--- title: "ARM (Minutes): Tariffs have no direct impact on the company" type: "Topics" locale: "en" url: "https://longbridge.com/en/dolphin/post/29434858.md" description: "ARM (ARM.O) released its Q4 FY2025 earnings report (as of March 2025) in the US after-hours trading session on May 8, 2025, Beijing time. Below is the earnings call Minutes for ARM's Q4 FY2025. For the Quick Interpretation of the earnings report, please refer to《ARM: Guidance Warning "Pours Cold Water", Valuation Bubble About to Burst?》I. $Arm(ARM.US) Key Earnings Highlights Review1. Revenue Performance: Q4 total revenue reached $1.24 billion, at the upper end of the guidance range. Full-year revenue exceeded $4 billion..." datetime: "2025-05-08T06:13:21.000Z" locales: - [en](https://longbridge.com/en/dolphin/post/29434858.md) - [zh-CN](https://longbridge.com/zh-CN/dolphin/post/29434858.md) - [zh-HK](https://longbridge.com/zh-HK/dolphin/post/29434858.md) author: "[Dolphin Research](https://longbridge.com/en/dolphin.md)" generator: "portal-rs" --- # ARM (Minutes): Tariffs have no direct impact on the company **ARM (ARM.O) released its Q4 FY2025 earnings report (as of March 2025) in the US after-hours session on May 8, 2025, Beijing time:** **Below are the earnings call minutes for ARM's Q4 FY2025. For earnings analysis, please refer to** [**ARM: Guidance Warning "Pours Cold Water," Valuation Bubble About to Burst?**](https://longportapp.cn/zh-CN/topics/29427869) **I.** $Arm(ARM.US) **Key Earnings Highlights** 1\. Revenue Performance: Q4 total revenue reached $1.24 billion, at the upper end of guidance. Full-year revenue exceeded $4 billion, with royalty revenue surpassing $2 billion, both hitting record highs. Q4 royalty revenue grew 18% YoY to a record $607 million, driven by flagship smartphones featuring Armv9 and CSS solutions. Licensing revenue surged over 50% YoY to a record $634 million, fueled by Armv9 technology and AI demand. 2\. Profitability: Non-GAAP operating profit hit a new high of $655 million. Non-GAAP EPS was $0.55, at the upper end of the $0.48-$0.56 guidance range. 3\. Annual Contract Value (ACV): **Q4 ACV grew 15% YoY, exceeding the company's long-term mid-to-high single-digit growth target**. 4\. Remaining Performance Obligations (RPO): RPO declined QoQ as ARM recognized revenue from prior licensing agreements. 5\. Operating Expenses: Non-GAAP operating expenses were $566 million in Q4, reduced due to some costs being deferred to Q1 FY2026. 6\. Q1 Guidance: Projects Q1 FY2026 revenue between $1.0-$1.1 billion, representing 12% YoY growth at midpoint. **Royalty revenue is expected to grow 25%-30% YoY**. Licensing business, despite a tough comp, should deliver its second-highest quarterly performance. Non-GAAP operating expenses are estimated at ~$625 million, including deferred Q4 costs. Non-GAAP EPS is guided at $0.30-$0.38. 7\. Tariff Impact: Direct tariff effects on royalty/licensing revenue appear limited, but indirect demand impacts remain uncertain. **10%-20% of royalty revenue comes from US shipments**. Licensing business is **minimally affected** as clients **continue investing** during short-term slowdowns given long chip development cycles. **II. ARM Earnings Call Details** **2.1 Executive Highlights** 1\. Business Highlights: Q4 capped a record year driven by cloud-to-edge AI efficiency demands. Quarterly revenue first exceeded $1 billion. Full-year revenue topped $4 billion with royalties over $2 billion - both historic firsts. **Up to 50% of new server chips at hyperscalers may use ARM architecture this year**. ARM NVIDIA Grace Blackwell (Armv9) is now in full production. Google's Armv9 deploys across 10 regions, adopted by 40 of its top 100 clients, offering 65% better performance than x86. Microsoft's Cobalt 100 supports major workloads (Databricks/Siemens/Snowflake) and internal services (Teams/Copilot). Over 50% of AWS' new CPU capacity in two years came from ARM-based Graviton. ARM gains momentum in custom chips as enterprises adopt its CPU/GPU/NPU solutions, boosting licensing/royalty revenue. NVIDIA's AI desktop DGX Spark with Armv9 Grace Blackwell validates ARM's AI infrastructure demand. Royalty growth reflects broader Armv9 CPU/CSS adoption in smartphones, where **royalties surged 30% YoY vs. industry's 2% shipment growth**. 