Arm Holdings Updates Earnings Outlook

In extended trading on Wednesday, Arm Holdings revealed a less optimistic forecast than anticipated, leading to a dip in stock prices.

The chip designer, in collaboration with Nvidia, adjusted its earnings per share expectations from 38 cents down to a range of 30 to 30 cents. Meanwhile, Arm’s estimated revenue fell between $1 billion and $1.1 billion, which is below the analyst consensus midpoint.

As a result, Arm’s shares plummeted by about 9% during after-hours trading. Overall, the stock has ticked down less than 1% since the beginning of 2025 up until Wednesday’s close.

In the fourth quarter, Arm reported a record revenue of $1.24 billion, a 34% increase from the previous year, which exceeded analyst expectations as noted by Visible Alpha. The adjusted net income was $376 million, or 36 cents per share last year, rising to $584 million, or 55 cents per share—again surpassing projections from Wall Street.

Additionally, Arm’s royalty revenue reached an all-time high of $607 million, climbing from 18%, while licensing and other revenues jumped 53% to $634 million.