Arm Earnings Show Revenue Up 27% as License Revenue Jumps 50%
Arm said its revenue rose 27% from a year earlier, beating its own forecast, as license revenue jumped 50% in the three months to September 30, 2026. Royalty revenue grew only 8%, the slowest in eight quarters, though Arm's partners reported shipping more than 10 billion Arm-based chips, a first for one quarter.
The short answer. Arm draws the designs that phone chips are built on, and a fast growing share of cloud server chips too. Its results show what chip makers pay to use those designs, both to license them and on each chip they ship. This quarter, revenue from licensing those designs jumped, while royalty revenue from chips already sold grew at its slowest pace in eight quarters. Arm also says customers have ordered its own AI chip through 2027. In after-hours trading at 4:30 p.m. ET, Arm's shares were 3.8% below Wednesday's close.
Arm second quarter of fiscal 2027 at a glance
Show the data
| Category | License and other revenue | Royalty revenue |
|---|---|---|
| Dec 2023 | $354M | $470M |
| Mar 2024 | $414M | $514M |
| Jun 2024 | $472M | $467M |
| Sep 2024 | $330M | $514M |
| Dec 2024 | $403M | $580M |
| Mar 2025 | $634M | $607M |
| Jun 2025 | $468M | $585M |
| Sep 2025 | $515M | $620M |
| Dec 2025 | $505M | $737M |
| Mar 2026 | $819M | $671M |
| Jun 2026 | $574M | $715M |
| Sep 2026 | $773M | $670M |
On this page
- Arm earnings show revenue up 27%
- Arm's own AI chip and its push into data centers
- Why Arm license revenue grew faster than royalties
- How Arm's quarter compares with AMD and Qualcomm
- How Arm stock moved after earnings
- How much profit Arm made
- Arm guidance for the next quarter
- Arm cash, shares and dividend
- Frequently asked questions
Every company reporting the same week, with its date and time, is in StockTitan's Earnings Calendar for the Week of November 2, 2026.
Arm earnings show revenue up 27%
Arm took in $1.44 billion from July to September 2026, which its letter calls a record second quarter. That is 27% more than a year earlier, and more than the top of Arm's own forecast range.
Arm's fiscal year runs from April to March, so this was the second quarter of its fiscal 2027. The company published the results on November 4, 2026, after the market closed, in a letter to shareholders.
In July, Arm forecast revenue of $1.38 billion, give or take $50 million. Companies call such a forecast guidance. Revenue came in at $1.443 billion, $13 million above the top of that range.
The letter calls it the fifth quarter in a row in which revenue grew more than 20% from a year earlier.
| Measure | Arm's July forecast | Result |
|---|---|---|
| Revenue | $1.38 billion, plus or minus $50 million | $1.443 billion |
| Operating expenses (non-GAAP) | About $780 million | $774 million |
| Earnings per share (non-GAAP) | $0.47, plus or minus $0.04 | $0.52 |
Source: Arm shareholder letter, second quarter of fiscal 2027 (July to September 2026), table of forecasts and results.
Arm's own AI chip and its push into data centers
For most of its history Arm sold designs, not chips. Now it also sells its own data center chip, the Arm AGI CPU. Arm says customers have placed orders that run through 2027, and the first paid deliveries are due by March 2027.
Arm launched the AGI CPU in March. The letter says purchase orders from multiple customers extend through calendar 2027. First commercial deliveries are on track for January to March 2027, the fourth quarter of Arm's fiscal 2027.
Arm still expects up to $2 billion in AGI CPU revenue over fiscal 2027 and 2028, the two years from April 2026 to March 2028. Its confidence in that figure "has increased over the last 90 days," the letter says, helped by more supply and the mix of customers.
Oracle's cloud plans to rent out AGI CPU machines in 2027, the letter says. Arm also cites independent tests by Signal65, shown at the Open Compute Project summit, a data center industry event. In them, the chip did about twice the work per server rack of AMD's EPYC 9755 processor.
