It's the End of an Era for Arm Holdings. Should Investors Be Worried?
Shares of Arm Holdings (NASDAQ: ARM) were down in pre-market trading Thursday morning despite a first-quarter earnings report that beat analyst expectations. Revenue shot up 39% year over year in the period ended June 30, driven by multiple high-value license agreements and a 17% rise in royalty revenue. The company estimates that 28.6 billion Arm-based chips were shipped in fiscal 2024, spread across the smartphone, embedded, automotive, cloud, and consumer electronics markets.
Despite Arm's solid results, there were a few things that may be worrying investors. First, the company's outlook wasn't quite as rosy as analysts expected. Arm expects to generate between $780 million and $830 million in revenue during the second quarter of fiscal 2025, compared to a consensus analyst estimate of $812.75 million. An adjusted earnings-per-share (EPS) guidance range of $0.23 to $0.27 also fell a bit short of the $0.28 analysts anticipated.
Second, Arm has stopped reporting the total number of Arm-based chips shipped each quarter. When a company suddenly stops reporting a key metric, that can sometimes be a red flag. In the fourth quarter of fiscal 2024, the number of chips shipped plunged 10% year over year to 7 billion.
Source Fool.com
