Arm Reports Record Revenue Amid AI Boom, Faces Uncertainty from Potential Tariff Impacts

Arm says it isn't worried by tariffs, but no FY26 guidance

No direct impact on royalty, licensing biz but device end demand in firing line World War Fee Arm shares took a tumble after it declined to issue guidance for the year ahead in light of the current economic uncertainty, despite the chip designer claiming record revenue for the quarter just ended. The UK-based tech biz said it has lower visibility into the market than usual as it kicks off a new financial year, owing to the predictability in global trade caused by the Trump administration's tariff trickery and hostility to foreign-made products. "As a result, we do not consider it prudent to issue full year guidance," chief financial officer Jason Child said, speaking on the company's investor call to discuss the latest financial figures. Shares in Arm were down by as much as 9 per cent in after-hours trading on the Nasdaq. However, Child was quick to assert his confidence that Arm would see healthy growth in the year ahead, going by what Arm says it can see in customer design pipelines and rising demand for custom silicon and AI. "Given this view, we expect to continue to invest in R&D aggressively to support our customers and partners. This is a moment to press our advantages to ensure AI is everywhere and runs on Arm," he said. Based on current visibility, the Arm expects only a limited direct impact on its royalty and licensing revenues, according to Child. It is the longer-term indirect impact on end demand, the potential effect of tariffs on products using Arm technology, that is a cause for concern. "In our royalty business, we estimate that 10 percent to 20 percent of our revenues stems from shipments into the US. In licensing, we have found in past slowdowns such as COVID that impact is minimal, as our customers invest through near-term slowdowns, given lengthy chip development timelines," he explained. If there was a 10 percent or 20 percent impact on demand, that would translate to "a couple percent impact on royalties probably at most," Child claimed, adding: "But again, until we know exactly how this is going to apply, it's hard to know exactly." Chief exec Rene Haas was his usual bullish self, re-iterating the opportunity he believes AI presents for Arm and repeating his earlier claim that half of new server chips deployed at hyperscale datacenters this year will be Arm-based. His optimism is perhaps based on Arm's record revenue figure of $1.24 billion for Q4 of its fiscal year 2025, which ended March 31. "We delivered record royalty of $607 million this quarter, reflecting the growing value of every chip shipped with Arm inside. And licensing revenue hit an all-time high of $634 million, driven by new deals, including a multi-year AI partnership with the Malaysian government," Haas boasted. For the full year, total revenue was up 24 percent year-on-year to just over $4 billion, with royalties making up $2.17 billion of that, an increase of 20 percent, while licensing and other revenue made up about $1.84 billion, up 29 percent. Haas said Arm's royalty growth is broad-based, coming from all major markets, including datacenter, automotive, smartphones and IoT. On smartphones in particular, he claimed royalties were up 30 percent year-on-year, far outpacing the modest 2 percent growth seen in phone shipments, "proof of our rising value per device," he stated. But it is AI and the datacenter that Haas keeps returning to, pointing out that Arm cores now feature in Nvidia's latest and much-sought after accelerator products. "Now that Nvidia has transitioned away from the Hopper architecture to the Blackwell architecture, which uses Arm Grace CPUs, that actually has an accelerant to our overall growth in the datacenter to general purpose compute," he claimed. "As I mentioned in the opening, the 50 percent of new server chip designs and hyperscalers being Arm-based is really driven by a) Grace Blackwell acceleration and b) the leverage that it brings us in terms of general-purpose compute. It just makes more sense for a hyperscaler to standardize across Arm. So that's what's contributing to the growth there," Haas added. For the first quarter of FY'26 (i.e. the current quarter), Arm forecasts revenue in the range of $1 billion to $1.1 billion, down from the quarter just ended. Child said he expects royalty revenue to be "kind of flattish" into Q2, blaming seasonal effects. "And then I expect to see somewhere in the 10 percent to 15 percent kind of sequential growth in each of the last two quarters in the back half of the year," he stated, adding "Obviously, we'll provide more specific guidance as we get later into the year." ®

ARM Says Tariffs Can't Touch Its Business As AI Boom Fuels Record Revenue: 'Can't Run AI Without ARM,' CEO Rene Haas Says - ARM Holdings (NASDAQ:ARM)

