Record Quarterly and Fiscal Year Revenue
Q4 revenue of $1.49B, up 20% year-over-year (highest quarterly revenue ever); fiscal 2026 revenue of $4.92B, up 23% year-over-year.
ARM Holdings PLC ADR
· ARM
May 6th, 2026
Summary
- Earnings Call Date:
- 2026-05-06
- Change Since:
- +46.53%
- Next Earnings Date:
- 2026-07-29
Earnings Call Sentiment
PositiveThe call communicated strong, broad-based growth with record revenue, EPS and accelerating data center momentum driven by Arm AGI CPU demand and expanding cloud adoption. Key positives include double-digit revenue growth, record margins, ACV growth, and major customer support and design wins. Near-term challenges include supply-chain/capacity limits for AGI CPU production, elevated R&D-driven operating expenses (up ~30% YoY), and some royalty volatility from mobile market comp and unit weakness. Management maintained conservative near-term guidance while expressing confidence in multi-year targets (e.g., $15B AGI CPU by FYE31) and long-term margin expansion.
Company Guidance
For Q1 of fiscal 2027 Arm guided revenue of $1.26 billion ± $50 million (about +20% YoY), with both royalty and license & other revenue each expected to be up around 20% YoY, non‑GAAP operating expense of ~ $760 million, and non‑GAAP EPS of $0.40 ± $0.04. Management reiterated first production Arm AGI CPU revenues are expected in the fourth quarter of this fiscal year, is maintaining a near‑term AGI CPU outlook of $1 billion (while noting > $2 billion of customer demand across FY27–FY28) and reaffirmed long‑term targets of $15 billion AGI CPU revenue + $10 billion IP revenue (total $25 billion) by FYE31 (translating to > $9 EPS). They also said ACV grew 22% YoY, license revenue is expected to be back‑end weighted (~60% H2), royalty growth is expected in the ~20% range for the year, OpEx will increase modestly quarter‑to‑quarter but grow less than revenue (driving incremental margin improvement), and first‑gen chip gross margins are ~30%+.
Strong Licensing and Royalty Growth
License and other revenue of $819M, up 29% year-over-year; royalty revenue of $671M, up 11% year-over-year. Full-year licensing revenue $2.31B (up 25%) and full-year royalty revenue $2.61B (up 21%).
Record Earnings and Margins
Record non-GAAP EPS of $0.60 in Q4 and $1.77 for fiscal 2026. Non-GAAP operating income of $731M with a ~49% non-GAAP operating margin.
Data Center and Cloud AI Momentum
Data center royalty revenue more than doubled year-over-year, driven by accelerating ramp of Arm-based server chips and increased deployments of data center networking chips (DPUs/SmartNICs where Arm has ~100% share). Arm-based compute represents about 50% market share with top hyperscalers.
Arm AGI CPU Demand and Strategic Wins
Arm AGI CPU has >$2B of customer demand across fiscal 2027–2028 (more than double initial launch statement). Meta is lead partner/co-developer; design wins/commitments from SAP, Cloudflare, F5, SK Telecom and others. Company remains on track to target $15B AGI CPU revenue by FYE31.
Ecosystem Support and Market Adoption
More than 50 leading companies supporting Arm's expansion into silicon. Major cloud providers (Google, AWS, Microsoft) and accelerator vendors (NVIDIA) are adopting Arm-based host/head CPUs in next-gen AI infrastructure (e.g., Google replacing x86 with Arm Axion CPUs for TPU 8t/8i).
Annualized Contract Value (ACV) Growth
ACV grew 22% year-over-year, indicating strong underlying licensing trends despite lumpiness of high-value deals.
Guidance Reflects Continued Growth
Q1 revenue guidance of $1.26B ± $50M (midpoint ~20% year-over-year growth). Company forecasts continued royalty and license growth (both ~20% YoY) and non-GAAP EPS guidance of $0.40 ± $0.04 for Q1.
Operator
Good day, and thank you for standing by. Welcome to the Arm Fourth Quarter Fiscal Year 2026 Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jeff Kvaal, Head of Investor Relations. Please go ahead.
Jeff Kvaal
Thank you, Sharon, and welcome everyone to our fourth quarter fiscal '26 earnings call. On the call are Rene Haas, Arm's Chief Executive Officer; and Jason Child, Arm's Chief Financial Officer. Today's call contains forward-looking information about the company and its financial results. While these statements represent our best current judgment, our business is subjected to many risks and uncertainties that could cause actual results to differ materially. Important risk factors that may affect our business and future financial results are described in our annual report on Form 20-F filed with the SEC. Arm assumes no obligation to update any forward-looking statements. We will also refer to non-GAAP financial measures during the call. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in our shareholder letter as can a discussion of certain projected non-GAAP financial measures that we are not able to reconcile without unreasonable effort and supplemental financial information.
Our earnings materials are available at investors.arm.com. With that, I'll turn the call to Rene.
Rene Haas
Thank you, Jeff, and welcome, everyone. Arm delivered a record quarter and record fiscal year. Revenue this quar...
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