Arm shares slide 6% on licensing revenue miss

Investing.com -- Arm Holdings ADR (NASDAQ: ARM) reported fiscal third-quarter results that beat expectations, its outlook also slid past estimates but shares fell more than 6% in extended trading on licensing revenue miss.

The chip technology firm posted EPS of $0.43, topping analyst expectations of $0.32. Revenue rose to $1.24 billion, just ahead of the $1.22 billion consensus.

For the fourth quarter of fiscal 2026, Arm forecast EPS of $0.58, compared with estimates of $0.57. It expects revenue of $1.47 billion, above the Street view of $1.44 billion.

Investors focused shifted to licensing revenue, which includes upfront fees for access to Arm’s technology. That segment totalled $505 million, below estimates of about $520 million. Company said the licensing revenue rose 25% from a year earlier.

In its shareholder letter, Arm said third-quarter revenue rose 26% from a year earlier, marking a record quarter and its fourth straight quarter above $1 billion.

Royalty revenue grew 27% to a record $737 million, driven by demand across data center, smartphones and AI-related markets.

“Demand for the Arm platform is strong as more leading companies signed high-value licenses for next-generation technologies,” the company said.

You May Also Be Interested In

• GitLab’s second-quarter revenue jumps 21% as AI demand drives bookings
• Trump weighs "mow the lawn" strategy to counter Iran in Strait of Hormuz
• Morgan Stanley upgrades Robinhood, sees 43% upside