Arm Holdings Stock Falls After Q1 Results, Weak Q2 Guidance: Details

Arm Holdings Plc ARM shares are trading lower after the company reported its first-quarter financial results Wednesday. Here's a look at the details from the report. 

The Details: Arm reported quarterly earnings of 40 cents per share, which beat the analyst consensus estimate of 34 cents by 17.65%. Quarterly sales clocked in at $939 million, which beat the analyst consensus estimate of $902.691 million by 4.02% with record license revenue and strong growth in royalty revenue.

The company reported license and other revenue of $472 million, up 72% year-over-year, due to the signing of multiple high-value license agreements. Royalty revenue came in at $467 million, up 17% year-over-year, driven by the rapidly increasing penetration of Armv9-based chips and strong growth in premium smartphones.

Arm said it saw strong non-GAAP operating income growth to $448 million resulting in a 47.7% non-GAAP operating margin.

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“AI demand and rising CSS adoption across major market segments drove record revenue,” said Rene Haas, CEO of Arm Holdings. “As the energy needs of AI continue to escalate, so does the demand for the high-performance, power-efficient Arm compute platform.”

Outlook: Arm Holdings sees second-quarter revenue in a range of $780 million to $830 million, versus the $804.08 million estimate, and earnings of between 23 cents and 27 cents, versus the 27-cent estimate.

ARM Price Action: According to Benzinga Pro, Arm Holdings shares are down 9.41% after-hours at $130.60 after gaining more than 8% in regular trading Wednesday. 

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Image: Courtesy of Arm Holdings Plc