Arm beats earnings expectations, beats FY2025 forecasts to dent stock price
Although Arm's fourth-quarter revenue and earnings beat estimates, the shares fell more than 6% in after-hours trading as the company missed analysts' revenue forecasts for FY2025.
Although Arm's (ARM) revenue and profits exceeded expectations in the fourth quarter, the company's stock fell over 6% in after-hours trading due to its revenue forecast for fiscal year 2025 falling short of analysts' expectations.
In its fourth-quarter report for fiscal year 2024, Arm Holdings announced revenue of $928 million, a 47% year-over-year increase, surpassing analysts' expectations of $880.9 million. Net income was $224 million, or 21 cents per share, a significant increase from $3 million, or 0 cents per share, in the same period last year, also exceeding analysts' expectations.
The company noted that record-high royalty revenue of $514 million drove revenue growth. Chips based on Armv9 technology now account for approximately 20% of royalty revenue, up from 15% in the previous quarter.
Despite Arm CEO Rene Haas emphasizing that increased demand for Arm-based technology in artificial intelligence will drive strong growth for the company, its revenue forecast for fiscal year 2025 is between $3.8 billion and $4.1 billion, below analysts' expectations of $4.03 billion.
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