Arm Holdings plc American Depositary Shares (ARM) 8 May 242024 Q4 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Arm Fourth Quarter Fiscal Year Ending 2024 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker, Ian Thornton, Vice President of Investor Relations. Please go ahead.

much. very you Thank good and afternoon, morning everybody. Good is Investor Relations name Ian Thornton, of Head the I'm at and My Arm. the March I would for of call our earnings year like to welcome the everyone fourth XXXX. XX, to conference fiscal ending quarter

Chief I'm Arm; Officer Financial and Haas, Chief of Arm's Executive joined Child, Rene today Officer. by the Jason

on all at and is update read will the Arm strategic investors.arm.com. on a available shareholder our Investor shareholder provides letter. you the Hopefully, website in the have downloaded Relations The letter it quarter. If progress not, rich

Before during the we targets, conference will everyone financial begin, I'd regarding like forecasts, and company to call, the remind that and discuss information results. this course forward-looking its other of Arm

today, represent While subject our and that many what are best uncertainties these risks as to expect. results from cause differ statements materially of to actual actual our we results could about results judgment future current and performance

highlight that XX, and any of they call, described S-X which any assumes addition statements, this statement on September the important that filed results to obligation no as future Arm during forward-looking speak our Form are with factors the we SEC risk made. performance our only affect registration on In risks XXXX. date in to update are may

released shareholder financial financial be will GAAP we In letter the financial information that measures these Reconciliations we of and and non-GAAP without supplementary measures discussion to certain measures refer unreasonable addition, comparable to during reconcile a we certain found of most that are earlier their financial financial non-GAAP the can non-GAAP projected directly efforts today. discussion. not measures able of in to

available and investors.arm.com. website other at our letter on shareholder earnings-related materials are The

who prepared call And over the to turn with has that, some Rene, remarks. I'll

hello, you, everyone. Ian, and Thank

call I'm then pass going I'll over and the to a off make to comments Jason. So it few kick just to

end just outstanding. being fiscal quarter, summary, of obviously the in But this our QX, year, was

public a year also revenue, for quarter. of company exceeding our record first end record the as have And revenues for range. this high being We fiscal completed, guidance the

XX% year-on-year, QX, is which revenue more; of function really year-on-year, capture the is for a XX% vX Royalty huge things up year-on-year. really was of up about all licensing increased More is also speak XX% this bit specifically AI. little I'll up a R&D investment which and driven by that adoption, acceleration opportunity and is to

growth back, expansion about the looking during IPO that then company. in talked and Now driving our we for strategies are now roadshow the all

had in all vX to better in which up drives around last vX is significant that mentioned, driven adoption the seeing broadly, As will seeing has more compounds that only but growth markets. by acceleration we're continue adoption. And And the in the the of what really business CPUs also end well. but smartphones, royalty we're royalty chip, that been for not quarter, we increase. infrastructure XX%, vX royalties inside our only client growth driver see really also year-on-year we as significant across which to And vX,

an TCO. not of to fantastic also a to blade, but but ability largely for a increasingly system efficiency the high-performing latest Google, In announced intended based Arm chip strategy. seen on hyperscaler center. our chose data custom quarter, the the also Axion points we've of their only us have and chip compute because They proof the last rack design our diversification performant processor for

introduced Ethos-UXX such safety, planet, the on as transformer we vX. solutions is we're This functional also power as very also our enhanced for the huge And growth features with lowest automotive first significant designs. performance bringing vX very based around We and sector the the automotive on very, announced we expect autonomous this now to IoT-based area. have

in verified confident its are terms in blocks into highly put taking IP, the around we our, subsystems. And solution, to performant a are full that them but together we strategies them of in most also with that very of solution. saves putting compute validated, comfortable trajectory market call, what customers and we of a of and terms its is essentially place One gives these growth huge time

we CSS quarter, performance to So which increased and will Neoverse give announced benefits our VX customers. this

their first the CSS efficiency. of customer to ramping. partners discussions is doing Neoverse now The market in Cobalt first space automotive in and key is with now design, in our terms to a customers And -- our Microsoft, chip time

from are on this probably exciting compute strategy. a But oversubscribed we more subsystem standpoint,

significantly We the market have future. for Every that very we we anticipating and and about far more CSSs, has are growing for anticipated, talking in approach we're need end excited than that time. product them over about the demand a

of XX% of from the using edge that this world's base by largest center, CPUs seeing data Arm driven standpoint. What support is, the the as are they those also over planet an the to it's AI. AI we has CPUs, natural workloads being from of Arm the All being these CPU because devices is anywhere now are and moved on training need installed has that, population

whether it's AI Llama, And increasing. run cloud Arm. this all we only from rely So and on to Edge, workloads see from GPT

