The historical rank and industry rank for ARM Holdings's Gross Margin % or its related term are showing as below:
ARM'
s Gross Margin % Range Over the Past 10 Years
Min: 92.85 Med: 95.2 Max: 96.04
Current: 95.24
During the past 4 years, the highestGross Margin % of ARM Holdings was 96.04%. The lowest was 92.85%. And the median was 95.20%.
ARM's Gross Margin % is ranked better than 98.87% of 975
companies
in the Semiconductors industry
Industry Median: 28.54
vs ARM: 95.24
ARM Holdings had a gross margin of 95.58% for the quarter that ended in Mar. 2024 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for ARM Holdings was 0.00% per year.
ARM Holdings Gross Margin % Historical Data
The historical data trend for ARM Holdings's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of ARM Holdings's Gross Margin %
For the Semiconductors subindustry, ARM Holdings's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
ARM Holdings's Gross Margin % Distribution in the Semiconductors Industry
For the Semiconductors industry and Technology sector, ARM Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where ARM Holdings's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
ARM Holdings (NAS:ARM) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
ARM Holdings had a gross margin of 95.58% for the quarter that ended in Mar. 2024 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
ARM Holdings Gross Margin % Related Terms
Thank you for viewing the detailed overview of ARM Holdings's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Arm Holdings is the IP owner and developer of the ARM architecture (ARM stands for Acorn RISC Machine), which is used in 99% of the world's smartphone CPU cores, and it also has high market share in other battery-powered devices like wearables, tablets, or sensors. Arm licenses its architecture for a fee, offering different types of licenses depending on the flexibility the customer needs. Customers like Apple or Qualcomm buy architectural licenses, which allows them to modify the architecture and add or delete instructions to tailor the chips to their specific needs. Other clients directly buy off-the-shelf designs from Arm. Both off-the-shelf and architectural customers pay a royalty fee per chip shipped.
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