Arm Holdings (ARM) demonstrated robust growth in its third quarter of 2025 (Q3 2025), with a significant surge in revenue and a notable increase in net income compared to the previous quarter (Q2 2025) and the year-earlier quarter (Q4 2024).
- Revenue Shift:
- ARM's revenue for Q3 2025 was reported at $1.24 billion1, surpassing the Q2 2025 revenue of $983.0 million2. This indicates a substantial increase in sales, primarily driven by the deployment of Armv9 CPUs and Compute Subsystems (CSS) across various markets, including smartphones, data centers, and automotive segments3.
- The company's full-year revenue for FYE25 exceeded $4 billion, with royalty revenues reaching $2 billion for the first time1. This reflects a strong performance across all segments and a growing market acceptance of ARM's technology.
- Expense Shift:
- While specific expense figures for Q3 2025 are not available, it is evident that ARM's operating expenses increased by 11% year-over-year to $566 million in Q4 20244. This rise is a testament to ARM's investment in research and development and strategic expansion.
- The company guided to $625 million in Q1 operating expenses, indicating continued investment in its engineering base amid broader demand expectations4. This suggests that while expenses are rising, they are being managed to support the company's growth trajectory.
- Profitability Impact:
- ARM's adjusted operating margin for Q4 2024 was 52.8%, which is above the 50% midpoint of its sales guidance4. This indicates efficient management of expenses relative to revenue.
- The company's net income for Q3 2025 was $252.0 million, up from $189.0 million in Q2 20252. This substantial increase in net income underscores the effectiveness of ARM's cost management despite the rise in expenses.
In summary, ARM experienced a notable boost in revenue for Q3 2025, driven by strong demand across its core segments and a growing market presence. While expenses have risen, the company's strategic investments are positioning it for continued growth and profitability.