The replica of the arm is an electronic chip board in a partnership between Malaysia and ARM HOUPTINGS in Malaysia and Kuala Lumpur on March 5, 2025.
Hari Anggara | Parenting | Getty Images
Arm holding Stocks in after-hours trading in the company fell as much as 9% in the first quarter income Results Wednesday.
This is the case with the analyst estimates surveyed by LSEG.
- Earnings per share: 35 cents adjustment vs. Expected 35 cents
- income: $1.05 billion vs. $1.06 billion expected
The company said it expects that revenue will be between $1.01 billion and $11.1 billion in the second quarter, in line with the $1.05 billion expected by analysts tracked by LSEG.
Net income fell to $130 million or 12 cents per share, or 12 cents per share, from $223 million ($223 million or 21 cents) a year ago.
Arm is a chip technology company that sells buildings to make chips to power billions of devices, including apple and Qualcommchip. However, the CEO Pure Haas In an interview with Reuters on Wednesday, the company said the company “consciously decided to make a bigger investment in technology beyond design”, confirming that the company is considering designing its own processor.
The move could lead to “execution risk,” executives told investors on their revenue calls. ARM has sold technology to nearly every top chip designer, and introducing its own finished chips or semiconductors could make them a competitor.
ARM’s customers include CSP or cloud service providers such as Microsoft and Amazon, which are developing custom chips based on ARM. OEMs or OEMs are companies that design their own computers like Apple.
“One thing we’re seeing with new customers like CSPs and OEMs and even traditional customers has called for a better starting point,” Haas said on Wednesday’s earnings call.
Haas said the arm might develop the entire chip, which could be integrated into a custom chip, or it could be developed as a whole chip itself.
“We are now looking for viability beyond the current platform to other subsystems, chiplets or possible complete solutions,” Haas said.
But, meanwhile, ARM’s biggest business is using royalties for its most basic technology in smartphone chips, said Jason Child, ARM CFO.
“Growth in the smartphone space is not as strong as we expected,” the child said.
ARM said that this is because it is primarily a licensing company, so it expects “a limited direct impact on our royalties and limited licensing revenue”, but the company “has less indirect impact on final demand and less impact on final demand” because tariffs slow down its sales of ARM technology in it.
“In terms of licensing, customers have historically invested in light of the longer chip development timeline,” Child said.
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SoftBank expanded its licensing agreement with ARM, the company said on Wednesday’s earnings call. SoftBank controls about 90% of the arms, and Make the company public In 2023.
Asked about expanding the agreement, Child pointed to a $500 billion plan with OpenAI to build an AI infrastructure called Stargate. “Stargate hopes to scale up in the next few years,” the child said. “This is a huge computing and huge potential for a lot of design opportunities.”
CNBC’s Kif Leswing contributed to the report.
