The logo of semiconductor design company Arm on a Chip.
Jakub Bolzycki | Noor Photos | Getty Images
UK chip design company shares arm The company’s shares fell 8.83% in premarket trading Thursday as subdued revenue guidance overshadowed a positive sales quarter driven by demand for artificial intelligence applications.
Arm reported fourth-quarter revenue of $928 million on Wednesday, a 47% year-over-year increase.
Results were primarily driven by Arm’s licensing business, which grew 60% in the quarter to $414 million. The company said it is “signing multiple high-value licensing agreements” for its artificial intelligence chips.
Meanwhile, Arm’s royalty revenue rose 37% annually to $514 million, as the company said it was seeing increasing penetration of its recently launched Armv9-based chips.
But what left investors unmoved was Arm’s guidance. Arm said it expects fiscal 2025 revenue to be between US$3.8 billion and US$4.1 billion. Analysts expected full-year revenue of $3.99 billion, according to LSEG data.
The company said sales in the first quarter of fiscal 2025, the current quarter, are expected to be $875 million to $925 million, compared with expectations of $857.5 million.
Correction: This article has been updated to correct revenue estimates for the first quarter of fiscal 2025.
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