ARM · Arm Holdings plc American Depositary Shares

Arm's Q1 FY2027 results were highlighted by record revenue of $1.289B, surpassing the midpoint of guidance of $1.26B. The growth was broad-based: license revenue rose 23% YoY to $574M, driven by high-value agreements and backlog, while royalty revenue grew 22% to $715M, benefiting from higher Armv9 and CSS content as well as a doubling of data center royalties. Non-GAAP gross margin expanded 20 bps to 98.1%, reflecting stable IP licensing mix. Operating expenses grew 18% YoY on a non-GAAP basis to $733M, mainly from increased R&D headcount and investment. Non-GAAP operating income rose 29% to $531M, yielding an operating margin of 41.2% versus 39.1% a year ago. Non-GAAP net income was $480M, with diluted EPS of $0.45, above the guidance range of $0.40 +/- $0.04. The company generated strong operating cash flow of $902M and non-GAAP free cash flow of $665M, helped by favorable timing. Management commentary highlighted accelerating data center transition, with Arm Neoverse shipments surpassing 1.5B cores and the Arm AGI CPU opportunity expanding to over $2B across FY27-FY28. For Q2, Arm guided revenue of $1.38B +/- $50M and non-GAAP EPS of $0.47 +/- $0.04, implying continued momentum. The results and outlook underscore Arm's positioning in AI infrastructure and edge computing, with growing adoption from hyperscalers and ecosystem partners.