ARM - Earnings call transcript Q3 2025 | Arm Holdings plc American Depositary Shares

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Operator

Good day, and thank you for standing by. Welcome to the Arm Third Quarter Fiscal Year 2025 Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to turn the conference over to your first speaker today, Jeff Kvaal, Head of Investor Relations. Please go ahead, sir.

Jeff Kvaal

to fiscal conference XX, 'XX, welcome third for XXXX. and of quarter which you, our call earnings the Thank ended December

Officer; On Arm's Chief are today Officer. and Executive Financial the Arm's Jason Rene Child, call Chief Haas,

targets, During information other financial regarding discuss its forward-looking and and the company will call, results. Arm forecasts, the

to represent many current of results judgment statements actual results materially. risks our cause today, uncertainties differ are future could results these While to about our best subject and that as and performance actual

In that future highlight in risk performance statements. addition assumes Form that the during Arm obligation we described SEC. on no to any forward-looking may risks to XX-F call, important the any filed our are results factors registration statement our with affect and update

not financial discussion the materials without our certain shareholder to during are our in non-GAAP refer shareholder and letter certain We comparable discussion. measures their that reconcile The non-GAAP all a found will and earnings-related these available financial of financial investors.arm.com. other unreasonable supplemental most to as of of information website GAAP well on to directly be letter. financial non-GAAP we projected measures able are financial as Reconciliations can measures measures at efforts

turn I'll to the that, with Rene. And over call Rene?

Rene Haas

guidance. report afternoon, Thank most all-time world's record the exceeded an Total that to drive and revenue all-time an XXXX. to of We're revenue you, pervasive quarter Arm demand AI high is compute good total Jeff, record year-on-year fiscal end the the on to XX% built strong revenue pleased ecosystem, and royalty for third grew of high continues everyone. momentum which for platform. the

adoption our chat to was features, of to markets our record. make This driving This and driving technology better is and to and as long-term IoT more demand strong to and better CSS. continued smartphones Licensing across autos take XX% to a Our strong our all partners NPUs. AI parking vX royalty of from advanced driven significantly grew of Arm's with requires year-on-year growth for embedded of assist, with deployment adoption commitments more compute end revenue AI remains with microprocessors technologies. CSS vX new our by everywhere.

vivo XXXX New ArmvX This from SoC of is MediaTek's CSS new to the and and CPU our customize flagship on take and Client, complexity based the on Increased OPPO GPU. advantage which smartphones system-on-chip. Immortalis-GXXX Arm Dimensity the driving CSS. is for Cortex-XXXX latest chip top the silicon hyperscalers includes

Graviton, Cobalt, We NVIDIA's are gaining AWS Microsoft share and Google Grace with Arm-based Axion chips. in center the data

of new X,XXX AWS Over recently top of was more announced Graviton. AWS' ECX Graviton. years use past the than over XX% customers XX% CPU installed on capacity X

world's have announced ecosystem. in the Arm-based GBXX DIGITS, combines more also than community, the increase into new developer which Superchip We NVIDIA developers, the largest the to powers our the smallest supercomputer. XX investment AI CPU continue Grace world's and to we and GPU million Project Blackwell

and power-efficient to cloud. easily AI Cortex-XXXX be is CPU to models cores, Cortex-AXXX. With scientists DIGITS, developers, and before into includes them for build Grace Project XX CSS researchers Arm XX more and based The Arm's the inference XX deploying able data Client upon will able

compute OpenAI, center and key the Arm's out advanced demand AI believe agents cloud. in at also We AI X SoftBank I'd of with for position deployment, projects to inference, intelligence and knowledge the Stargate Group and for enterprise AI call in further training strongly Along to that both the like that AI, for work. are increase very AI AI the ecosystem. develop called cement to Cristal the going advances infrastructure for

Jason. that, the needs ecosystem the with most over I growth for decades come. cloud popular the address edge to from power to to to compute world's And solutions to in will Arm's expect hand We the

