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Arm Beats Forecasts but Stock Slips After Hours

Arm beat its own guidance and analyst forecasts for the September quarter and guided the next one higher, yet the shares slipped in after-hours trading.

Arm Holdings (NASDAQ: ARM) reported quarterly revenue and earnings ahead of Wall Street forecasts after the bell today, but the shares were down around 1.8% in after-hours trading. The chip designer licenses processor designs and collects royalties on the chips built from them.

The stock closed today’s regular session down 5% at $191.80. At about 16:10 in New York (21:10 UK time), it was trading around 1.8% lower after hours.

ARM.US

Revenue for the second quarter of fiscal 2027 was $1,443m, up 27% from $1,135m a year earlier and above Arm’s guidance of $1.38bn, give or take $50m. Non-GAAP earnings per share were $0.52, against guidance of $0.47, give or take $0.04.

Yahoo Finance consensus had revenue at $1.38bn, from 30 analysts, with the highest estimate at $1.41bn. EPS consensus was $0.48, from 31 analysts, with a high of $0.50. Revenue therefore beat the average by about 4.6% and EPS by about 8.3%, and both cleared the top of the range.

The beat was led by licensing. License and other revenue rose 50% to $773m from $515m, while royalties grew 8% to $670m from $620m, held back by memory pricing hitting smartphones. Data centre royalties doubled.

Bar chart of Arm license and other revenue rising from $515m to $773m and royalty revenue from $620m to $670m between the September 2025 and September 2026 quarters
Arm revenue by type, quarter ended 30 September, $m. Source: Arm Holdings

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

Rene Haas, Chief Executive, Arm

Arm said it has purchase orders for its AGI CPU from multiple customers through calendar 2027, with first commercial deliveries on track for fiscal Q4 FY27. Its confidence in up to $2bn of AGI CPU revenue over FY27-28 has risen over the past 90 days.

The counterweights sit lower down the results. GAAP EPS fell 45% to $0.12 from $0.22, and non-GAAP free cash flow dropped 73% to $110m from $411m.

Guidance for the third quarter of fiscal 2027 is for revenue of $1.54bn, give or take $50m, and non-GAAP EPS of $0.56, give or take $0.04. Consensus is $1.52bn and $0.55. US trading resumes tomorrow at 14:30 UK time.

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