- ARR (annual recurring revenue)
- The yearly value of subscription contracts in force at a point in time. Common in software; definitions vary by company.
- ARPU
- Average revenue per user over a period. Used by consumer services and telecom companies.
- Capex (capital expenditure)
- Spending on long-lived assets such as data centres, fabs and equipment.
- Churn
- The share of customers or revenue lost over a period because subscriptions were cancelled or not renewed.
- Cloud computing
- Renting computing power, storage and software over the internet instead of running your own servers.
- EDA
- Electronic design automation: the software used to design and verify chips.
- Fab
- A semiconductor fabrication plant, where chips are built on silicon wafers.
- Fabless
- A chip company that designs chips but pays a foundry to manufacture them.
- Foundry
- A company that manufactures chips designed by others. A pure-play foundry does not sell chips of its own design.
- Free cash flow
- Cash from operations minus capital expenditure.
- GAAP and non-GAAP
- GAAP are the US accounting rules. Non-GAAP figures are company-adjusted versions that exclude certain items.
- GPU
- Graphics processing unit: a processor with many parallel cores, used for graphics and increasingly for AI and scientific computing.
- Gross margin
- Revenue minus the direct cost of goods or services sold, as a percentage of revenue.
- IDM
- Integrated device manufacturer: a company that designs and manufactures its own chips.
- Installed base
- The number of a company's devices or licences in active use.
- IP core
- A reusable chip design block, such as a processor core, licensed to other chip designers.
- Moat
- A lasting advantage that makes it hard for competitors to win a company's customers.
- Network effect
- When a product becomes more valuable as more people use it.
- Node (process node)
- A foundry's name for a manufacturing generation, such as 3nm. A label, not a precise measurement.
- Operating margin
- Operating income as a percentage of revenue.
- SaaS
- Software as a service: software delivered over the internet and paid for by subscription.
- Segment
- A part of a business that a company reports separately in its financial statements.
- Switching costs
- The money, time and risk a customer faces when moving to a competitor.
- TAM (total addressable market)
- An estimate of total demand for a product if a company won every possible customer. Companies' own TAM figures are often optimistic.
- Wafer
- A thin round slice of silicon on which many chips are made at once.
- Yield
- The share of chips on a wafer that work as intended.
- 10-K and 10-Q
- Annual and quarterly reports that US-listed companies file with the Securities and Exchange Commission.
See these terms in context in how chips get made and reading an earnings report.