Jason Child

This range. record Thank which to end strong was grew XX% and on was was our QX our as the above growth initial million in growth. $XXX guided and driven the continued our and chips year-on-year record was you, revenue top the as based adoption revenues continued million, of custom of was ArmvX quarter Total silicon Rene. by shipments above another compute Royalty revenue deliver as center. well from data going was a into we $XXX expectations. growth subsystems

overall revenue revenue from data recovery revenues from multiple weakness. automotive center, on Based signs networking and CSS such of than being while grow by XXXX, both continue expectations, chips helped which within Dimensity vivo. smartphones, equipment for and MediaTek's chips smartphones all the after quarters smartphones faster deployed IoT from based royalty to most Royalty flagship the both of on in as smartphone from was This were reports, market. OPPO showed and the recent much ArmvX is royalty

size than increased better was to Licensing from of and contributions license revenue high-value in XX% forecasted. fluctuations to normal million, year-on-year backlog. we and varies which quarter-to-quarter $XXX multiple timing revenue agreements due License

As at lower was in always, rate. of low rate above run look annualized or recent year-on-year, than our to QX was value, the which licensing understand that ACV, plan. best recommend X% is growth underlying contract we you up ACV the teens long-term a but little

the as into performance from revenue down that delivered Remaining backlog RPO, products Arm or sequentially obligations, P&L. was slightly released

future maximize future and come decades our to ago, you or investments today today. from want To know, opportunity, streams. revenues our revenue technology for investment in today are developed we R&D maximize even revenue As Arm's costs years our

At time, led non-GAAP our the near-record profit levels to spending $XXX at delivered the in of line our quarter, which at also costs R&D highest And operating non-GAAP operating their million. level heightened we with million, $XXX same in third expectations. was

investments and we the long-term near-term balance growth forward, profitability. continue for will Going of business the increasing to

fiscal This ending guidance our Turning fourth pipeline. view now licensing end guidance, our both reflects XXXX. markets of on touch to I'll briefly quarter March our XX, and current year and

growth represents XX% $X.XXX this of At QX, we For year-on-year. expect revenue between of revenue billion. and $X.XXX midpoint, billion the

have deals in the license wider range left have play. prior as slightly we large quarters revenue We guidance some in than

high into year. fiscal Although of closure, we to some deals of deal could next the hard timing be the confidence may forecast and have slip

us mentioned, previously today the our for our revenue essential enables long-term to investments success. As R&D in growth increase

accelerating next are of We investments generation technologies. the in our

expect EPS for now we non-GAAP QX to be approximately in the And to $X.XX. non-GAAP operating expect expense of QX, to million. be our $XXX We range $X.XX

our 'XX, guidance. high growth, year teens our is midpoint fiscal year of year-on-year a expect we increasing is $X year of year-on-year, long-term we growth about royalty around in the which ahead to full target For are billion. rate midpoint revenue XX%. XX% guidance previous With the represents This with this, which of consistent full

to year year-on-year. XX% around our grow full license expect We revenue

between expenses increase. We and billion, operating We be $X.X expect year EPS a to our represents expect about which to non-GAAP be XX% non-GAAP therefore $X.XX. $X.XX year-on-year full

With turn the to the will the call that, for Q&A portion operator I of call. back the

Operator

the question Stanley. of from from [Operator Instructions] first Simpson And Lee line your Morgan comes

Lee Simpson

kick on really subsequent just flow also the licensing Arm's as where year. I we the guess in this asking it asking And strength landscape broader the I could Maybe seen relates by in capability. go into I'm news but that touches see AI recent to off of really about we've really the as we some

it had your Arm like OpenAI ranging new $XXX we SoftBank So the era or And here if budgets weeks having it interestingly, And understand intelligence. both we're and to development Cristal and over as just back, even first-mover an billion. called seems sits the adopter the agentic because AI. U.S. advantage where of of an kind heard joint trying AI between look in X day so, with enabler Stargate announcement of we in last of we've looks a in

if perspective? the us, products back, for large these is sell-in what maybe of new clearly I can to And the outline new maybe a So Arm including the and just the to trying in just take to step you projects? what Arm, more long-term set is benefit earnings opportunity help

Rene Haas

there try bit. you the to question. so a lot Thank There's simplify I'll a for

So addition Stargate, billion a was over extremely States, $XXX $XXX infrastructure being partnership in a technology the weeks time. SoftBank, and which NVIDIA. invested in to announced ourselves, those with immediately project And United an Oracle where be billion companies and project will is Microsoft a this significant is partners OpenAI back, few that and and

be CPU such platform. Arm there'll with with extremely CPU a be be Combined for the CPU huge are we to potential of Grace, choice for going the around the innovation forward, the configurations. for space. Arm, For of will choice Blackwell And technology excited initial that

which agentic AI think incredibly was is will exciting agents we intelligence, be hardware of So every moving discussed about the industry. Cristal really project, node this across for earlier which ecosystem. and the week, transformational

the inside about of and/or increasingly you such think smallest way this everything being is the the the center, interface So all to as driver earbuds the devices drives really that about AI agents data the if device.

