Arm Holdings (ARM) reported fiscal second-quarter earnings that topped analysts' estimates, but shares fell in extended trading Wednesday as its sales outlook disappointed.

The chip designer saw revenue grow 5% year-over-year to $844 million, above the analyst consensus from Visible Alpha. Net income was $107 million or 10 cents per share, compared to a loss of 110 million or 11 cents per share a year ago, exceeding expectations.

The gains came as Arm's royalty revenue jumped 23% to $514 million, though its license and other revenue fell 15% to $330 million.

Arm Offers Soft Sales Forecast

Arm's current-quarter revenue estimate of $920 million to $970 million was roughly in line with the analyst consensus of $942.47 million. However, the midpoint of its full-year forecast of $3.8 billion to $4.1 billion, unchanged from the quarter prior, was lower than analysts projected.

Shares of Arm fell over 4% ♏in extended trading Wednesday following the rel🦂ease.