Arm Holdings — 2026Q3 earnings
reported 2026-07-29
EPS $0.45 vs $0.40 est — beat
next session +7.4% (close 2026-07-29 → 2026-07-30)
Source
Press release ↗Summary
A record Q1 FY2027: revenue rose 22% to $1.29 billion on record licensing and royalty revenue, non-GAAP EPS of $0.45 beat the top of guidance, data-center royalties more than doubled again, and free cash flow of $665 million benefited from favorable timing. The strategic headline is the new Arm AGI CPU silicon business, where demand now exceeds $2 billion across FY2027-28 — double the opportunity outlined a quarter earlier — with new customers added in the US and China. On the call, Jason Child identified cloud AI as the largest royalty driver, disclosed SoftBank contributed $193 million of licensing revenue with a roughly $200 million quarterly run-rate expected for the rest of the year, and guided Q2 to $1.38 billion ±$50 million, about 22% growth at the midpoint.
Earnings call
Earnings call webcast ↗Review
From the report
Arm's Q1 FY2027 (quarter ended June 30, 2026) was a record quarter: revenue of $1.29 billion rose 22% year over year on record Q1 licensing and royalty revenue, non-GAAP EPS of $0.45 came in above the top of guidance, data-center royalties more than doubled again, and demand for the new Arm AGI CPU silicon business now exceeds $2 billion across FY2027-28 — double the $1 billion opportunity outlined a quarter earlier — while free cash flow of $665 million benefited from favorable timing.
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Record Q1 revenue of $1.29 billion, up 22% year over year, with royalty revenue of $715 million (up 22%) and data-center royalties more than doubling year over year. show quote
“Revenue reached $1.29 billion, up 22% year over year, driven by record first-quarter licensing and royalty revenue. Royalty revenue grew 22% to $715 million, with data center royalties more than doubling year over year.”
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Non-GAAP EPS grew 29% year over year to $0.45, beating the top end of Arm's own guidance range. show quote
“Combined with continued investment in R&D, non-GAAP EPS grew 29% year over year to $0.45, above the top end of our guidance range.”
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Customer demand for the Arm AGI CPU now exceeds $2 billion across fiscal 2027 and fiscal 2028, with new customers added in the US and China since launch. show quote
“Customer demand has accelerated beyond our initial expectations and now exceeds $2 billion across fiscal 2027 and fiscal 2028. Since launch, we've continued to add new customers, including multiple customers in the US & China, while the overall value of our pipeline has continued to strengthen.”
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Arm Neoverse shipments passed 1.5 billion cores, with the most recent 500 million shipping in just nine months versus 6 years for the first 1 billion. show quote
“Arm Neoverse shipments have now surpassed 1.5 billion cores, with the most recent 500 million shipping in just nine months, where the first 1 billion took 6 years, reflecting Arm’s growing market share and increasing value capture.”
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Operating cash flow was $902 million and non-GAAP free cash flow was $665 million, helped by favorable timing of receivables collections and tax payments. show quote
“Operating cash flow was $902 million and non-GAAP free cash flow (FCF) was $665 million, benefiting from favorable timing of receivables collections and tax payments.”
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From the call
On the call, CFO Jason Child said cloud AI remained the largest royalty driver with data-center royalty revenue still more than doubling, disclosed that SoftBank contributed $193 million of the quarter's licensing revenue with a roughly $200 million quarterly run-rate expected for the rest of the year, and guided Q2 revenue to $1.38 billion plus or minus $50 million (about 22% growth at the midpoint); CEO Rene Haas reiterated that Arm AGI CPU demand now exceeds $2 billion with new customers in the U.S. and China.
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CEO Rene Haas said Arm AGI CPU demand now exceeds $2 billion, with new customers added in the U.S. and China and a strengthening pipeline. show quote
“Demand now exceeds $2 billion as we continue to add new customers, including multiple customers in the U.S. and China, while the overall value of our pipeline has continued to strengthen.”
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CFO Jason Child identified cloud AI as the largest driver of royalty growth, with data-center royalty revenue continuing to more than double year on year. show quote
“Once again, the largest driver of royalty growth was cloud AI. Data center royalty revenue continues to more than double year-on-year, reflecting our sustained momentum across the market.”
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CFO Jason Child disclosed that Arm's agreement with SoftBank contributed $193 million of the $574 million in licensing revenue, with a quarterly run-rate of around $200 million expected for the rest of the year. show quote
“Of the $574 million of licensed revenue, our agreement with SoftBank for technology licensing and design services contributed $193 million. We expect the quarterly run rate for the rest of the year to be around $200 million.”
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CFO Jason Child guided Q2 FY2027 revenue to $1.38 billion ±$50 million, about 22% year-on-year growth at the midpoint. show quote
“For Q2, we expect revenue of $1.38 billion ±$50 million. At the midpoint, this represents revenue growth of about 22% year-on-year.”
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as of 2026-08-10