of a it's I AI opportunity every workloads those because that run Arm, mentioned. on For endpoints will significant one

run Additionally, through running the given will these make pervasive world's most through is on Arm platform for workloads will that optimize the Arm easy developers Arm libraries, it AI agents. platform, to we KleidiAI and Arm. our and target very to compute And those

terms those of our very represent their industry both significant, company. So impact announcements are of the and in significant both for to opportunity

Jason Child

licensing And upside of kind components. question your on the other

for $XX the quarter, all access up the which the of have AI year-on-year. been into to to and XX% needs the past course, go was CSS. up same quarters, continue kind components of versus the about technology few in also and guidance Certainly, to AI over million are it the then, our drivers prepare vX So that is of chips, need

we've to on. there's CSS As additional Rene mentioned, contracts continue we be and working sold that

license grow order in XX% guidance for year-on-year. that -- around In of in the next terms can of quarter, actually the revenue of we're guiding order this the kind

planned since the kind of And much to of that are kind big those we bucket as mostly and number AI- the early very on on deals much of track deals look a in very CSS-driven. for in said so and be we QX. of being have year, expected. had we've And same Those

Operator

of line Your next Quatrochi the from question Wells from Joe comes Fargo.

Joseph Quatrochi

mentioned as demand royalty guess your initially prior You CSS partner versus the the I should we fiscal ramping enter to think than about contribution stronger is 'XX we for how expectations? anticipated. that revenue

Jason Child

not about 'XX feel Yes, to rate, in we exit about so good yet. terms very talk But momentum we're we've ready the delivered. that of

into in no $XXX million CSS this Dimensity starting Cobalt material the have that and is of that's about example, to at flowing XX% led of that, previous higher revenue, and mostly first that about. record we talked quarter last our shipments XXXX deployments For revenue now. that's see quarter actually Certainly we the royalty than also chip by that revenue Also royalty CSS $XXX million. surprise this quarter

expect As more over we see we couple do the there momentum. quarters, to continue of continued deployments CSS next to be

going the wait next have we're to In quantifying momentum, to until terms of quarter.

Operator

Your next the Charles Shi from of line Needham & comes Company. from question

Yu Shi

think what's next calendar it's a I commentary, the had difference maybe your year to to year. I expiring in of news just what Just calendar seems just coverage to large that want There want reporting, all the expiring lot customers. is expecting to thoughts we [indiscernible] to think. view the touch with press contract in They 'XX. between current it's month last on quantified some get won't you some you're think based there be know happen revenue do of 'XX. maybe expire on happen, one what upon versus think they I will the this haven't since there. trial but there seems the be, in

Jason Child

This Jason. is

and impact the think was question lawsuit the of Qualcomm about on I the revenue.

Yu Shi

correct. Correct, Yes.

Jason Child

to basically and But the the that we all going continue will continue continue receiving lawsuit There's and reason financial defending and were a impact. that really in perspective, IP no we'll The paying around important. forecasted the was way to that primary royalties IPO lawsuit. forecast had to be they've -- in prevail we back not very as assumed the been for from pay. our had much same that's to for at rates past though We that

Yu Shi

number see if missed it. have I past you But bit you the tell another for Maybe an the I it little what can shareholder contribution clarification. Maybe Got number, us the just quarter? RMB from is of question, a the somewhere. letter. don't number

Jason Child

Yes.

the As total quarter, percentage it XX%, was royalties with a in prior quarter. consistent the of so

Yu Shi

Okay.

quarters to also, Okay. it's know like understand probably you the go bit XX%? for in yes, a it expect quarters? coming The of but us been I why -- of quarters XX% answer little couple up and a is stalling at of XX%. can also a the again looks help it's Do couple you already

Jason Child

will adoption Let some continue how kind to piece, cover is of view math about the me overall and it occurring just let how kind just vX then of and maybe of Rene of occur. talk larger the I'll

of So dollars, we about if the total, ago a XX% I about growth it's just so a a this percentage all, you would just say, flat went the saw math rate so quarter. as first look the quarter it's of in is, to at vX of year and actually percentage XX% the XX% from total. But

rate. So the would say, absolute I dollars triple-digit grew by,

drive rate the of growth as growth meet royalty rates more to not we're the accelerating great a the you further kind And future to that have in and vX it's fact it's confidence indication quarters beyond. so that exceed fact that to will higher, that flat our royalty of ability, see runway royalties. you have we for provide still expect grow fact been next longer that able And to while We our a is the about ability should XX% of total relatively actually or our goes probably XX% -- growth.

