2024-05-09 00:14:09
(Original headline: Weak tracking! Annual performance outlook is lukewarm. Arm (ARM.US) fell nearly 10% after market open)
Zhitong Caiji APP learned that chip design company Arm Holdings (ARM.US) released its fiscal fourth quarter performance report after the market closed Wednesday Eastern Time. During the fiscal fourth quarter ending in March, the company’s revenue was $928 million annually. over a year. Growth of 47%, beating market consensus expectations of $880.4 million. Excluding certain items, non-GAAP earnings per share were 36 cents, beating the consensus estimate of 30 cents.
In this quarter, Arm’s authorized sales were US$414 million, an increase of 60% year-on-year, and royalty revenue was US$514 million, an increase 37% over one year. CEO René Haas said licensing revenue represented the tech company’s “research and development and investment confidence.”
Looking ahead to the upcoming fiscal quarter, Arm said that in the first fiscal quarter ending in June, the company’s sales would reach between $875 million and $925 million, compared to analysts’ consensus forecast of $868 million. Excluding certain items, non-GAAP earnings per share would have been 32 cents to 36 cents, compared to 31 cents expected by analysts.
However, it’s worth noting that while Arm gave lukewarm revenue guidance for the fiscal year, the company’s stock price continued to decline after the market closed, sparking concerns about the slowdown of the boom in investments in artificial intelligence in the technology sector. At press time, ARM fell 9.7% to $95.80.
The company said that in fiscal 2025 ending in March next year, its revenue will reach $3.8 billion to $4.1 billion, with non-GAAP earnings per share of between 1.45 and 1.65 dollars. Analysts forecast total revenue of $4.01 billion, up 26% year over year, and non-GAAP earnings per share of $1.53.
In the most recent fiscal quarter, optimistic performance forecasts sent the company’s stock price up 24%, and the company became the darling of Wall Street’s artificial intelligence stocks. The company’s shares are up 41% this year as of Wednesday’s close.
Arm’s chip design and licensing standards have become key technologies for most smartphones. Under the leadership of René Haas, the company is trying to turn that position into a greater presence in data center hardware, as demand for artificial intelligence drives major upgrades to data center hardware. As part of this effort, Arm provides a more comprehensive technology blueprint for companies such as Amazon’s (AMZN.US) AWS.
Haas said in an interview that Arm remains “very confident in long-term growth.” “A lot of the strategies we developed a few years ago are paying off,” he said.
Chief Financial Officer Jason Child said on a conference call with analysts that the company estimates revenue growth will be at least 20% in fiscal 2026 and 2027.
Arm plays an unusual role in the semiconductor industry. It licenses the basic instruction set that software uses to communicate with chips and also provides chip design modules that companies such as Qualcomm (QCOM) use to create their own products.
Arm is moving towards providing more comprehensive configurations that can be used directly in the manufacturing phase. This change makes it a competitor for customers like Qualcomm, but the change is more valuable to other customers, especially large data center owners.
Arm, based in Cambridge, England, is still 90% owned by SoftBank Group, which acquired the company for $32 billion in 2016. In 2023, Arm held an initial public offering (IPO), raising 4, 9 billion US dollars, setting a record for the largest IPO in the United States that year.
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