Arm Holdings (ARM.US), UK-based chip and software designer, is one of the best performing Wall Street stocks today. Share price surges almost 60% after the company reported fiscal-Q3 2024 earnings yesterday after the close of the Wall Street session.
Company, which had IPO in 2023 and is still in 90% owned by SoftBank Group, reported much better-than-expected results for October - December 2023 period. Sales and profits turned out to be higher, while operating expenses were lower than expected. A strong free cash flow generation also highlights how successful the company was. Arm's executives said that its expansion beyond smartphone chips has been very successful, with smartphone-related products accounting for just a third of total sales. The company is expanding into data-center and automotive markets. Customers are using more and more chips from Arm Holdings per device and it helps fuel royalty revenue growth.
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Open account Try demo Download mobile app Download mobile appThis positive outlook for the business translated into surprisingly bullish forecasts for fiscal-Q4 2024 and full fiscal-2024. This, in turn, is fuelling a massive share price gain during today's Wall Street session.
Fiscal-Q3 2024 earnings (October - December 2023)
- Revenue: $824 million vs $760 million expected
- License and other revenue: $354 million vs $311.8 million expected
- Royalty revenue: $470 million vs $448.9 million expected
- Annualized contract value: $1.16 billion vs $1.11 billion expected
- Adjusted gross profit: $797 million vs $746.1 million expected
- Adjusted gross margin: $96.7% vs 96.4% expected
- Adjusted operating expenses: $459 million vs $461 million expected
- Adjusted operating income: $338 million vs $274.4 million expected
- Adjusted operating margin: 41.0% vs 35.7% expected
- Adjusted net income: $305 million vs $262 million expected
- Adjusted EPS: $0.29 vs $0.25 expected
- Adjusted free cash flow: $724 million vs $126 million expected
Fiscal-Q4 2024 forecast (January - March 2024)
- Revenue: $850-900 million vs $778 million expected
- Adjusted operating expenses: 'about $490 million' vs $524 million expected
- Adjusted EPS: $0.28-0.32 vs $0.21 expected
Full-year fiscal-2024 forecast (April 2023 - March 2024)
- Revenue: $3.16-3.21 billion, up from previous guidance of $2.96-3.08 billion
- Adjusted operating expenses: 'about $1.70 billion', down from previous guidance of 'about $1.77 billion'
- Adjusted EPS: $1.20-1.24, up from previous guidance of $1.00-1.10
Arm Holdings (ARM.US) surges almost 60% today following the release of fiscal-Q3 2024 earnings. Stock trades over 100% above IPO price from mid-September 2023 ($51 per share). Source: xStation5
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