Rene Haas

Yes. about those get products to and of they're driven introduced. maybe of to the a just you largely transitions think give how when transitions, by And sense OEM they

take which has in vivo MediaTek So phones, the their now and example, been ramp for for into are production. XXXX, designed those OPPO

So then vX vX. get then to across start and state. But you of the happen. ramp spike a couple up of high versions as are mid-range to as released, and things to segment, steady next a a adoption products end from the mid-range you'll see Broader high to move the the a to

rate very, we So overall seeing the is be. that to completely consistent the and transition with how expected ramp very expected we're

opposed said, we And where their OEMs room as as licensing largely shifting about expansion for it's but you are. mix by happy new driven to very companies. chip So

Operator

comes Redburn And Timm Instructions] your Schulze-Melander of Atlantic. question [Operator from line the from

Timm Schulze-Melander

growth. mix expect talk to kind should and what a contribute Maybe and the to Can of about on just we to year? key maybe more off you the of bit just specifically FY momentum royalty little question the kind on full evolution 'XX vX what

Jason Child

'XX this just We is we announce -- Jason. do Yes, next -- We're quarter. when we guidance year, it we'll on last results. typically provide QX like

detail the said the we've So into rate. we've past. past what royalties That's in say more to we'll would somewhere probably said go grow would we in that mid-XX% in what the then. expect growth I is

to We CSS. we're update through that that haven't -- not is vX going well as combination way today. The the as providing there get an of to we're adoption

into overall, some That's recent that time, growth. And larger rate vX because is say, you over actually to in CSS also a grow. quarter CSS a, rate you double adoption of see saw most expect should what royalty so is input would continue roughly growth. roughly to vX, and is the growth vX of strong vX, vX of to course, X the even this But double had really great, but royalty remember is just that input on I is vX.

us So very the good think, 'XX. last sets look in we overall, but we over for up to you the all this next the just showed have at quarter components, what we expect momentum and quarter, that a

Rene Haas

Jason And is CSS and to CSS same when market. royalty rates is rate the kill to on sure 'XX. just expand not of the the the offered solution me, rate make doesn't the on a 'XX new change CSS in maybe necessarily royalty Those but Yes. for that year-on-year further as

are So over over increase time. variable time they those and

Timm Schulze-Melander

hard super agreements? to expect week see and is structurally follow-up. clearly terms structurally But And your line. get going we over the in of means of then something take that are longer that's That's of helpful. Super the longer anything just that years? quick these or it's coming to That month. complexity to should changing client Is to licensing revenue, The day or in exact the sort maybe one great. predict there just

Jason Child

I millions This ATA, a is a haven't renewal maybe with deal your the No, last primarily But they lot would no. There's the many, versus shorter probably we to a new need involve general There's kind takes months. of just no. that's buckets. of Directors contracts brand But frame. Typically, X time dollars, these same these look the cycle. and you nonetheless, at existing process versus year? to Jason. in can say done year different approval the is, It's someone all approvals That when or question, next a probably before. now an is anything many take Boards of the contracts probably in it's larger longer hundreds that changing while. of where all the longer in and work been with get the of But this factors.

Operator

Your question from from next comes of Rakesh line the Vijay Mizuho.

Vijay Rakesh

like Graviton question almost that's IP. how looks is on top progressing, it success, you using the X,XXX a how a XX% having -- the the Can good quick of follow-up. Just very Cobalt I on Arm to have you're talk AWS, the ramping? and And XXX customers

Rene Haas

shipments good the data to being everything cloud. But our from AWS. xXX statements directly away the of into Grace, general, AI GBXXX, CPU Arm HXXX the Microsoft not transition because those be tailwind primary if more momentum because data centers, taken standpoint of Yes. you with an partners that a we're Cobalt. broadly is clear, defer running relative from about an these host accelerant the to I'll of also Cobalt Grace inside with control is plus To or of making the what from But a the deployment and center in for kicker, is Blackwell increased a only will. we've of products Microsoft seeing all AWS in for comments

on to terrific. in commentary very been the but on happy we're again with momentum momentum general. Cobalt, has the So specific I'd defer Microsoft

Vijay Rakesh

I sequentially, saw Got a related it nice it party up the then on side, like traction XX%. it. very And looks

look that does term, are Just changes any you that how there? wondering, out ramp? longer term, you Does seeing As long progress?

