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Arm Holdings (ARM) issues Q2 2025 EPS guidance below analyst estimates

Arm is hopeful for the future, but is tempering expectations for the next fiscal quarter.

Ozzie Mejia

July 31, 2024 2:05 PM

Arm Holdings Ltd.

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ARM Holdings Ltd. was among several tech companies to report in with its quarterly earnings for Q1 2025 on Wednesday. The company has ambitious plans for the near future, specifically in regards to AI. However, it has tempered its expectations for future earnings, placing its expected EPS number for Q2 2025 below analyst expectations.

Arm's Q2 2025 quarterly guidance figures project an EPS figure of $0.23-0.27/share, which is slightly lower than the analyst expectations of $0.27/share. Analysts are estimating $805 million in revenue for the next quarter, which falls in line with Arm's internal projections of $780-830 million.

Even with the lowered expectations, Arm has outlined its ambitions for the future. The following was posted as part of Arm's Shareholder Letter:

Arm's ecosystem of software and design partners is unique. Arm has the world’s largest compute ecosystem with more than 20 million software developers, which is up from 15 million one year ago. We continue to increase investment across all market segments to accelerate software development on Arm. More Arm software developers drives demand for new Arm compute platform solutions, which in turn drives an increase in software development and creates a virtuous cycle of demand.

New companies are joining Arm’s ecosystem and existing customers are leveraging their knowledge and experience of Arm technology into additional end markets. In the last few months, Google and Microsoft announced their first Armbased chips for the data center. During the quarter, Mediatek joined Arm Total Design, a fast-growing ecosystem that accelerates the development of data center chips to meet the performance and efficiency needs of AI applications. This takes the total number of Arm Total Design partners to 25 since launch late last year. Also during the quarter, Google announced new AI capabilities for Android phones, including integration of their Gemini AI model directly into Android. Already, 70% of the AI-enabled apps on the Google Play Store run directly on the Arm CPU, and the addition of Gemini will enable more apps to take advantage of the Arm compute platform.

All combined, we expect Arm’s long-term strategy to provide sustainable growth for years and decades to come.

Arm's expectations are coming off a better-than-expected quarter for the start of its 2025 fiscal year. Arm is diving further into AI as part of its future plans, outlining the demand for Arm compute platforms in smartphones, cloud services, and more. Arm (ARM) finished the day up by $11.21/share, but has fluctuated wildly in after-hours trading, down by roughly $12-13/share as of the time of this post.

We'll continue to bring you news on Arm Holdings and the various other tech companies reporting their financial earnings today. Keep it on Shacknews for further updates.

Ozzie Mejia

Senior Editor

Ozzie has been playing video games since picking up his first NES controller at age 5. He has been into games ever since, only briefly stepping away during his college years. But he was pulled back in after spending years in QA circles for both THQ and Activision, mostly spending time helping to push forward the Guitar Hero series at its peak. Ozzie has become a big fan of platformers, puzzle games, shooters, and RPGs, just to name a few genres, but he’s also a huge sucker for anything with a good, compelling narrative behind it. Because what are video games if you can't enjoy a good story with a fresh Cherry Coke?