ARM, Ahead of IPO, Optimistic Outlook: "20% Revenue Growth Next Year"

ARM Expects 11% Revenue Growth This Fiscal Year at Private Investment Event
Strong Growth Forecast Through 2026

British semiconductor design company ARM expects its revenue to grow by more than 20% in the fiscal year 2025 (April 1, 2024 ? March 31, 2025) due to increased semiconductor demand driven by artificial intelligence (AI). With ARM's Nasdaq listing just around the corner, this outlook is expected to further raise investor expectations.

According to Bloomberg, ARM revealed this forecast on the 6th (local time) at a private investor luncheon held in New York, USA. An anonymous source reported that ARM announced at the event that its revenue is expected to grow by 11% and mid-20% in fiscal years 2024 and 2025, respectively. ARM recorded revenue of $2.679 billion in the previous fiscal year, which was about a 1% decrease compared to the previous year.

According to the source, ARM's CEO, Rene Haas, emphasized at the event, "We expect the largest revenue increase since the company's founding." He predicted that the company's growth would continue until 2026, with revenue increasing by more than 15%. He also expressed an optimistic outlook that the operating profit margin would expand to 60% in the long term. For fiscal year 2023, ARM recorded an operating profit margin of 29%.

Bloomberg explained that since ARM's Nasdaq listing is imminent, the optimistic outlook presented by the company will have a significant impact on determining ARM's corporate value at the time of listing.

ARM, considered a major player in this year's IPO market, plans to raise $4.97 billion through the listing. In the securities registration statement submitted to the U.S. Securities and Exchange Commission (SEC) on the 5th, ARM proposed a price range of $47 to $51 per depositary share. Applying the upper end of the desired price range, the corporate value is estimated at $54.5 billion. This is the largest scale on the New York Stock Exchange since electric vehicle company Rivian's $13.7 billion IPO in 2021.

ARM plans to set the public offering price on the 13th, with stock trading scheduled to begin the following day, the 14th.