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Arm Shares Slip Despite Q2 Double-Beat: Details (CORRECTED)

Erica Kollmann 1 day ago

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Here's a detailed look inside the Q2 earnings report from Arm Holdings.

Editor’s Note: This article has been updated to correct the royalty revenue, annualized contract value and license revenue figures, as well as the CEO’s quote. An earlier version mistakenly included figures from the first quarter.

Arm Holdings Plc (NASDAQ:ARM) posted its second-quarter fiscal 2027 results after Wednesday’s closing bell, beating estimates on the top and bottom lines.

Arm Q2 Details  

Arm reported quarterly earnings of 52 cents per share, which beat the analyst estimate of 47 cents, per Benzinga Pro data. 

Quarterly revenue came in at $1.44 billion, which beat the Street estimate of $1.38 billion.

Arm gave the following revenue breakdown for the quarter:    

  • Royalty revenue increased 8% year-over-year to $670 million
  • Annualized contract value (ACV), a metric for normalized license and other revenue, increased 12% year-over-year to $1.79 billion 
  • License and other revenue increased 50% year-over-year to $773 million

"Arm delivered its fifth consecutive quarter of revenue growth above 20%, reflecting the strength of our business as AI drives increasing demand for compute," said CEO Rene Haas.

"Our IP business continues to grow, with 50% licensing growth demonstrating the increasing investment in the power efficient Arm compute platform which will drive even higher royalty growth in the future. Additionally, 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," Haas added.

Looking Ahead

Arm expects third-quarter adjusted earnings of 52 cents to 60 cents per share, compared with analysts’ estimate of 56 cents.

The company forecast revenue of $1.49 billion to $1.59 billion, compared with Wall Street’s estimate of $1.528 billion.

The revenue forecast midpoint of $1.54 billion stands slightly above consensus.

Arm also expects adjusted operating expenses of approximately $825 million.

ARM Stock Price: According to data from Benzinga Pro, Arm Holdings stock was down 3.55% to $185 in Wednesday’s extended trading.  

Photo via Shutterstock

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