Our best probably licensing proxy is activity for the that.

it make than quickly as to need capture to the faster to can about needs they workloads. these way is the sure The to think designs software hardware, licensing of new AI applies moving as hardware AI upgraded be revenue is,

So because last talked licensing quarter. quarter this huge in have continued we activity. about our of that, that growth We it and seen

we was revenue than very, be in even the of confident year this to we better past and So years. upcoming very based upon that expect growth upcoming that XX% outlook and the this, our growth, year for This are over year.

accelerating. been has growth Our

that Arm, in expect The not and get $X in excited first future $X This bright, X billion It $X run taken be we Lastly, years we very could get $X after year. billion us have. years be revenue. passed I to only billion. we'll to years Arm our year, and XX more to is this billion near in it's $X to billion year, we took the about XX future and to

to that, turn with Jason. And I'll it over

you, Rene. Thank

to strong tremendous year a end a QX for Arm. was

grown grew we revenue quarter, revenue non-GAAP as $XXX delivering a and we billion. also to record our revenue performance licensing revenues, year-over-year acceleration million, with operating while Also, up also XX% RPO, strong and of 'XX. margin up FYE $X.X setup as delivering the or year-over-year royalty obligations, have The well XX% royalty For provides for XX%. XX% nearly remaining by record XX% RPO to great

I Turning briefly the touch first both year XXXX. and fiscal on to quarter XX, ending March guidance. will

operating year-over-year $XXX a sequential representing $XXX million, expect is we between and a increase. $XXX to be a expense due expected to of Non-GAAP million For QX, decline million, revenue to XX% expense. awards XX% change from expected our in non-GAAP and awards, remuneration onetime between QX transition complete be cash to $X.XX as is $X.XX. EPS a Resulting equity and we away to

further, in reported to in growth semiconductor hyperscalers. weakness inventory revenue correction remain This automotive offset year-over-year in widely by market, strong of at we peers. This dynamics approximately little smartphones, continued continued expect broader has with many QX along and by share a is in been our royalty growth IoT XX%. as and industrial of driven by adoption with recovery is revenue partially Unpacking gains ArmvX the driven by

from growth slight revenues, we and expect revenue For QX other by driven sequential backlog. licensing

increase. and Looking billion, $X.X out to $X.X we revenues year-over-year representing fiscal 'XX, XX% a to expect between billion XX% of

XX% increase R&D non-GAAP we invest to representing operating to expenses growth billion, expect of initiatives. support We year-over-year as continue a $X.XX future in

year between non-GAAP is be full $X.XX. EPS to Our expected and $X.XX

contract believe or measure the business is annualized best our ACV. value, We license understood by

strong. remains Our outlook ACV for

double-digit growth low for We expect reflecting latest the Arm's durable the demand in IP. year,

year. to approximately lumpy QX license be to from expect for due quarter Licensing half revenue of the our recognition. continue of the our Based period first revenue, the forecast, however, we on to year, of to XX% largest the with revenue QX smallest being timing will and period being current the represent the

renewals have high new of licenses. visibility combination through We backlog a and

our starting we and remain share subsystems royalties, in expect very vX the market on based half in compute second driven ramp chips by year. and the as For cloud full continued in mid-XX% in adoption, demand gains chips for to growth well Arm-based of as range automotive the year the confident

already based development licenses, growth in and on revenue maintain year-over-year Looking at 'XX. we each of XXXX to expect beyond XX% the ending agreements total chips of royalty-bearing pipeline shipping, least and this out now for year, in the signed, years further or for new fiscal

the now to I'll call turn Ian. back over

Thank you, Jason.

