Arm Ltd, a chip designer that is preparing for what would be the biggest initial public offering (IPO) this year, saw its revenue decline about 1 percent in the most recent fiscal year, according to a draft filing for its IPO reviewed by Bloomberg.
Companies often look to post rising revenue in the periods leading up to stock sales, but Arm’s sales fell to US$2.68 billion in the 12 months ended on March 31, according to the filing, which is still subject to change. Japan’s Softbank Group Corp, which owns Arm, plans an IPO of the company as soon as next month that could value the chip designer at as much as US$70 billion.
Arm’s draft F-1 filing is based on US accounting rules as the company prepares to list on NASDAQ. In May, Softbank said sales at the unit had grown 5.7 percent in the latest fiscal year under international standards.
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US accounting rules and International Financial Reporting Standards (IFRS) have separate thresholds for when revenue can be recognized.
The overall chip industry is still emerging from a sales slump triggered by a buildup of excess inventory, especially in the smartphone market — a central focus for Arm. Qualcomm Inc, one of Arm’s biggest partners, gave a disappointing forecast for the latest quarter earlier this month, sending its shares tumbling. And even Apple Inc’s prized iPhone has seen demand slow.
Arm’s draft filing shows sales for the quarter ended June 30 fell 2.5 percent to US$675 million under US standards. That is a smaller drop than Softbank reported earlier this month, when it said sales for the unit fell about 11 percent to US$641 million under IFRS.
Arm designs technology including microprocessors, and its intellectual property is used in just about every smartphone in the world. It was publicly traded until 2016, when Softbank bought it for around US$32 billion. The Japanese conglomerate said in 2020 that it was selling the company to Nvidia Corp for US$40 billion, but regulatory pressure forced Nvidia to abandon its bid last year. Arm said in April it had made a confidential filing for a US IPO.
The filing could be made public as early today, people familiar with the matter said. Arm is expected to sell about 10 percent of the company’s shares in the listing.
A representative for Arm declined to comment.
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