Arm’s post-IPO profit beats forecast, shares fall on weak revenue forecast, Investing.com says

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Arm, the former SoftBank semiconductor company, today announced its first financial report since its initial public offering, with total revenue exceeding sales expectations, reaching $806 million. Despite these positive results, the company’s shares fell more than 3% as its revenue guidance for the quarter fell short of expectations.

On Wednesday, Arm reported adjusted earnings per share (EPS) of $0.36. However, the company’s guidance for the current quarter forecast earnings of $0.21 to $0.28 per share and revenue of $720 million to $800 million, slightly below Wall Street forecasts.

The company’s licensing business has grown significantly over the past year, doubling in size and increasing total annual revenue by 28%. This growth was reflected in license sales, which increased 106% to $388 million. In contrast, rights revenue fell 5% to $418 million.

ARM-based chip shipments exceeded 7.1 billion units this quarter. The chips are integrated into a variety of devices including smartphones and personal computers, underscoring the company’s broad market reach.

Despite those strong numbers, Arm still suffered a net loss of $110 million due to one-time stock compensation worth more than $500 million triggered by its Sept. 14 Nasdaq IPO in New York. The company expects this compensation to be in the range of $150 million and $250 million in the coming quarters.

In 2022, regulators blocked a proposed sale of Arm to Nvidia (NASDAQ: NVIDIA). Today, major tech companies like Google (NASDAQ: ) and Meta are using Arm’s technology to develop chips with artificial intelligence capabilities.

This article was created and translated with the help of artificial intelligence and reviewed by an editor. For more information, please see our terms and conditions.

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