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When Were the Arm Q1 FY2027 Earnings Released?Arm Holdings released its fiscal first-quarter 2027 earnings after the U.S. market closed on Wednesday, July 29, 2026.The results covered the three monthsWhen Were the Arm Q1 FY2027 Earnings Released?Arm Holdings released its fiscal first-quarter 2027 earnings after the U.S. market closed on Wednesday, July 29, 2026.The results covered the three months

Arm Q1 FY2027 Earnings Results: Revenue Beats, Data Center Royalties Double, but ARM Stock Falls

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Author: James Mitchell

2026/07/30 13:25

Key Takeaways

Arm released its fiscal first-quarter 2027 earnings on July 29. Revenue rose 22% to a record $1.29 billion, while adjusted earnings, licensing revenue and royalty revenue all exceeded expectations. Arm also issued stronger-than-expected Q2 guidance as AI data-center demand accelerated.

When Were the Arm Q1 FY2027 Earnings Released?

Arm Holdings released its fiscal first-quarter 2027 earnings after the U.S. market closed on Wednesday, July 29, 2026.

The results covered the three months ended June 30. This means the report may also appear in searches as Arm Q2 2026 earnings, although the company officially calls it Arm Q1 FY2027 earnings.

Investors can review Arm’s official Q1 FY2027 shareholder letter and the company’s quarterly earnings results page for the full financial statements, presentation and webcast.

Did Arm Beat Q1 FY2027 Earnings Expectations?

Arm reported quarterly revenue of $1.289 billion, up 22% year over year and above analysts’ average estimate of approximately $1.26 billion.

Adjusted diluted earnings were $0.45 per share, compared with Wall Street’s expectation of about $0.40. GAAP diluted earnings reached $0.25 per share, more than double the $0.12 reported in the same quarter one year earlier.

Arm described the period as a record first quarter, supported by growth in both its licensing and royalty businesses.

Arm Royalty Revenue Increased 22%

Royalty revenue rose 22% year over year to $715 million.

Arm earns royalty revenue when customers ship processors and other chips that use its technology. Growth was supported by wider adoption of newer, higher-value products such as the Armv9 architecture and Arm Compute Subsystems, together with increased deployment of Arm-based chips in data centers.

Arm said data-center royalty revenue more than doubled from one year earlier, showing that the company is becoming less dependent on smartphones as cloud providers develop more Arm-based server processors.

Licensing Revenue Reached $574 Million

License and other revenue increased 23% to $574 million, also setting a first-quarter record.

Licensing revenue can fluctuate between quarters because it depends on the timing and size of major technology agreements. However, Arm’s annualized contract value increased 13% to $1.73 billion, indicating continued demand for access to its chip architecture and intellectual property.

Arm’s business model therefore benefits at two different stages. It first receives licensing revenue when companies gain access to its technology, and it later earns royalties when chips using that technology are shipped.

Data-Center Royalties More Than Doubled

The strongest structural signal in Arm’s earnings report came from its data-center business.

Arm said more than 1.5 billion Neoverse cores have now been shipped. The first one billion cores took approximately six years to ship, while the latest 500 million were shipped in only nine months.

Arm-based processors are becoming more widely used alongside AI accelerators because CPUs are still needed to manage data, operating systems and inference workloads.

Nvidia’s Vera CPU, Google’s Axion processor, Amazon’s Graviton platform and Microsoft’s Cobalt processors are all built using Arm technology. Qualcomm has also announced plans to enter the AI data-center CPU market with an Arm-based processor.

Demand for the Arm AGI CPU Exceeded $2 Billion

Arm also provided an update on its new Arm AGI CPU, which was introduced in March as the company expanded beyond intellectual-property licensing into production silicon.

Arm said customer demand for the processor now exceeds $2 billion across fiscal 2027 and fiscal 2028, above the initial $1 billion opportunity discussed previously.

The company has delivered initial products to multiple customers and added customers in both North America and China. Arm has secured enough manufacturing capacity to support more than $1 billion of demand and is working with supply-chain partners to expand that capacity further.

Oracle is among the customers that have agreed to purchase the new data-center processor, according to comments made by Arm management after the earnings release.

Arm Increased Research and Development Spending

Arm continued to invest heavily in engineering and product development.

GAAP research and development expenses increased 29% to $838 million. On an adjusted basis, R&D expenses rose 20% to $530 million.

GAAP operating margin declined from 10.8% to 7.1%, partly reflecting higher share-based compensation and product-development costs. However, adjusted operating margin increased from 39.1% to 41.2%.

The difference between the two figures is important because Arm’s expansion into complete data-center processors requires more investment than its traditional intellectual-property licensing model.

Arm Free Cash Flow Reached $665 Million

Arm generated $902 million in operating cash flow during the quarter.

Adjusted free cash flow reached $665 million, compared with $150 million one year earlier. The company said the increase benefited from the timing of customer payments and tax expenses.

Arm ended the quarter with approximately $3.89 billion in cash, cash equivalents and short-term investments.

What Is Arm’s Q2 FY2027 Guidance?

Arm expects fiscal second-quarter revenue of approximately $1.38 billion, plus or minus $50 million.

The midpoint was above analysts’ average estimate of around $1.34 billion.

Adjusted diluted earnings are expected to reach approximately $0.47 per share, plus or minus $0.04, compared with the market expectation of about $0.43.

Arm also expects adjusted operating expenses of approximately $780 million as it continues investing in engineering, software and production silicon.

Why Did ARM Stock Fall After Earnings?

ARM stock fell nearly 7% in after-hours trading, even though first-quarter results and second-quarter guidance exceeded expectations.

The decline appeared to reflect concern about Arm’s smartphone exposure. Management indicated that smartphone royalty growth could slow to approximately 10% to 15% in the next quarter as memory shortages affect parts of the mobile-device market.

Smartphones remain a major source of Arm’s royalty revenue. As a result, strong AI and data-center growth did not completely offset investor concerns about near-term weakness in the company’s largest established market.

What Should Investors Watch Next?

The main question is whether Arm’s data-center and AI businesses can grow quickly enough to reduce its dependence on smartphone shipments.

Data-center royalties, adoption of Armv9 and Compute Subsystems, and demand for the Arm AGI CPU will be important measures of that transition.

Investors should also monitor smartphone royalty growth, R&D spending and manufacturing capacity. Arm’s move into complete processors could create a larger revenue opportunity, but it also introduces higher development costs and greater supply-chain requirements than its traditional licensing model.

Explore Arm and Stock-Related Markets on MEXC

Arm’s earnings allow market participants to follow changes in AI data-center demand, semiconductor licensing, smartphone shipments and the adoption of Arm-based processors.

Users can register for access to U.S. stocks and review the U.S. stocks trading guide. MEXC also provides access to U.S. stock-related futures markets, together with a futures trading tutorial.

FAQ

Did Arm beat Q1 FY2027 earnings estimates?

Yes. Arm reported revenue of $1.289 billion and adjusted earnings of $0.45 per share, above Wall Street expectations of approximately $1.26 billion and $0.40 per share.

How much did Arm’s royalty revenue grow?

Arm’s royalty revenue increased 22% year over year to $715 million. Data-center royalties more than doubled.

What is Arm’s Q2 FY2027 guidance?

Arm expects approximately $1.38 billion in revenue and adjusted diluted earnings of about $0.47 per share.

Why did ARM stock fall after earnings?

ARM stock fell because investors focused on an expected slowdown in smartphone royalty growth, even though the company’s earnings and Q2 guidance exceeded estimates.

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