Arm Holdings Plc – ADR (NASDAQ:ARM) reported second-quarter financial results after the market close on Wednesday. Here's a look at the key metrics from the quarter.

Q2 Earnings: Arm reported second-quarter revenue of $844 million, beating analyst estimates of $808.37 million, according to Benzinga Pro. The chip designer reported adjusted earnings of 30 cents per share, beating analyst estimates of 26 cents per share.

Total revenue was up 5% year-over-year, driven by record levels of royalty revenue, which was up 23% year-over-year. Royalty revenue growth was primarily driven by continued adoption of Armv9, as well as an overall smartphone market recovery.

Annualized contract value (ACV) was up 13% year-over-year to $1.25 billion. Arm said free cash flow was negative $65 million in the quarter. The company ended the period with $2.36 billion in cash, cash equivalents and short-term investments.

"Demand for our high-performance Armv9 and CSS compute platforms continues to exceed expectations, and to accelerate our licensing and royalty revenue growth. AI everywhere is generating new opportunities for the Arm compute platform from the cloud to the edge," said Rene Haas, CEO of Arm Holdings.

Outlook: Arm sees third-quarter revenue of $780 million to $830 million. The company expects third-quarter adjusted earnings to be between 23 cents and 27 cents per share versus estimates of 21 cents per share.

Arm also reiterated full-year guidance. The company continues to expect full-year revenue of $3.8 billion to $4.1 billion. Arm expects full-year adjusted earnings to be between $1.45 and $1.65 per share.

Management will hold a conference call with analysts and investors at 5 p.m. ET.

ARM Price Action: Arm shares were down 1.85% in after-hours, trading at $142 at the time of publication Wednesday, according to Benzinga Pro.

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