Arm wants to use the proceeds from its upcoming initial public offering to look at pursuing deals and hiring more staff in order to set out an ambitious course of expansion for the UK chip designer.
The company would seek to step up its push beyond mobile phones and deeper into cars, data centers and hardware underpinning the metaverse, according to the CFO. He said that cash generated through an IPO can be used for M&A or to hire quicker.
The group has been distracted by a battle over control of its lucrative China unit, job cuts, and the collapse of its $66 billion sale to US rival NVIDIA.
As a downturn in tech stocks threatens hopes of blockbuster returns from the proposed float by SoftBank, ambitions for further growth could yet be hit.
Arm executives are pretty confident that the company can "stand on its own two legs" and will push ahead with its IPO. The timing is great for us.
After months of intense lobbying by the UK government, SoftBank is close to pursuing a dual listing of Arm in New York and London.
The US market is the most liquid and most prospective investors are based there. The location for Arm's listing was for SoftBank to answer.
Arm may not be able to continue research and development efforts if the IPO doesn't raise enough capital.
The price of Arm was too high when SoftBank first bought it. Richard Wawrzyniak is an analyst at Semico Research.
Arm reported a sharp turnround last year after several years of stagnant revenue. The chip designer saw a 35 per cent rise in revenues to $2.7 billion and a 68 per cent rise in adjusted earnings to $1 billion.
The performance was attributed to years of investment in growth areas.
The people were wondering where these came from. The company's full-year results were called into question by the company's CEO. The SoftBank years helped us invest in the trajectory we are on.
Since the purchase of Arm by SoftBank, the chip designer's headcount has fluctuated. After SoftBank revealed plans to list the company earlier this year, Arm is in the process of cutting up to 15% of its work force.
A two-year stand-off with the chief executive of the company's China joint venture has now beenresolved, which is one of the biggest obstacles to pursuing an IPO in the next year.
The plan to transfer Arm's shares in the Chinese joint venture to a SoftBank vehicle has been completed.
Masayoshi Son, the founder and CEO of SoftBank, said last month that he was going to hold on to a majority stake in Arm in the upcoming IPO.
Over the past six years, SoftBank did not invest any of its own capital into the chip designer, but it did allow them to run at a certain profit level that allowed them to invest.
Masa is a long game type of guy. He doesn't really care about what's happening inside the current quarter.
Arm can open itself up to public markets because the revenue growth is going to be able to support the investment that we need and still hit.
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