ARM Holdings Beats on Both Top and Bottom Lines

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ARM Holdings (NAS: ARMH) reported earnings on April 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), ARM Holdings beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share grew.


Margins improved across the board.

Revenue details
ARM Holdings reported revenue of $211.9 million. The 18 analysts polled by S&P Capital IQ predicted revenue of $206.4 million on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $186.2 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.16. The eight earnings estimates compiled by S&P Capital IQ predicted $0.15 per share. GAAP EPS of $0.04 for Q1 were 33% higher than the prior-year quarter's $0.03 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 94.0%, 30 basis points better than the prior-year quarter. Operating margin was 37.9%, 1,290 basis points better than the prior-year quarter. Net margin was 28.2%, 970 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $211.0 million. On the bottom line, the average EPS estimate is $0.15.

Next year's average estimate for revenue is $902.8 million. The average EPS estimate is $0.69.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 838 members out of 909 rating the stock outperform, and 71 members rating it underperform. Among 221 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 206 give ARM Holdings a green thumbs-up, and 15 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ARM Holdings is hold, with an average price target of $29.26.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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