will to move the the hand [Operator We operator. I Instructions] now Q&A call. you, back portion of to

come Instructions] of First Deutsche [Operator Ross will question Bank. from Seymore

your Rene, guide. on had the cloud on business the results I and side. and question specifically infrastructure strong a Congrats

that share Or in the are the laid for are or being process? and I are ramp? products now really you the number you occurring number that you market You of an all that acceleration rate they think to so. wondering process, you rising design customers. the above a ramp disparate rattled during the said, growth us seeing to XX% have hyperscaler of are XX% Are and IPO out from talked about original market starting during off contemplating beyond IPO of those I was What wins that is, roughly, that a launched,

all bodes couple that would for I'm increased And reasons. the a in say say well positive I Ross. it, said around the numbers, a dynamics bit would still a for in center of of investment the has I and we've for us, those one since AI. that is I confident think Arm changed data things

First of designing efficiency very a more Arm-based rack efficient what's be but building off, custom center, and about very, will much an an not storage to be blade interconnecting that power will that to design and implementation only when overall power for required data you efficient. relative chip think and by more gets the the power interesting a

the we data IPO you with think Grace applications. in this with chatted I the announcement, on an NVIDIA's Hopper, about and acceleration I are most Secondly, AI now recent going but to during see Blackwell, Grace these think center process

GPU, Blackwell access have to you of a of terms and chip GPU a factors in much an system do CPU allows memory, as bus, In conventional the to might is connect to training limiting externally, over designing a get able one applications. the to of where benefits Grace an is xXX get that are interconnect is higher One you inference slower. which a between for is, NVIDIA PCIe with that much the CPU which integrating for by the you the Arm that the you and such

a the like memory much So NVLink, custom you in bandwidth. bus NVIDIA example, higher get by using

in think going official increase had not but probably adoption will we're that numbers the right what saying anything mean data center is now. than we is to that indicated, I So Arm that the faster

question Securities. America of Vivek come And our Arya next Bank of will from

to your vX faster of look mid-XX% took What the off of have imply XX so off for It's about have, chart a the in Rene, expect become think presentation to What's the that that do years in the like the gotten half Jason in looks shows at of exiting you on that or vX gates, about it the vX how base. seems If for conversion? you assumption conversion what of Slide your does conversion or year? said fiscal XX% X conversion. I so conversion this it so 'XX? I that level or growth royalty. year. It

Jason I'll today, is on vX, in touch at different an a vX do really back I from from all vX. to But between is, let all that is what and high business about. to didn't have vX conversion that the what can conversion rate. We we and speak infrastructure Yes. vX level, say

So growth to from just going vX we conversion a terms that be see vX that didn't of for is we vX in vX. driver from that saw to

of segments, that And fairly premium vX. smartphone segment that has moving business a better as In which accelerated seeing been the has acceleration handset documented are I to rapid other enjoyed is than pretty it's growth some the the well we probably in think business, that well. it's handset premium the

than So bit I those for vX vX happen look, more why a drivers X think, should quickly. and that are will different it

might think particularly be what rate year-on-year how growth it our on we and applies comment Jason potential the exit let revenue to projection. I'll

share or It growth basis then and total a clip. of this per plus reasonable XX%, XX% points last probably basis quarter a minus I of that's going think from XX% percentage to but XXX of steady somewhere recent to points XX% or quarter is XXX around the quarter as say would be could I most that growth assumption. a Yes. from pretty

growth we there in probably vX probably puts that the out X- still around see there be we is out the you probably somewhere high end, that some X-year vX in to the as even somewhere to XX% maybe to XX% So frame because time vX and going which get to is adoption.

when talked IPO an Keep you I to also even royalty from think vX do this quarter, almost go at last mind, about double when that's increased see in we back and subsystems. you

see back of And to of end becoming of also share will then probably so and come we half start frame somewhere That X-year year, large our the that subsystems has kind hold this start take of online to this at royalties. a our to year, next time X- in the of in the year.

