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Arm CEO Rene Haas during the Transforming Business through AI Conference in Tokyo, Japan, on Feb. 3, 2025
Arm Holdings (ARM) reported fiscal third-quarter results that topped Wall Street estimates and raised the midpoint of its narrowed sales outlook. However, shares fell in extended trading Wednesday as investors may have been looking for stronger results.
The chip designer and Nvidia (NVDA) partner’s third-quarter revenue rose 19% year-over-year to a record $983 million, above the analyst consensus compiled by Visible Alpha. Earnings came in at $252 million, or 24 cents per share, compared to $87 million, or 8 cents per share, a year earlier, also beating expectations.
By category, Arm’s royalty revenue improved 23% to $580 million, while its license and other revenue grew 14% to $403 million.
Looking ahead, Arm said it anticipates fourth-quarter revenue of $1.175 billion to $1.275 billion, with the midpoint in line with estimates.
Arm also narrowed its full-year revenue forecast range to $3.94 billion to $4.04 billion, lifting the midpoint to $3.99 billion from $3.95 billion. The midpoint of its forecast for adjusted earnings per share climbed to $1.60 from $1.55. Analysts had called for revenue of $3.96 billion and adjusted EPS of $1.57.
The results come after Arm was recently named a key technology partner in a $500 billion joint venture with Arm majority owner SoftBank, OpenAI, and Oracle (ORCL) to build artificial intelligence infrastructure in the U.S. This week, SoftBank and OpenAI formed an additional joint venture to expand AI services for businesses globally, starting in Japan.
Arm shares dropped about 6% in extended trading Wednesday following the company’s earnings release, erasing gains during the regular session. The stock has more than doubled in value over the past 12 months through Wednesday’s close.
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