Licensing revenue soared 32 per cent to £38.3m, hitting the upper end of Imagination’s forecast.
Royalty revenue, which it receives on each of the 1.25bn chips shipped by partners, jumped 15 per cent to £109m in the 12 months to 30 April.
Imagination said that demand for its Ensigma communications chips was growing, “driven by the emerging trends in the internet of things and home connectivity”.
Chief executive Hossein Yassaie said: “The significant growth in the licensing deal closure and the growing customer base confirm the strong alignment of our technologies to the existing and emerging markets as well as our partners’ needs.”
Imagination reported group revenues up 13 per cent at £170.8m and a loss of £314,000, down from £12.1m profit in 2013.
Shares closed up at 251.5p, valuing the firm at £673m.