Jason Child

largest China, expect would pretty Arm be is related party, consistent. over so to China, of to probably mean Arm the revenue. kind it expect will be and percentage a consistent be smaller we I time. component that expect would I it probably, I pretty of

I was But not lot. it in this expect probably XX-ish mid-teens quarter, next it whole we to quarters, over to time. to in a I've percent over past, said think the going change few probably the range. fall the

Operator

from of from line Your Citi. Gardiner comes question Andrew next the

Andrew Gardiner

potential on move I silicon whether the particular, into anything able further M&A, as won't having continues I just about the happening sort the that saying be model for to you There traditional related to that you your in what but needing, get press lean do you perhaps IP internally customers to SoftBank without of direction beyond and had of -- know M&A. to space. really be M&A, perhaps causing one you're that, sort with year? terms and Can you of look perhaps you, they're in above speculation the is and what further pure it's in you or to current the is Arm in of why and on beyond -- a sort specific discussions out

Rene Haas

unfortunately, the are thank upon time, of spend And and future. rumors. about growth at say that surmised, on can question. detail I reflect speculate customer our of very to a thinking as much of thing develop products rate isn't software and in rumors of Arm and that, the evolving you is more the can't ecosystem lot faster, the in can't space sooner, to trying M&A. of which tremendous market more that can pressure all seeing I'm there We for about that to heart hard rate on But in AI most any sure much better, the you all is us Yes, which terms the efficient. And the we solve a of I than it our look thinking as One and about problems. give change, we very say and/or speculation how on time you models is of at personally, puts certainly my we're

Operator

the question from Harlan comes next of Your from Sur JPMorgan. line

Harlan Sur

that. question, for with demand led that has I solutions, good pulls mean, Rene, to of compute a which team always right? AMBA then follow-on example a IP the a as your strategy, was system-level Maybe

CSS Your good another move of to that. example is

like is heterogeneous, towards Now scaling strategy. more SoC complex strategy the that it sort seems to attack moving like market is the rapidly sort of of the this team chiplet-based

an Chiplet monetize Like And so CSA building You ecosystem team around what's is going acceleration Are your around Arm are Architecture. CSA? how guys the more strategy? this the far? seeing you or to System progress of importantly, this like an activity like

Rene Haas

A strong see this these We've get seen We us the where are faster. Because in Harlan. the AI take the get for designs to well. To it. complex that getting the help Arm Thanks, going silicon to the software Total really major lots There's allows our it. heart very, the just one the driving link chiplets everything chips more we engage. go houses demand your demand in hardware kicked so. build, to we're there. And fact ecosystem, absolutely to of even outpacing questions time and the Jason as for there's smartphone a significant in lot and design to of demands product. products takes that to involved industry the software. back really what's points market of of place asking the compute gave. this, demand partners. harness strong Yes. to of Design for relative markets there. and an the just the do market a phenomenal on call that to benefit serve end as We're in very, And that potentially all in point about all of we what's Arm on sooner of CSSs inside partners, capabilities very are the any and huge these something is develop is demand There's just that between now CSS, with clearly more good I terms CSS off acceleration of also Customers our and about We've It program as very I answer previous mentioned. incredibly

designed the -- to was smartphones these X, everything ago, subsystem, were You the the years memory for chips these X remember predefined. were power, have smartphones that

anything goes to given to you still these that small or language able apps. system, have you run is challenge phone to display, fact quite be an So the a you operating to models to fit a run the inside have that still still run have

address to market on. that getting we're helps what And that, products So really focused is faster. what very

Operator

of Bank comes Arya the of from line from America. question next Vivek Your

Vivek Arya

of fiscal to wanted to adoption this it grow I said But start numbers, that go I or that as back a royalty. of percentage of appreciate stalled XXX the you vX course, and more year, would percentage think the represents quarter, Of I it right? dollars your basis adoption points would at XX%. -- absolute at question, grow every contribution points but by or X -- has by in

what's not So to last we right or since was that you it could And had year? see create start at fiscal year, does an an you did assumption versus way is for of at this much look as driver the not explain the I hoping upside the Or next this happening it? in the year. acceleration

