Arm shares tumble 10% as $505M licensing haul misses Wall Street target despite record $1.242B revenue

Arm’s share price fell 7.48% in Wednesday after-hours trading and was down 10% by Thursday morning, as investors reacted to a shortfall in licensing revenue and cautious guidance. The company reported record quarterly revenue of $1.242 billion and $737 million in royalties, but licensing came in at $505 million versus the $519.9 million analysts expected, while margins, cash flow and bookings weakened. Additional pressure came from Qualcomm’s warning on memory shortages and smartphone production, reinforcing concerns about Arm’s heavy reliance on mobile-related royalties even as it pushes into AI and data center chips.