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What To Know About Arm Ahead Of Its IPO 

Illustration of IPO Bubble letters.

Arm Holdings filed plans for a long-awaited public-market debut on Monday, setting the stage for the largest tech listing in almost two years and sparking hopes of an IPO market rebound.

Arm is widely viewed as one of the most important technology companies in the world, with its chip designs included in an estimated 99% of smartphones worldwide as well as a growing number of other devices.

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With that in mind, let’s take a closer look at Arm and its planned IPO.

Why it matters: A successful Arm debut could breathe new life into a depressed IPO market that has paused many venture-backed startups’ plans to go public for the past two years. Notably, SoftBank picked the Nasdaq for the British chip designer’s IPO, snubbing the London Stock Exchange.

Backstory: When SoftBank CEO Masayoshi Son led his company’s purchase of Arm in 2016, he did so as a bet that the so-called Internet of Things would be the “greatest paradigm shift in the history of humankind” and that Arm’s chip designs would be incorporated in many of those connected devices. 

SoftBank tried to sell Arm to Nvidia in 2020 for $40 billion, but the deal was stymied by U.S. and European regulators and ultimately called off last year. 

Son, for his part, has more recently shifted to talking about Arm’s potential role in the “explosive growth” in artificial intelligence technologies, though an analysis of the company’s financials show that AI thus far remains more hope than reality. Nvidia, which is seen as the dominant chipmaker in the AI revolution, has seen its share price more than triple in the past year. It remains a major Arm customer and reportedly has been in talks to be an anchor investor in the IPO.

Key numbers:

  • $60 billion-$70 billion: aimed-for listing valuation for Arm when it debuts on the Nasdaq next month.
  • $2.68 billion: Arm’s revenue in its fiscal year 2023. That’s down a smidge compared to a year earlier, as global smartphone sales slumped, but was offset by higher per-chip revenue.
  • $524 million: Arm’s net income in fiscal year 2023.
  • $8 billion-$10 billion: How much Arm previously aimed to raise in the IPO. That number will be lower, after SoftBank bought the 25% stake it didn’t already directly own from its Vision Fund.
  • $32 billion: How much SoftBank paid for Arm when it bought the company and took it private in 2016.
  • 30 billion: Number of computer chips a year made from Arm’s designs, which are used by around 260 different customers, according to the company. 
  • 6,000: Approximate number of Arm employees globally.
  • 1990: The year Arm was founded, as a joint venture between Acorn Computers, Apple and VLSI Technology.

Who wants a piece: Arm customers including Apple, Intel, Amazon, Nvidia, Microsoft, Google parent Alphabet, Samsung Electronics and TSMC are vying to take a piece of the IPO, Reuters reported, viewing the company’s chip designs as crucial to staying competitive in an era of advanced computing and AI.

Illustration: Dom Guzman

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