Arm delivers a record second quarter, reaching $1.44 billion in total revenue

Today (November 4, 2026), Arm (NASDAQ: ARM) published a letter to its shareholders containing the company’s results for its second quarter of fiscal year 2027, which ended September 30, 2026. The infographic below provides the key highlights for the quarter: 

Here are what the results mean and how they were achieved: 

• Total revenue for Arm in Q2 FYE27 increased 27% year over year to $1.44 billion, representing Arm’s highest ever second quarter. This reflects strong execution and growing demand for the Arm compute platform. 
• Record second quarter was driven by strong licensing and other revenue of $773 million, reflecting a 50% year over year increase, an important leading indicator of future royalty growth. Meanwhile, royalty revenue for the quarter reached $670 million, with data center royalties doubling year over year.  
• For the first time, Arm’s partners reported more than 10 billion Arm-based chips shipped during the quarter – an increase of 1.5 billion chips year over year – adding to the scale of the platform already used by more than 30 million developers.  
• Arm’s business is driven by two areas – both built on the same Arm compute platform, leveraging a common software ecosystem – that are seeing rapid growth as AI increases the amount and complexity of compute required across every market:
  • The IP business, where partners are increasing investment in Arm technology and deploying record numbers of Arm-based silicon; and  
  • The new silicon business, where demand for the Arm AGI CPU is extremely strong.
• Arm AGI CPU expands the business opportunity by delivering Arm-design silicon directly to customers, with demand continuing to strengthen:
  • Arm’s confidence in achieving up to $2 billion in Arm AGI CPU revenue over FYE27 and FYE28 has increased over the past 90 days, supported by additional supply and customer mix. 
  • Purchase orders for Arm AGI CPU have been secured from multiple customers extending through calendar 2027, and the first commercial deliveries are on track for Q4 FYE27. 
  • Oracle Cloud Infrastructure (OCI) announced plans to offer Arm AGI CPU instances in 2027. 
  • Independent testing by Signal65 showed Arm AGI CPU delivering approximately 2x the performance per rack versus AMD EPYC 9755. 
• Arm-based server market share at the top hyperscalers more than tripled – from 15% in calendar 2024 to more than 50% in calendar 2025. Based on current ramps across AWS Graviton, Google Axion, Microsoft Cobalt, and NVIDIA platforms, Arm expects that share to exceed 60% by the end of calendar 2026:
  • Amazon recently reported that Arm-based Graviton revenue commitments increased more than 20x year-over-year. 
  • Google identified Arm-based Axion as a critical component of its AI infrastructure. 
  • Microsoft highlighted strong adoption of Arm-based Cobalt CPUs. 
  • NVIDIA continues to expand its Arm-based Vera CPU platform for agentic AI, with it now generally available on OCI and deployed in production with OpenAI.
• Arm introduced Arm Neoverse CSS N4, enabling partners to develop differentiated silicon CPUs, networking, infrastructure management, and security, and delivering up to 2x performance per socket and 25% better performance per watt than the prior generation.  
• Arm compute sits on both sides of the trust boundary for agentic AI, with NVIDIA’s recently announced OpenShell architecture using Arm-based CPUs to execute AI workloads, and Arm-based BlueField-4 DPUs to independently enforce security and isolation.
• Arm-based PCs have now reached approximately 20% of global PC shipments, reflecting the growing adoption of Arm in personal computing.
  • A new portfolio of PCs powered by NVIDIA’s Arm-based RTX Spark further expands Arm’s reach into local AI, content creation, and gaming for PC. 
  • Google introduced Googlebook, a new category of AI-native laptops designed for Gemini Intelligence, with Arm serving as a primary compute platform for many models.
• In smartphones, Arm CSS for Mobile 2 drives the performance of agentic AI workloads up by 70% through Arm Scalable Matrix Extension 2 (SME2), which is already adopted by major smartphone vendors like OPPO and vivo. Meanwhile, Arm Mali G2-Ultra NX, Arm’s first AI-native GPU, delivers up to 4x the frame rate at the same sustained power, with Xiaomi adopting the technology, and leading game developers and engines integrating Arm Neural Technology.
• Physical AI royalty revenue grew 50% year over year, driven by increased adoption of advanced driver-assistance and in-vehicle infotainment systems expanding into more vehicles.  
• As vehicles become more intelligent and autonomous, demand for compute performance, real-time control, safety and security continues to increase, with Armv9 and Arm Zena CSS providing the foundation for this transition.  
• Arm launched Arm Total Design for Physical AI, bringing together more than 80 companies across compute, software, AI models, and system integration, to accelerate the development and deployment of physical AI systems.

The full letter to shareholders is available on the Arm investor relations website (https://investors.arm.com/financials/quarterly-annual-results). Information about the Arm earnings conference call can be found here.  

Forward-looking statements

This blog post contains forward-looking statements regarding Arm’s future performance, market opportunity, and customer demand. These statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. For a discussion of factors that could affect Arm’s results, please refer to Arm’s filings with the U.S. Securities and Exchange Commission.  

All product and company names are trademarks or registered trademarks of their respective holders.