ARM's Q1 earnings shine but next quarter's potential in doubt
ARM's first-quarter earnings numbers were bright, but subquarterly estimates fell short of analysts' expectations.
Arm Holdings (ARM) released its Q1 earnings report for the period ending June 30. The company reported an EPS of $0.40 and revenue of $939 million, reflecting a 39% year-over-year increase.
Licensing revenue grew by 72% to $472 million, while royalty revenue increased by 17% to $467 million. Both figures surpassed analysts' expectations of $0.35 EPS and $907 million in revenue.
For Q2, Arm projects an EPS between $0.23 and $0.27 and revenue between $780 million and $830 million, below analysts' expectations of $0.28 EPS and $813 million in revenue.
The company maintained its financial forecast for 2025, anticipating revenue between $3.8 billion and $4.1 billion and an EPS of $1.45 to $1.65. The full-year revenue forecast for 2025 is $4 billion, with an EPS of $1.57.
Despite the better-than-expected earnings report, Arm's stock dropped by 9% in after-hours trading yesterday, possibly due to investor concerns about the sustainability of the company's future revenue growth.
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