British chipmaker ARM Holdings has reported strong Q2 results mainly due to the sale of new intellectual property licenses. The company reported on Tuesday Q2 pretax profit of £94.2 million with earnings of £5.43 pence per share, a nine percent rise year-over-year.

ARM posted overall revenue of £187.1m, an increase of nine percent from £86.6m in Q1 2014.

ARM reported net cash generation of £86.7 million.

The firm's boost in profit is due to a surge in processor licensing revenue within the quarter. In total, seven ARMv8-A licenses were issued during Q2 2014, as well as 8 Mali multimedia processor licences and 41 other processor licences. This increased overall licensing revenue year-on-year by 36 percent to £89.6m.

ARM also said that there has been a growth in shipments of chips based on ARM processor technology, and in total, 2.7 billion units were shipped in the second quarter, a rise of 11 percent year-on-year.

Simon Segars, Chief Executive Officer, said:
"Our continued strong licensing performance reflects the intent of existing and new customers to base more of their future products on ARM technology. The 41 processor licences signed in Q2 were driven by demand for ARM technology in smart mobile devices, consumer electronics and embedded computing chips for the Internet of Things, and include
further licences for ARMv8-A and Mali processor technology. This bodes well for growth in ARM’s medium and long term royalty revenues.

As expected, our royalty revenue in Q2 2014 has been impacted by seasonal trends and inventory management in parts of the electronics supply chain. An improving market environment in the second half gives us confidence in strengthening royalty revenue in H2 2014."