Arm Holdings PLC reported earnings Wednesday for the first time since returning to the public markets, but its shares were headed lower in the extended session as its December-quarter outlook missed the mark at the midpoint.
The chip designer logged a fiscal second-quarter net loss of $110 million, or 11 cents a share, whereas it earned $114 million, or 11 cents a share, in the year-before quarter. On an adjusted basis, Arm
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recorded 36 cents in earnings per share, compared with the 26-cent FactSet consensus.
Total revenue rose to $803 million from $630 million, while analysts had been expecting $740 million. The company generated $388 million in revenue from licenses and other sources, along with $418 million from royalties.
Arm’s quarterly revenue total was its highest ever, the company said in its shareholder letter.
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“We have seen strong demand for higher-performance CPUs as companies look to capture the increasing demand for [artificial intelligence], from cloud servers to smartphones to automotive applications,” the company said in its letter.
Royalty revenue was down 5% from a year before, Arm executives noted in the letter, amid lower sales of smartphone chips.
For the fiscal third quarter, Arm is modeling $720 million to $800 million in revenue, along with 21 cents to 28 cents in adjusted EPS. The FactSet consensus was for $776 million on the top line and 27 cents in adjusted EPS.
Arm’s stock fell about 7% in Wednesday’s after-hours trading. The company went public in mid-September.
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