By Elias Schisgall

Arm Holdings said it expects higher demand for its new line of computer chips, but left its revenue guidance from the chips unchanged as it works to boost supply.

The British semiconductor company said in March that it expected to sell $1 billion worth of the chips through early 2028. On Wednesday, it said its demand forecast had doubled to $2 billion, but said that it lacked supply to meet the new order requests.

"The number that we talked about at end of March was supply in place to support $1 billion of demand," Chief Executive Rene Haas said on an analyst call. "That includes memory, that includes wafers, that includes packaging, that includes access to test equipment. So for the $2 billion, we are now in the process of securing supply to support that."

The company is "working around the clock to make sure we can find the right answers for our customers," he added. Arm still expects revenues from the chips to begin landing in the fourth quarter of the current fiscal year.

Operating expense growth is expected to rise sequentially by a few percent each quarter this year, in part related to the supply-chain buildout, executives said on the call. The company expects revenue growth to outpace operating expense growth by the end of the year.

Shares were down 7.2%, to $220.18, following the call after rising nearly 28% when the market closed.

Haas said the company received an influx of new order requests after it initially announced the chips, with customers asking, "How quickly can we get units?"

Arm still expects that supplying tech for artificial-intelligence data centers will become its largest business. It said it is on track to hit a target of $15 billion in revenue from the chips by 2031.

"The direction is clear, customers want Arm at the center of the data center," Haas said on the call.

Arm reported a fiscal fourth-quarter profit of $313 million, or 29 cents a share. That compares with a profit of $210 million, or 20 cents a share, a year earlier.

Stripping out certain one-time items, adjusted earnings were 60 cents a share. Analysts polled by FactSet were expecting 58 cents a share.

Revenue grew 20%, to a record $1.49 billion, beating analyst estimates of $1.47 billion, according to FactSet.

The company said in February that it expected revenue growth to slow in the fourth quarter due to typical seasonality, as well as a tougher year-ago comparison due to higher royalty revenue from a chip by MediaTek.

Royalty revenue rose 11%, to $671 million, driven by growth in smartphones and AI applications. Royalty from AI data centers more than doubled year-over-year.

License and other revenue jumped 29%, to $819 million, which the company attributed to strong demand for its platform.

For the current quarter, the company guided for adjusted earnings in a range of 36 cents to 44 cents a share on revenue between $1.21 billion and $1.31 billion.

Analysts expect first-quarter adjusted earnings of 37 cents a share on $1.25 billion in revenue.

Write to Elias Schisgall at elias.schisgall@wsj.com

(END) Dow Jones Newswires

May 06, 2026 19:26 ET (23:26 GMT)

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