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British chip designer Arm warned that uncertainty around US tariff policies meant it was unable to give guidance for annual revenue, while customers such as Nvidia and Apple face shocks to global supply chains.
Reporting its fourth-quarter results on Wednesday, SoftBank-owned Arm issued a conservative sales outlook, forecasting revenue between $1bn and $1.1bn in the current quarter, at the lowest end of Wall Street predictions due to the timing of closing new licensing deals.
Its shares dropped as much as 9 per cent to $113 per share in after-hours trading.
Arm’s earnings offer a glimpse into the health of the smartphone and AI chip market, with Arm’s designs used by some of the world’s largest companies, which license its designs to build chips.
They reflect the period before President Donald Trump announced sweeping ‘reciprocal’ tariffs on most of America’s trading partners at the start of April, sending shockwaves through global markets.
Arm’s chief financial officer Jason Child said revenues in the three months to the end of March had not been affected by uncertainty around trade tariffs announced by Trump, but that there was “lower visibility than normal” into demand from clients and declined to give guidance for 2026 revenues.
Arm, which generates revenue from license fees and royalties for its chip technology, said it was in the process of completing new licensing agreements but that some had not yet been signed, resulting in a more cautious outlook.
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Arm posted revenue of $1.2bn for the quarter to the end of March, up 34 per cent compared to the previous year, in line with Wall Street expectations. It reported a 6 per cent drop in net income compared to the previous year from $224mn to $210mn. Meanwhile, revenue for the 2025 financial year rose 24 per cent to $4bn.
While Apple and other hardware makers were subsequently granted a reprieve on the ‘reciprocal’ tariffs, the administration is currently conducting a national security review to determine whether to impose further tariffs on semiconductors and the electronics that contain them.
Nvidia has meanwhile seen its AI chip exports to China hit by new restrictions, and faces potential further restrictions on the sale of its chips.
As of Wednesday’s close of trading, Arm’s shares were down around 3 per cent since the start of the year. The company saw massive growth in 2024 as it emerged as one of the key beneficiaries of a massive AI spending spree by big tech companies.
It listed in the US in September 2023 following its acquisition by SoftBank, which still holds around 90 per cent of shares.
