SAN FRANCISCO :Chip designer Arm Holdings topped revenue and profit expectations for the second quarter on Wednesday, in part because customers like Apple are using a more profitable version of its next-generation technology.
The company, however, forecast current-quarter revenue with a midpoint that was merely in line with estimates, and shares slid about 3 per cent.
For the current fiscal third quarter, Arm forecast revenue in a range between $920 million and $970 million, with a midpoint of $945 million, compared with an average analyst estimate of $944.3 million, according to LSEG data.
The company said it expects fiscal third-quarter earnings of between 32 cents and 36 cents per share. Analysts had expected a third-quarter profit of 34 cents a share.
“This quarter is all about the validation of the strategies we’ve been talking about,” Chief Executive Rene Haas told Reuters in an interview. “We’ve got some real proof points.”
Arm derives revenue from licensing fees for its chip designs and collects a royalty for each chip sold that uses its technology. The company is in the midst of introducing its v9 architecture, which is expected to generate higher royalty payments.
Arm’s designs power nearly every smartphone in the world, and it has attempted to make headway in data centers and other markets. It has developed a number of pre-built designs that enable customers to build chips more quickly and has doubled the number of pre-built design licenses this fiscal year, the company said.
Haas said the company has signed up its first smartphone chip customer for its premade blueprints. Arm has previously sold those designs to server chip designers.
Arm’s second-quarter revenue rose 5 per cent to $844 million, compared with analyst estimates of $808.4 million.
The UK chip designer reported second-quarter earnings of 30 cents per share, adjusted for stock-based compensation, among other things. Analysts expected earnings of