high the a forecast we that's have and years in confidence XX% kind or should be reason why to of in So that pretty range approaching royalty come. strong that for

will from Cowen. TD of coming be Ramsay And our Matt next question

like with can wins question that CPUs versus of Microsoft Amazon rapidly. data on things sort pulling be very, accelerators, started be data goes Rene, a vast if accelerants is infrastructure I flip majority, it portion in the seems other Hopper and the you've will you wanted up look with. from Grace do trend the that accelerator to is will clearly same Google I've a getting I at accelerating follow very like, that Ross business that and a percentage questions of and been Grace how center, is the to going little Blackwell to bit center, pretty that one design And into CapEx of thing, and the and Arm just on announced see side, of the accelerated off folks

across just the Arm's you that node in portion little growth in So accelerator accelerated of sort but maybe role exciting of of speak servers bit could CapEx. head a the not to

question. Yes. Thanks, the for Matt,

both of if think with specifically talked you using had increasingly benefits was about per And the talk of was we go the the design about CPU important back becomes as win spends I to dollar one they balance. and terms in CapEx hyperscalers, and the original Arm manage and that you having large performance GPU the metric with per performance Graviton, these dollar. AWS to

called get is that not dollar per chip tailwind be think just standpoint because performance AWS terms again, to but, us candidly better launching ECX Nitro, a from of into a acceleration, TCO moment. a that's you example a SoC a is on give cost into that also advantage the you when growth compute do pretty rack going I Nitro versus storage the based and then a which for competition. you you now offload. SoC combine with They chip potentially And for for a in to an with configure compelling for Arm, only built a Graviton going

greatly today to that's not can imagine, is to enhance some because fairly only to you done standard implementation, So that architecture system, with going operating for incumbent Arm relative running those anyone more configure that can with but no these I something talked There's to candidly, how very, this interesting that do the with on AI and the And only booting tailwind why the do think very market think not any but, devices terms is way be Arm boot way of share, about. and think question partners all to gets importantly, allows no I only about start the the with Arm in you to wants a going is everything interesting. system. what's work I code, a that to the that's to interface, we if interconnect the flexibility. trade-off, alternative custom the of there It alternative. And the features has with do

that positioned well in do we to So platform. are extremely well

think growth we were market to the think actually for originally I you which is our the in think So why us, than I data good be better the share is quite is numbers for I probably everything center short going summary described articulated. had

will Hosseini next of from International come Our Mehdi Susquehanna question Group.

Is of to for of your Just color assume the year second mix the want more be Should the rebounded go fiscal and be back licensing. that more is half I going the specifically Or customers in year? broad-based? to to ArmvX? driven to fiscal smartphone that by 'XX going licensing renewing that on

be to broad-based. it expect more would I

in on going expect the of it you that it's AI definitely to the markets AI on focus really should mentioned, biggest to be with going year. the But quarter different the all we in and I capability I mean, license focus to be that's broad-based. As mostly QX. be quite end serve, the

And on smartphone the smartphone, year the shipment 'XX. the royalty will kick in in with calendar

Well, year, our it but the our last should calendar you see first to in be start the of of subsystems launch quarter basically QX, guess I in QX it 'XX. would in will so

X case, see royalty are license market know royalty, level in time the because et technology confidence growth probably terms or why that the we high to a the we quite best the is From have those know done, X we cetera. we Yes. is it's the the rates, contracts years, we which time of share,

For Ross', the or run an it only server to cetera, SUSE going and really it Arm. SoC to and needs fit one to earlier the Kubernetes, choice, that's question Linux to and et new designs, to needs trying if develop cetera, in Matt's you're there's et run

If to an choice, trying Arm. to there's one you're it's build only SoC Windows, run

it's there's to an trying you're one Arm. Android choice, to run or Gemini, build If SoC only

take extremely signed boundary. it's the moves across of is going choices part on that that's whether XX we features. to why to terms it's the always licensing get to the that add terms effort participate as licensees of January when high. The be of the Copilot of happen, December is things we're next-generation extremely to And the to terms advantage in on of able technology new high have AI you So and accelerating as or these access that because such seeing a in Windows Gemini tricky XX, an Android, you confidence But want in limited happening visibility, license market. if in the in factors rather quarter is such which for to confidence are

from Shi And comes of our question Needham [Operator Charles next Instructions] & Company.

bit your quite have seen March. I quarter about you a over This growth question, in very last in maybe backward-looking. I was another little growth December And frequently got the a strong revenue sequential a royalty obviously, see question quarter.

of in disclosed which revenue royalty we since growth. probably related for sequential that sequential proxy coming it's China like on already the a of is a Arm China, of X%-ish the the So the much notice was did quarter, revenue Arm of Outside December least basis. growth China, from parties, how only in driver you actually December, a at royalty

