Slide 1: Arm Limited Roadshow Slides Q4 2019
Arm Limited Roadshow Slides Q4 2019 v1 © 2019 Arm Limited Arm Limited is a subsidiary of
Slide 2: Technology trends that will redefine all industries
Technology trends that will redefine all industries Artificial Intelligence in Autonomous Augmented Hyperscale cloud every device machines reality and connectivity Security and Privacy 2 © 2019 Arm Limited
Slide 3: Arm defines the technology that will redefine all industries
Arm defines the technology that will redefine all industries Mobile and Networking Automotive Internet of Things Consumer and Servers and Robotics Artificial Intelligence in every device Autonomous machines Augmented reality Hyperscale cloud and connectivity 3 Security and Privac
Slide 4: Arm introduction
Arm introduction • Global leader in technology licensing • R&D outsourcing for semiconductor companies • Innovative business model • Upfront licence fee – flexible licensing models • Ongoing royalties on customer sales • Technology can be reused across multiple applications • Long-term, secular grow
Slide 5: Arm's business model
Arm’s business model • Arm develops technology that is licensed to semiconductor companies • Arm receives an upfront license fee and a royalty on every chip that contains its technology Business Development 1) Arm licenses 2) Partners develop technology to chips and ship chip Partners them to OEMs T
Slide 6: Arm's strategy
Arm’s strategy • Maintain or gain share in long-term growth markets • From mobile phones to networking infrastructure and servers to embedded smart devices and automotive • Increase value of Arm technology per smart device • Invest in developing more advanced processors with higher royalty rates • P
Slide 7: Arm's main growth markets
Arm’s main growth markets Mobile and Consumer Networking & Servers Embedded Markets $89bn $67bn $76bn TAM 2029 TAM 2029 TAM 2029 Smartphones, tablets and laptops Base stations, routers, switches, and Automotive, white-goods, wearables, Apps processor, modem, connectivity, servers for cloud a
Slide 8: History of Arm
History of Arm Joint venture between Designed into first mobile Now all electronic devices can Acorn Computers and Apple phones and then smartphones use smart Arm technology 1990 1993 onwards Today 8 © 2019 Arm Limited
Slide 9: Arm-based chip shipments
Arm-based chip shipments 25 >166bn 34% 22.5bn 22.8bn Arm-powered chips shipped (billions) 20 Arm-based chips shipped to date Market share in 2019 15 10 5 0 1991 Calendar Years 2019 9 © 2019 Arm Limited
Slide 10: Q4 Licensing is within the normal range
Q4 Licensing: 34 is within the normal range In July 2019, Arm introduced Arm Flexible Access (AFA) licensing program which provides a wide range of Arm’s most Historic licensing popular processors for no upfront license fee. 60 AFA licenses are not included in the Q1 Average licensing count. = 17 Q3
Slide 11: Licensing enables future royalties
Licensing enables future royalties • Arm signed 34 processor licences in Q4 2019; 147 for the FY2019 • Arm’s current royalty revenues are derived from licences signed many years ago • Growing base yields royalty revenues over long period Significant Royalty Potential +147 $700m from Recent Licences
Slide 12: Arm's expanding opportunity
Arm’s expanding opportunity 2019 2029 Market Share Market Value Market Value Mobile Applications processor 90% $41bn $43bn Other mobile chips $10bn 40% $30bn $13bn Infrastructure Networking $17bn 32% $36bn Data Center/Cloud $20bn 5% $32bn Automotive $3bn IVI and ADAS 75% $20bn $12bn Other automotive
Slide 13: Arm's expanding opportunity
Arm’s expanding opportunity 2019 2029 Market Share Market Value Market Value Embedded Controller in $4bn IoT Devices 90% $30bn $16bn Microcontrollers/ 25% $10bn SIM Cards $15bn Other Consumer 42% $15bn Electronics Markets $33bn Other chips 38% $11bn $23bn Total Market All chips with 34% $138bn proce
Slide 14: Arm's current business
Arm's current business Arm primary business is the development of intellectual property (IP) blocks which are used in silicon chips Our partners combine Arm IP with their own IP to create complete chip designs We earn license fees when we deliver Arm IP to our partners and royalties when our partner
Slide 15: Generating profits and cash to be reinvested
Accelerating investment Investing in new to increase share gains processor technology • Machine learning processors • Computer vision • Augmented reality • Platform security Generating profits and cash to be reinvested Investing in new IoT software and services • Device Management • Connectivity as
Slide 16: Pelion – Combining physical and digital insights
Pelion – Combining physical and digital insights Simplifying deployment and enabling scale 16 © 2019 Arm Limited
Slide 17: Return on Investments – Arm v8-A case study
Return on Investments – Arm v8-A case study • Arm incurs R&D costs many years before revenue starts Multiple processors in development Research into 64-bit computing First generation started in 2000 of processors Architecture development and Arm v8-A processor design Development starts 2008 2009 201
Slide 18: Revenues, investments and profits
Revenues, investments and profits $2,000m 8,000 $1,800m Revenue 7,000 • Until 2016 revenues grew faster than Total Costs costs as Arm constrained investment in $1,600m R&D to enable increasing profits Adjusted EBITDA 6,000 $1,400m Headcount 5,000 • For the current phase of investment $1,200m Arm exp
Slide 19: Arm Investor Relations Contact
Arm Investor Relations Contact Contact Title Contact +44 776 885 6503 Ian Thornton Head of Investor Relations ian.thornton@arm.com More content available on • Arm’s website: arm.com • SoftBank Group’s website: group.softbank/en/ir 19 © 2019 Arm Limited