Q2 2025 Arm Holdings PLC Earnings Call Transcript
Key Points
- ARM Holdings PLC (ARM) reported record royalty revenue, up 23% year-on-year, driven by increased adoption of the v9 architecture.
- The company exceeded the high end of its revenue guidance for the quarter, with total revenue reaching $844 million.
- ARM's smartphone royalty revenue grew by 40% year-over-year, significantly outpacing the 4% growth in smartphone unit shipments.
- ARM has doubled the number of CSS licenses in the past year, indicating strong demand for its new technology offerings.
- The company is seeing strong demand for its AI capabilities, with significant milestones achieved in partnerships with NVIDIA, Microsoft Azure, and Google GCP.
- Licensing revenue declined 15% year-over-year, although this was better than the expected 25% decline.
- There is ongoing litigation with Qualcomm, which could potentially impact future revenue and operating expenses.
- The industrial sector continues to show weakness due to an ongoing inventory correction in the semiconductor industry.
- ARM's guidance indicates that IoT market recovery is not expected until next year.
- The company faces challenges in the networking sector, which is expected to remain slow despite growth in data center applications.
Good day, and thank you for standing by. Welcome to the Arm second-quarter fiscal year 2025 webcast and conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jeff Kvaal, Head of Investor Relations. Please go ahead.
Thank you very much. Welcome to our earnings conference call for the second quarter of fiscal '25 ending September 30, 2024. On the call today are Rene Haas, the Chief Executive Officer of Arm; and Jason Child, Arm's Chief Financial Officer. During the call, Arm will discuss forecasts, targets and other forward-looking information regarding the company and its financial results.
While these statements represent our best current judgment of future results and performance as of today, our actual results are subject to many risks and uncertainties that could cause actual results to differ materially. In addition to these risks that we may highlight during the call,
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