Arm Holdings has released its earnings forecast for the upcoming fiscal year, and the results have disappointed analysts. The chip designer, known for its partnership with Nvidia, expects fiscal Q1 adjusted earnings per share to range between 30 cents and 38 cents, falling short of Wall Street’s expectations of 41 cents. This news sent shares of Arm Holdings down by 9% in after-hours trading.
The company’s revenue projection for Q1 also missed expectations, with estimates ranging from $1 billion to $1.1 billion—below the consensus estimate of $1.05 billion. Despite these challenges, Arm Holdings posted impressive figures in its fiscal fourth quarter, including record revenue of $1.24 billion, marking a 34% year-over-year increase. Adjusted net income came in at $584 million, or 55 cents per share, surpassing the analyst estimates.
Arm Holdings Earnings Forecast: Key Drivers Behind the Decline
Several factors contributed to the disappointing earnings forecast. Despite a strong fiscal fourth quarter, where royalty revenue surged 18% to a record $607 million, the company is facing some headwinds in the current fiscal year. The strong performance in license and other revenue—up 53% to $634 million—could not offset the more cautious outlook for Q1.
The lower-than-expected guidance has raised questions about the sustainability of Arm Holdings’ revenue growth, especially as the company continues to navigate competitive pressures in the chip design space. As a result, investors are carefully watching the trajectory of Arm Holdings’ performance in 2025.
Arm Holdings Earnings Forecast: A Look Ahead for Investors
Looking forward, investors remain uncertain about the company’s ability to meet its forecast, given the cautious projections for Q1. Despite a strong fiscal Q4 performance, the earnings forecast for the upcoming quarter suggests that growth might slow. Analysts will continue to monitor the company’s strategy and market conditions to gauge whether Arm Holdings can regain its momentum.
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Source: www.investopedia.com
