Arm tops quarterly revenue of $1.24bn, a first, but share price still takes a knock

Arm has published its results for its fourth quarter and fiscal year ending 31 March, 2025.

In the latest quixotic verdict from the markets, revenue was up, earnings were up, but Arm’s shares value took a hit.

The fourth quarter was a strong end to another great year for the chip designer. Arm achieved record-breaking results in Q4 ($1.24billion vs $1.23bn predicted) and delivered record revenue of $4bn. The Cambridge success story, which recently celebrated the moment 40 years ago when its first chip was fired up, tipped into a $1billion revenue milestone for the first time in its history.

Royalty revenue rose 18 per cent year-over-year to $607m, driven primarily by the continued adoption of the Armv9 architecture, the ramp of chips based on Arm CSS, and increased usage of Arm-based chips in data centres.

License and other revenue rose 53 per cent year-over-year to $634m. Earnings per share were 54 cents against 52 cents expected.

But still Arm’s shares took a 9 per cent hammering when the results came out.

Why? The market punished the firm for delivering a Q1 2025 outlook below analysts’ expectations, with revenue anticipated to be down to $1bn, and fiscal first-quarter adjusted earnings per share of 30 cents to 38 cents, short of the 41 cents called for by Wall Street.

Rene Haas, CEO of Arm, said: “Arm delivered record-breaking results for both the fourth quarter and the full fiscal year ending 2025.

“We surpassed $1bn in revenue for the first time in Q4, driven by increased deployment of our CSS platforms across the AI data centre, cloud compute and mobile. As AI growth from the cloud to the edge creates demand for more energy-efficient compute, Arm will enable AI everywhere.”

By mid-week, the negative flutter was over and Arm shares were doing just finer at $132, up from $107 at the start of April.