ARM achieves sales above guidance but outlook disappoints

Business news | February 7, 2025

By Peter Clarke

Semiconductor IP licensor Arm Holdings plc (Cambridge, England) is on course to achieve annual sales of US$4 billion as it achieved sales of US$983 million in the third quarter of its fiscal 2025.

The company, which is majority owned by SoftBank Group, made an increased net profit on US$252 million on the revenue of US$983 million, which was up 19 percent compared with the same quarter a year before. The revenue was above the top-end of the guidance previously given of US$920 million to US$970 million.

However, the outlook for the fourth fiscal quarter of between US$1,175 million and US$1,275 million seemed to play into arguments that AI spending may moderate in 2025 while the sector waits for AI-PC and AI-smartphone sales to start picking up. Arm’s share price dipped by about 4 percent on the publishing of the financial results.

In January Arm joined the multihundred billion dollar Stargate project AI datacenter infrastructure project with OpenAI, Microsoft, Nvidia and Oracle and also the Cristal Intelligence project on agentic AI with OpenAI and SoftBank.

This all indicate that there is much potential for the Arm architecture to be key to future AI processors.

Arm royalties were US$580 million in 3QFY25 an annual increase of 23 percent while licensing revenue hit US$403 million an increase of 14 percent.

Rene Haas, CEO of Arm, told analysts that the record 3QFY revenue was driven by AI demand and adoption and deployment of the ARMv9 architecture and strong demand for the ARM CSS (client subsystem), which increases Arm’s royalty rate per chip.