Arm's designs are spreading in data centers through other companies' chips too. The letter names Google's Axion, Amazon's Graviton, Microsoft's Cobalt and NVIDIA's Vera processors.
By Arm's figures, its share of the server market at the biggest cloud companies rose from 15% in 2024 to more than 50% in 2025. It expects that share to pass 60% by the end of 2026.
Why Arm license revenue grew faster than royalties
Arm earns money two ways. It licenses its designs to chip makers, and it collects royalties on the chips they sell that use them. This quarter license revenue grew 50%, while royalty revenue grew 8%.
License and other revenue rose to $773 million. Arm says the jump came from strong demand for its designs, from the timing and size of several large license deals, and from work it had already booked. Annualized contract value, Arm's measure of the yearly value of its signed license deals, grew a slower 12%.
Royalty revenue, from chips already sold, rose to $670 million. That made license revenue the larger of the two this quarter. A year earlier, royalties were bigger.
License revenue swings with the timing of big deals. Arm's letters for the last 12 quarters show it passing royalties four times.
Royalties also slipped 6.3% from the quarter before, to $670 million from $715 million in April to June 2026. A year earlier, they rose over the same three months.
Arm's partners reported shipping more than 10 billion Arm-based chips in the quarter, 1.5 billion more than a year earlier, the letter says. Royalties depend on what each chip pays as well as on how many ship.
Arm says newer technology earns it "higher royalty rates per chip," naming its Armv9 architecture and Arm CSS, its ready-built packages of chip designs. It also credits more Arm-based chips in data centers. It says this was "partially offset by the impact of memory pricing on the smartphone market." The letter does not say how large that effect was.
The bright spots sat outside phones. Data center royalties doubled from a year earlier. Royalties from what Arm calls physical AI, driven by driver assistance and in-car entertainment systems, rose 50%.
Show the data
| Category | Value |
|---|---|
| Dec 2024 | 23% |
| Mar 2025 | 18% |
| Jun 2025 | 25% |
| Sep 2025 | 21% |
| Dec 2025 | 27% |
| Mar 2026 | 11% |
| Jun 2026 | 22% |
| Sep 2026 | 8% |
Arm sees today's licenses as an early signal. It calls strong licensing "an important leading indicator of future royalty growth." A design licensed now turns into chips that pay royalties once they ship.
| Revenue line | July to September 2026 | July to September 2025 | Change |
|---|---|---|---|
| License and other revenue | $773 million | $515 million | Up 50% |
| Royalty revenue | $670 million | $620 million | Up 8% |
| Total revenue | $1,443 million | $1,135 million | Up 27% |
| Annualized contract value (yearly value of signed license deals) | $1,790 million | $1,600 million | Up 12% |
Source: Arm shareholder letter, Key Financial and Operating Metrics, second quarter of fiscal 2027 against the second quarter of fiscal 2026.
How Arm's quarter compares with AMD and Qualcomm
AMD and Qualcomm show a similar pattern over the same three months, with data centers and cars up and phones down. AMD's data center sales rose 97%, while Qualcomm's sales of phone chips fell 26%.
AMD reported on November 3, 2026. Its Data Center segment, which sells AI chips and server processors, took in a record $8.5 billion in the quarter ended September 26.
Qualcomm reported on November 4, 2026. Its sales of chips for phones fell to $5.14 billion in the quarter ended September 27. Its sales of chips for cars rose 89% to $1.99 billion.
Qualcomm says chip makers face higher costs across the industry, memory among them, and it is raising its prices to cover them.
Show the data
| Category | Change |
|---|---|
| AMD data center sales | +97% |
| Qualcomm car chip sales | +89% |
| Arm physical AI royalties (cars) | +50% |
| Arm royalties, all | +8% |
| Qualcomm phone chip sales | -26% |
How Arm stock moved after earnings
In after-hours trading at 4:30 p.m. ET on Wednesday, November 4, 2026, Arm's shares were 3.8% below that day's close, by StockTitan's real-time Nasdaq data. They had already fallen in Wednesday's regular session.
