Arm Holdings plc

Good day and thank you for standing by. Welcome to the Arm's second quarter fiscal year 2025 webcast and conference call. At this time, all participants are in the listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jeff Corral, Head of Investor Relations. Please go ahead.

Thank you very much. Welcome to our earnings conference call for the second quarter of fiscal 25, ending September 30th, 2024. On the call today are Rene Haas, the Chief Executive Officer of ARM, and Jason Child, ARM's Chief Financial Officer. During the call, Arm will discuss forecasts, targets, and other forward-looking information regarding the company and its financial results. While these statements represent our best current judgment about future results and performance as of today, our actual results are subject to many risks and uncertainties that could cause actual results to differ materially. In addition to these risks that we may highlight during the call, important risk factors that may affect our future results and performance are described in our registration statement on Form 20F with the SEC. ARM assumes no obligation to update any forward-looking statements. We will refer to non-GAAP financial measures during the discussion, reconciliations of certain of these non-GAAP financial measures to their most directly comparable GAAP financial measures, as well as a discussion of certain projected non-GAAP financial measures that we are not able to reconcile without unreasonable efforts and supplemental information can be found in our shareholder letter. The shareholder letter and other earnings-related materials are now available on our website at investors.arm.com. And with that, I'll turn the call over to Rene. Rene.

Thank you, Jeff, and good afternoon, everyone. It's been now about one year since our IPO, and I'm very proud to tell you that in that year, we have exceeded all of our expectations on execution of our growth strategies. The demand for AI everywhere is increasing the demand for ARM's compute platform. To date now, since our history, over 300 billion ARM chips have been shipped. Now, in the past quarter, we had a great set of results exceeding the high end of the guidance. We had record royalty revenue, up 23% year-on-year as adoption of v9 increases. We had continued strong licensing revenue, showing that our customers are continuing to invest in the future of AI and AI everywhere world. The long-term growth drivers for our business remains consistent. Every modern digital chip being designed needs a CPU, and the vast majority of these chips are being designed with ARM because of the unequaled software ecosystem. Now, more specifically on royalty revenue growth, really being driven now by more value per chip. In the past quarter, version 9 now represents 25% of our royalty revenue compared to 10% a year ago. More importantly, in the past quarter, our royalty revenue for smartphones grew 40%, This is versus 4% unit growth in the past quarter, a significant delta. We had new announcements, one of them being Apple's new iPhone 16 and iPhone 16 Pro and ARM version 9. And MediaTek announced their newest chipset, the Dimensity 9400, using ARM's V9 CSS for Client, our first CSS shipping in the mobile sector. We've now doubled the number of CSS licenses in this past year. It goes without saying that AI is everywhere. ARM is the only compute platform that can run AI from the edge to the cloud. AI is driving demand for our performant and power-efficient compute platform everywhere. Some significant milestones. NVIDIA's Grace Blackwell shipments have started, integrating the NVIDIA GPU Blackwell with ARM CPU in Grace. We've had new shipments now from Microsoft Azure Cobalt and Google GCP Axion, both ARM v9-based data center, now in general availability. Significant milestones. In the past quarter, Arm and Meta have worked together on optimizing Llama 3.2 using Arm Kaleidi libraries, enabling faster on-device AI processing. In the automotive market, we're seeing a very strong pipeline for CSS now for both ADAS and IVI applications. And in general, demand for edge AI products for CPU acceleration of V9 is very strong. We have the largest software ecosystem ever invented. Hardware is nothing without the software, and we have over 20 million software developers, the largest in the world. We're working closely with important ecosystem partners like GitHub, who just recently announced the integration of ARM tools into GitHub Copilot, a significant milestone for developers. The future is very bright. AI will be everywhere, and it will run on ARM. And with that, I will hand over to Jason.