Chipmaker Arm Holdings Reports Better-Than-Expected Q4 Results: Record Royalty Revenue, Strong License Revenue

Arm Holdings Plc ARM reported its fourth-quarter financial results after the bell Wednesday. Here's a look at the details.

The Details:

Arm Holdings reported quarterly earnings of 36 cents per share which beat the analyst consensus estimate of 30 cents by 20%.

Quarterly sales clocked in at $928 million, beating the analyst consensus estimate of $875.59 million by 5.99%.

The company reported quarterly royalty revenue of $514 million, up 37% year-over-year, driven by the rapidly increasing penetration of Armv9-based chips which typically command a higher royalty rate, and the recovery in the semiconductor industry.

Arm said license revenue was $414 million, up 60% year-over-year, due to multiple high-value license agreements being
signed as companies increase investment in Arm-based technology for AI across all end markets.

“Arm's third quarter as a public company has produced our third set of record results as we continue to build upon the
world’s most popular compute platform. 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.

Outlook:

Arm sees first-quarter revenue in a range of $875 million to $925 million, versus the $857 million estimate and adjusted earnings of between 32 cents and 36 cents per share, versus the 31 cent estimate.

The company sees fiscal year 2025 revenue in a range of $3.8 billion to $4.1 billion, versus the $3.98 billion estimate, and adjusted earnings of between $1.45 and $1.65 per share, versus the $1.54 estimate.

ARM Price Action: According to Benzinga Pro, Arm Holdings shares are down 7.65% after-hours at $97.96 at the time of publication Wednesday.

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