Arm's First-Quarter Report Mixed Results with Revenue Surprises and Stock Plunge

TapTechNews August 1st news, the first-quarter financial report released by the chip design giant Arm shows a mixed situation in its performance. Although the overall revenue and profit exceeded market expectations, the core business - royalty revenues failed to meet the standard, resulting in a more than 7% plunge in the stock price in after-hours trading.

Arm's net profit in the just-ended first fiscal quarter reached 223 million US dollars, a more than doubling year-on-year increase, and the adjusted earnings per share was 40 cents, higher than the 34 cents expected by the market. At the same time, the company's revenue also recorded a strong 39% year-on-year growth, reaching 939 million US dollars, exceeding the 906 million US dollars predicted by analysts.

However, looking closely at the financial report data, it can be found that Arm's royalty revenues were only 467 million US dollars, lower than the 492 million US dollars expected by the market. Although another business - licensing and other sources reached 472 million US dollars, exceeding expectations, but overall, the weak performance of the core licensing business dragged down the stock price.

Despite this, Arm still maintained its expected annual revenue between 3.8 billion and 4.1 billion US dollars.

TapTechNews noted that Arm's stock price has also recently faced pressure from analysts. HSBC downgraded Arm's stock rating a few days ago, expressing concerns about the high valuation of the stock and the potential short-term profit downside risk, especially considering the possible slowdown in the Android smartphone market and the possibility that the heat in the field of artificial intelligence may be lower than expected.

As of the close of Wednesday, Arm's stock price has almost doubled since the beginning of the year, but the plunge after the release of this financial report undoubtedly poured cold water on investors, and the company will be relisted in September.