Arm posts record revenue in first results since IPO

Chip designer Arm has reported a 28% year-on-year increase in revenue, its highest ever at $806m (£656.5m) in its first financial results since its IPO.

Despite the revenue growth, shares in the Cambridge-headquartered company fell by up to 8% after it posted a sales outlook below Wall Street expectations. Arm is estimating full-year revenue in the range of $2.96bn to $3.08bn.

The revenue growth was in part achieved by licencing agreed with technology firms along with more royalties from market share and larger royalty rates.

Arm, which creates designs for the semiconductors powering many of the world’s electronic devices, benefited from the growing demand for chips to power AI applications. Arm said the AI boom drove a 106% year-on-year increase in licence revenue.

The company reported a loss of $110m (£89.5m) for the three months up to 30 September and paid out $509m in employee stock compensation.

Rene Haas, CEO of Arm, said: “Following our successful IPO, Arm is off to an outstanding start as a public company with record revenue fueled by the success of our diversified business.”

In its third-quarter results, Arm reported it had delivered 400 million fewer chips than the same period last year, taking its cumulative total to 272.5 billion.

“Our royalty revenue benefited from market share gains in automotive and cloud compute as our latest technologies, such as Armv9, increased penetration across all markets where AI is driving the need for our unique combination of performance and power efficiency,” said Haas.

Arm completed its IPO on Nasdaq in New York in September, despite lobbying efforts from the British government to float in London.

Earlier this month Arm investment in the computing firm Raspberry Pi.