Core Viewpoint - ARM is transitioning from a licensing model to a more direct role in chip production, particularly focusing on AI-related silicon, which could significantly impact its competitive positioning and growth potential [2][3][4]. Company Overview - Founded in 1990, ARM is a leading technology company based in England, known for its semiconductor designs that power a wide range of electronic devices [1]. - ARM has traditionally licensed its instruction sets to major chipmakers and collected royalties, without manufacturing chips itself [4][5]. Recent Developments - ARM launched its first in-house chip, the Arm AGI CPU, designed for AI data centers, which promises over 2x performance per rack compared to traditional x86 platforms [3]. - The company is now competing directly with some of its customers, marking a significant shift in its business strategy [2]. Financial Performance - In Q3 fiscal 2026, ARM reported record revenue of $1.24 billion, a 26% year-over-year increase, surpassing Wall Street expectations [9]. - Royalty revenue rose 27% annually to $737 million, driven by the adoption of higher-value technologies [9][10]. - Annualized contract value (ACV) increased by 28% year-over-year to $1.62 billion, indicating strong forward momentum [12]. Market Position and Valuation - ARM's market capitalization is approximately $142.6 billion, with shares up 47.94% in 2026, contrasting with a 3.5% decline in the S&P 500 [7]. - The stock trades at 145.63 times earnings and 29.25 times sales, significantly above industry averages, suggesting high expectations for future growth [8]. Analyst Sentiment - Analysts are increasingly optimistic about ARM's strategy shift, with Raymond James upgrading the stock to "Outperform" and setting a price target of $166 [14]. - The consensus rating for ARM is "Moderate Buy," with 20 out of 30 analysts rating it a "Strong Buy" [15].

Core Viewpoint - Arm Holdings has experienced a revenue boost due to increased demand for artificial intelligence (AI), although its stock has lost about a third of its value over the past year and faces potential risks in the smartphone segment [1] Group 1: AI and Revenue Growth - Arm's data center business is expected to become its largest segment, aiming for a 50% market share among top hyperscalers, driven by the shift towards AI and inference [2] - Fiscal third-quarter revenue increased by 26% year over year to $1.24 billion, with license revenue rising by 25% to $505 million, partly due to an agreement with Softbank contributing $200 million [4] - Royalty revenue grew by 27% year over year to $737 million, driven by the adoption of newer ARM technologies, including Armv9 architecture and Arm CSS [5] Group 2: Smartphone Risks and Future Guidance - Increasing memory supply constraints may lead to a potential 15% reduction in smartphone sales volumes, but even a 20% reduction would only impact smartphone royalties by 2% to 4% [3] - Annualized contract value (ACV) surged by 28% to $1.62 billion, with guidance for fiscal fourth-quarter revenue projected at around $1.47 billion, representing an 18% year-over-year growth [6] - Royalty growth is expected to be in the low teens, while licensing growth is projected in the high teens, with adjusted earnings per share forecasted between $0.54 and $0.62 [6]

Arm Holdings plc Q3 FYE26 Investor Presentation investor.relations@arm.com https://investors.arm.com February 4, 2026 © 2025 Arm 1 Forward-Looking Statements This presentation contains forward-looking statements that reflect Arm Holdings plc's ("Arm") plans, beliefs, expectations and current views with respect to, among other things, future events and financial performance. These statements involve known and unknown risks, uncertainties and other important factors that may cause Arm's actual results, levels ...

