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Dec 31, 2025
ARM Q3 2026 Earnings Report
Arm delivered record third-quarter results with strong revenue and earnings growth driven by AI demand.
Key Takeaways
Arm posted record Q3 revenue with strong growth in both royalty and licensing, while profitability improved on a non-GAAP basis as AI-related demand accelerated across data center, edge, and physical AI markets.
Revenue reached a record level, marking the fourth consecutive quarter above $1 billion.
Royalty revenue growth was driven by higher adoption of Armv9 and Compute Subsystems.
Non-GAAP earnings increased year over year despite higher R&D investment.
AI-driven demand continued to expand across cloud, edge, and automotive markets.
Revenue by Segment
Forward Guidance
Arm guided for continued revenue and earnings growth in Q4 FYE26 driven by sustained AI demand.
Positive Outlook
- Revenue guidance implies sequential growth in Q4.
- Non-GAAP EPS guidance shows continued profitability expansion.
- Ongoing strength in AI-related workloads.
- Strong adoption of Arm Compute Subsystems.
- Expanding presence in data center and cloud markets.
Challenges Ahead
- Operating expenses expected to increase sequentially.
- Margin pressure from continued R&D investment.
- Dependence on customer adoption cycles.
- Exposure to semiconductor market volatility.
- Foreign exchange and macroeconomic risks.
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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