Nvidia, CSS, Malaysia drive Arm’s billion-dollar quarter

Business news | May 8, 2025

By Peter Clarke

Processor IP licensor Arm Holdings plc posted a record-breaking billion-dollar fourth fiscal quarter and four-billion-dollar year.

In 4QFYE25 Arm made a net profit of US$210 million on revenue of US$1.24 billion. The revenue was up 34 percent year-on-year.

Arm said the strong quarter was supported by Nvidia’s transition from Hopper to Blackwell GPUs for AI as well as increased Compute Subsystem (CSS) deals and a multiyear licensing deal signed with the Malaysian government.

Although Arm said it saw no impact from speculation over tariffs it gave a lower forecast for the 1QFYE26 of between US$1.0 billion and US$1.1 billion. It also declined to give a full-year forecast.

For the full fiscal year ending 2025 Arm made a net profit of US$792 million on revenue of US$4.01 billion. Revenue was up 23.9 percent compared with the previous year while profit was more than doubled from US$306 million.

In the medium to long-term Arm’s propects look good as it continues to serve semiconductor licensees and increasingly goes directly to their customers.

While neither Hopper nor Blackwell requires support from an Arm CPU Blackwell is being shipped almost exclusively with Nvidia’s own Arm-based Grace CPU. At the same time Arm has been selected as the CPU architecture by Amazon Web Services (Graviton), Microsoft (Cobalt 100) and Google (Axion).

Rene Haas, CEO of Arm, told analysts that he expects 50 percent of server CPUs delivered to top hyperscalers to be Arm-based this year.

Arm’s exceptional quarter was driven by licensing revenue up 53 percent y-on-y to US$634 million. Arm made the point that licensing recognition and revenue is, by its nature lumpy, but highlighted a multi-year agreement with the Malaysian government to accelerate the AI ecosystem there by providing access to CSS and the flexible access business model

However, royalty revenues were also up 18 percent year-on-year to US$607 million. Arm stated that royalty growth was backed across multiple sectors including data center, automotive, smartphones, and IoT.

Arm is benefitting from the increasing complexity of compute, particularly in the datacenter. It made the point that whereas high-end compute typically had 8 cores in 2016 they now have 192 cores. As well as the number of cores the Armv9 architecture and compute subsystems (CSS), linking multiple cores together and providing access, are lifting royalty rates.

Armv9, having been responsible for about 25 percent of royalties for the first three quarters of the fiscal year, jumped up to “north of 30 percent” in the most recent quarter.

The company pointed out that CSS deals are all based on Armv9 architecture and that it has 13 licensees so far. The company has not named licensees but said it has six in the ‘client’ sector, implying smartphones, PCs and other terminal equipment, and six in infrastructure, implying datacenters, high-performance computing and networking. The most recent announcement was of an unnamed global EV manufacturer.