granted
ARM's motion, and Nazomi appealed the District Court's ruling. On 7 September
2004, the Court of Appeals for the Federal Circuit heard the appeal and issued
its decision on 11 April 2005. Because, in the opinion of the Court of Appeals
for the Federal Circuit, the District Court did not construe the disputed claim
term in sufficient detail for appellate review, the Court of Appeals for the
Federal Circuit remanded the dispute back to the District Court for further
analysis. A supplementary 'Markman' hearing was held on 11 October 2005 and we
are presently awaiting the ruling of the District Court. Based on legal advice
received to date, ARM has no cause to believe that the effect of the original
ruling by the District Court will not be upheld.


                                ARM Holdings plc
                        First Quarter Results - US GAAP

                                                Quarter    Quarter    Quarter
                                                  ended      ended      ended
                                               31 March   31 March   31 March
                                                   2006       2005     2006 (1)
                                              Unaudited  Unaudited  Unaudited
                                               --------   --------  ---------
                                                  £'000      £'000      $'000
Revenues
Product revenues                                 61,232     51,372    106,213
Service revenues                                  3,402      3,645      5,901
                                               --------   --------  ---------
Total revenues                                   64,634     55,017    112,114
                                               --------   --------  ---------

Cost of revenues
Product costs                                    (5,815)    (4,913)   (10,087)
Service costs                                    (1,552)    (1,410)    (2,692)
                                               --------   --------  ---------
Total cost of revenues                           (7,367)    (6,323)   (12,779)
                                               --------   --------  ---------
                                               --------   --------  ---------
Gross profit                                     57,267     48,694     99,335
                                               --------   --------  ---------

Research and development                        (17,456)   (14,723)   (30,279)
Sales and marketing                             (10,191)    (8,284)   (17,677)
General and administrative                      (10,609)    (7,837)   (18,402)
Deferred stock-based compensation                     -     (2,360)         -
Amortisation of intangibles purchased            
through business combination                     (4,587)    (3,967)    (7,957)
                                               --------   --------  ---------
Total operating expenses                        (42,843)   (37,171)   (74,315)
                                               --------   --------  ---------

Income from operations                           14,424     11,523     25,020
Interest, net                                     1,673      1,009      2,902
                                               --------   --------  ---------
Income before income tax                         16,097     12,532     27,922
Provision for income taxes                       (4,137)    (3,453)    (7,176)
                                               --------   --------  ---------
Net income                                       11,960      9,079     20,746
                                               --------   --------  ---------

Net income                                       11,960      9,079     20,746
Other comprehensive income:
Foreign currency adjustments                     (5,895)     8,744    (10,225)
Unrealised holding loss on
available-for-sale securities, net of tax
of £301,000 (2005: £692,000)                       (680)    (1,614)    (1,180)
                                               --------   --------  ---------
Total comprehensive income                        5,385     16,209      9,341
                                               --------   --------  ---------

Earnings per share (assuming dilution)
Shares outstanding ('000)                     1,420,175  1,424,612
Earnings per share - pence                          0.8        0.6
Earnings per ADS (assuming dilution)
ADSs outstanding ('000)                         473,392    474,871
Earnings per ADS - cents                            4.4        3.6

(1)     US dollar amounts have been translated from sterling at the 31 March
2006 closing rate of $1.7346=£1 (see note 1)


                              ARM Holdings plc
                    Consolidated balance sheet - US GAAP

                                               31 March   31 March   31 March
                                                   2006       2005     2006 (1)
                                              Unaudited  Unaudited  Unaudited
                                               --------   --------  ---------
                                                  £'000      £'000      $'000
Assets
Current assets:
Cash and cash equivalents                       143,431    128,077    248,795
Short-term investments                           34,625     23,990     60,061
Marketable securities                             4,226      8,835      7,330
Accounts receivable, net of allowance of
£2,461,000 (2005: £2,173,000) (see note 3)       61,026     55,518    105,856
Inventory: finished goods                         1,844      1,490      3,199
Prepaid expenses and other assets                12,313     12,567     21,358
                                              ---------  ---------  ---------
Total current assets                            257,465    230,477    446,599

