Arm Holdings (ARM) has announced quarterly financial results that narrowly beat Wall Street’s forecasts.
For its fiscal third quarter, the British chipmaker reported earnings per share (EPS) of $0.43 U.S., which slightly surpassed the $0.41 U.S. consensus of analysts.
Revenue in the quarter totaled a record $1.24 billion U.S., which was slightly above the $1.23 billion forecast on Wall Street. Sales were up 26% from a year earlier.
Management said the company’s royalty revenue was $737 million U.S., up 27% from a year ago and above the $708 million U.S. that analysts expected.
Licensing revenue in the quarter amounted to $505 million U.S., up 25% from a year earlier but below the $520 million U.S. expected among analysts.
Looking ahead to the current quarter, the company expects revenue of $1.47 billion U.S., plus or minus $50 million U.S., on earnings of $0.58 U.S. a share, plus or minus four cents.
Wall Street was expecting $1.44 billion U.S. in revenue on earnings of $0.57 U.S. a share for the current quarter.
Arm, whose microchips and processors are mainly found in smartphones, makes money by licensing its chip designs to companies such as Apple (AAPL) and Qualcomm (QCOM).
Arm’s latest chip technology generates higher royalty rates than its previous products.
The company is also expanding into the high-end cloud server market by selling its chip technology to companies such as Microsoft (MSFT) and Nvidia (NVDA).
There has been some concern among analysts and investors about demand for smartphone chips as artificial intelligence (A.I.) evolves.
ARM stock has declined 40% over the last 12 months to trade at $104.90 U.S. a share.
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