The earnings call for Arm's Q2 2025 was largely positive, with significant growth in royalty revenue and strong demand for Armv9 and CSS licenses. Despite challenges in the industrial sector and ongoing litigation with Qualcomm, the company's outlook remains optimistic with strong guidance for the next quarter and fiscal year.

Company Guidance

During the ARM Q2 2025 earnings call, the company provided robust guidance across several key metrics. ARM reported Q2 total revenue of $844 million, surpassing the top end of their guided range, with royalty revenue reaching $514 million, a 23% year-over-year increase and matching their highest royalty revenue quarter to date. The company attributed this growth to the continued adoption of Armv9 and the initial deployment of CSS products. For Q3, ARM anticipates revenue between $920 million and $970 million, indicating a 15% year-over-year growth at the midpoint. ARM reiterated its full fiscal year 2025 guidance, expecting revenue between $3.8 billion and $4.1 billion, reflecting an 18% to 27% year-over-year increase, and non-GAAP operating expenses around $2.05 billion, a 19% increase from the previous year. Additionally, ARM forecasted non-GAAP EPS guidance for the full year to be between $1.45 and $1.65. The guidance highlights ARM's ongoing success in capitalizing on AI opportunities, expanding its presence in smartphones and automotive markets, and the significant progress in the adoption of Armv9 architecture.

Record Royalty Revenue Growth

Royalty revenue grew 23% year-over-year, reaching $514 million, driven by Armv9 adoption and CSS deployments. Smartphone royalties increased approximately 40% year-over-year despite only a mid-single-digit increase in smartphone shipments.

Strong Licensing Revenue and Demand

Licensing revenue was $330 million, a 15% decline year-over-year but better than the expected 25% decline. Annualized contract value (ACV) in Q2 was up 13% year-over-year. The CSS licenses doubled this year, contributing to a strong pipeline and demand.

Data Center and AI Integration

NVIDIA's Grace Blackwell shipments started, integrating NVIDIA GPU Blackwell with Arm CPU in Grace. Microsoft Azure Cobalt and Google GCPx, both Armv9 based, are now generally available, marking significant milestones in data center adoption.

Positive Outlook and Guidance

Guidance for Q3 expects revenue between $920 million and $970 million, representing a 15% year-over-year growth. Full-year revenue is expected between $3.8 billion and $4.1 billion, an 18% to 27% increase year-over-year.

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ARM Holdings PLC ADR (ARM) Earnings, Revenues Date & History

The upcoming earnings date is based on a company’s previous reporting, and may be updated when the actual date is announced

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ARM Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Feb 05, 2025	2025 (Q3)	0.34 / -	0.29	―	―	―
Nov 06, 2024	2025 (Q2)	0.26 / 0.30	0.36	-16.67% (-0.06)
Jul 31, 2024	2025 (Q1)	0.34 / 0.40	0.24	66.67% (+0.16)
May 08, 2024	2024 (Q4)	0.30 / 0.36	0.003	11900.00% (+0.36)
Feb 07, 2024	2024 (Q3)	0.25 / 0.29	0.177	63.84% (+0.11)
Nov 08, 2023	2024 (Q2)	0.26 / 0.36	0.11	227.27% (+0.25)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

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ARM Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Nov 06, 2024	$144.68	$150.65	+4.13%
Jul 31, 2024	$144.17	$121.51	-15.72%
May 08, 2024	$106.07	$103.59	-2.34%
Feb 07, 2024	$77.01	$113.89	+47.89%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.

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