Jason Child

one. that Yes, this take is Jason. I'll

-- So I year? I is, and exactly be next what after what frame. it's say would does don't mean, ultimately, say to if it is next I the this growth to the us for set going could. would get to I know year better year up just you're or time trying

vX. to us, then XX%, XX%. And assumptions, our went a from went to, of to quarters it when then as because and If went we've we a total good it straight X XX% gives a XX% seen come contracts, believe said, is provide view you do to XX% that are it's help a products it's percentage market had you actually back and now still of already have metric and you go again, XX%. people as going to to insight that? the to leveled the reason said, of growth indicated, we the Well, we few I the adoption believe to total. Why we fact vX. the out think, that The into us, on already The at sold we as the as said quarters total, XX% understand it it's into already gives reach as slowed percentage of thing better a where to just because is that I going

what's all have we If shipments result, strong timing. It's expected. That's actually coming surprising a going online, grown the of to than under generations growth just of we'd it it's has reason why not seen The are do contract, and mix. as past stronger vX previously be that's again, is And question little few the to the It's and bit So is a the a high growth, a fact because to over just that quarters confidence. But have us. those good. able question what's know great. occur what's already coming. we when you've

So the the this are reason the understand try number to ultimately, an of as we help provided drivers. those indicator royalty leading Again, indicators to more was growth.

are mix thing. slower numbers should royalty overall the were while much think growth. And slower focus able royalties so now. those on the good a fact But when growth you metrics gave royalty having going a vX is our of back slightly again that we've been to they meet exceed We or I than

adoption. than overall think would would vX And so that's growth on focus why I more I I royalty

Operator

question Guggenheim Your Securities. line DiFucci John from from comes of next the

John DiFucci

kind optimization high-level is lot There's a think. of Rene. question a been to It's and My discussion of regards DeepSeek. for of I around investor -- question, discussion a in around training lot

it Assuming Arm. as even does to guess, your on how topic on that beyond if pertains I Rene, Arm's hear And change this opportunity I'd all? your like to just thoughts this broadly, more is AI, all view valid, at

Rene Haas

that on reasoning achievements if was that things. was VX RX, sort think a you efficient done that, very and Broadly creative then inference. was existing of top DeepSeek DeepSeek, top the and few work work, by build terms created in will, a work there obviously AKA of their on model, model about else, of some to a model very, was generic someone doing both a frontier very Well, lot of speaking, of you their that model, of if

efficiency. that's It for reasons. it and for think compute. I great honest by with for industry it's cost. demand the doing It's a couple lowers it And think great expands that, I to the drives be overall great, of you because the

down it's a run a about these from makes of where constrained. It's for think compute need it standpoint, When applications areas is you to to power just will terrific good to inference, the Arm, and you easier workloads So thing. efficient that can given AI fact application everywhere general the run the in put amount inference constrained, cost Arm. of more lower is

a be to you'd cell never Blackwell never a As able able be in as it product you'd wonderful Grace to into phone, earbuds. it is, put put

it spend their the Meta's market, $XX billion. places. But put be billion we're about think inference, about pulling it's car. nowhere good look by And could large the this Google if cost is announced also the is in No billion. is expenditures one transformational just the billion can all being that a you as close at when think into of Arm talked for a players nowhere drive terms talked $XX down in what do. back. great. I in also the to even think that you to I result, a because Satya we're overall announced can't that of $XX $XX near in call. capabilities And I has You enough AI those reason

it in where spot. I it's actually because And our think that's for think So allows areas I better demand. overall increase good sweet will and key, great it thing, is a us efficiency a even and thing actually -- and I'm Arm, play compute

Operator

next from comes Krish from Sankar the question Your Cowen. TD of line

Sreekrishnan Sankarnarayanan

wanted up the on ACV. follow to Jason, just

on. I you give growth full year the know will mentioned decel. later guidance You

data Are the Arm kind think go-forward coming or that it much how And curious from on to growth? there programs big center the teens ACV the back ramp Just of that double-digit coming ACV of or business a longer-term mobile are is could on about basis. a China today? to how any the

Jason Child

Sure.

