LONDON — Rising sales and profits at processor and chip design technology licensor ARM Holdings plc were again driven by the company’s processor intellectual property division in the company’s first quarter financial results.

ARM Holdings (Cambridge, England) made a net income of £11.96 million (about $21.3 million) on revenues of £64.63 million (about $115 million) up 17 percent versus the same period in 2005. The net income expanded 31.7 percent to £9.08 million (about $16 million).

Rapidly growing royalty revenues from the processor IP division helped to drive business forward. Total royalty revenues in Q1 2006 were £28.1 million (about $50 million), representing 44 percent of total group revenues, compared to £20.9 million (about $37 million) in Q1 2005, an increase of 35 percent.

The royalty revenues comprised £23.2 million (about $41.5 million) from the processor division and £4.9 million (about $8.8 million) from physical design libraries. Processor royalties grew 38 percent year-on-year, while physical library royalties grew 19 percent year on year.

Other highlights of the quarter included the signing of a long-term technology agreement with TSMC for physical IP that covers 65-nm and 45-nm manufacturing process nodes as well a record 572 million ARM powered products shipped, up 47 percent on the comparable period last year. ARM said it signed 15 processor and 9 physical IP licenses in the quarter and was also encouraged by revenues from development systems increasing 38 percent.

“We have seen encouraging activity in both licensing and royalties this quarter. Interest in our new Cortex family of processors continues to grow with a further license signed in Q1 and a number of licensing discussions in progress,” said Warren East, chief executive officer, in a statement.

“Our first license agreement for the most advanced, 45-nm, process technology has further strengthened our position as a leading provider of physical IP. We continued to extend our market penetration across the span of digital products with royalty units increasing 47 percent compared to the same period last year.”

(Conversion of sterling amounts to U.S. dollars done at a rate of £1 = $1.7886)