Deferred income taxes                             3,556      4,422      6,168
Prepaid expenses and other assets                 1,587      1,674      2,753
Property and equipment, net                      12,987     12,803     22,527
Goodwill                                        381,669    385,572    662,043
Other intangible assets                          66,920     72,345    116,080
Investments                                       7,798      8,800     13,526
                                              ---------  ---------  ---------
Total assets                                    731,982    716,093  1,269,696
                                              ---------  ---------  ---------

Liabilities and shareholders' equity
Accounts payable                                  4,343      2,221      7,533
Income taxes payable                             12,960     10,826     22,481
Personnel taxes                                   1,277      1,329      2,215
Accrued liabilities                              21,614     25,024     37,492
Deferred revenue                                 25,225     20,354     43,755
Dividends payable                                 6,918          -     12,000
                                              ---------  ---------  ---------
Total current liabilities                        72,337     59,754    125,476

Deferred income taxes                             4,090      7,289      7,094
                                              ---------  ---------  ---------
Total liabilities                                76,427     67,043    132,570
                                              ---------  ---------  ---------

Shareholders' equity
Ordinary shares                                     693        693      1,202
Additional paid-in capital                      444,084    425,252    770,308
Deferred compensation                           (19,248)    (4,404)   (33,387)
Treasury stock, at cost                          (2,005)   (16,315)    (3,478)
Retained earnings                               178,695    183,913    309,964
Accumulated other comprehensive income:
Unrealised holding gain on
available-for-sale securities,
net of tax of £795,000
(2005: £1,096,000)                                3,179      3,859      5,514
Cumulative translation adjustment                50,157     56,052     87,003
                                              ---------  ---------  ---------
Total shareholders' equity                      655,555    649,050  1,137,126
                                              ---------  ---------  ---------
Total liabilities and shareholders'
equity                                          731,982    716,093  1,269,696
                                              ---------  ---------  ---------

(1)  US dollar amounts have been translated from sterling at the 31 March
     2006 closing rate of $1.7346=£1 (see note 1)



Notes to the Financial Statements

(1) Basis of preparation - reporting currency

The Group prepares and reports its financial statements in UK sterling. Purely
for the convenience of the reader, the US GAAP income statement and balance
sheet have been translated from sterling at the closing rate on 31 March 2006 of
$1.7346=£1. Such translations should not be construed as representations that
the sterling amounts represent, or have been or could be so converted into US
dollars at that or at any other rate.

(2) Share-based compensation charges

Included within the income statement shown above are share-based compensation
charges of £4.0 million: £0.2 million in cost of revenues, £2.3 million in
research and development costs, £0.8 million in sales and marketing costs and
£0.7 million in general and administrative costs.

(3) Accounts receivable

Included within accounts receivable at 31 March 2006 are £22.5 million (2005:
£20.5 million) of amounts recoverable on contracts.

(4) Consolidated statement of changes in shareholders' equity (US GAAP)

                Share Additional     Deferred   Treasury   Retained Unrealised  Cumulative      Total
              capital    paid-in compensation      stock   earnings    holding translation
                         capital                                          gain  adjustment
                £'000      £'000        £'000      £'000      £'000      £'000       £'000      £'000
At 1 January
2006              693    425,252       (4,404)   (16,315)   183,913      3,859      56,052    649,050
Net income          -          -            -          -     11,960          -           -     11,960
Dividends           -          -            -          -     (6,918)         -           -     (6,918)
Unrealised
holding losses
on
available-for-
sale
securities          -          -            -          -          -       (680)          -       (680)
Deferred
compensation
arising on
share schemes       -     18,832      (18,832)         -          -          -           -          -
Amortisation
of deferred
compensation        -          -        3,988          -          -          -           -      3,988
Issuance of
shares              -          -            -     21,267    (10,260)         -           -     11,007
Purchase of
own shares          -          -            -     (6,957)         -          -           -     (6,957)
Currency
translation
adjustment          -          -            -          -          -          -      (5,895)    (5,895)
-----------   -------   --------    ---------    -------    -------   --------    --------    -------
At 31 March
2006              693    444,084      (19,248)    (2,005)   178,695      3,179      50,157    655,555
-----------   -------   --------    ---------    -------    -------   --------    --------    -------

(5) Non-GAAP measures

The following non-GAAP measures, including reconciliations to the US GAAP
measures, have been used in this earnings release. These measures have been
presented as they allow a clearer comparison of operating results that exclude
share-based compensation charges and acquisition-related charges. All figures in
£'000 unless otherwise stated.