So wonder either if the you in guys over can most that China driving was XX% December royalty non-China, quarter? the you quarter, revenue of which can the use us what a one, clarify, opportunity And to growth? kind of give this for March growth is breakdown sequential or sequential driving China

Sure, this that is Jason. I'll take question.

in So been It little handset has is in would China up, there back the quarter. first, to X.X%, X% it, recovery bit the I what say so going or of market. a December was year-on-year

was bigger I from, Chinese bit of the the general consumer But was, the say, buying would just the little would impact market. I a say, shift mix or So partners. OEMs

where products Our on revenues the where based sold not was. the are but effectively who customer is on based the partner

someone China. customers was there buying versus transfer basically, of producers from a So Chinese Chinese from outside from

well. related And is that up perspective, in rest shows There China. by there so shift are to And a mostly of other related is parties. from parties way, world a as, what the as royalty from parties

March I it pretty in it, XX%, royalty end, terms XX% and you'll trends. from, similar quarter back a significant XX% what accelerate. of QX. was world Now QX, did acceleration in we the The saw was rest the of mean, see in

the see China across more increase saw that broad-based are really we is also well. back factors as the But there world. same to for you QX acceleration in in So going

May percentages, the I When ask Jason? year-on-year Q-on-Q? about you quick it. clarification, mean you or Got talk a acceleration of

Year-on-year.

Goldman Our Sachs. next question will of come from Hari Toshiya

like one your I think your Jason. revenue. business, I had comments, something decline the Based for on sequential a on quarter a in outlook June you're for relatively short-term question royalty, maybe assuming X% for royalty

continues rate maybe transition, units double vX the your digits, grow Given royalty Q-over-Q. be down would think nicely, to again, blended to so vX I must

if is business years. over seasonality typical up past your at think I of couple sequentially the look I

the I coming of So guess decline? sequential other the question really know you're it smartphone but assuming, a base, that off the is, high be whether you're curious driving big what some market I or what's drivers.

Sure.

sequential just partners decline seeing X% really we the the when good our forecast of actually I estimates is different seeing industrial disclosed I would all know what in, of are weakness, combination all looking you driver say, across and or declines the look what us significant or at So and faith basically either players, of big through mean, specifically pretty networking publicly. markets, those all I'm the IoT. I they've

mobile think side, on consistent. pretty the be I things will

our we'll positive, a of coming that's ago, last still we're bottom seeing end of of in And a flow see. so But course, may obviously will of there royalties, very it did you know impacts, the at of kind our quarter. different the let end out we're and little right seeing significant now, kind we through the what quarter. upside. But the see we'll If because what range. than be our growth partners year up overall perhaps which, the from very, be XX-ish off But much over the look less percent will year-on-year

is and and into and should infrastructure are a IoT to fair be resilient. just June Jason, clarify, And Is that it relative to automotive statement? relatively fair say that client underperformers

I Yes, think it's right. generally

come Ananda our Capital. Baruah And question will next of Loop from

interesting get reciprocity in love your you've PC to the the [ I'd work, ecosystem clients there been years that thoughts Rene, the and your going given a seems maybe all folks guess, next dealing, to over on. in on lot of potential ] few various be I really coherence

would thoughts potential great. any the on just be So

obviously We've has Apple The Windows completely time. for for on the a thanks question. ecosystem over. the converted ecosystem working Yes, long been

about about think we're talking our growth, we when So Windows.

we the of years, are over potential. about number think I very next positive growth the

Everything Windows that's to to be is a things particularly needed multiple X, one take multiple on the of the And think units, multiple be a because that I'm serve of consumers. base for over provide points, going level will now and grow, share, hearing with the the months. end diversification the Arm multiple X price that, the experiences of supplier level to to great there for are the going fan. of XX be experience ecosystem, performance, a industry SKUs, segment to that build you that suppliers next says machine the the where to the XX Arm I market that life, multiple market PC significant years, we a seen we've time, in other the the the of fact primarily will think ecosystem battery fantastic next high-performance minus can over

I think all things significant to are those going up for add growth.

that once think going I I think in next XX over growth XX we're start vendor see months. diversifies, the the So to to kick to base

