Arm Holdings Reports Record Revenue Surge

Chip designer Arm Holdings posted a 39% increase in quarterly revenue, forecasted consistent sales for the fiscal second-quarter, and reported first-quarter earnings that exceeded analyst expectations. Arm's technology powers most smartphones globally, and its market value has surged due to AI computing bets.

In a surprising financial performance, chip design giant Arm Holdings reported a remarkable 39% increase in quarterly revenue on Wednesday. The UK-based company has forecasted fiscal second-quarter sales to be broadly in line with Wall Street estimates, predicting revenue between $780 million and $830 million, against average analyst expectations of $804.1 million.

In its recent financial disclosures, Arm revealed that first-quarter revenue soared to $939 million, surpassing the analyst forecast of $902.7 million. Alongside, the company showcased an impressive first-quarter earning of 40 cents per share, adjusted for stock-based compensation and other factors, outpacing the anticipated 34 cents per share.

Arm's primary revenue streams stem from licensing fees for its semiconductor designs and royalties from chip sales utilizing its technology. While its designs dominate smartphone chips globally, Arm is also venturing into data centers and other markets. Research from TD Cowen indicates that chips featuring Arm technology generate $200 billion annually for various chipmakers.

The company's stock price has nearly tripled since its initial public offering last September, reflecting significant market confidence, particularly related to artificial-intelligence computing. Despite this optimism, Arm's revenue and profits haven't benefited from AI advancements to the same extent as industry heavyweight Nvidia. (Max Cherney in San Francisco; Editing by David Gregorio)

(With inputs from agencies.)