0001973239-26-000097
SEC filingSoftBank Group controls 86.4% of shares; related party revenue from SoftBank and Arm China drives significant portion of total revenue.
Arm Holdings plc is a global company that develops microprocessor architectures and licenses intellectual property (IP) to semiconductor and systems companies. Its technology is used in a wide range of end markets, including mobile and consumer electronics, automotive, enterprise electronics, and the Internet of Things (IoT). The company generates revenue primarily through licensing fees and royalties based on chip shipments incorporating its designs. Additionally, Arm has expanded into production silicon with products such as the Arm AGI CPU and compute subsystems (CSS).
The filing does not explicitly break down reporting segments. However, the business is described as comprising traditional IP licensing (architecture and processor licenses) and a newer production silicon business. The company also has a software and services component. No revenue share by segment is provided in this section.
Arm's portfolio includes processors based on its instruction set architecture (ISA), such as the Arm AGI CPU, Neoverse V series for infrastructure, and various Cortex cores. It offers compute subsystems (CSS), chiplets, and complete chip solutions. Other products include neural processing units (NPUs) and graphics processing units (GPUs) with dedicated AI acceleration. The company also previously offered Artisan foundation IP (standard cells, memory compilers), which was divested to Cadence in 2025.
Arm goes to market through direct licensing of its IP to semiconductor companies, OEMs, and cloud service providers. It also relies on third-party foundries and contract manufacturers for production silicon. Customer concentration is high: the top 5 customers (including Arm China and SoftBank Group) accounted for approximately 57% of total revenue in fiscal 2026. Arm China alone represented 16% of revenue, and Qualcomm contributed 9%. The PRC market (including direct and Arm China-derived revenue) accounted for 18% of total revenue.
Arm faces intense competition from established architectures like x86, as well as the open-source RISC-V architecture, which is supported by many customers and a joint venture in the automotive sector. Other competitors include semiconductor companies with proprietary architectures for specific markets (e.g., accelerators for AI workloads). Arm also competes with customers who develop their own processors based on Arm's architecture rather than licensing pre-designed cores.
Arm's strategic priorities include expanding into high-growth markets such as automotive, cloud/AI data centers, IoT, personal computers, and robotics. The company is investing in production silicon products (Arm AGI CPU, CSS, chiplets) to offer more integrated solutions. It emphasizes maintaining a robust ecosystem with EDA tools, foundries, and software partners. Additionally, Arm relies on its commercial relationship with Arm China to access the PRC market and continues to explore strategic acquisitions and partnerships to complement its organic growth.
No headcount figure is provided in this section. The filing emphasizes the critical role of the management team, including CEO Mr. Haas, and the need to attract and retain qualified engineers and sales talent. Competition for skilled personnel is intense, and the company's success depends on its ability to motivate and retain key employees.
The document does not provide consolidated income statement metrics (revenue, gross profit, operating income, net income, EPS) for the current or prior periods. However, it discloses revenue from related party transactions: licensing and servicing arrangements with SoftBank Group affiliates generated $704.4 million in fiscal year 2026 (compared to $145.5 million in fiscal year 2025), and revenue attributable to Arm China was approximately 16% of total revenue in FY2026 (down from 17% in FY2025 and 21% in FY2024).
No segment-level breakdown is provided in this section. The only revenue segmentation is by related party: SoftBank Group and Arm China. SoftBank Group's revenue contribution increased significantly year-over-year, while Arm China's share declined.
Management's outlook is not explicitly stated. However, the document notes a modified statement of work under the Consulting Agreement with SoftBank Group that results in a fixed payment of $300 million to be paid during fiscal year 2027. Additionally, the Shareholder Governance Agreement includes SoftBank Group's consent rights over certain decisions, such as the adoption of incentive plans, until it holds a majority of shares or we cease to be consolidated. The company's controlled status by SoftBank Group (86.4% ownership) and the pledge of 72.0% of shares as collateral for a margin loan facility represent key governance and risk considerations.
As of March 31, 2026, Arm Holdings reported cash and cash equivalents of $2.751B and short-term investments of $0.850B, totaling $3.601B in highly liquid assets. The company carries zero debt, with total shareholders' equity of $8.286B. The balance sheet remains fortress-like, with a net cash position. Deferred revenue (contract liabilities) stood at $1.046B (current $0.294B + non-current $0.752B), reflecting customer prepayments for licenses and support.
Arm's primary contractual obligations include lease payments (operating: $0.549B, finance: $0.062B) and electronic design automation (EDA) liabilities of $0.175B (current $0.078B + non-current $0.097B). Total recognized commitments amount to $0.786B, though the company also has $2.071B in remaining performance obligations (RPO) from customers, which will be recognized as revenue in future periods. A pending acquisition of DreamBig for approximately $0.265B was announced but not yet closed.
Arm does not pay dividends and has no share buyback program. The company reinvests heavily in its business, with capital expenditures (property and equipment) of $0.545B in FY2026, representing 11.1% of total revenue. Additionally, the company capitalized $0.174B in internal-use software. There is no debt issuance or repayment activity. The only financing cash outflows were related to withholding taxes on vested shares ($0.529B) and lease payments ($0.026B).
Arm reports two revenue streams: License and Other Revenue ($2.307B, +25.5% YoY) and Royalty Revenue ($2.613B, +20.5% YoY). Geographically, the United States contributed $1.761B (35.8% of total), followed by Japan $0.825B (16.8%), PRC $0.874B (17.8%), Taiwan $0.695B (14.1%), Republic of Korea $0.392B (8.0%), and other countries $0.373B (7.6%). Revenue from related parties totaled $1.499B (30.5% of total), primarily from Arm China.
No cash flow statement data was available in the provided document excerpt. The excerpt only includes the auditor's report and discussion of revenue recognition, but the actual cash flow statement on page 132 was not included. Therefore, no analysis can be performed.