ARM breaks the billion mark for the first time

ARM posts record figures: For the first time, the architecture designer makes more than one billion US dollars in sales. 1.24 billion dollars in the first quarter – the fourth fiscal quarter of the 2025 financial year for ARM. Compared to the same period last year, revenue grew by 34 percent.

Operating profit increased by a factor of almost 18 to 410 million dollars. This makes the minimal decline in net profit to 210 million dollars all the more surprising. Similarly, the operating cash flow fell by more than half to 258 million dollars –, even though ARM recently spent less money on research and development (546 million, -6.5 percent).

Large negative items

The annual report reveals two large negative items: Firstly, ARM lost 290 million dollars in its books at the end of the quarter due to investments in other companies. This is a paper loss that can be caused by weak share prices on the reporting date of March 31, for example. The past few months have been turbulent on the stock markets.

On the other hand, ARM lists a loss of 290 million dollars due to negative accounts receivable. This could be due to the timing of bookings.

In the full fiscal year (April 1, 2024 to March 31, 2025), ARM earned a good 4 billion dollars, 24 percent more than in the previous year. Operating profit increased by 650 percent to 831 million dollars. This leaves a net profit of 792 million dollars (+159 percent).

More license income, but displeasure on the stock market

Income from ARM licenses in particular has recently risen considerably – by 53 percent to 634 million dollars within one year. For the first time, license revenues are higher than royalty revenues (607 million dollars, +18 percent). This refers to the royalties per ARM chip sold.

According to ARM, interest in the so-called Compute Subsystems (CSS) is unexpectedly high. This is a modular system that licensees can use to click together their processors. The various components such as CPU cores, AI unit, GPU and memory interface are provided by ARM. The more components come from ARM itself, the higher the license costs. The CSS is now available for server chips, smartphone processors and automotive systems. In addition, the current version ARMv9 is said to be pricier than ARMv8 before it.

ARM expects sales of one billion to 1.1 billion dollars in the current second calendar quarter. The stock market does not like this – since the announcement of the business figures, the share price has fallen by eight percent.

(mma)