ARM Says Tariffs Can't Touch Its Business As AI Boom Fuels Record Revenue: 'Can't Run AI Without ARM,' CEO Rene Haas Says

ARM Holdings ARM executives reassured investors that the company’s business model protects it from direct tariff impacts amid growing U.S.-China trade tensions, according to its fourth quarter of 2025 earnings call.

What Happened: “We don’t have direct impact on tariffs since tariffs today are really applied to end products and are not applied to services, which is what we’re providing,” said Jason Child, ARM’s CFO.

The British chip design firm reported record fourth quarter revenue of $1.24 billion, with full-year revenue topping $4 billion for the first time. ARM saw licensing revenue surge 50% year-over-year to $634 million, while royalty revenue grew 18% to $607 million.

Despite strong performance, ARM declined to provide full-year guidance, citing macroeconomic uncertainties including potential indirect tariff effects. The company estimates 10-20% of its royalty revenue stems from shipments into the U.S., creating some exposure to demand fluctuations.

“If it’s a 10% or 20% impact on demand, then it could be a couple percent impact on royalties probably at most,” Child explained.

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Why It Matters: ARM projects first quarter revenue between $1-1.1 billion, representing 12% year-over-year growth, with royalty growth accelerating to 25-30%. The company continues benefiting from AI demand, with CEO Rene Haas emphasizing, “AI is changing everything, and you can’t run AI without ARM.”

ARM’s growing adoption in data centers remains a key growth driver, with Haas stating: “We expect up to 50% of new server chips at hyperscalers to be ARM-based this year.”

Price Action: Arm Holdings PLC’s stock closed at $124.19 on Wednesday, up 1.43% for the day. In after-hours trading, the stock dropped sharply by 11.63% to $109.75. Year to date, Arm’s stock is down 3.13%, according to data from Benzinga Pro.

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