Q3 2026 Arm Holdings PLC Earnings Call Transcript
Key Points
- ARM Holdings PLC (ARM) delivered a record third quarter with revenue growing 26% year on year to $1.24 billion.
- Royalties increased 27% to a record $737 million, driven by strong performance in AI and data center sectors.
- Data center royalty revenue grew more than 100% year on year, with expectations for it to become ARM's largest business segment.
- Licensing revenue rose 25% year on year, with significant contributions from high-value licenses for next-generation technologies.
- ARM's compute platform is well-positioned to support AI workloads across various power envelopes, from milliwatts to gigawatts.
- The company faces risks and uncertainties that could cause actual results to differ materially from forecasts.
- Non-GAAP operating expenses increased by 37% year on year due to strong R&D investment, impacting operating income growth.
- There are concerns about potential demand destruction in consumer electronics, particularly from memory constraints.
- The company anticipates a deceleration in royalty revenue growth due to difficult comparisons and potential supply chain issues.
- ARM's reliance on SoftBank as a significant customer raises questions about the durability of revenue from this relationship.
Good day and thank you for standing by. Welcome to the our 3rd quarter fiscal year 2026 webcast and conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to turn the confidence over to your first speaker today, Jeff Cavill, head of investor relations. Please go ahead.
Thank you very much and welcome to our 3rd quarter fiscal '26 earnings call. On the call of Renee 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 about the company and its financial results. While these statements
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