Arm Holdings has reported a 28 per cent profit increase in the second quarter of its financial year ended 30 September.

The quarter saw revenues for the Cambridge-based chipmaker exceed $800 million for the first time in its history.

However, having forecast that revenues in its third quarter would fall between $720 million to $800 million, Arm shares dipped by eight per cent upon Thursday opening on New York’s Nasdaq.

According to data from the London Stock Exchange Group (LSEG), the $760 million midpoint of the range fell short of analyst estimates of around $767 million for the quarter.

Arm said it said it had good visibility into its licensing pipeline for the second half of the fiscal year but noted there was uncertainty regarding the exact timing of some deals, explaining that the revenue recognition profiles for future agreements are subject to change.

“Industry analysts forecast that the semiconductor industry is starting to recover, which can benefit our royalty revenue, however the trajectory of the recovery is not clear, and the industry remains vulnerable to changes in the external macroeconomic environment,” it said.

It added that it was important to remember that the application of accounting standards can result in “significant portions of multi-year licensing contracts to be recognised as revenue immediately, often as much as half of a deal’s total value.”

Arm forecast its 2024 revenue would range with a midpoint of $3.02 billion, a figure which would best analyst expectations of $2.95 billion, according to data from LSEG.

Arm decided to list its IPO on the Nasdaq in September instead of the London Stock Exchange despite lobbying from the UK government.

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