Arm Holdings 3Q Profit Falls Despite Revenue Growth

By Kelly Cloonan

Arm Holdings logged lower profit in its latest quarter despite a rise in sales due to increased demand for its chips in artificial intelligence data centers.

The British semiconductor company on Wednesday posted a profit of $223 million, or 21 cents a share, compared with $252 million, or 24 cents a share, a year earlier.

Adjusted earnings per share were 43 cents, ahead of estimates of 41 cents a share according to analysts polled by FactSet.

Revenue climbed 26% to $1.24 billion, above analyst estimates of $1.23 billion.

Royalty revenue increased 27% to $737 million, driven by higher royalty rates per chip and increased use of Arm's chips in data centers.

"Demand for AI computing on our platform continues to accelerate," Chief Executive Rene Haas said.

License and other revenue gained 25% to $505 million, due to normal fluctuations in the timing and size of several large license agreements and contributions from the company's backlog, it said.

For the fiscal fourth quarter, the company guided for adjusted earnings of 58 cents, plus or minus 4 cents, and revenue of about $1.47 billion, plus or minus $50 million.

Analysts project revenue of $1.44 billion.

Write to Kelly Cloonan at [e-mail]

(END) Dow Jones Newswires

02-04-26 1644ET