Arm Holdings Plunges 10.38% on Cautious Outlook

On May 8, 2025, Arm Holdings experienced a significant drop of 10.38% in pre-market trading, marking a notable decline in its stock performance.

Arm Holdings reported its fourth-quarter earnings, revealing adjusted earnings per share (EPS) of $0.55, surpassing analyst estimates of $0.53. The company's total revenue for the quarter was $1.24 billion, slightly above the $1.23 billion consensus estimate. The operating profit for the quarter was $6.55 billion, exceeding the $6.218 billion forecast. However, licensing and other income was $6.34 billion, falling short of the $6.621 billion estimate, while usage fee income was $6.07 billion, surpassing the $5.677 billion projection.

Looking ahead, Arm Holdings provided a cautious outlook for the first quarter of the fiscal year 2026, projecting revenue between $10 billion and $11 billion, below the $11 billion analyst estimate. The company also forecasted EPS in the range of $0.30 to $0.38, lower than the $0.42 estimate. Arm Holdings cited global trade and economic uncertainties as reasons for not providing full-year guidance.

CEO Rene Haas highlighted the company's record-breaking results for the fourth quarter and the full fiscal year, driven by increased deployment of CSS platforms across AI data centers, cloud computing, and mobile devices. Haas emphasized Arm's role in enabling AI everywhere as demand for energy-efficient computing grows.