Arm posts record $2.8bn earnings after pulling out of London IPO

Masayoshi Son, chief executive of Arm's SoftBank, eyeing a listing seven years after the company went private Credit: Tomohiro Ohsumi/Getty Images

British chip developer Arm posts record $2.8bn (£2.2bn) annual revenue as the Cambridge-based company prepares for a U.S. public listing after condemning the London Stock Exchange.< /p>

The microchip maker, whose technology is used as the blueprint for semiconductors in billions of smartphones, said sales rose 5.7% in the year to March as it confidentially filed for publication.

Led by its Japanese owner, SoftBank , which privatized the former FTSE 100 company in 2016, Arm hopes to debut on the US Nasdaq stock exchange for $60 billion.

Arm's revenue, which comes from licensing its technologies to chip makers, has spurred demand for 5G network equipment and sales of high-end smartphones.

Dollar-denominated earnings were virtually unchanged, according to SoftBank's annual report.

A Japanese investor is eyeing a profitable sale of Arm's shares in the second half of the year, which was delayed due to volatility in the public markets.

Yoshimistu Gotu, CFO of SoftBank, said: “Overall, Arm is performing much better than expected … I can say that our preparations for the IPO are going smoothly.”

SoftBank, meanwhile, said it tumbled to a record $32 billion loss in its tech investment arm in the year to March as valuations of both public and private companies tumbled.

The tech giant founded by a mysterious billionaire Masayoshi Sonom lost over $100. billion in venture investments around the world.

These bets have since stopped when stock prices collapsed.

In its full-year results for the year ending March, SoftBank said it made a profit on some investments, such as his stake in Uber, which he completely sold.

However, this was offset by a drop in the valuation of companies like Doordash.

Overall, SoftBank posted an annual loss of $7.1 billion as it offset part of its investment losses with a huge sell-off in Chinese e-commerce giant shares Alibaba, a company that Son backed in 1999.

SoftBank snubbed London for Arm's initial public offering despite months of wooing from British government officials.

Arm executives met with Prime Minister Rishi Sunak as he tried to persuade them to include City in the company's mega deal.

The Japanese company has always advocated a public offering in the US, where it is likely to receive a higher valuation of its valuable asset.

Meanwhile, Arm is considering changing the licensing terms. for its chip designs as a means of boosting revenue by charging mobile phone makers based on the value of the device.

The Cambridge-headquartered company is also embroiled in a bitter legal dispute with one of its biggest clients.

Arm has accused US company Qualcomm, which supplies products to some of the world's largest smartphone makers, of violating licensing terms.

Qualcomm denies the allegations.

SoftBank has selected bankers from institutions such as Goldman Sachs, JP Morgan, Barclays and Mizuho to spearhead Arm's initial public offering.