Financial Highlights - Total revenue reached $1135 million, a 34% year-over-year increase[11, 24] - Royalty revenue grew to $620 million, up 21% year-over-year, driven by Arm technology adoption and increased usage in data centers[24] - License and other revenue increased significantly to $515 million, a 56% year-over-year increase, due to the timing of high-value license agreements[24] - Non-GAAP operating income was $467 million, resulting in a non-GAAP operating margin of 41%[44] - Trailing twelve months Non-GAAP free cash flow was $1073 million[11] Market and Technology Trends - Arm forecasts its market share with top hyperscalers will approach 50% in 2025[13] - The cumulative number of Arm-based chips shipped since 1990 exceeds 325 billion[12] - Armv9 architecture adoption is driving royalty growth, commanding higher royalties per chip compared to previous architectures[25, 28] - Semiconductor industry revenue is forecasted to grow at a CAGR of 8%[17] Compute Subsystems (CSS) - Arm signed another three CSS licenses in the quarter, for chips used in smartphones, PCs, and AI data centers[14] - CSS substantially increases Arm's royalty revenue per chip[41]

Core Insights - ARM Holdings has seen a stock increase of approximately 28% since January 2025, driven by its competitive chipset designs against AMD and Intel [2] - The company reported Q4 FY'25 revenue of $1.24 billion, marking a 34% year-over-year increase, and is positioning itself as a key player in the AI and data center CPU markets [2][3] Financial Performance - ARM's revenue has grown significantly, with a 41.2% average growth rate over the last three years, compared to 5.3% for the S&P 500 [7] - In the past 12 months, ARM's revenues increased by 23.9%, from $3.2 billion to $4.0 billion, while the S&P 500 saw a growth of 4.4% [7] - The latest quarterly revenue reached $1.2 billion, a 33.7% increase from $928 million a year prior, compared to a 4.5% improvement for the S&P 500 [7] Profitability Metrics - ARM's operating income over the last four quarters totaled $831 million, resulting in an operating margin of 20.7%, which is higher than the S&P 500's 18.3% [8] - The net income for ARM during the same period was $792 million, yielding a net income margin of 19.8%, compared to 11.9% for the S&P 500 [8] Financial Stability - ARM's debt stood at $356 million with a market capitalization of $173 billion, leading to a low debt-to-equity ratio of 0.2%, significantly lower than the S&P 500's 22.8% [9] - The company holds $2.8 billion in cash, which is 31.6% of its total assets of $8.9 billion, compared to the S&P 500's cash-to-assets ratio of 6.7% [9] Market Position and Strategy - Major hyperscalers like Amazon, Microsoft, and Google are increasingly adopting ARM's designs, particularly the Armv9 architecture, for their AI infrastructures due to its energy efficiency [3] - ARM aims to capture 50% of the data center CPU market by the end of 2025, up from 15% in 2024, reflecting its current momentum [3]

Financial Highlights - Total revenue reached $1053 million, a 12% year-over-year increase[11] - Royalty revenue grew to $585 million, up 25% year-over-year, driven by Armv9 architecture adoption and increased data center usage[25] - License and other revenue totaled $468 million, a 1% year-over-year decrease due to timing fluctuations[25] - Non-GAAP operating expenses were $619 million[11] - Trailing 12 months Non-GAAP free cash flow was $597 million[11] Market and Technology Trends - Arm forecasts its market share with top hyperscalers will approach 50% in 2025[13] - Over 70000 customers are using Arm-based chips in data centers[13] - The company has shipped over 325 billion Arm-based chips since 1990[12] - Arm's customers shipped 2x the number of chips in FYE25 than in FYE16[17] Future Outlook - Q2 FYE26 revenue is projected to be between $101 billion and $111 billion[47] - Q2 FYE26 Non-GAAP operating expense is expected to be approximately $655 million[47] - Q2 FYE26 Non-GAAP fully diluted earnings per share are projected to be between $029 and $037[47]

investor.relations@arm.com https://investors.arm.com May 7, 2025 © 2025 Arm 1 Arm Holdings plc Q4 FYE25 Investor Presentation In addition to disclosing results determined in accordance with generally accepted accounting principles, or GAAP, Arm utilizes, and this presentation includes, certain non-GAAP financial measures that differ from measures calculated in accordance with GAAP. Arm's non-GAAP financial measures include non-GAAP cost of sales, non-GAAP gross profit (loss), non-GAAP gross margin, non-GAAP ...