So let's see.

a So be that and the terms revenue way the the from if of our ACV that we ACV provided all if the all ATA coming go in you it high our annual it vast treat -- typically is ATA to single knowing basically went the guess for our idea majority in when and of we deals where is forecast digits. deals have reason license mid- I should ratable, should actually you public, growing of And back to X% think as we with land, the back escalator. that deals. And nearly of probably

non-ATA that. should all it then won't and deals -- have So the be

minus it's in X% range. probably plus or So the

guess, of as in that's quarters, mostly has Then our So licenses, as I as seen seen well last what we've forecast well. the adopting now vX acceleration CSS we've over been. kind -- because AI, now of around X

provide could that. try insight give of terms a quarter, of should guidance the really When to model, I'll was it, mid-teens or I took growth or way in from next But XX% on of It forecasted. kind vast at high. Will minus, us to we provided that's range? back to, what percent, plus that know. So I of royalties. that majority from to get all XX% really certainly what X-ish upside the That's we a never happen. growth you the more up little kind you the don't not expect come longer-term the

increases higher certainly rate. so still, to versions, a said rate. They're well. as there's And CSS, onetime vX Rene change, typically year, royalty with increases much a vX, as going those annually both in earlier, be And new are step not but and with each at royalty

coming than overall, license. majority royalties of should expect in the So the more from the you from growth future

Sreekrishnan Sankarnarayanan

Arm of Got you. China? And Jason, ACV just is how much

Jason Child

XX% -- of somewhere the at The pretty it's close Arm the portion, kind somewhere of quarter, so sorry, it China so This the percent to last that range. was kind it's range, mix. kind in XX-ish of overall in Yes. Arm

Operator

your for from take Mark Evercore. We now question final question will line the of and today, comes Lipacis from our final

Mark Lipacis

CSS handsets? data or Mark I mostly center sure you the data between CSS Jason, center Rene. -- made is for Lipacis want it question activity, from your license I balanced that Evercore. It's And comments make just and when understood is that and to earlier. Rene, Jason A then you

there's comes become Arm likely smartphones? And AI that And a Or high very chiplet device die processing then that attach on power also? side. just going Does into more similar the architected? necessarily a a smartphones, earbud chip? is the to the a question be mean the on IoT like does rate processors with CSS monolithic longer CSS to term, that are As so of kind those then of

Rene Haas

Yes.

can the the I'll take address maybe sort then Jason So numbers. of that part of first and

CPU chiplet described, will. gigantic going or so, I CPU almost the everywhere. certainly, you think maximize from every that compute every you I whether an of us not high this us think die other so have which right we because with just CSS it standard. But because exists can be SoC, to But performance. words, endpoint for tiny. opportunity mix about just provide see NPU In to a that just the but is GPU the today everywhere, standpoint, on you'll you'll small and only have end a earbuds they're combination the approach is not if pervasive to It it's maybe across right a package, a allows the inside number a combined of as

demand piece. terms a You we're on I'll driver, which why type of last seeing the end markets. key point CSS let handle sort of very across really is hit in of very, strong Jason demand all those

Jason Child

Yes.

On said announced the CSS we've coming, that the we here it's not mix, that auto, yet. in past

So dozen business. that and roughly client that our basically of the sold, in XX-XX between assume about we've infrastructure terms it's

Operator

I for closing back will now the remarks. hand call

Rene Haas

questions. everyone, all Thank and you, thank for your you,

appreciate we very always, good what is and Arm very As questions. in doing interest much very, the

has a there. quarter $X guiding done summarized now we $X Royalty's before. at quarter. something of obviously the As never and billion got in in well just just to before was never billion to We've beginning, about company and phenomenal, a at is next we're the record the been quarter, million, close north which $XXX the record revenue,

by in Arm. revenues you that able healthy a and just quarter to at the margin something for a so is record we're with ended being beat of to next the proud just share So projection quarter

are we intelligence to Stargate the to with near-term and our future, So and vX very that all us, execution be the strategies with Cristal excited about time it's the about Arm. opportunities fantastic CSS bring whether of

interest, questions all to we speak for your and you and will thank So you next quarter.

Operator

conference Thank Thank call. you you. This for participating. concludes today's

now may disconnect. You

Arm Holdings plc American Depositary Shares (ARM) 5 Feb 252025 Q3 Earnings call transcript