Semiconductor designer Arm reported quarterly revenue growth of 47% in its latest financial report, surpassing previous guidance.
The Cambridge-based chip designer posted revenue of $928m (£743.8m) for the fourth quarter of FYE24, 3% greater than the upper end of its previous forecast for the period.
Arm, owned by Japanese conglomerate SoftBank, listed publicly on the Nasdaq last year in 2023’s biggest IPO. The move was seen as a snub to London, where Arm had been listed for 18 years from 1998 to 2016.
The group designs microchips that have become an essential element in AI technology. The company said an increase in the demand for AI was a major factor in Arm’s revenue growth.
Royalty revenue from the adoption of the Armv9 chip in smartphones, servers and vehicles and strong licensing revenue growth were also credited with driving the positive results.
CEO Rene Haas and CFO Jason Child said further growth would be driven by the increasing need for energy efficiency in the AI market.
According to the Arm executives, the massive compute demands of generative AI will mean firms that prioritise energy-efficient processes will be in greater demand as the adoption of AI continues to become more common.
Shares in Arm dropped slightly, despite the revenue growth, as the company’s full-year revenue guidance of between $3.8bn and $4.1bn was short of analyst expectations compiled by Visible Alpha.
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