Stock market turbulence: ARM remains below one billion US dollars
Without this company, almost nothing would work worldwide. Nevertheless, ARM's turnover is currently largely stagnating.
(Image: raigvi / Shutterstock)
The British company behind the CPU instruction set of the same name, ARM, generated revenue of around USD 844 million in the third calendar quarter of 2024, up 5 percent on the previous year. All growth comes from royalties, i.e. the fees that ARM receives per ARM chip manufactured. This makes it clear that ARM usually only receives pennies per chip, or a few dollars at most in the case of more expensive smartphone processors.
ARM is left with a net quarterly profit of 107 million dollars. The largest expenditure item is research and development at 507 million dollars.
License revenues fall
The royalty branch has a turnover of 512 million dollars – 23 percent more than in the previous year. Business with licenses, which allow customers to develop ARM processors in the first place, fell by 15 percent to 330 million dollars. ARM explains this with the "normal fluctuation in the timing and scope of several high-value license agreements". Interest in ARM remains high, the company assures.
Nevertheless, things do not look very rosy: This is the worst license result since the second calendar quarter of 2023.
ARM has been trying to expand its own sources of revenue for years. On the one hand, new markets such as server processors and Windows on ARM should help, on the other hand, the company is apparently looking for higher royalties per ARM chip. The first court hearing in the legal dispute with Qualcomm, one of ARM's most important customers, begins in December.
ARM accuses the company of breaching a license by taking over the processor start-up Nuvia. Qualcomm replies that ARM is trying to increase its fees unfairly. The legal dispute is likely to have an impact on the entire processor market.
Share price first falls and then rises
ARM expects sales of between 920 and 970 million dollars in the current quarter. The stock market reacted ambivalently to the business figures: After the announcement, the share price fell by 5 percent, after which it rose again by 11 percent.
(mma)