Q1 2026 Arm Holdings PLC Earnings Call Transcript
Key Points
- ARM Holdings PLC (ARM) reported its second highest revenue quarter at $1.05 billion, with royalty revenue reaching $585 million, up 25% year-on-year.
- The company has seen a 40% increase in enterprises running AI workloads on ARM Neoverse data center chips, with a 14x surge since 2021.
- ARM's Neoverse CPUs are now powering significant AI infrastructure, including NVIDIA Grace, AWS Graviton, Google Axion, and Microsoft Cobalt.
- ARM's Compute Subsystems (CSS) are exceeding expectations, with new licenses signed and delivering higher royalty rates.
- The company is experiencing strong momentum in AI, with over 22 million developers building on ARM, representing more than 80% of the global base.
- Licensing revenue decreased by 1% year-on-year, following a strong previous quarter.
- The smartphone sector's growth was slower than expected, impacting royalty revenue slightly.
- ARM faces uncertainties in the macroeconomic climate, which could affect royalty and licensing revenues.
- Operating expenses are expected to increase due to accelerated R&D investments, impacting short-term profitability.
- ARM's expansion into full-end solutions and potential entry into the ASIC market presents execution challenges.
Good day, and thank you for standing by. Welcome to the Arm first-quarter fiscal year 2026 webcast and conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Jeff Kvaal, Vice President, Investor Relations. Please go ahead.
Thank you very much, Sharon, and welcome, everyone. This is our first earnings call of fiscal year 2026. On the call today are Rene Haas, Arm's Chief Executive Officer; and Jason Child, Arm's Chief Financial Officer. During the call, Arm will discuss forecasts, targets and other forward-looking information regarding the company and its financial results.
While these statements represent our best current judgment about future results and performance, our actual results are subject to many risks and uncertainties that could cause results to differ materially. In addition to any risks that we highlight during this call, important risk factors that may
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