Arm (ARM) Investor Update summary

Business performance and growth drivers

• Achieved record revenues in three of the last four quarters, with over 310 billion Arm-based chips shipped to date and 28.6 billion shipped in FYE24.

• Forecasting over 20% year-on-year revenue growth for the current fiscal year, with a 45% non-GAAP operating margin and strong cash flows.

• Gaining market share in PCs, data centers, automotive, IoT, and holds over 50% market share in chips with CPUs, with 100% share in smartphone CPUs.

• All major technology companies, including Alphabet, Amazon, NVIDIA, and Samsung, are long-term customers.

• Royalty revenue growth is expected to strengthen as inventory corrections subside and Armv9 adoption increases.

Technology and R&D investment

• Accelerated R&D investment to support next-generation technology, focusing on security, AI acceleration, and higher CPU performance.

• Investing heavily in software development, with $3 billion planned for Armv9 software and significant R&D for advanced architectures.

• Over 80% of employees are engineers, with headcount and revenue both growing at a 17% CAGR over the past two years.

• Plans to continue hiring engineers at a similar pace, including through acquisitions, to support long-term growth.

• Use of AI tools like GitHub Copilot has improved productivity by about 10%, with further gains expected as adoption increases.

Market and ecosystem strategy

• Arm licenses CPU and other IP to both semiconductor and system companies, enabling customers to design their own chips.

• Compute subsystems and chiplet technologies are being developed to simplify chip design and enable reuse across markets.

• Partnerships with over 30 companies for compute subsystems and over 60 for chiplet system architecture, broadening reach in data centers, networking, and edge computing.

• Arm's ecosystem includes over 20 million software developers and a vast software base, supporting broad adoption.

• Customers increasingly seek direct relationships with Arm to control software and hardware integration.