On November 4, 2026, Arm announced its financial results for the second quarter of fiscal year 2027, ended September 30, 2026.
Quarterly total revenue reached $1.44 billion, up 27% year-over-year;
Quarterly licensing and other revenue reached $773 million, up 50% year-over-year;
Quarterly royalty revenue reached $670 million, up 8% year-over-year;
Non-GAAP operating income reached $638 million, with an operating margin of 44.2%*;
GAAP operating income reached $201 million, with an operating margin of 13.9%.
"Rene Haas, CEO of Arm, said: 'Arm has achieved revenue growth of over 20% for five consecutive quarters, fully demonstrating the strong momentum of our business amidst the持续 rise in AI-driven computing demand. Our IP business continues to grow, with licensing revenue up 50%, reflecting customers' increasing investment in Arm's energy-efficient computing platform, which will drive stronger growth in future royalty revenue. Meanwhile, market demand for our chip business is accelerating, and with continued increases in customer commitments, we are more confident in achieving up to $2 billion in combined Arm AGI CPU revenue across fiscal years 2027 and 2028. As AI reshapes industries, Arm is becoming the preferred computing platform.'
"Here are the highlights of this quarter's performance and their main drivers:
Arm's total revenue for the second quarter of fiscal year 2027 increased by 27% year-over-year to $1.44 billion, setting a new record for Arm's revenue in the same period historically. This reflects Arm's strong execution and the growing market demand for the Arm computing platform.
The record-breaking second quarter performance was driven by strong licensing and other revenue, which reached $773 million, a 50% year-over-year increase. This growth momentum is also a key leading indicator for future royalty growth. Meanwhile, royalty revenue for the quarter reached $670 million, with data center royalties doubling year-over-year.
Arm partners shipped over 10 billion Arm-based chips in a single quarter for the first time, an increase of 1.5 billion year-over-year, further expanding the scale of the Arm platform. Currently, more than 30 million developers are using this platform.
Arm's business is driven by two major segments, both based on the same Arm computing platform and sharing a unified software ecosystem. As AI continues to increase the demand for computing scale and complexity across various markets, these two segments are growing rapidly:
In the IP business segment, partners continue to increase their investment in Arm technology, and the deployment volume of Arm-based chips has reached a new high;
In the new chip business segment, market demand for Arm AGI CPUs is extremely strong.
Arm AGI CPUs further expand business opportunities by providing Arm-designed chips directly to customers, with market demand continuing to strengthen:
Over the past 90 days, with increased supply and changes in customer mix, Arm has gained greater confidence in achieving combined Arm AGI CPU revenue of up to $2 billion across fiscal years 2027 and 2028.
Arm AGI CPUs have received purchase orders from multiple customers covering the entire 2027 calendar year, with the first commercial deliveries scheduled for the fourth quarter of fiscal year 2027 as planned.
Oracle Cloud Infrastructure (OCI) announced plans to launch instances featuring Arm AGI CPUs in 2027.
Independent test reports from Signal65 show that Arm AGI CPUs deliver approximately twice the performance per rack compared to the AMD EPYC 9755.
The market share of Arm-based servers among leading hyperscale cloud service providers has more than tripled, rising from 15% in 2024 to over 50% in 2025. Based on current deployment progress with Amazon Graviton, Google Axion, Microsoft Cobalt, and NVIDIA platforms, Arm expects this market share to exceed 60% by the end of 2026:
Amazon recently stated that revenue commitments for its Arm-based Graviton processors have increased more than 20-fold year-over-year.
Google views its Arm-based Axion as a key component of its AI infrastructure.
Microsoft stated that its Arm-based Cobalt CPUs are seeing widespread adoption.
NVIDIA continues to expand its Arm-based Vera CPU platform for agent AI, which is now commercially available on OCI and has been deployed in OpenAI's production environment.
Arm launched Arm Neoverse CSS N4 to help partners develop differentiated CPU, networking, infrastructure management, and information security solutions. Compared to the previous generation, it offers up to 2x single-socket performance and a 25% improvement in performance per watt.
In agent AI scenarios, Arm computing covers both sides of the trust boundary. NVIDIA's recently released OpenShell architecture uses Arm-based CPUs to execute AI workloads, while employing Arm-based BlueField-4 DPUs to independently handle security and isolation mechanisms.
Arm-based PCs now account for approximately 20% of global PC shipments, reflecting the increasingly widespread adoption of Arm in personal computing.
New PC product lines powered by NVIDIA's Arm-based RTX Spark further expand Arm's presence in local PC AI, content creation, and gaming.
Google launched Googlebook, a new category of AI-native laptops designed specifically for Gemini Intelligence, with several models featuring Arm as the primary computing platform.
In the smartphone sector, the second-generation Mobile Compute Subsystem (Arm CSS for Mobile 2) boosts the performance of agent AI workloads by 70% through Arm's second-generation Scalable Matrix Extension (SME2). This technology has already been adopted by major smartphone manufacturers such as OPPO and vivo. Meanwhile, Arm Mali G2-Ultra NX, Arm's first AI-native GPU, delivers up to 4x frame rates at the same sustained power consumption. Xiaomi has adopted this technology, and leading game developers and game engines are also integrating Arm Neural Technology.
Physical AI royalty revenue increased by 50% year-over-year, primarily driven by the rising adoption rates of Advanced Driver Assistance Systems (ADAS) and in-vehicle infotainment systems, accelerating their普及 across more vehicle models.
As vehicles become increasingly intelligent and automated, market demand for computing performance, real-time control, functional safety, and information security continues to grow. Armv9 and Arm Zena CSS provide the foundation for this transformation.
Arm launched the Arm Total Design for Physical AI ecosystem program, bringing together more than 80 companies in computing, software, AI models, and system integration to accelerate the development and deployment of physical AI systems.