At 4:30 p.m. ET the shares traded at $184.50, against Wednesday's close of $191.80.
In Wednesday's regular session, before the results came out, the shares closed 5.3% below Tuesday's close of $202.49. The latest price is on StockTitan's Arm overview page.
How much profit Arm made
Under standard accounting rules, Arm's profit fell to 12 cents a share. On Arm's own adjusted measure, which leaves out stock pay and a few other items, it rose to 52 cents a share.
Net income under standard rules was $130 million, down from $238 million a year earlier. Adjusted earnings a year earlier were 39 cents a share.
The two measures differ mainly because of stock given to employees. Arm counted $376 million of share-based pay as a cost this quarter, up from $265 million a year earlier. The adjusted figures leave it out.
The year-earlier profit also included a $131 million gain from selling a business, which did not repeat.
Arm's gross margin, the revenue left after the direct cost of what it sells, was 97.1%. That is before research and other running costs. Most of its spending goes on engineers. Research and development cost $857 million under standard rules, up 24% from a year earlier.
Operating income, profit from the business before interest and taxes, was $201 million under standard rules. On the adjusted basis it was $638 million, or 44.2% of revenue, up from 41.1% a year earlier.
| Measure | July to September 2026 | July to September 2025 |
|---|---|---|
| Net income (GAAP) | $130 million | $238 million |
| Diluted earnings per share (GAAP) | $0.12 | $0.22 |
| Net income (non-GAAP) | $566 million | $417 million |
| Diluted earnings per share (non-GAAP) | $0.52 | $0.39 |
| Operating income (GAAP) | $201 million | $163 million |
| Operating margin (GAAP) | 13.9% | 14.4% |
| Operating income (non-GAAP) | $638 million | $467 million |
| Operating margin (non-GAAP) | 44.2% | 41.1% |
| Gross margin (GAAP) | 97.1% | 97.4% |
| Share-based compensation cost | $376 million | $265 million |
Source: Arm shareholder letter, condensed consolidated income statements, cash flow statements and the reconciliation of standard (GAAP) to adjusted (non-GAAP) figures, three months ended September 30, 2026 and 2025, unaudited.
Arm guidance for the next quarter
For October to December 2026, Arm expects revenue of about $1.54 billion and adjusted earnings of about 56 cents a share.
Each forecast comes with a range. Revenue could land $50 million either side, and earnings 4 cents either side.
At the middle, revenue would be about 24% higher than a year earlier. Arm reported $1.24 billion for that quarter in its shareholder letter for October to December 2025.
Arm also plans to spend more. It expects adjusted operating expenses of about $825 million, against $774 million this quarter. The letter gives no new forecast for the full fiscal year.
| Measure | Third quarter of fiscal 2027 forecast |
|---|---|
| Revenue | $1.54 billion, plus or minus $50 million |
| Operating expenses (non-GAAP) | About $825 million |
| Earnings per share (non-GAAP) | $0.56, plus or minus $0.04 |
Source: Arm shareholder letter, table of forecasts and results, forecast for the third quarter of fiscal 2027 (October to December 2026).
Arm cash, shares and dividend
Arm held $3.62 billion in cash and short-term investments at the end of September 2026. Its cash flow statement shows no dividend paid and no shares bought back in the six months to September.
Cash from the business was weaker this quarter. Operating cash flow fell to $207 million from $567 million a year earlier. Free cash flow, the cash left after spending on equipment and other long-term assets, fell to $110 million from $411 million.
Over the past twelve months, free cash flow was $1.10 billion, about the same as the year before. Arm also spent $249 million on acquisitions in the quarter.
Arm had 1,070 million shares outstanding on September 30, 2026, up from 1,064 million on March 31, 2026. Its balance sheet shows no bank loans or bonds among its liabilities.