                                         (5.1)     (5.2)     (5.3)     (5.4)
                                      Q1 2006   Q4 2005   Q1 2005   FY 2005
Income from operations                 14,424    14,094    11,523    47,917
Acquisition-related charge -
amortisation of intangibles             4,587     4,809     3,967    17,726
Acquisition-related charge - deferred
stock-based compensation                    -       479     2,066     5,496
Other stock-based compensation and
related payroll taxes                   3,988     2,628       294     4,873
---------------------------           -------   -------   -------   -------
Pro forma income from operations       22,999    22,010    17,850    76,012
---------------------------           -------   -------   -------   -------
As % of revenue                          35.6%     35.0%     32.4%     32.7%


                                         (5.5)     (5.6)     (5.7)     (5.8)
                                      Q1 2006   Q4 2005   Q1 2005   FY 2005
Income before income tax               16,097    15,778    12,532    53,234
Acquisition-related charge -
amortisation of intangibles             4,587     4,809     3,967    17,726
Acquisition-related charge - deferred
stock-based compensation                    -       479     2,066     5,496
Other stock-based compensation and
related payroll taxes                   3,988     2,628       294     4,873
---------------------------           -------   -------   -------   -------
Pro forma income before income tax     24,672    23,694    18,859    81,329
---------------------------           -------   -------   -------   -------



                                                        (5.9)            (5.10)
                                               31 March 2006       31 December
                                                                          2005
Cash and cash equivalents                            143,431           128,077
Short-term investments                                34,625            23,990
Short-term marketable securities                       4,226             8,835
---------------------------                          -------          --------
Pro forma cash                                       182,282           160,902
---------------------------                          -------          --------


                                     (5.11)      (5.12)      (5.13)      (5.14)
                                   Q1 2006     Q4 2005     Q1 2005     FY 2005
Pro forma cash at end of
period (as above)                  182,282     160,902     141,785     160,902
Less: Pro forma cash at
beginning of period (as above)    (160,902)   (164,737)   (142,817)   (142,817)
Add back: Cash outflow from
acquisitions (net of cash
acquired)                                -       4,264      14,260      20,304
Add back: Cash outflow from
payment of dividends                     -       4,677           -      10,436
Add back: Cash outflow from
purchase of own shares               6,957      10,773           -      16,211
Less: Cash inflow from
exercise of share options          (11,007)     (1,033)     (9,425)    (13,083)
---------------------------        -------     -------     -------     -------
Pro forma cash generation           17,330      14,846       3,803      51,953
---------------------------        -------     -------     -------     -------


                                     (5.15)      (5.16)      (5.17)      (5.18)
                                   Q1 2006     Q4 2005     Q1 2005     FY 2005
Net income                          11,960      12,977       9,079       41,880
Acquisition-related charge -
amortisation of intangibles          4,587       4,809       3,967       17,726
Acquisition-related charge -
deferred stock-based
compensation                             -         479       2,066        5,496
Other stock-based
compensation                         3,988       2,628         294        4,873
and related payroll taxes
Estimated tax impact of
above charges                       (2,464)     (3,346)     (1,831)      (8,912)
---------------------------        -------     -------     -------      -------
Pro forma net income                18,071      17,547      13,575       61,063
---------------------------        -------     -------     -------      -------
Dilutive shares ('000)           1,420,175   1,431,084   1,424,612    1,427,013
Pro forma diluted EPS                1.27p       1.23p       0.95p        4.28p


Note

The results shown for Q1 2006, Q4 2005, and Q1 2005 are unaudited. The results
shown for FY 2005 are audited. The financial information contained in this
announcement does not constitute statutory accounts within the meaning of
Section240 (3) of the Companies Act 1985. Statutory accounts of the Company in
respect of the financial year ended 31 December 2005, upon which the Company's
auditors have given a report which was unqualified and did not contain a
statement under Section 237(2) or Section 237(3) of that Act, are available on
ARM's website at www.arm.com and are in the process of being filed with the
Registrar of Companies.

