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Arm posts strong results, but sees share price dip

ARM Holdings has reported 4Q financials ahead of projections but still took a hit on the markets.

The UK-based New York-listed firm beat estimates on revenue and earnings per share. The company reported an adjusted 36 cents a share on sales of USD 928 million in the quarter ended March 31. Analysts had expected earnings of 30 cents a share on sales of USD 866 million.

And yet, the markets were unimpressed. At Wednesday's close, shares were at USD 106.07, down 1.6% on the day. It seems investors were expecting a stronger 2025 outlook that Arm management presented. For fiscal year 2025, it forecasted revenue in a range of USD 3.8 billion to USD 4.1 billion. Management also expects revenue to keep growing at around 20% annually over 2025 and 2026, given the pipeline of new licenses and chips under development.

“In Q4, we delivered record revenues and exceeded the high-end of our guidance ranges for both revenue and non-GAAP EPS. This growth was driven by record royalty revenue as Armv9 adoption continues, especially in smartphones, server, and automotive markets. Revenue from licensing was also very strong, driven by multiple high-value agreements and the increased demand for Arm's power-efficient technology for AI from data centers to edge computing,” said Arm CEO Rene Haas in a letter to shareholders.

Haas delivered this news in Arm's third quarter as a public company. It floated last September after a tortuous period in which Nvidia had offered USD 40 billion to buy ARM  from Softbank only to have the deal blocked by regulators in the US and Europe.


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May 14 2024 7:33 am V22.4.46-2
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