ARM Holdings PLC · NASDAQ:ARM
ARM — Q3 FYE25 Earnings Presentation
28 slides from ARM's earnings presentation, Feb 5, 2025
Slide 1: Arm Holdings plc Q3 FYE25 Investor Presentation
Arm Holdings plc Q3 FYE25 Investor Presentation investor.relations@arm.com https://investors.arm.com February 5, 2025 1
Slide 2: Forward-Looking Statements
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, unce
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures 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-GAA
Slide 4: Q3 FYE25: Highlights
Q3 FYE25: Highlights Operating Highlights Innovation Highlights +310bn Arm-based chips shipped $983m Cumulative number of Arm-based chips since 1990. Our volume has created a base for the largest Total revenue up 19% YoY ecosystem in the semiconductor industry AI on Arm is going everywhere $522m Non
Slide 5: Royalty Growth from Rising Complexity, Volume Expansion
Royalty Growth from Rising Complexity, Volume Expansion More Complexity More Chips More Arm Per Chip More advanced workloads need Semiconductor industry revenue is The concept of AI everywhere is Arm’s latest Armv9 architecture forecasted to grow at a CAGR of increasing demand for Arm’s highly 8%2 p
Slide 6: AI on Arm: Energy Efficiency from the Data Center to the Edge
AI on Arm: Energy Efficiency from the Data Center to the Edge IoT & Mobile Cloud Compute Automotive Embedded Generative AI Optimized Autonomous Smart AI for all for AI Driving Home applications 6
Slide 7: Unparalleled Software Ecosystem
Unparalleled Software Ecosystem 20M+ Developers on Arm, 10M+ Developer hours for Arm 1st decade of Armv8 1.5Bn Ecosystem hours 30M+ Developer hours 1st decade of Armv9 7
Slide 8: Q3 FYE25: Record total and royalty revenues
Q3 FYE25: Record total and royalty revenues Total revenue: $983m up 19% YoY Royalty revenue: $580m up 23% YoY driven by the continued adoption of the Armv9 architecture, the ramp of chips based on Arm CSS, IoT improvement, and increased usage of Arm-based chips in data centers License and other reve
Slide 9: Armv9 adoption driving royalty growth
Armv9 adoption driving royalty growth Royalty Revenue by Architecture 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% FYE16 FYE17 FYE18 FYE19 FYE20 FYE21 FYE22 FYE23 FYE24 Q1 FYE25* Q2 FYE25* Q3 FYE25* Armv7 & older Armv8 Armv9 Armv9 commands a higher royalty per chip than prior architectures Armv9 adop
Slide 10: Diversification in multiple long-term growth markets
Diversification in multiple long-term growth markets Royalties by End Market - FYE16 Royalties by End Market - FYE24 IoT / Embedded 20% Other Automotive 8% Smartphone AP 40% Mobile Cloud and networking 10% Other mobile 7% Consumer electronics 15% Arm is increasing revenue from markets beyond mobile
Slide 11: Royalty: Gaining Share in a Massive Market
Royalty: Gaining Share in a Massive Market Market Share1 Market Value1 FYE22 to FYE24 FYE22 to FYE24 MOBILE APPLICATIONS >99% >99% $30bn $33bn OTHER Client MOBILE 64% 67% $16bn $16bn CONSUMER ELECTRONICS 24% 30% $65bn $50bn CLOUD Auto Infrastructure COMPUTE 9% 15% $16bn $21bn NETWORKING EQUIPMENT 23
Slide 12: Compute Subsystems: A better starting point for chip design
Compute Subsystems: A better starting point for chip design Rising design and manufacturing complexity is lifting cost, time-to-market and risk CSS helps partners solve cost and CSS adopted across Growing ecosystem time-to-market challenges many end markets accelerates deployment Longer manufacturin
Slide 13: Q3 FYE25: From Revenues to Profits
