Arm Holdings reports Q2 beat, shares fall 7% on soft Q3 guidance

Arm Holdings (NASDAQ:), which went public on September 14, saw its shares drop more than 7% after-hours today following its Q2 report that exceeded expectations, while Q3 guidance missed consensus estimates, attributed to a large deal that will likely land later than anticipated.

Quarterly EPS came in at $0.36, better than the consensus estimate of $0.26. Revenue grew 28% year-over-year to $806 million, compared to the consensus estimate of $746.9M, driven by multiple high-value long-term license agreements signed with industry-leading technology companies, and royalty revenue benefiting from market share gains and higher royalty rates.

Annualized contract value (ACV) at the end of Q2 was $1.108 billion, representing a 3% year-over-year growth. Remaining performance obligations (RPO) were $2.414B, up 38% year-over-year.

For Q3/24, the company expects EPS to be in the range of $0.21-$0.28, compared to the consensus of $0.27. Revenue is seen at $720-$800M.

For the full year, the company anticipates EPS in the range of $1.00-$1.10, compared to the consensus estimate of $1.04, and revenue of $2.96-$3.08B, compared to the consensus of $2.96B.