Arm Holdings plc Q2 2027 Earnings Recap

Arm’s stock fell 17.7% after earnings, signaling investor concern despite record quarterly revenue. The likely pressure point is the outlook: management expects Arm AGI CPU deliveries only in fiscal Q4 2027 and framed up to $2 billion of revenue across fiscal 2027 and 2028, while royalty growth was 8%—well below licensing growth.

Key Takeaways

• Revenue rose 27% year-over-year to $1.44 billion; non-GAAP EPS increased 33% to $0.52.
• License and other revenue grew 50% to $773 million, including $209 million from SoftBank; management said licensing was about $100 million above its expectation.
• Royalties increased 8% to $670 million. Data center royalties doubled, while automotive-related royalties grew 50%.
• Arm expects first commercial deliveries of its AGI CPU in fiscal Q4 2027 and sees up to $2 billion of revenue across fiscal 2027 and 2028.
• Arm-based server share at top hyperscalers rose from 15% in calendar 2024 to over 50% in 2025; Arm expects it to exceed 60% by the end of 2026.