Gary come Mobley Wells will question of Fargo next Our Securities. from

'XX you're IPO year And during your were XX% above grown the X well predicting rate long-term you fiscal When revenue that's years, you XX%, have roadshow. licensing for is growth. seemingly, will a predicting done, what prior and XX% the

we new into revenue half of other the to convert long-term about top in related highlight that, growth? to will it customers XX converted should be you half? So licensees. How how think that your is you ATA hard license the target And of terms

that anything a to be upside licensing the the you're indications momentum. don't stop looking that The is the So thanks would get we continue The the about reason for very see that positive right, is that revenue, what a way licensing we it's being before. think I mentioned strong, nice activity question. very, for that I and forward

trying And c, we're choice b, partners these have any maintain reason, that to that very you're to support, only level that more require continue more confident a, ecosystem the are, and logical If broad that OS of and momentum. markets, application that the enter support; Arm. AI; we is of rich for and requiring sustain

terms over terms my in forward. think not customer renew ] base at when, move of much can estimation customers [ increased probably of that so in the point some XX% will I ATA, percentage for a which hope of renewals, time the what of lot is on they'll predictability what us if of the that, be to an license in we which give going but is ultimately

Jason, part the that second question. of to refer you So I'll

Well, ATA X not in to let's see, you sure on partners we so notes, from ATA, more. XX caught increase our did XX, we if the I'm added

But we about So look our, least year over even probably that at happy closer top all half correction. next we growth would is, the of and say IPO, what full now. XX% quite are of industry at what kind thought roughly year-on-year I versus when we're we a into industrial little XX out networking that have there of say, I'd turns to would and It expecting IoT we were we kind royalties, of in aren't there. thought

about mostly related little specifically, to even additional up demand for capabilities much what just bit, because And licensing though Rene to are we reduction royalty down very even a AI. talked we're so taking this royalty able take license by more of that than

very of more the ATAs, being normal, pretty least are because turning terms new about because no large design And in than in a certainly royalties. vX, they companies, higher all into the a it Now good and kind royalties. older the with then at high turning say license into wins deals typically Especially deals, of into they're would those larger, all conversion or are royalty counterparts. I have they rates those mature these

total what we expectation. much our that's at at about expect the get XX-plus next IPO, to the revenue, percent still would in we of very I talked would back years, couple royalties of get So when

Compute say also start see see would deeper the Subsystems as of to we end royalty year. say, into great starting a I would the mix get just royalties this of at the next to we come into we're as setup that, vX rates us and then higher that much for, even I we go at year, as higher a online again gives penetration cycle life

next will Simpson from Our Morgan question of Stanley. Lee come

I just includes licensing to out NVIDIA, that profiles, want the Texas, enhanced cetera. the stood from that to take NXP, automotive, for you et us automotive and back vX profiles

would that, don't working gone multiple heard for licensing have much the been CSS if to number, I Just just but RPO. trying of this are QX's to understand recognized how customers maybe And on have know release related that how you mentioned I much into XXXX. would in in correctly

Yes.

So automotive I'll of from vX a technology contribution the AI detail relative to standpoint. into let Jason licensing go the

automotive multiple CSS some want that degree way engaged to that OEMs that complex partners of about the of a And the software would could would to customization different engagement, an something but number needs to but some The of that is stack who the also we level standardized. supports On extremely each automotive market standardization. have in is contributions of love think full also that have solution industry relative it a be are that. differentiation a have

be about resiliency. in So need we've devices, level, It other will had supply And there level. across lots different very, just complexity our think of for when the confident all the the makes of OEMs chain yet engagement that of automotive. to but sense kind you kinds we're businesses demand with seen CSSs this of cost that very these incredible we've involved that in for the

ties together. relative revenue I'll all let licensing So and the how Jason to question address that the

Yes.

will delayed, as will unique. we'll into for So that is that happens. is quite it is the be booking. licensing this revenue, announce as In of when auto, coming it's as It for time automotive little delivered very, backlog. case, At all actually get XX% around released it the this and booked since very booking, it's the in a it's so not going of launched, vX, Typically, soon, soon case, we be revenue.

