Arm Holdings stock weighs record quarter against royalty pressure

Arm Holdings reported a record fiscal second quarter on November 4, with total revenue rising 27 percent year over year to 1.44 billion US dollars. The results and outlook were published in the Arm Newsroom. The quarter marked the company's fifth consecutive period of revenue growth above 20 percent.

Licensing leads the quarterly advance

Licensing and other revenue increased 50 percent to 773 million US dollars. Royalty revenue rose 8 percent to 670 million US dollars, with data-center royalties doubling year over year. Physical AI royalty revenue increased 50 percent as adoption expanded in advanced driver-assistance and in-vehicle infotainment systems.

Smartphone-related demand remained a counterweight. Arm said higher memory costs affected smartphone volumes, while weaker edge AI demand is expected to limit near-term royalty growth. The contrast leaves investors watching whether strong licensing activity converts into recurring royalties.

AGI CPU orders raise execution stakes

Purchase orders from multiple customers for the Arm AGI CPU extend through calendar 2027. First commercial deliveries remain on track for the fourth quarter of fiscal 2027, and management has increased its confidence in generating up to 2 billion US dollars of AGI CPU revenue across fiscal 2027 and 2028.

Oracle Cloud Infrastructure plans to offer Arm AGI CPU instances in 2027. The move could broaden Arm's revenue model beyond intellectual-property licensing, but it also brings manufacturing, supply-chain and execution requirements that investors will need to monitor.

Next quarter keeps royalty pressure visible

For fiscal third quarter 2027, Arm expects revenue of 1.54 billion US dollars, plus or minus 50 million, at a midpoint implying year-over-year growth of approximately 24 percent. Licensing and other revenue is expected to rise by slightly more than 50 percent, while royalty revenue is forecast to grow at a low-single-digit rate.

Arm Holdings stock traded at 167.40 euros on Lang & Schwarz at 16:15 CET on Monday, November 9, 2026. That was 8.14 percent above the 154.80 euro quote in the latest own report published at 13:18 CET on the same day.

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