By Elias Schisgall
Arm Holdings reported a higher profit in its fiscal fourth quarter, and said it is seeing rampant demand for its new computer chips.
The British semiconductor design company said it now has more than $2 billion of demand across fiscal 2027 and 2028 for its new Arm AGI CPUs, following an announcement last month that it would move into the chip-making business.
Data centers are now set to be Arm's largest business, and the company remains on track toward its $15 billion forecast, it said Wednesday. The chips are specialized to support agentic AI applications.
"The direction is clear: customers want Arm at the center of the AI data center," executives wrote in a letter to shareholders.
Shares of Arm were up 11% to $264 after the bell.
Arm reported a profit of $313 million, or 29 cents a share. That compares with a profit of $210 million, or 20 cents a share, a year earlier.
Stripping out certain one-time items, adjusted earnings were 60 cents a share. Analysts polled by FactSet were expecting 58 cents a share.
Revenue grew 20% to a record $1.49 billion, beating analyst estimates of $1.47 billion, according to FactSet.
The company said in February that it expects revenue growth would slow in the fourth quarter due to typical seasonality, as well as a tougher year-ago comparison due to higher royalty revenue from a chip by MediaTek.
Royalty revenue rose 11% to $671 million, driven by growth in smartphones and artificial-intelligence applications. Royalty from AI data centers more than doubled year-over-year.
License and other revenue jumped 29% to $819 million, which the company attributed to strong demand for its platform.
For the current first quarter, the company guided for adjusted earnings in a range of 36 cents to 44 cents a share on revenue between $1.21 billion and $1.31 billion.
Analysts expect first-quarter adjusted earnings of 37 cents a share on $1.25 billion in revenue.
Write to Elias Schisgall at elias.schisgall@wsj.com
(END) Dow Jones Newswires
05-06-26 1641ET
