But its shares plunged as much as 10 per cent on fears that the London-listed company leans too strongly on its business from Apple.
Analysts doubted whether Imagination has a large enough range of clients to hit its target of shipping an annual one billion chips by 2016.
Liberum Capital said: “We continue to believe that Imagination will struggle to hit this target primarily relying on only one of the key smartphone players, Apple.”
Apple, which holds a nine per cent stake in Imagination, is facing increasing competition from its rivals in the smartphone and tablet world.
Just hours before Imagination published its results, Microsoft unveiled a tablet called Surface, which does not use Imagination’s technology.
But Imagination chief executive Hossein Yassaie said he was unfazed by this, saying that Microsoft’s new operating platform Windows 8 will be a significant partner for the firm.
He said: “Our smart technologies are being adopted more widely across new and existing partners... making our stated goal of around one billion annual unit shipment by 2016 a realistic objective.”
Imagination posted a pre-tax profit of £28,544, up 74 per cent from the previous year, and said its cash balance increased by 34 per cent to £66.3m.
Royalty revenues grew 55 per cent to £63.8m, while technology revenues jumped 41 per cent to £98.2m.
Its shares closed down six per cent at 457p.