2\. Product Launches: ARM debuted its first Armv9 edge-AI platform (Cortex A320 + Ethos-U85 MPU) for billion-parameter models, adopted by Infineon/NXP/Renesas/Qualcomm/STMicro. GM and NVIDIA collaborate on ARM-based Drive AGX for next-gen cars. CSS now ships at scale, lifting mobile/cloud royalties. ARM signed its first automotive CSS deal with a global EV leader for custom chips. Its universal CPU architecture enables OEMs to deliver cloud features in cars. ARM supports 22M+ developers - the world's largest such community. 3\. Cloud AI: ARM's core AI software layer has surpassed 8B installs on ARM devices. **2.2 Q&A** **Q: Tariff impact on ARM's costs/revenue?** **A:** As a service provider, ARM faces **no direct tariff exposure**. No Q4 impact seen; none expected in Q1. **Indirect supply chain effects may emerge later**, but fundamentals stay strong with Q4 royalties +18% YoY and Q1 guidance raised to 25%-30%. If device cost hikes dent US demand, royalty impact could reach low single-digits, but visibility is limited. **Q: Did Armv9 adoption rise from 25% to 30%? Growth drivers?** **A:** Yes, Armv9 now exceeds 30%. CSS (all Armv9-based) grows increasingly important. Two CSS products (client/infrastructure) now contribute royalties; more coming later this year. Future Armv9 adoption updates may be limited as CSS-driven growth becomes dominant. CSS remains early-stage but should lift Armv9 penetration. **Q: Is CSS pricing still ~2x standard Armv9 implementations?** **A:** Yes. Second-gen CSS brings major upgrades, with pricing typically rising through iterations. Update cycles vary by category (annually/biennially). **Q: Does ARM's endgame involve OEMs as direct clients? Implications?** **A:** Custom silicon is key for OEM differentiation, especially with ARM-based platform software. AI workloads amplify chip complexity, accelerating direct OEM engagements. Traditional fabless semi players remain relevant, but OEM demand expands ARM's TAM. **Q: Why no FY2026 guidance vs. past practice?** **A:** Partners' reduced visibility (especially on royalties) and macro uncertainties (e.g., tariffs) would require unusually wide guidance ranges, deemed unhelpful. **Q: Segment royalty growth and cloud/network mix?** **A:** Smartphones (+30% YoY) and clients (PCs/devices) outperformed. Infrastructure (hyperscaler CSS) should sustain double-digit growth. Networking rebounded from 2023 lows. Auto (IVI/ADAS) maintains double-digit growth. IoT lags but is recovering. 50% of new hyperscaler server chips now use ARM, aided by NVIDIA's Grace transition. **Q: Malaysia government license deal - one-off or sovereign AI trend?** **A:** The March deal enables Malaysian startups to accelerate chip designs using ARM CSS. Other governments may follow given its strategic benefits. **Q: 2025 royalty trajectory and Grace-to-Vera impact? Seasonal weakness?** **A:** No full-year guidance. Q1 growth expected; Q2 may be seasonally soft; H2 could see 10%-15% QoQ growth. **Q: License business drivers and China tariff impact?** **A:** Q4 licenses hit $600M+ (record), up 53% YoY. CSS demand, platform growth, and AI-driven product cycles fuel expansion. ACV growth (15%) suggests potential mid-to-high single-digit license growth upside. **Q: CSS client mix (13 total)?** **A:** ~6 client (mostly mobile), ~6 infrastructure, 1 auto. **Q: Stargate/Crystal AI opportunities?** **A:** ARM participates in OpenAI's Stargate (Grace Blackwell chips). Energy efficiency makes ARM the sole CPU supplier despite massive compute needs. **Q: Chiplets strategy?** **A:** ARM's AMBA bus is the de facto standard for chiplet interfaces. CSS and chiplets are synergistic for custom SoCs. **Q: FY2025 review and outlook?** **A:** Record year ($4B+ revenue) validates ARM's strategy. Unprecedented AI demand across devices positions ARM strongly. \ **Disclosures:** [**Dolphin Research Disclaimer**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [ARM.US](https://longbridge.com/en/quote/ARM.US.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**