Profit falls as Arm’s data-center royalties double year over year
Arm Holdings reported fiscal second-quarter revenue of $1.44 billion, an increase of 27% from a year earlier, as artificial-intelligence demand fueled growth. Revenue also exceeded the $1.38 billion forecast from analysts surveyed by FactSet.
The semiconductor company’s reported profit declined to $130 million, or 12 cents a share, from $238 million, or 22 cents a share, in the same period a year earlier. After excluding certain one-time items, adjusted per-share earnings were 52 cents, ahead of the 48 cents anticipated by analysts, according to FactSet.
Arm said, “AI is driving strong demand for compute across cloud, devices and autonomous systems.” The company’s intellectual-property business, where partners buy Arm technology and deploy Arm-based silicon, and its new silicon business, which includes Arm CPUs, both drove growth.
The company also was gaining market share across the data-center sector as AI developers looked for power efficiency and performance. Data-center royalties doubled year over year.
For the current third quarter, Arm expected revenue of $1.54 billion, plus or minus $50 million. That forecast was above the $1.52 billion projected by Wall Street analysts.
Arm also forecast adjusted earnings of 56 cents a share, plus or minus 4 cents, for the third quarter. Analysts forecast 55 cents a share. Arm shares were down 5.28%.