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Arm's Q3 revenue rose 19%, beating analyst estimates

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Arm narrowed full-year revenue and per-share profit

guidance

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Arm's Armv9 tech carries higher royalty rates, used in

Apple's ( AAPL )

iPhones

By Max A. Cherney

SAN FRANCISCO, Feb 5 (Reuters) - Chip tech provider Arm

Holdings gave a fiscal fourth-quarter forecast

on Wednesday that was slightly above Wall Street's expectations,

as it sees steady demand for customized silicon.

For the current fiscal fourth quarter, Arm forecast revenue

in a range between $1.18 billion and $1.28 billion, with a

midpoint of $1.23 billion, compared with an average analyst

estimate of $1.22 billion, according to LSEG data.

Arm's third-quarter revenue rose 19% to $983 million,

compared with analyst estimates of $946.7 million.

The UK chip designer reported third-quarter earnings of 39

cents per share, adjusted for stock-based compensation among

other items. Analysts expected earnings of 34 cents a share.

Arm generates revenue from licensing fees for its

semiconductor designs and collects a royalty for each chip sold

that uses its technology.

For the full year, Arm narrowed its revenue guidance to a

range of $3.94 billion to $4.04 billion from $3.8 billion to

$4.1 billion. The company also narrowed its adjusted earnings

per share guidance for the full year.

CEO Rene Haas said the company's narrowed full-year guidance

was the result of being close to the end of the fiscal year.

"You kind of know where you're going to land the plane as you're

getting that close," Haas said in an interview.

The chip technology provider's latest Armv9 technology

carries higher royalty rates than its prior versions. It is used

in the chips that power Apple's ( AAPL ) latest generation of

iPhones.

The company's designs power nearly every smartphone in the

world, and the company has attempted to make headway in data

centers and other markets. Chips with Arm technology generate

$200 billion a year of revenue for the many chipmakers that sell

them, according to research from TD Cowen.

But in recent years, low-profile Arm has attempted to alter its

position in the chip market by raising prices and moving to

potentially compete with its biggest customers, Reuters reported

last month. In December, Arm failed at one attempt to secure

higher royalty rates from Qualcomm ( QCOM ) in a Delaware court

after a week-long trial.

Last month, President Donald Trump's administration announced a

$500-billion AI infrastructure venture called Stargate that

includes data centers and related technologies. Backers include

Arm-majority owner SoftBank, Oracle and Arm

itself.

(Max A. Cherney in San Francisco and Juby Babu in Mexico City;

Editing by Rod Nickel)