Arm reported document monetary outcomes for This fall 2025, however cautious steerage for the upcoming quarter rattled buyers
Arm Holdings plc reported document monetary outcomes for the fourth quarter and financial yr ended March 31, 2025, hitting a number of key milestones in income and profitability. Nonetheless, its cautious steerage for the upcoming quarter has rattled buyers, sending shares down 9% in premarket buying and selling.
Arm posted This fall income of $1.241 billion, a 34% year-over-year enhance and the primary time the corporate surpassed $1 billion in quarterly income. Royalty income rose 18% to $607 million, whereas license and different income jumped 53% to $634 million. Adjusted web revenue for the quarter reached $584 million, or $0.55 per share, topping analyst estimates.
For the total fiscal yr, income surpassed $4 billion, with royalty revenues exceeding $2 billion for the primary time. The corporate reported a non-GAAP gross margin of 98% and an working margin of 53%.
Whereas the semiconductor firm stays foundational to nearly each smartphone on the planet, it’s aggressively pushing into new markets:
- Knowledge facilities: CEO Rene Haas famous on the buyers name that “practically 50% of all new server chips shipped to high hyperscalers in 2025 can be Arm-based.” Arm’s structure now underpins chips from main gamers together with AWS (Graviton), Microsoft (Cobalt 100) and Google (Axion). Google’s Axion Armv9 chips are deployed in 10 areas, serving 40 of its high 100 clients and delivering “as much as 65% higher value efficiency than current-generation x86,” stated Haas. The corporate is probably going right in considering knowledge facilities are key to its future success — a February report discovered that AI knowledge facilities are booming, with 80% of survey respondents anticipating “vital will increase in capability necessities attributable to AI workloads.”
- Automotive: Arm expertise is powering AI-defined autos, together with in a collaboration between GM and NVIDIA utilizing the Arm-based NVIDIA DRIVE AGX Thor.
- AI and edge computing: The launch of the primary Armv9 compute platform tailor-made for edge AI strengthens the corporate’s place within the booming AI {hardware} area.
Comfortable Q1 steerage rattles market
Regardless of the This fall beat, Arm issued a weaker-than-expected forecast for fiscal Q1 2026. The corporate expects income between $1.0 billion and $1.1 billion, and adjusted EPS of $0.30 to $0.38. “On the midpoint, this represents income development of 12% year-on-year,” stated CFO Jason Youngster.
This steerage got here as a shock to analysts and buyers, who had anticipated stronger momentum following the This fall outcomes. In consequence, a number of brokerages lowered their value targets for Arm, with the median now sitting at $144.50, based on knowledge compiled by LSEG.
In mild of macroeconomic and commerce uncertainties, Arm declined to supply full-year steerage for fiscal 2026. “Given the uncertainty within the international commerce and financial image, we have now decrease visibility than is conventional to start out the yr,” Youngster stated. “However, we reiterate our confidence in wholesome development within the coming yr and years to return.”
He emphasised the corporate’s continued dedication to R&D funding, stating: “This can be a second to press our benefits to make sure AI is in all places and runs on Arm.”
Arm additionally addressed issues about tariffs and geopolitical tensions. Whereas direct income impacts from tariffs are anticipated to be restricted, the corporate acknowledged it has “much less visibility into the oblique affect on finish demand.” Presently, 10–20% of royalty income stems from shipments into the U.S., and previous downturns like COVID had minimal licensing affect attributable to lengthy chip growth cycles.
