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Mar 31, 2025
ARM Q4 2025 Earnings Report
Arm reported record Q4 revenue and royalty income, surpassing the $1B mark for the first time.
Key Takeaways
Arm delivered strong Q4 results with total revenue of $1.241 billion and record royalty and license revenues, driven by increasing deployment of Armv9 chips and AI demand across sectors.
Total revenue reached a record $1.241 billion, up 34% YoY.
Royalty revenue rose to $607 million, reflecting Armv9 and CSS chip demand.
Adjusted EPS climbed to $0.55 from $0.36 YoY.
AI growth across cloud and edge boosted custom silicon and royalty streams.
Revenue by Segment
Forward Guidance
Arm expects lower revenue and EPS in Q1 FYE26 but continued strong demand in AI and custom silicon will support long-term growth.
Positive Outlook
- Continued adoption of Armv9 architecture.
- Strong pipeline of CSS licenses across verticals.
- AI chip demand from hyperscalers remains robust.
- Record engineering headcount for innovation.
- CSS for Automotive licensing gains traction.
Challenges Ahead
- Revenue guidance for Q1 FYE26 reduced to $1.0–$1.1 billion.
- EPS guidance lowered to $0.30–$0.38 for Q1 FYE26.
- RPO declined 4% QoQ, reflecting contract timing.
- Cash flow from operations decreased YoY.
- Free cash flow dropped 74% YoY for the quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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