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Hardware and semiconductors

Semiconductor IP licensor financial model, built free.

A three-statement Excel model for a semiconductor IP and patent licensor, built from your own figures and checked to balance.

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We use generative AI in parts of our process, so mistakes can occur. Every model should be checked by a person before it is relied on. Read more

The business

Licenses processor architectures, interface IP or standard-essential patents to chip and device makers, earning upfront licence fees and per-unit royalties on its licensees' shipments.

See the sampleHow the model works

In short

  • 01

    Three linked statements

    Income statement, balance sheet and cash flow, linked in every period.

  • 02

    Valued two ways

    Discounted cash flow and trading multiples, side by side.

  • 03

    Monthly to annual

    Monthly, quarterly, half-yearly or annual periods, for up to 30 years.

  • 04

    Checked every period

    A Checks sheet shows the balance sheet balances and the cash reconciles.

The sample

The sample, as Excel draws it.

Built by the same system and checks as yours, on illustrative figures: every sheet as Excel draws it, or live.

Annual · 10 years · Low detail
Semiconductor IP licensor sample model.xlsx
The Summary sheet of the sample semiconductor IP licensor model

Illustrative figures: the sample describes no real business. The live preview shows values; your model’s Excel file has every formula.

How it works

How the model works for a semiconductor IP licensor.

  1. How it earns revenue3 formulas
    Recurring revenue and ARR · All product plans
    Subscription revenueOpening ARRClosing ARRshare of the year
    Recurring revenue and ARR · All product plans
    New customer ARRNew customersfrom new customers and sales and marketingARR per new customer
    Recurring revenue and ARR · All product plans
    Net expansion ARRPrice increase on the installed baseUpsell and cross-sell (net of contraction)
  2. What drives its costs3 formulas
    Cost of revenue · All product plans
    Cost of revenueHosting and infrastructureCustomer support and success
    New customers and sales and marketing · All product plans
    Sales and marketingCustomer acquisition spend (new logos)Account management and renewals
    New customers and sales and marketing · All product plans
    Customer acquisition spend (new logos)New customersCustomer acquisition cost (CAC)
  3. How it is funded1 formula
    Equity raising
    Equity raisedDistributions reinvested under the DRPOther equity raised (net of costs)Equity from an offer, milestone funding, conversions and creditor shares
  4. How profit becomes cash3 formulas
    Working capital
    Trade receivablesRevenuefrom statementsDebtor daysDays in period
    Working capital
    InventoryDirect costs (positive)from statementsInventory daysDays in period
    Working capital
    Trade payablesCash operating costs (positive)from statementsCreditor daysDays in period
What it covers

17 parts, each one tested.

Every part is a tested building block with its own checks: yours is put together from the ones your business needs.

  • Exchange rate (US dollar)Exchange rate by financial year
  • Operating expensesHeadcount build by function
  • Corporate costsFixed cost base indexed to CPI
  • Working capitalFull working capital
  • Income taxCorporate rate with tax losses
  • Equity raisingDistribution reinvestment plan
  • Discounted cash flow valuationDCF on free cash flow to the firm
  • Multiples valuationEV / EBITDA multiple
  • Key-metric summaryLast-twelve-month and run-rate metrics
  • Case selectionStackable stress toggles
  • R&D and capitalised developmentGross R&D × capitalisation rateResearch and development expense after capitalisation, with the capitalised software asset and its amortisation.
  • Headcount plan by functionHiring plan by functionEmployees and staff cost by function (cost of revenue, sales and marketing, R&D, G&A).
  • CPI forecastCPI glide path
  • New customers and sales and marketingNew customers per period × CACNew paying customers (logos, subscribers, gross adds) won each period for a plan, and the sales and marketing spent winning them (acquisition cost) and keeping them (account management). Carrying the spend per plan keeps new customers and the spend that wins them consistent; its roll-up lands in operating expenses.
  • Customer base and churnConstant churn rateCustomer roll-forward for a plan — opening customers + new customers − churned customers = closing customers.
  • Recurring revenue and ARRARR bridge on ARPA with price increases and net expansionThe ARR bridge for a plan (opening ARR + new-customer ARR + net expansion − churned ARR = closing ARR) and the subscription revenue recognised from it. Pricing (ARPA, seats, tiers, price increases) and net expansion (upsell, cross-sell, contraction) are part of each method.
  • Cost of revenueHosting and support as % of revenueDirect cost of serving a plan's customers — hosting, customer support and success, app-store fees, royalties and (for telcos) wholesale access — so that gross margin can differ by plan. Use this in any model with product plans.
Key numbers

The numbers it tracks.

  1. 01licensee shipments
  2. 02royalty per chip
  3. 03royalty revenue
  4. 04licence revenue
  5. 05ARR from subscription licences
  6. 06operating margin
Used for

What it is used for.

Also used for
  • Scenarios and sensitivities
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Looking for a semiconductor IP licensor financial model template? Ours arrives built for your business, with your figures in it.

See a finished model, sheet by sheet

The sample is built on illustrative figures and describes no real business. Models are calculations prepared from the information you provide. They are not financial advice and must be independently verified. See our terms.