Arm Q4 earnings: AI tailwinds push revenue up 47%

Arm Holdings PLC (NASDAQ: ARM) slipped about 7.0% in extended hours on Wednesday even though it reported better-than-expected revenue for its fourth financial quarter.

Why is Arm stock down in after-hours?

The price action is interesting because the chip design company issued solid guidance indicating continued demand for artificial intelligence as well. $ARM now forecasts its revenue to fall between $875 million and $925 million in Q1 on up to 36 cents of per-share earnings.

Analysts, in comparison, were at $866 million and 31 cents a share, respectively. Rene Haas – its chief executive said in a letter to shareholders today:

Note that chips of this Nasdaq-listed firm power almost every smartphone in the world. Apple, Nvidia, Google, and Microsoft are among its notable customers. Arm stock is still up well some 40% versus the start of 2024.

Notable figures in Arm Q4 earnings release

• Earned $224 million versus the year-ago $3.0 million
• Per-share earnings also increased significantly to 21 cents
• Adjusted EPS printed at 36 cents as per the earnings report
• Revenue jumped 47% year-over-year to $928 million
• Consensus was 30 cents a share on $880 million in revenue

Arm Holdings recorded an annualised growth of 37% in its royalty revenue while licensing and other revenues went up a whopping 60% in its fourth quarter. CEO Haas also said on Wednesday: