What can we expect from ARM's Q4 2025 earnings forecast?

**ARM's Q4 2025 Earnings Forecast Overview**: ARM Holdings is expected to report earnings per share (EPS) of approximately $0.34, reflecting a 20% increase year-over-year. The estimated revenue for the quarter is $1.22 billion, indicating a 47% year-over-year growth. 1. **Strong Royalty and Licensing Revenue**: ARM's revenue surge is primarily driven by record royalty revenue, which reached $514 million, a 37% year-over-year increase. This growth is attributed to the rising adoption of Armv9-based chips, especially in high-growth markets such as smartphones, servers, and automotive sectors. 2. **License Revenue Boost**: License revenue also contributed significantly to the revenue beat, achieving $414 million, a 60% year-over-year increase. This growth is due to multiple high-value license agreements signed by companies investing more in Arm-based technology, particularly for AI applications across all end markets. 3. **Market Position and Outlook**: ARM's continued success in the AI-driven market is evident, with its compute platform being the most popular across all AI software models. The company's CEO, Rene Haas, highlighted the strong demand for Arm-based technology, which is expected to drive growth further. Despite the positive results, ARM's guidance for fiscal 2025 slightly missed analysts' expectations, with revenue anticipated to be between $3.8 billion and $4.1 billion, compared to the $4.03 billion consensus. 4. **Investor Considerations**: While ARM's recent performance is encouraging, the company's stock experienced a notable decline following the earnings release due to the guidance miss. However, the long-term growth potential, particularly in AI and the planned development of AI chips, could present opportunities for investors. In conclusion, ARM's Q4 2025 earnings are poised to reflect strong growth, driven by robust royalty and licensing revenue. While short-term expectations may not meet all forecasts, the company's strategic positioning in the AI market and plans for future growth offer a positive long-term outlook.