Arm issues light earnings guidance as the company stops disclosing number of chips reported as shipped

Arm shares fell more than 13% in extended trading on Wednesday after the chip-architecture maker issued light earnings guidance for the current quarter and the full fiscal year.

Here's how the company did in the fiscal first quarter compared with LSEG consensus:

Arm's revenue grew 39% year over year in the quarter, which ended on June 30, according to a shareholder letter. Net income came to $223 million, or 21 cents per share, up from $105 million, or 10 cents per share, in the year-ago quarter.

But Arm maintained its full-year view of $1.45 to $1.65 in adjusted earnings per share on $3.8 billion to $4.1 billion in revenue. Analysts surveyed by LSEG had been looking for $1.58 in adjusted earnings per share and revenue of $4.02 billion.

The middle of the revenue guidance range factors in a growth rate from royalties in the low twenties, down from a forecast from April in the mid twenties, Jason Child, Arm's finance chief, said on a conference call with analysts.

For the fiscal second quarter, Arm sees adjusted earnings of 23 to 27 cents per share on $780 million to $830 million in revenue. That would imply no growth at the middle of the range. Analysts polled by LSEG had expected 27 cents per share and $804.1 million in revenue.

Revenue from royalties — a percentage of average selling price or a set amount per chip when they ship — totaled $467 million. That was up 17%, but it was lower than the $486.6 million consensus among analysts polled by StreetAccount.

License and other revenue, at $472 million, was up 72% and above the $418.3 million LSEG consensus.

The company said that as of this quarter, it is no longer reporting the number of Arms-based chips that were reported as shipped.

"We previously considered the number of chips