ARM Holdings ARM executives reassured investors that the company's business model protects it from direct tariff impacts amid growing U.S.-China trade tensions, according to its fourth quarter of 2025 earnings call. What Happened: "We don't have direct impact on tariffs since tariffs today are really applied to end products and are not applied to services, which is what we're providing," said Jason Child, ARM's CFO. The British chip design firm reported record fourth quarter revenue of $1.24 billion, with full-year revenue topping $4 billion for the first time. ARM saw licensing revenue surge 50% year-over-year to $634 million, while royalty revenue grew 18% to $607 million. Despite strong performance, ARM declined to provide full-year guidance, citing macroeconomic uncertainties including potential indirect tariff effects. The company estimates 10-20% of its royalty revenue stems from shipments into the U.S., creating some exposure to demand fluctuations. "If it's a 10% or 20% impact on demand, then it could be a couple percent impact on royalties probably at most," Child explained. See Also: Trump Tariff Pressure Reportedly Opens Global Doors For Elon Musk's Starlink As Nations Rush To Show 'Goodwill' Get StartedStart Futures Trading Fast -- with a $200 Bonus Join Plus500 today and get up to $200 to start trading real futures. Practice with free paper trading, then jump into live markets with lightning-fast execution, low commissions, and full regulatory protection. Get Started Why It Matters: ARM projects first quarter revenue between $1-1.1 billion, representing 12% year-over-year growth, with royalty growth accelerating to 25-30%. The company continues benefiting from AI demand, with CEO Rene Haas emphasizing, "AI is changing everything, and you can't run AI without ARM." ARM's growing adoption in data centers remains a key growth driver, with Haas stating: "We expect up to 50% of new server chips at hyperscalers to be ARM-based this year." Price Action: Arm Holdings PLC's stock closed at $124.19 on Wednesday, up 1.43% for the day. In after-hours trading, the stock dropped sharply by 11.63% to $109.75. Year to date, Arm's stock is down 3.13%, according to data from Benzinga Pro. Read Next: Cathie Wood Strengthens AI Chip Holdings With Nvidia And AMD Purchases, Reduces Palantir Position By Another $38.8 Million Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock ARMARM Holdings PLC$109.75-11.6%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum-Growth-Quality-Value4.77Price TrendShortMediumLongOverviewGot Questions? AskWhich chip companies could benefit from AI growth?How will data center investments evolve with ARM?Who stands to gain from ARM's licensing growth?Which semiconductor stocks to consider amid tariffs?How might AI-driven companies leverage ARM technology?What impact will tariffs have on tech supply chains?Could cloud service providers shift to ARM chips?Which hyperscalers are moving to ARM-based architectures?How will investors react to ARM's earnings guidance?What opportunities exist in AI technologies supporting ARM?Powered ByMarket News and Data brought to you by Benzinga APIs

Arm Holdings Posts Record Q4 Revenues, Q1 Guidance Lower As 'Indirect Tariff Impacts Loom': Analysts Cut Price Targets - ARM Holdings (NASDAQ:ARM)

