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Jun 30, 2025
ARM Q1 2026 Earnings Report
Arm reported record first quarter revenue and royalty growth, driven by strong demand across all end markets.
Key Takeaways
Arm delivered strong Q1 results for fiscal 2026 with $1.05 billion in revenue, marking a record for a first quarter. Royalty revenue saw a 25% increase year-over-year, while licensing declined slightly. Non-GAAP EPS came in at $0.35, reflecting healthy operating leverage and growth across the AI and data center segments.
Total revenue reached $1.053 billion, up 12% year-over-year.
Royalty revenue hit $585 million, a 25% increase from the prior year.
Non-GAAP EPS was $0.35, exceeding guidance midpoint.
Free cash flow was $150 million, with strong operating cash flow of $332 million.
Revenue by Segment
Forward Guidance
Arm guided Q2 FYE26 revenue between $1.01 billion and $1.11 billion with continued investment in R&D and CSS. Expected non-GAAP EPS ranges from $0.29 to $0.37.
Positive Outlook
- Strong royalty momentum across end markets expected to continue.
- Sustained adoption of Armv9 architecture.
- Continued growth in CSS and Zena compute subsystems.
- Expanding customer base in AI, cloud, and automotive.
- Healthy backlog with $2.23 billion in remaining performance obligations.
Challenges Ahead
- License revenue remains subject to timing fluctuations.
- Higher R&D expenses impacting GAAP profitability.
- Operating margin down from prior year due to investment ramp.
- Decline in GAAP EPS year-over-year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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