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Arm, the British chip designer, issued a warning about the uncertainty surrounding US tariff policies, leading to a lack of guidance on annual revenue. This uncertainty also affects Arm’s customers like Nvidia and Apple, who are dealing with disruptions in global supply chains.
In its fourth-quarter results announcement on Wednesday, Arm, which is owned by SoftBank, provided a cautious sales forecast, estimating revenue to be between $1 billion and $1.1 billion for the current quarter. This outlook was at the lower end of Wall Street’s predictions due to the timing of finalizing new licensing deals.
Following this announcement, Arm’s shares fell by as much as 9% to $113 per share in after-hours trading.
Arm’s financial performance gives insights into the smartphone and AI chip market, as its designs are used by major companies worldwide that license its technology to manufacture chips.
The company’s earnings report covers the period before President Donald Trump’s announcement of reciprocal tariffs on most of America’s trading partners in April, causing significant market turbulence.
Arm’s CFO, Jason Child, mentioned that the revenues for the three months ending in March were not impacted by the trade tariff uncertainties. However, he noted a lower visibility into client demand and refrained from giving revenue guidance for 2026.
Arm’s revenue comes from license fees and royalties for its chip technology. The company is currently finalizing new licensing agreements, but some deals are still pending, leading to a more cautious outlook.
Arm reported revenue of $1.2 billion for the quarter ending in March, a 34% increase compared to the previous year, meeting Wall Street’s expectations. Net income saw a 6% decline from $224 million to $210 million year-over-year. Additionally, revenue for the 2025 fiscal year grew by 24% to $4 billion.
While Apple and other hardware manufacturers received exemptions from the reciprocal tariffs, the US government is currently reviewing whether to impose additional tariffs on semiconductors and related electronics for national security reasons.
Nvidia is facing challenges in exporting AI chips to China due to new restrictions and may encounter further limitations on chip sales.
As of the close of trading on Wednesday, Arm’s shares had decreased by around 3% since the beginning of the year. The company experienced significant growth in 2024, benefiting from the increased AI investments by major tech firms.
Arm went public in the US in September 2023 after being acquired by SoftBank, which still retains about 90% of the company’s shares.