Arm Holdings, the newly public chip designer, saw its shares fall 8.1% in after-hours trading on Wednesday, despite beating analysts’ expectations with its latest earnings report. The company reported revenue of $806 million for the September quarter, surpassing expectations of $740 million. Additionally, Arm posted adjusted earnings-per-share of 36 cents, compared to the consensus estimate of 26 cents.
However, the company’s guidance for the current quarter was less optimistic. Arm provided a revenue forecast of $720 million to $800 million for the quarter ending in December, falling short of the consensus estimate of $776 million at its midpoint.
In a letter to investors, Arm’s management expressed their satisfaction with the company’s performance as a newly listed entity, highlighting the strength of their business model and the resilience of their diverse products and end markets.
Arm Holdings went public in September with an initial public offering price of $51 per share. The company generates revenue by licensing its chip architecture and other chip designs to semiconductor companies and hardware manufacturers.
Despite the decline in share price following the earnings announcement, the positive performance of Arm Holdings demonstrates the promising potential of its business model and establishes a solid foundation for future growth.