LONDON Configurable cores and IP specialist ARC International (St Albans, England) has reported unaudited sales of £14.4 million ($28.9 million) for the year ended December 31, 2007, up 17 percent on the previous year on a dollar basis, and a net loss of £1 million , a 10 decrease year-on-year.
Both figures are in line with expectations, with royalties, backlog and bookings are all looking positive.
"We are particularly pleased with the 54 percent increase in royalties revenues, up to £4.9 million ($9.7 million) and the fact that we have outpaced the semiconductor sector in overall growth," Carl Schlachte, president and CEO of ARC told EE Times .
He also noted that from an almost "dead start" a few years ago, 50 percent of revenues are now coming from the multimedia sector.
Licensing revenues of $15 million (£7.4 million) were rather flat for the year, up a mere 2 percent. The total revenue figure excludes an estimated $800,000 from an acquisition made during the year.
"We have completed four acquisitions during the past seven months, three of which (Teja Technologies, Alarity and Tenison Technology EDA Ltd) have focused on adding tools and modeling capability to fill gaps, and we expect licenses from these to be coming through strongly in the year ahead," Schlachte added.
However, he stressed the most recent deal to acquire Sonic Focus Inc, which specializes in audio enhancement technology, indicates the way the company is moving to a more vertical strategy and moves ARC into new revenue streams.
"For the first time, we will start getting licensing and royalty revenues directly from OEMs which typically are higher than those obtained from chip firms and which a big departure for us and one that pushes us in the direction of being a consumer IP company, and not just focused on developing and offering genreric IP."
Looking forward, Schlachte said he is "very positive" about 2008, on the back of its strongest backlog ($16.6 million, £8.3 million, and an increase of 96 percent from the same time last year) and sales pipeline in the company's history "This outlook to come extent is contrary to some in the chip industry, in particular some of the old guard."