Arm Holdings PLC ARM shares tanked in early trading on Thursday, after the company on Wednesday reported its fiscal fourth-quarter results. The announcement came amid an exciting earnings season. Here are some key analyst takeaways. KeyBanc Capital Markets On Arm Holdings Analyst John Vinh maintained an Overweight rating, while reducing the price target from $195 to $175. Arm Holdings reported its quarterly revenues and earnings at $1.24 billion and 55 cents per share, beating consensus estimates of $1.23 billion and 52 cents per share, Vinh said in a note. Management guided to fiscal first-quarter revenues at $1.05 billion at the midpoint and earnings of 34 cents per share, below consensus estimates of $1.10 billion and 42 cents per share, as "indirect tariff impacts loom," he added. While the company's fiscal fourth-quarter results were supported by better-than-expected royalties, 10%-20% of these royalties are derived from shipments into the U.S., the analyst stated. In the absence of a tariff deal, "there are likely headwinds across consumer exposed end-markets including smartphones, CE, networking, and IoT," he further wrote. BofA Securities On Arm Holdings Analyst Vivek Arya reaffirmed a Buy rating, while cutting the price target from $144 to $135. The company's quarterly results were boosted by healthy licensing growth of 20%, continued royalty rate expansion on v9/CSS adoption as well as data center adoption and market share gains, Arya said. Arm Holdings did not provide full-year guidance, "citing delays in deal closures and uncertainty in end-demand due to evolving global tariffs," the analyst wrote. He expects the company's sales to grow 17%-18% to around $4.7 billion, about 5% below consensus of $4.93 billion. Guggenheim Securities On Arm Holdings Analyst John DiFucci reiterated a Buy rating, while trimming the price target from $180 to $147. Arm Holdings' results were mixed for the quarter, with better-than-expected Royalty revenues and disappointing License revenues, DiFucci said. The company surpassed earnings estimates due to lower operating expenses, he added. Management guided to fiscal first-quarter total revenue below consensus and did not issue full-year guidance, the analyst stated. "Arm does not expect to be impacted directly by tariffs, but noted that the indirect impact via the end-markets it serves is more uncertain," he further wrote. Check out other analyst stock ratings. JPMorgan On Arm Holdings Analyst Harlan Sur maintained an Overweight rating, while cutting the price target from $175 to $150. Penetration of v9 penetration, the latest version of Arm Holdings' CPU architecture that supports AI, Internet of Things (IoT) and specialized computing, re-accelerated to 30% of royalty revenues in the March quarter, Sur said. The company's total backlog exiting the fiscal year declined by 10%, the analyst stated. "We do acknowledge that the team does continue to have a strong focus on more system level/software/AI initiatives, which will be future differentiators on product performance," he further wrote. Rosenblatt Securities On Arm Holdings Analyst Kevin Cassidy reaffirmed a Buy rating, while reducing the price target from $203 to $180. Arm Holdings delivered record total revenues, backed by record revenues for both Licensing and Royalties, Cassidy said. ACV (annualized contract value) grew 15% year-on-year, "above the long-term expectation for mid-to-high single-digit percent growth," he added. The company is increasing its investments into new technologies, which pushes operating expenses above consensus, leading to the earnings guidance miss, the analyst stated. "In our view, with the AI market changes accelerating and TAM expanding, Arm cannot sit on its laurels," he further wrote. Needham On Arm Holdings Analyst Charles Shi reiterated a Hold rating on the stock. Arm Holdings' quarterly results were solid, although its fiscal first-quarter guidance came in slightly below the Street, Shi said in a note. While not providing full-year guidance, the company "soft-guided its royalty and licensing segment revenue profile, which leads us to believe the company still maintains the view that FY26 will be a 20% growth year despite the macro uncertainties," the analyst wrote. However, the company guided to "a significant step up" in operating expenses in the fiscal first quarter, with modest increases through the year, "which could lead to some margin compression," he added. Benchmark On Arm Holdings Analyst Cody Acree reiterated a Hold rating on the stock. Arm Holdings reported record revenues in the fiscal fourth quarter, with quarterly revenue exceeding $1 billion for the first time, Acree said. The company earned record licensing and royalty revenues, he added. For fiscal 2025, Arm Holdings' revenues exceeded $4 billion, with royalty revenues surpassing $2 billion for the first time, the analyst stated. "While we understand the company's sequentially soft license outlook, which is expected to be down about 28% Q/Q, following the high value Malaysian deal in Q4, and its expected 2% Q/Q decrease in royalties, likely driven by seasonally softer volumes in smartphones, we believe investors will need time to fully consider the details of this report, with the company's shares likely lacking a material positive catalyst for at least the short-term," he further wrote. ARM Price Action: Shares of Arm Holdings had declined by 5.19% to $117.75 at the time of publication on Thursday. Read More: * ARM Says Tariffs Can't Touch Its Business As AI Boom Fuels Record Revenue: 'Can't Run AI Without ARM,' CEO Rene Haas Says Photo: Shutterstock ARMARM Holdings PLC$117.92-5.05%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum-Growth-Quality-Value4.77Price TrendShortMediumLongOverviewGot Questions? AskWhich tech companies may face indirect tariff impacts?How will smartphone manufacturers adapt to tariffs?What investments are smart given Arm's guidance?Which royalty-based stocks are worth considering now?How could AI-related stocks benefit from Arm's growth?What market sectors are vulnerable to tariff changes?How might data center companies capitalize on Arm's tech?What consumer electronics firms could thrive post-tariff?Which IoT companies could gain from Arm's innovations?What investment strategies could hedge against tariffs?Powered ByMarket News and Data brought to you by Benzinga APIs