Q3 2025 Arm Holdings PLC Earnings Call Transcript
Key Points
- ARM Holdings PLC (ARM) reported record total revenue and royalty revenue for the third quarter of fiscal 2025, with total revenue growing 19% year-on-year.
- The company is experiencing strong demand for its v9 and CSS technologies, driven by AI growth across various markets including smartphones, autos, and IoT.
- ARM is gaining market share in the data center with significant adoption of its technology by major players like AWS, Microsoft, Google, and NVIDIA.
- The company has a large developer community of over 20 million, which supports its ecosystem and future growth.
- ARM's guidance for the fourth quarter indicates expected revenue growth of 32% year-on-year, reflecting strong market demand and potential large license deals.
- ARM's non-GAAP operating costs have reached their highest level at $522 million due to increased R&D spending, which could impact short-term profitability.
- The company's ACV growth rate has decelerated to 9% year-on-year, which is lower than the recent run rate of low teens.
- There is uncertainty regarding the timing of large license deals, which could affect revenue forecasts if they slip into the next fiscal year.
- The Qualcomm lawsuit poses a risk, although ARM has forecasted revenue assuming it will not prevail in the lawsuit.
- ARM China remains a significant portion of revenue, but its contribution is expected to decrease over time, potentially impacting overall revenue growth.
Good day, and thank you for standing by. Welcome to the Arm Third 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 turn the conference over to your first speaker today, Jeff Kvaal, Head of Investor Relations. Please go ahead, sir.
Thank you, and welcome to our earnings conference call for the third quarter of fiscal '25, which ended December 31, 2024. On the call today are Rene Haas, Arm's Chief Executive Officer; 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 about 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 any risks that we highlight during the call, important risk
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