Arm’s Q4 Royalties Fall to $671M, Shares Gain 13% Before Pullback
ARM•Arm’s Q4 royalties of $671 million missed the $693 million estimate, yet revenue and 40 cents EPS beat forecasts, sending shares up 13% before reversing overnight. The company warned of smartphone unit declines but forecast its new AGI CPU will generate over $2 billion in 2027–28 from AI data-center demand.
1. Q4 Financial Results
Arm reported Q4 royalty revenue of $671 million, below the $693 million consensus estimate, but overall revenue and EPS of 40 cents exceeded forecasts, reflecting robust licensing fees and initial AI data-center chip shipments.
2. Market Reaction
Shares spiked 13% in after-hours trading on the earnings beat but retraced overnight as investors weighed weak smartphone unit growth against the upside from data-center demand.
3. Outlook and Strategic Shift
CEO Rene Haas cautioned that phone shipments flipped to negative last quarter but highlighted accelerating AI data-center growth, guiding Q1 revenue to $1.26 billion and forecasting its new AGI CPU will generate over $2 billion across 2027–28.
