Chip designer Arm Holdings late Wednesday surpassed analyst estimates for its fiscal fourth quarter and with its guidance for the current period. However, its sales outlook for the year ahead missed the mark. Arm stock fell in extended trading.
The Cambridge, U.K.-based company earned an adjusted 36 cents a share on sales of $928 million in the quarter ended March 31. Analysts polled by FactSet had expected earnings of 30 cents a share on sales of $866 million. In the year-earlier period, Arm earned an adjusted 2 cents a share on sales of $633 million.
For the current quarter ending in June, Arm expects to earn an adjusted 34 cents a share on sales of $900 million. That's based on the midpoint of its guidance. Wall Street was modeling earnings of 31 cents a share on sales of $866 million for the fiscal first quarter.
For its full fiscal year 2025, Arm predicted adjusted earnings of $1.55 a share on sales of $3.95 billion. Analysts were hoping for earnings of $1.54 a share on sales of $3.98 billion. In the just-finished fiscal 2024, Arm earned an adjusted $1.27 a share on sales of $3.23 billion.
Arm Stock Retreats After Report
In after-hours trading on the stock market today, Arm stock sank 6.6% to 99.09. During the regular session, Arm stock dropped 1.6% to close at 106.07.
Arm Holdings went public on Sept. 14, with its shares priced at 51.
Arm's chip designs are used by a who's who of semiconductor creators including Apple, Qualcomm, Nvidia and many more. Arm provides basic designs and technology for the semiconductors produced by its clients. Chipmakers customize and build on those blueprints.
"AI is driving increased demand for Arm-based technology across all end markets," Chief Executive Rene Haas said in a shareholder letter.
He added, "From cloud to edge, all AI software models, from GPT to Llama, rely and run on the Arm compute platform. As these models become larger and smarter, their requirements for more compute with greater power efficiency can only be realized through Arm."
Arm stock is on the IBD Tech Leaders list.
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