Arm's royalty revenues boom, execs talk up hopes for AI bonanza
Smartphone chip champ Arm is crowing over expanding royalty revenues, driven by uptake of Armv9 technology, yet execs can't stop talking up AI as its future money spinner.
The chip designer today reported revenue of $844 million for its fiscal Q2 2025, ended September 30, up 5 percent year-on-year, but down on the $939 million it posted in the previous quarter, breaking the company's run of increasing revenue each quarter stretching back for more than a year.
This was expected. CFO Jason Child previously said Q2 would be a low point during the 2025 fiscal year due to timing of licensing revenue recognition, but this wasn't enough to placate the markets, with Arm shares down 5 percent following the news.
For the silicon design biz, royalty revenue was the major highlight. This brought in $514 million, up 23 percent year-on-year, attributed to increasing uptake of the Armv9 architecture in chips used for smartphones, and also adoption of its Compute Subsystem (CSS) chip blueprints.
"Smartphone royalties increased approximately 40 percent year over year compared with a mid-single-digit increase in the number of smartphones sold, mainly due to smartphone application processors being increasingly Armv9-based with a higher royalty rate," Child explained.
