Members of Arm’s leadership; Chief Commercial Officer Will Abbey, CEO Rene Haas, CFO Jason Child and General Manager for Automotive Dipti Vachani ring the opening bell, as Softbank’s Arm, chip design firm, holds an initial public offering (IPO) at Nasdaq Market site in New York, September 14, 2023.
Brendan McDermid | Reuters
Shares of chip designer Arm soared 48% on Thursday after the chip design company reported better-than-expected earnings and issued a strong profit forecast for the current quarter.
The stock surge added about $38 billion to Arm’s market cap, with more than $34 billion of that accruing to SoftBank, which owns 90% of the company.
Arm’s chip design technology is in most smartphones and many PCs. The company reported adjusted earnings per share of 29 cents, topping the average analyst estimate of 25 cents, according to LSEG, formerly known as Refinitiv. Revenue rose 14% to $824 million, beating the $761 million average estimate.
For the current quarter, Arm projected earnings per share of between 28 cents and 32 cents on sales of $850 million to $900 million. Analysts were expecting earnings of 21 cents per share on sales of $780 million. At the midpoint of its revenue range, Arm is looking for revenue growth this quarter of 38%.
Founded in 1990 and acquired by Masayoshi Son’s SoftBank in 2016 for $32 billion, Arm went public on the Nasdaq in September. The company sold shares at $51 apiece in its IPO and was trading above $122 on Thursday. Son remains chairman of the company and he’s joined on the board by SoftBank’s Ron Fisher.
Arm makes money through royalties, when companies pay for access to build Arm-compatible chips. That usually amounts to a small percentage of the final chip price.
Arm said its customers shipped 7.7 billion Arm chips during the September quarter, the most recent period for which figures are available. Arm counts Apple, Google, Microsoft and Nvidia as customers, and the company is riding the artificial intelligence…
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