SoftBank’s Arm registers for blockbuster IPO

Arm Ltd, a chip maker owned by SoftBank Group, has confidentially filed for an initial public offering (IPO) with U.S. regulators, according to a statement released on Saturday.
Arm chip business
Despite challenging market conditions, the move suggests that Softbank is pushing ahead with its plans to list Arm on the U.S. stock market, after announcing its intentions in March.

Arm reportedly plans to sell shares on Nasdaq later in the year, seeking to raise between $8 billion and $10 billion.

However, the size and price range for the offering have not yet been determined. The IPO’s timing and size are also subject to market conditions.

U.S. IPOs, excluding listings for special purpose acquisition companies, are down about 22 percent to $2.35 billion year-to-date, according to Dealogic.

SoftBank has been targeting a listing for Arm since its deal to sell the chip designer to Nvidia for $40 billion collapsed last year because of objections from U.S. and European antitrust regulators.

Earlier this year, Arm rebuffed a campaign from the British government to list its shares in London and said it would pursue a flotation on a U.S. exchange.

Arm’s preparations for the IPO are being led by Goldman Sachs Group, JPMorgan Chase & Co, Barclays, and Mizuho Financial Group.


“The world’s data centers, IoT systems, automobiles and next-generation consumer devices all need more and more power efficient computing capabilities, fueling the long-term demand for Arm technology and innovation,” Rene Haas, CEO of Arm, said in its earnings report earlier.

Arm’s Q3 revenue in fiscal 2022 increased 28 percent to $746 million. Arm partners shipped a record 8 billion Arm-based chips, taking total shipped to date to more than 250 billion.

Arm posted adjusted EBITDA of $450 million with adjusted EBITDA margin of more than 50 percent in the quarter.

Arm generated licensing revenue of $300 million (+65 percent) including  strategic agreements with four key customers (an automotive OEM, cloud service provider, a leading microcontroller manufacturer, and a consumer electronics semiconductor vendor).

Arm generated royalty revenue of $446 million (+12 percent) driven in part by strong demand for Arm-based server technology and Arm-based chips in automotive, as well as Armv9 processor technology gaining traction in premium smartphones and cloud server applications.

Arm achieved strong revenue growth in all target markets with double- or triple-digit revenue increases across automotive, client (consumer devices), infrastructure and IoT.