Arm releases its first financial report since IPO, Q2 chip shipments down 6% YoY.

Arm's Initial Post-IPO Financial Report Shows 6% Decline in Q2 Chip Shipments

【PhoneAuto News】The AI craze is spreading worldwide, leading to skyrocketing stock prices. Cloud computing, as an indispensable infrastructure for AI computing power, also plays an important role in this wave. In the midst of this frenzy, UK chip design giant Arm has also achieved impressive performance, but its performance guidance for the fourth quarter is lower than market expectations.

Arm’s CFO, Jason Child, stated prior to the release of the financial report that although the guidance for the fourth quarter is below expectations, the guidance for the full fiscal year is higher than expected. This is mainly due to a large order of licensed permits being delayed by one quarter. He explained that the delayed delivery of this large order has resulted in a lower revenue expectation for the fourth quarter, while the revenue expectation for the full fiscal year remains stable.

In the financial report released on Wednesday, Arm performed strongly in the company’s second quarter of the 2024 fiscal year, which ended on September 30 (referred to as the third quarter). Revenue increased by 28% year-on-year to $806 million, marking the first time in the company’s history that quarterly revenue exceeded $800 million, surpassing analysts’ expectations of $746.9 million. Adjusted earnings per share (EPS) were $0.36, a year-on-year increase of 112%, higher than the analysts’ expectation of $0.26. Adjusted operating profit increased by 92% year-on-year to $381 million, with an adjusted operating profit margin of 47.3%, a YoY increase of 15.9 percentage points.

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However, despite surpassing analysts’ expectations in the third quarter performance indicators, Arm’s performance guidance for the fourth quarter fell short. The company predicts that revenue and adjusted EPS will be lower than market expectations in the fourth quarter of the calendar year. This prediction caused Arm’s stock price to plummet after the financial report was released, with after-hours decline exceeding 8%.

Although Arm’s performance guidance for the fourth quarter is disappointing, analysts remain optimistic about Arm’s future development. Commenting on the situation, an analyst stated that although the third-quarter performance looks good and the fourth-quarter guidance is not ideal, they don’t really know what Arm’s customer cycle is like. The analyst believes that Arm’s performance guidance is based on the actual situation of its customer cycle, which may be more complex than market expectations.

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