A surprisingly significant increase in sales makes ARM optimistic for the current quarter. However, the chip designer’s forecasts for the 2024/2025 financial year, also published on Wednesday, fell slightly short of expectations. “I wanted to make sure we set a goal that we were confident we could achieve,” Chief Financial Officer Jason Child told Reuters.
The timing for concluding licensing agreements is difficult to estimate. US-listed ARM shares fell nine percent in after-hours trading.
Leader in smartphone processors
Thanks to a robust computer chip economy, the British company reportedly increased its revenue by 47 percent last quarter to $928 million (861.97 million euros). Based on this, the company expects revenue of between $875 and $925 million for the current quarter. Analysts had previously expected 857.5 million. For the full year, ARM targets consolidated revenue of $3.8 to $4.1 billion. The company receives a revenue share for each computer chip sold based on its designs. Almost all smartphones in the world run on ARM processors.
The hype around artificial intelligence (AI) has delivered strong share price gains for ARM in recent months, but has had only a limited impact on the balance sheet so far. The special AI processors from world market leader Nvidia from the US are based on a different technology. However, many of the remaining semiconductors in high-performance AI computers are manufactured based on ARM designs.
However, the British company hopes to get a bigger piece of the pie soon. To reduce their dependence on Nvidia, many AI providers, such as Alphabet subsidiary Google, are developing their own dedicated processors and relying on ARM designs.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