SoftBank Group is Arm's controlling shareholder, as the letter notes in its list of risks.
| Measure | Value |
|---|---|
| Cash and cash equivalents | $3,251 million (September 30, 2026) |
| Short-term investments | $370 million (September 30, 2026) |
| Operating cash flow, July to September 2026 | $207 million (a year earlier: $567 million) |
| Free cash flow (non-GAAP), July to September 2026 | $110 million (a year earlier: $411 million) |
| Free cash flow (non-GAAP), twelve months to September 30, 2026 | $1,096 million (a year earlier: $1,073 million) |
| Shares issued and outstanding | 1,070 million (September 30, 2026) |
| Payments for acquisitions, net of cash acquired, July to September 2026 | $249 million |
Source: Arm shareholder letter, condensed consolidated balance sheets and statements of cash flows, unaudited.
What to watch
- Whether royalty growth picks up as newly licensed designs reach production: Arm's next quarterly shareholder letters.
- Paid deliveries of the Arm AGI CPU, due to start from January to March 2027: Arm's shareholder letter for January to March 2027.
- Whether revenue lands near the $1.54 billion forecast: Arm's shareholder letter for October to December 2026.
Our numbers
These figures are our calculations from Arm's shareholder letters and StockTitan's Nasdaq price data.
- $13 million: revenue of $1,443 million above the $1.43 billion top of Arm's July forecast range
- 4 of 12 quarters: license revenue above royalty revenue, in the quarters ended June 2024, March 2025, March 2026 and September 2026
- 6.3%: the fall in royalty revenue to $670 million from $715 million in the quarter ended June 2026; a year earlier the same step was a 6.0% rise
- Slowest of eight: the 8% royalty growth against the rates Arm stated for the seven quarters before it, from 11% to 27%
- About 24%: the $1.54 billion middle of the forecast for October to December 2026 against $1,242 million a year earlier; 20% to 28% across the range
- 5.3%: the fall in Arm's share price from the $202.49 close on November 3, 2026 to the $191.80 close on November 4
Frequently asked questions
Did Arm beat its own forecast?
Yes. Arm had forecast revenue of $1.38 billion, give or take $50 million, and reported $1.443 billion. It had forecast adjusted earnings of $0.47 a share, give or take $0.04, and reported $0.52.
How did Arm stock react to earnings?
In after-hours trading at 4:30 p.m. ET on Wednesday, November 4, 2026, Arm's shares traded at $184.50, 3.8% below that day's close of $191.80, by StockTitan's Nasdaq data. In Wednesday's regular session, before the results, they had closed 5.3% below Tuesday's close.
Why did Arm royalty revenue grow only 8%?
Arm says higher royalty rates on newer designs and more chips in data centers lifted royalties, "partially offset by the impact of memory pricing on the smartphone market." Data center royalties doubled. The 8% was the slowest royalty growth of the last eight quarters.
What is Arm's guidance for the next quarter?
For October to December 2026, Arm expects revenue of $1.54 billion, give or take $50 million, and adjusted earnings of $0.56 a share, give or take $0.04.
What is the Arm AGI CPU?
It is Arm's own data center processor, launched in March 2026, which Arm sells as a finished chip instead of licensing the design. Arm says orders from several customers run through 2027. It expects first paid deliveries from January to March 2027, and up to $2 billion in revenue from the chip over fiscal 2027 and 2028.
Did Arm announce a dividend or a buyback?
No. Arm's cash flow statement shows no dividend paid and no shares bought back in the six months to September 30, 2026. Its shareholder letter for the quarter announces neither.
Sources
- Arm Holdings plc Reports Results for the Second Quarter of the Fiscal Year Ending 2027, StockTitan
- Arm shareholder letter for the second quarter of fiscal 2027, Form 6-K exhibit 99.2, SEC
- Arm shareholder letter for the third quarter of fiscal 2026, Form 6-K exhibit 99.2, SEC
- Arm's earlier shareholder letters, Form 6-K filings, SEC
- AMD Reports Third Quarter 2026 Financial Results, StockTitan
- Qualcomm Fourth Quarter and Fiscal 2026 results, StockTitan
- Arm investor relations, quarterly and annual results
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