Q3 FYE25: From Revenues to Profits 98% 45% Non-GAAP Non-GAAP Gross Margin Operating Margin $983m $19m $964m $522m License Revenue $403m $442m $417m Royalty Revenue $580m Revenue Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP COS Gross Profit Operating Operating Net Income Expense Income Notes: 1. Depr
Slide 14: Near-Term Guidance
Near-Term Guidance Q4 FYE 25 FYE 25 Revenue ($m) $1,175m - $1,275m $3.94b - $4.04b Non-GAAP Operating Expense ($m)1 ~$590m ~$2.07b Non-GAAP fully diluted earnings per share ($)1 $0.48 - $0.56 $1.56 - $1.64 (1) For more information and definitions of the non-GAAP measures see the “Key Financial and
Slide 15: Arm is Building the Future of Computing
Arm is Building the Future of Computing Arm is the world’s most pervasive CPU architecture 310+ Billion Arm-based chips shipped since inception Everything today is a computer – CPUs needed everywhere 28.6 Billion Arm-based chips shipped in FYE24 Ongoing innovation to support of customer needs – from
Slide 16: Appendix
Appendix arm
Slide 17: Q3 FYE25: Annualized Contract Value
Q3 FYE25: Annualized Contract Value Annualized contract value increased 9% YoY in Q3 $1,400m $700m $1,253m $1,270m $1,160m $1,182m $1,193m $1,200m $1,080m $1,108m $600m $1,030m $1,048m $1,009m $1,000m $472m $500m $414m $403m $800m $388m $400m $354m $330m $299m $600m $259m $275m $300m $188m $400m $20
Slide 18: Q3 FYE25: Remaining Performance Obligation (RPO)
Q3 FYE25: Remaining Performance Obligation (RPO) Remaining performance obligations represent revenue that will be recognized in future periods RPO is down 3% QoQ $3,000m $800m $2,414m $2,433m $2,484m $2,385m $2,325m $700m $2,500m $2,168m $600m $2,000m $1,773m $1,751m $1,758m $1,712m $1,681m $472m $5
Slide 19: Q3 FYE25: Non-Financial Metrics
Q3 FYE25: Non-Financial Metrics Arm Total Access (ATA) at 40 extant licenses, Arm Flexible Access Arm Total Access up 1 QoQ 39 40 Target market for these licenses include smartphones, AI 295 269 accelerators, automotive applications, data centers and 33 241 31 embedded computing 222 191 203 ATA lice
Slide 20: Royalty Revenue: Arm is Gaining Share
Royalty Revenue: Arm is Gaining Share Market Share by Chip Value $250bn Arm x86 Other $200bn $150bn $100bn $50bn $0bn 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Calendar Years Notes: Based on Arm internal estimates. Other includes legacy and niche architectures such as: • Proprietary architec
Slide 21: Royalty Revenue Provides a Platform for Long-Term Growth
Royalty Revenue Provides a Platform for Long-Term Growth Royalty revenue can continue for many years or decades $2,000m $1,800m Royalty revenue from Arm products launched during Fiscal Year Ending $1,600m Still collecting $1,400m royalties on $1,200m products developed in the $1,000m early 1990s $80
Slide 22: Reconciliations: GAAP to Non-GAAP and Adjustments
Reconciliations: GAAP to Non-GAAP and Adjustments Includes retrospective change to Non-GAAP reporting 22
Slide 23: Reconciliations: GAAP to Non-GAAP and Adjustments…cont’d
Reconciliations: GAAP to Non-GAAP and Adjustments…cont’d 23
Slide 24: Reconciliations: GAAP to Non-GAAP and Adjustments…cont’d
Reconciliations: GAAP to Non-GAAP and Adjustments…cont’d 24
Slide 25: Reconciliations: GAAP to Non-GAAP and Adjustments
Reconciliations: GAAP to Non-GAAP and Adjustments 25
Slide 26: Reconciliations: GAAP to Non-GAAP and Adjustments…cont’d
Reconciliations: GAAP to Non-GAAP and Adjustments…cont’d 26
Slide 27: Reconciliations: GAAP to Non-GAAP and Adjustments
Reconciliations: GAAP to Non-GAAP and Adjustments 27
Slide 28: Reconciliations: GAAP to Non-GAAP and Adjustments…cont’d
Reconciliations: GAAP to Non-GAAP and Adjustments…cont’d 28