Arm Holdings Q3 Earnings Preview: Royalty Revenue, Mobile Trends On Watch

by Erica Kollmann Benzinga Staff Writer

Zinger Key Points

Analysts expect Arm to report quarterly earnings of 34 cents per share on revenue of $946.73 million.
The company has beat expectations on both the top and bottom lines in each of the last four consecutive quarters.
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Arm Holdings Plc ARM is set to report its third-quarter results on Wednesday after the closing bell. Investors will be watching closely to see if the company can beat estimates for the fifth consecutive quarter.

What To Watch: Arm's Armv9 architecture penetration across industries drove royalty revenue growth in the second quarter and investors are looking to see if that trend continued in the third quarter. However, analysts have warned the broader mobile industry is witnessing slowing growth and stagnant product turnover which could affect royalty revenue.

Investors will be eyeing the company's free cash flow, which was negative $65 million in the third quarter, and annualized contract value which grew 13% year-over-year to $1.25 billion.

Arm's Compute Subsystems platform and collaborations in AI, data centers and the automotive industry will also be on watch.

Three analysts from Susquehanna, Barclays and Wells Fargo updated coverage on Arm in January with an average price target of $152.33 with an implied downside of 6.66% for Arm shares.

According to estimates from Benzinga Pro, analysts expect Arm to report quarterly earnings of 34 cents per share on revenue of $946.73 million. The company beat expectations on both the top and bottom lines in each of the last four consecutive quarters.

ARM Price Action: According to data from Benzinga Pro, Arm Holdings shares are up 4.92% at $170.19 at the time of publication Wednesday.

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