Timm Schulze-Melander Our next Atlantic. of be question will from coming Redburn

maybe back dig little the next impact. and to pricing trying and disaggregate wanted just a into the to the I just bit royalty for volume quarter outlook So

price, I which, quarter about a should increasing the by percentage the going But think you somewhere breaks us mix of give points I XX% you 'XX X that a talked of of about about us to the you over mix? that grow decent guided maybe color course bit pretty tailwind. Can think are a little sort volume, royalties down give just how and in range. between

Okay.

their but details XX%. have don't their was percent. growth grew all quarter, last our mix, we look So around obviously, I average if on X-ish And and at at partners, of all we on

higher of vX. So higher is royalties the to very as the mix royalties that premium differential either well more as much related chips,

X-ish would royalties, I somewhere paid then on expecting just decent is know overall our will that expecting handle of a on, be to aspects said, premium in peer market that get in of of into portion have XX% quarter, the range. we're mix the probably range. say, but percent now the next different ahead going royalties we're we that vX that across we very our is And we the So the group time. the hard Obviously, as

components. those So key are the

of unit say, do of going most that would I'm of growth. unit pretty going most I again, to the we overall forward, see the consistent. because I and all these, to be mostly we don't the assuming market our I'm mix mix across continue of pretty expect we're would because, but going get to it assuming that growth is vX the effectively continue run ahead that growth detail, to to significantly impacts assume royalty have

will Our Harlan coming of next JPMorgan. from question Sur be

QX of of ACV, future higher their the towards Subsystems large seems all very, importantly, chip It across to right, strong adopting markets, look end compute like the combination as XX% so renewals some Backlog sort strong year-over-year, IP of very year; customers. programs. design they your obviously, value-added more end and but, was up Compute a

this this As and like you can again does the your the discussion pipeline are with to backlog that growth look customers year. looks strong team drive renewal fiscal at their program going total year? pipeline, you But timing, licensing grow suggest

start with your Jason. Harlan, is that. with start question. I'll this I'll

you number by at think of a That this kind year, definitely backlog. of of into looking year. high assuming less year, revenue kind plus you back at than level, bookings we're change And can I I total assuming at if was billion what last if for look we're $X.X at look about that. last

mentioned, we a we mostly really of to came Now billion. that because as strong we a a AI. bit due deals number started below booking incremental last year, was with had that mostly year And quite $X.X

last for would get kind maybe right now, to least the we that's probably is had it license that of XX% take this assumptions our on year bookings to our So what year, that of at plan. we'll have

Now there is certainly opportunity.

a was overage like probably achieved. probably actually that range. If that you similar was XX% some with of or was somewhere last that more year, look plan started there out what in XX% We we

going the the do whether have the level?" But and of did So and see we percent we factor the sight when at it's wide we're back relatively when "Well, plan, good to range, kind mostly of and for whatever. what's or of kind try midpoint these of hit up to say current line I this of provide timing of QX QX to have deals a because you plan. we are if to in say, confidence our of guidance XX-plus I'd year, the midpoint or

is or already royalties. in backlog in guidance under either contract Our

possibly incremental trying pipeline, year, we're what's going So could for already the a to that's today. that's pipeline is some beyond last in really, that forecast would upside and of where then which like trying what there is to possible what come. But bookings that's sign looks in be bunch that, if beyond do beyond that. the the the I'm stuff year, not the to this we're forecasting really we're what year

Rene Haas, I would call to remarks. CEO, for turn back the like now to closing

everyone, in you, good future company. all you and Thank the our very thank of hopefully, insight we of we about and questions, why some confident so given are of set for have the dialogue terms

public we're these we've forecasting the third time as done on going be to record time the quarter quarter third of a And that we've it's company third growth our is so that it's to the calls. third going the forward. it's time And one you. This reported revenue

public company. of markets ago we've into a next the again, seeing place quarters record course, PCs, to is as the coming that the fruition, quarter. such So I forecasting We're as validation all what automotive, of smartphones. X and of And expansion also had that think, infrastructure, in client years multiple business some our you're of put revenue we strategies

that, the for to our addition business. In AI tailwind, which has growth unprecedented driven licensing

following come a other. the So and have is business talking the year XX% to about any than following off the growth, outlook year better of we're unlike It's any platform it's and could the do where other. about To we a when be talking great company then year business a a brighter. will growth And Arm for been and in. not company unlike that,

So close thank you for to who I'll all Ian or it the to and call. your now leave time, else

all us, time. days' later you talk in That's XX very We'll some you to of and thank indeed. much from some and

you today's for And Thank conference this concludes participating. call.

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