ARM Holdings PLC · NASDAQ:ARM

ARM — Q1 FYE25 Earnings Presentation

27 slides from ARM's earnings presentation, Jul 31, 2024

  1. Slide 1: Arm Holdings plc Q1 FYE25 Results Presentation

    Arm Holdings plc Q1 FYE25 Results Presentation investor.relations@arm.com https://investors.arm.com AI-generated image July 31, 2024 © 2024 Arm

  2. 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

  3. 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

  4. Slide 4: Q1 FYE25: Highlights

    Q1 FYE25: Highlights Operating Highlights Innovation Highlights 100bn AI-ready Arm-based chips $939m forecasted to ship by end of FYE26 AI-related design wins continuing to drive licensing in Total revenue up 39% YoY near-term and royalties for years to come $448m Arm-based PCs shipments increasing

  5. 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 The semiconductor industry Arm’s high performant and energy- Arm’s latest Armv9 architecture revenue is forecasted to grow at a efficient CPUs and subsystems are CAGR of

  6. 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 © 2024 Arm

  7. 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 © 2024 Arm

  8. Slide 8: Q1 FYE25: Record Quarterly Revenue

    Q1 FYE25: Record Quarterly Revenue Record total revenue: $939m up 39% YoY License and other revenue: $472m up 72% YoY driven by multiple high-value license agreements and the increased demand for Arm’s technology in AI-related applications Royalty revenue: $467m up 17% YoY with strong smartphone sal

  9. 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 Armv7 & older Armv8 Armv9 Armv9 commands a higher royalty per chip than prior architectures Armv9 adoption started in smart

  10. 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

  11. 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 MOBILE Client 64% 67% $16bn $16bn CONSUMER ELECTRONICS 24% 30% $65bn $50bn CLOUD Infrastructure COMPUTE 9% 15% $16bn $21bn NETWORKING EQUIPMENT 23% 28%

  12. Slide 12: FYE25-Q1: From Revenues to Profits

    FYE25-Q1: From Revenues to Profits 97% 48% Non-GAAP Non-GAAP Gross Margin Operating Margin $939m $24m $915m License Revenue $472m $467m $448m $419m Royalty Revenue $467m Revenue Non-GAAP Non-GAAP Non-GAAP Non-GAAP Non-GAAP COGS Gross Profit Operating Operating Net Income Expense Margin Notes: 1. Dep

  13. Slide 13: Near-Term Guidance

    Near-Term Guidance Q2 FYE 25 FYE 25 Revenue ($m) $780m - $830m $3.80b - $4.10b Non-GAAP Operating Expense ($m)1 ~$500m ~$2.05b Non-GAAP fully diluted earnings per share ($)1 $0.23 - $0.27 $1.45 - $1.65 (1) For more information and definitions of the non-GAAP measures see the “Key Financial and Opera

  14. Slide 14: Arm is Building the Future of Computing

    Arm is Building the Future of Computing Arm is the world’s most pervasive CPU architecture 290+ 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

  15. Slide 15: Appendix

    Appendix © 2024 Arm

  16. Slide 16: Q1 FYE25: Annualized Contract Value

    Q1 FYE25: Annualized Contract Value Annualized contract value increased during Q1 driven by multiple high-value, long-term ATA agreements $1,400m $700m $1,160m $1,182m $1,193m $1,200m $1,080m $1,108m $600m $1,052m $1,009m $1,030m $1,048m $1,000m $472m $500m $414m $388m $800m $400m $354m $299m $600m

  17. Slide 17: Q1 FYE25: Remaining Performance Obligation (RPO)

    Q1 FYE25: Remaining Performance Obligation (RPO) Remaining performance obligations represent revenue that will be recognized in future periods RPO is up 29% year-over-year and down 13% sequentially due to the contribution to revenue from backlog during the quarter $3,000m $800m $2,414m $2,433m $2,48

  18. Slide 18: Q1 FYE25: Non-Financial Metrics

    Q1 FYE25: Non-Financial Metrics Arm Flexible Access Arm Total Access Arm Total Access at 33 extant licenses, up 2 QoQ Additionally, 2 major customers renewed 33 31 • Target markets for these licensees include automotive 222 241 applications, data centers and embedded computing 191 203 • ATA licensee

  19. Slide 19: Royalty Revenue: Arm is Gaining Share

    Royalty Revenue: Arm is Gaining Share Market Share by Chip Value $250m Arm x86 Other $200m $150m $100m $50m $0m 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Calendar Years Note: Other includes legacy and niche architectures such as: 19 © 2024 Arm • Proprietary architectures (68000, 80x51, AVR,

  20. Slide 20: Royalty Revenue Provides a Platform for Long-Term Growth

    CONFIDENTIAL 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 ea

  21. Slide 21: Reconciliations: GAAP to Non-GAAP and Adjustments

    Reconciliations: GAAP to Non-GAAP and Adjustments Includes retrospective change to Non-GAAP reporting Arm Holdings plc Published on July 31, 2024 Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY FY FY 31-Mar 30-Jun 30-Sep 31-

  22. Slide 22: Reconciliations: GAAP to Non-GAAP and Adjustments Cont’d

    Reconciliations: GAAP to Non-GAAP and Adjustments… cont’d Arm Holdings plc Published on July 31, 2024 Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY FY FY 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Ju

  23. Slide 23: Reconciliations: GAAP to Non-GAAP and Adjustments Cont’d

    Reconciliations: GAAP to Non-GAAP and Adjustments… cont’d Arm Holdings plc Published on July 31, 2024 Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY FY FY 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Ju

  24. Slide 24: Reconciliations: GAAP to Non-GAAP and Adjustments Cont’d

    Reconciliations: GAAP to Non-GAAP and Adjustments… cont’d Arm Holdings plc Published on July 31, 2024 Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY FY FY 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Ju

  25. Slide 25: Reconciliations: GAAP to Non-GAAP and Adjustments Cont’d

    Reconciliations: GAAP to Non-GAAP and Adjustments… cont’d Arm Holdings plc Published on July 31, 2024 Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY FY FY 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Ju

  26. Slide 26: Reconciliations: GAAP to Non-GAAP and Adjustments Cont’d

    Reconciliations: GAAP to Non-GAAP and Adjustments… cont’d Arm Holdings plc Published on July 31, 2024 Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY FY FY 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Ju

  27. Slide 27: Reconciliations: GAAP to Non-GAAP and Adjustments Cont’d

    Reconciliations: GAAP to Non-GAAP and Adjustments… cont’d Arm Holdings plc Published on July 31, 2024 Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY FY FY 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Ju

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