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Arm Holdings beats Q2 estimates on licensing strength and guides Q3 to $1.54 billion

Arm Holdings topped fiscal second-quarter expectations with $1.44 billion in revenue and adjusted earnings per share of $0.52, supported by strong licensing gains as it projected third-quarter sales of $1.54 billion.

Stock chart for ARM Holdings PLC showing a 5.28% decline to $188.77 and an additional drop in after-hours trading.
Image: @StockSavvyShay

Arm Holdings reported fiscal second-quarter 2027 revenue of $1.44 billion, up 27% year over year and ahead of Wall Street estimates of roughly $1.38 billion. Adjusted earnings per share reached $0.52, beating consensus estimates ranging between $0.47 and $0.48. Net income reached $566 million against a projected $515 million, while non-GAAP operating income totaled $638 million, surpassing analyst expectations of $569 million.[2][4][5][6][9]

The quarter's performance was driven by licensing and other revenue, which surged 50% year over year to $773 million, topping forecasts of $661 million. Royalty revenue climbed 8% from a year earlier to $670 million, falling short of analyst targets of $712 million to $720.8 million. Even so, Arm forecasts royalty revenue to grow at a 20% annual rate through fiscal 2031, following a quarter in which partners shipped a record 10 billion Arm-based chips.[1][4][5][8]

For the fiscal third quarter, Arm guided revenue to $1.54 billion plus or minus $50 million and adjusted EPS to $0.56 plus or minus $0.04, roughly in line with consensus projections. Bloomberg reported that the company's data center computing expansion is helping cushion a slump in the smartphone market, while AGTP noted AI spending is driving demand for Arm's chip designs. Arm reported that server market share grew from 15% in 2024 to over 50% in 2025, with expectations to exceed 60% by late 2026. The company also announced that its Arm AGI CPU represents up to a $2 billion revenue opportunity across fiscal 2027 and 2028, and launched Arm Total Design for physical AI alongside more than 80 partner companies.[3][4][7][9]

Despite the earnings beat, Arm shares slipped in extended trading after closing the regular session down 5.28% at $188.77 on November 4, dropping an additional 1.58% after hours.[9]

Key facts

  • Arm reported fiscal Q2 2027 revenue of $1.44 billion, exceeding the $1.38 billion consensus estimate and rising 27% year over year.
  • Adjusted EPS was $0.52 compared to estimates of $0.47 to $0.48, and net income totaled $566 million versus an estimated $515 million.
  • License and other revenue climbed 50% year over year to $773 million, beating expectations of $661 million, while royalty revenue rose 8% to $670 million, missing estimates of $712 million to $720.8 million.
  • Partners shipped a record 10 billion Arm-based chips during the quarter, and Arm expects royalty revenue to grow at a 20% annual rate through fiscal 2031.
  • Arm guided fiscal Q3 revenue to $1.54 billion plus or minus $50 million and adjusted EPS to $0.56 plus or minus $0.04.
  • Arm projected an up to $2 billion revenue opportunity for its Arm AGI CPU across fiscal 2027 and 2028, and launched Arm Total Design for physical AI with over 80 participating companies.
  • Arm reported server market share jumped from 15% in 2024 to more than 50% in 2025, with expectations to exceed 60% by the end of 2026.
  • ARM shares closed down 5.28% at $188.77 on November 4 and declined an additional 1.58% in after-hours trading.

Sources · 8 sources

  1. WS

    Wall St Engine@wallstenginePost on X ·

    $ARM forecasts royalty revenue to grow at a 20% annual rate through fiscal 2031, after partners shipped a record 10 billion Arm-based chips in a single quarter.

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  2. UW

    unusual_whales@unusual_whalesPost on X ·

    BREAKING: Qualcomm, $QCOM, earnings: - EPS: $2.17, est: $2.16 - Rev: $10.4 billion, est: $10.1 billion $ARM earnings: - EPS: $0.52, est: $0.48 - Est: $1.44 billion, est: $1.38 billion

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  3. BL

    Bloomberg@businessPost on X ·

    Arm gave a revenue forecast for the current period that met analysts’ estimates, a sign its push into data center computing is helping offset a slump in the smartphone market https://t.co/hFK5muShSf

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  4. WS

    Wall St Engine@wallstenginePost on X ·

    $ARM HOLDINGS Q2’27 EARNINGS HIGHLIGHTS 🔹 Revenue: $1.44B (Est. $1.38B) 🟢; +27% YoY 🔹 Adj. EPS: $0.52 (Est. $0.47) 🟢; +33% YoY 🔹 Non-GAAP Oper Income: $638M (Est. $569M) 🟢 Revenue Mix: 🔹 Royalty Revenue: $670M (Est. $712M) 🔴; +8% YoY 🔹 License & Other Revenue: $773M (Est. $661M) 🟢; +50% YoY Q3 Guide: 🔹 Revenue: $1.54B ± $50M (Est. $1.53B) 🟡 🔹 Adj. EPS: $0.56 ± $0.04 (Est. $0.55) 🟡 🔹 Non-GAAP OpEx: ~$825M Announcements: 🔹 Arm AGI CPU: Up to $2B revenue opportunity across FY27–28 🔹 Physical AI: Launched Arm Total Design with 80+ companies Key Updates: 🔹 Server Share: 15% in 2024 → 50%+ in 2025; 60%+ expected by end-2026 🔹 Arm-based PCs: ~20% of global shipments Comments: 🔸 “demand for our silicon business continues to accelerate, with growing customer commitments giving us even greater confidence in achieving up to $2 billion in Arm AGI CPU revenue across fiscal 2027 and 2028.”

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  5. TE

    TechmemeArticle ·

    Arm reports Q2 revenue up 27% YoY to $1.44B, vs. $1.38B est., royalty revenue up 8% to $670M, vs. $720.8M est., and licensing revenue up 50% to $773M (Reuters) Reuters : Arm reports Q2 revenue up 27% YoY to $1.44B, vs. $1.38B est., royalty revenue up 8% to $670M, vs. $720.8M est., and licensing revenue up 50% to $773M — Arm Holdings (O9Ty.F), beat Wall Street estimates for second-quarter revenue on Wednesday, driven by higher royalty payments and licensing fees …

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  6. TR

    TrendSpider@TrendSpiderPost on X ·

    $ARM Q2 EARNINGS Adj EPS: $0.52 vs $0.47 est ✅ Sales: $1.443B vs $1.376B est ✅ https://t.co/E3cFIsDhIY

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  7. AG

    AGTP@AGTPinsightsPost on X ·

    BREAKING: Arm forecasts third-quarter revenue above analyst estimates, as the AI spending boom drives demand for its chip designs. https://t.co/VWAqPlNrV4

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  8. TE

    Techmeme@TechmemePost on X ·

    Arm reports Q2 revenue up 27% YoY to $1.44B, vs. $1.38B est., royalty revenue up 8% to $670M, vs. $720.8M est., and licensing revenue up 50% to $773M (Reuters) (Visit Techmeme dot com for the link and full context!)

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  9. SB

    Shay Boloor@StockSavvyShayPost on X ·

    $ARM Q2 EARNINGS • Revenue $1.44B vs Est. $1.38B • EPS $0.52 vs Est. $0.48 • Net Income $566M vs Est. $515M Q3 Guidance • Revenue $1.54B vs Est. $1.54B • EPS $0.56 vs Est. $0.55 https://t.co/C2S0DkWVFl

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