Summary of ARM Holdings Conference Call Company Overview - **Company**: ARM Holdings (ARM) - **Industry**: Semiconductors Key Financial Results - **Revenue**: ARM reported revenue of **$1.14 billion**, exceeding Goldman Sachs (GS) and Street estimates of **$1.06 billion** [2] - **Operating Margin**: Recorded at **41.1%**, significantly higher than GS and Street estimates of **36.0%** [2] - **Operating EPS**: Reported at **$0.39**, above GS and Street estimates of **$0.33** [2] - **Licensing Revenue**: Achieved **$515 million**, surpassing GS's estimate of **$473 million** and Street's estimate of **$474 million** [2] - **Royalty Revenue**: Reached **$620 million**, ahead of GS's estimate of **$586 million** and Street's estimate of **$585 million** [2] Guidance for FY3Q - **Revenue Guidance**: Midpoint guidance set at **$1.225 billion**, well above GS's estimate of **$1.09 billion** and Street's estimate of **$1.11 billion** [3] - **Operating Expense Guidance**: Projected at **$720 million**, exceeding GS's estimate of **$675 million** and Street's estimate of **$676 million** [3] - **Operating EPS Guidance**: Expected to be **$0.41**, above GS's estimate of **$0.34** and Street's estimate of **$0.35** [3] Market Expectations and Stock Performance - **Investor Sentiment**: The stock is expected to rise due to better-than-expected revenue and EPS guidance, driven by a recovery in royalty revenue [1] - **Focus Areas for Investors**: Key topics of interest include operational expenses, smartphone market recovery, Datacenter business updates, and contributions from v9 and CSS to royalty revenues [1] Price Target and Risks - **Price Target**: Set at **$150**, based on a multiple of **75x** normalized EPS estimate of **$2.00** [4] - **Risks**: - Slower transition from v8 to v9 and CSS [4] - Less traction in Datacenter business [4] - Faster traction for Compute Sub-Systems [4] - Emergence of new customer cohorts licensing ARM technology [4] Additional Insights - **Quarterly Growth**: Year-over-year revenue growth of **34.5%** and quarter-over-quarter growth of **7.8%** [7] - **Gross Margin**: Excluding stock-based compensation, gross margin was **98.2%**, slightly above estimates [7] - **Market Capitalization**: ARM's market cap stands at **$171.2 billion** [8] This summary encapsulates the key financial metrics, guidance, market expectations, and risks associated with ARM Holdings as discussed in the conference call.