Arm Reports Record Revenue in Q3
Today Arm (NASDAQ:ARM) published a letter to its shareholders containing the company’s results for its fiscal third quarter for FYE25 ended Dec. 31, 2024. The infographic below provides the key highlights:
Here are what the results mean and how they were achieved:
- Revenue of $983 million, which is up 19% year-over-year due to record levels of royalty revenue and continued strength in license revenue.
- Royalty revenue of $580 million, which is up 23% year-over-year. This is being primarily driven by the continued adoption of Armv9, the ramp-up of chips based on Arm Compute Subsystems (CSS), IoT improvement and increased usage of Arm-based chips in datacenters.
- License and other revenue of $403 million, which is up 14% year-over-year due to normal fluctuations in the timing and size of multiple high-value license agreements signed during the quarter.
- Non-GAAP operating income of $442 million resulting in a 45% non-GAAP operating margin, and non-GAAP earnings per share of $0.39.
- Arm expects Arm CSS to become the product of choice for many partners to license for future chip designs, with strong demand due to requirements for increasingly complex, customized silicon for specific workloads, and benefits of reduced development costs and time-to-market.
- All major global automakers, including BMW, Honda, Rivian, Nuro and Mercedes rely on Arm’s energy efficient and safe platform to power automated driving, parking, advanced autonomous capabilities and feature-rich cockpit experiences in their latest vehicles. At CES 2025, a key focus was on the Arm-based NVIDIA DRIVE AGX Thor, the first centralized compute platform for AI and autonomous driving workloads, which is built on Arm’s server-class Neoverse Automotive Enhanced (AE) CPU. The adoption of the same Neoverse platform in the cloud and at the edge – in the car – means software developers can develop applications in the cloud and then seamlessly run them in the car, accelerating the time-to-market.
- The emergence of new Arm-based AI hardware – many of which are devices that do not extensively rely on the cloud for processing and are untethered from the power grid – and smaller, lighter language models are unlocking edge AI use-cases across consumer technologies, automotive and industrial IoT. Examples include:
- NVIDIA’s new Project DIGITS, which combines the Arm-based Grace CPU featuring 20 power-efficient Arm Cortex-X and Arm Cortex-A CPU cores with the Blackwell GPU into the GB10 Superchip to power the world’s smallest AI supercomputer;
- The recently announced Arm-based Samsung Galaxy S25, which brings context-aware multimodal AI agents – combining voice, video, and text input – to mobile for the first time; and
- Flagship AI smartphones from OPPO and vivo that have adopted MediaTek’s new Arm-powered Dimensity 9400 system-on-chip (SoC).
- Arm is a key technology supplier to the recently announced Stargate Project, alongside Microsoft, NVIDIA, OpenAI, and Oracle. The news further cements Arm at the very center of one of the largest AI infrastructure investments to date.
- Arm is a strategic partner with OpenAI and the SoftBank Group on “Cristal intelligence”, which enables AI agents that solve complex problems for knowledge work. The Arm compute platform, powered by KleidiAI libraries, is set to provide the performance, efficiency, and scalability required to support the growing computational demands of these new AI agents from edge to cloud.
The full letter to shareholders is available on the Arm investor relations website (https://investors.arm.com/financials/quarterly-annual-results). Information about the Arm earnings conference call can be found here.
Any re-use permitted for informational and non-commercial or personal use only.
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