The results for ARM for Q1 2006 and previous quarters as shown reflect the
accounting policies as stated in Note 1 to the US GAAP financial statements in
the Statutory accounts of the company for the fiscal year ended 31 December 2005
and in the Annual Report on Form 20-F for the fiscal year ended 31 December
2004.

This document contains forward-looking statements as defined in section 102 of
the Private Securities Litigation Reform Act of 1995. These statements are
subject to risk factors associated with the semiconductor and intellectual
property businesses. When used in this document, the words 'anticipates', 'may',
'can', 'believes', 'expects', 'projects', 'intends', 'likely', similar
expressions and any other statements that are not historical facts, in each case
as they relate to ARM, its management or its businesses and financial
performance and condition are intended to identify those assertions as
forward-looking statements. It is believed that the expectations reflected in
these statements are reasonable, but they may be affected by a number of
variables, many of which are beyond our control. These variables could cause
actual results or trends to differ materially and include, but are not limited
to: failure to realise the benefits of our recent acquisitions, unforeseen
liabilities arising from our recent acquisitions, price fluctuations, actual
demand, the availability of software and operating systems compatible with our
intellectual property, the continued demand for products including ARM's
intellectual property, delays in the design process or delays in a customer's
project that uses ARM's technology, the success of our semiconductor partners,
loss of market and industry competition, exchange and currency fluctuations, any
future strategic investments or acquisitions, rapid technological change,
regulatory developments, ARM's ability to negotiate, structure, monitor and
enforce agreements for the determination and payment of royalties, actual or
potential litigation, changes in tax laws, interest rates and access to capital
markets, political, economic and financial market conditions in various
countries and regions and capital expenditure requirements.

More information about potential factors that could affect ARM's business and
financial results is included in ARM's Annual Report on Form 20-F for the fiscal
year ended 31 December 2004 including (without limitation) under the captions,
'Risk Factors' and 'Management's Discussion and Analysis of Financial Condition
and Results of Operations,' which is on file with the Securities and Exchange
Commission (the 'SEC') and available at the SEC's website at www.sec.gov.

About ARM

ARM designs the technology that lies at the heart of advanced digital products,
from wireless, networking and consumer entertainment solutions to imaging,
automotive, security and storage devices. ARM's comprehensive product offering
includes 16/32-bit RISC microprocessors, data engines, 3D processors, digital
libraries, embedded memories, peripherals, software and development tools, as
well as analog functions and high-speed connectivity products. Combined with the
company's broad Partner community, they provide a total system solution that
offers a fast, reliable path to market for leading electronics companies. More
information on ARM is available at http://www.arm.com/


ARM, ARM Powered, RealView, SecurCore, TrustZone, Keil and ARM7TDMI are
registered trademarks of ARM Limited. ARM7, ARM7TDMI-S, ARM9, ARM922T,
ARM926E-S,, ARM946E-S, ARM11, ARM1176JZ-S, Cortex and MPCore are trademarks of
ARM Limited. Artisan Components and Artisan are registered trademarks of ARM
Physical IP, Inc., a wholly owned subsidiary of ARM. All other brands or product
names are the property of their respective holders. ARM refers to ARM Holdings
plc (LSE: ARM and Nasdaq: ARMHY) together with its subsidiaries including ARM
Limited, ARM Inc., ARM Physical IP Inc., Axys Design Automation Inc., Axys GmbH,
ARM KK, ARM Korea Ltd, ARM Taiwan Ltd, ARM France SAS, ARM Consulting (Shanghai)
Co. Ltd., ARM Belgium NV., ARM Embedded Technologies Pvt. Ltd. and Keil
Elektronik GmbH.



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