Why Arm Holdings Stock Was Moving Higher Today

Core Insights - Arm Holdings reported better-than-expected results for its fiscal second quarter, with shares rising 4.1% following the announcement [1] - The company reaffirmed its full-year guidance, indicating confidence in future performance [1] Financial Performance - Revenue for the second quarter increased by 5% to $844 million, surpassing the company's guidance of $780 million to $830 million and analyst consensus of $808.4 million [2] - Royalty revenue, the larger segment, rose 23% to $514 million, driven by the adoption of Armv9 architecture, which now constitutes 25% of royalty revenue, up from 10% a year ago [3] - License revenue decreased by 15% to $330 million, but annualized contract value increased by 13% to $1.25 billion, and remaining performance obligations rose by 10% to $2.39 billion [4] Profitability Metrics - Adjusted earnings per share fell from $0.36 to $0.30, attributed to the decline in license revenue and increased R&D and sales and marketing expenses [5] - Management expects adjusted earnings per share for the third quarter to be between $0.32 and $0.36, aligning with estimates [6] Future Outlook - The company maintains its fiscal year guidance of $3.8 billion to $4.1 billion in revenue and adjusted earnings per share of $1.45 to $1.65 [5] - Arm is positioned to benefit from the growing demand for artificial intelligence, despite modest revenue growth in the recent quarter [6]