ARM (NASDAQ:ARM) Issues Quarterly Earnings Results, Beats Estimates By $0.04 EPS

ARM (NASDAQ:ARM) announced its earnings results on Wednesday. The company reported $0.52 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.48 by $0.04, FiscalAI reports. The company had revenue of $1.44 billion during the quarter, compared to analyst estimates of $1.38 billion. ARM had a net margin of 20.25% and a return on equity of 12.24%. The firm’s quarterly revenue was up 27.1% compared to the same quarter last year. During the same period in the previous year, the business earned $0.39 earnings per share.

Here are the key takeaways from ARM’s conference call:

• Arm reported record Q2 revenue of $1.44 billion, up 27% year over year, and non-GAAP EPS of $0.52, up 33%. Q3 revenue guidance is $1.54 billion at the midpoint, representing approximately 24% year-over-year growth.
• License and other revenue rose 50% to a record $773 million, reflecting stronger customer commitments and ATA and CSS agreements. Management views this licensing momentum as a leading indicator of future royalties, though license revenue can vary with deal timing.
• Data center royalties doubled year over year, while Arm’s share at top hyperscalers rose above 50% in calendar 2025; Arm expects it to exceed 60% by the end of 2026. Executives cited growing adoption across major cloud platforms and a shift from x86 as drivers of further growth.
• Demand for the Arm AGI CPU strengthened, with purchase orders from multiple customers and improved confidence in achieving up to $2 billion in revenue across fiscal 2027 and 2028; initial deliveries remain targeted for fiscal Q4 2027. The company is still securing supply, and its first-generation product is expected to have gross margins of 30%–40%.
• Higher memory prices are weighing on smartphone demand and keeping edge AI royalties roughly flat; Arm expects Q3 royalty growth in the low single digits year over year. Management expects smartphone conditions to normalize, but the near-term pressure offsets strength in cloud and physical AI.

ARM Trading Down 11.4%

Shares of NASDAQ:ARM traded down $21.89 during trading on Thursday, reaching $169.91. 4,482,745 shares of the company traded hands, compared to its average volume of 7,421,394. The firm has a market capitalization of $181.48 billion, a price-to-earnings ratio of 176.46, a P/E/G ratio of 5.91 and a beta of 3.93. ARM has a 52-week low of $100.02 and a 52-week high of $452.70. The business’s fifty day moving average is $256.08 and its 200-day moving average is $229.28.

Wall Street Analyst Weigh In

Several brokerages have issued reports on ARM. Needham & Company LLC reaffirmed a “buy” rating and set a $255.00 price target on shares of ARM in a research note on Thursday. KeyCorp increased their price objective on ARM from $300.00 to $430.00 and gave the company an “overweight” rating in a research report on Tuesday, July 14th. Bank of America reiterated a “neutral” rating and set a $335.00 price objective (up from $245.00) on shares of ARM in a research report on Thursday, July 30th. Jefferies Financial Group reissued a “buy” rating and set a $320.00 price objective on shares of ARM in a report on Monday, July 20th. Finally, UBS Group dropped their target price on ARM from $360.00 to $320.00 and set a “buy” rating for the company in a research report on Thursday, July 30th. One investment analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating, seven have issued a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the company has a consensus rating of “Moderate Buy” and an average target price of $297.32.

Insider Activity

In related news, CFO Jason Child sold 10,400 shares of ARM stock in a transaction on Monday, September 21st. The shares were sold at an average price of $300.00, for a total value of $3,120,000.00. Following the transaction, the chief financial officer directly owned 153,442 shares of the company’s stock, valued at $46,032,600. The trade was a 6.35% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Trending Headlines about ARM

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Arm reported fiscal Q2 revenue of $1.44 billion, up 27.1% year over year, and EPS of $0.52, beating analyst estimates of $1.38 billion and $0.48. Data-center royalties more than doubled, while licensing revenue rose 50%. Arm Shares Slip Despite Q2 Double-Beat: Details
• Positive Sentiment: The company forecast current-quarter revenue above analyst expectations and highlighted demand from AI and cloud customers. It also said Amazon Graviton revenue commitments have grown more than 20-fold year over year. Arm forecasts third-quarter revenue above estimates
• Neutral Sentiment: Arm’s longer-term AI opportunity includes its AGI CPU, with Oracle planning to offer Arm-based instances in 2027. These plans may support future growth, but depend on customer adoption and delivery. Oracle Cloud plans to offer Arm AGI CPU instances in 2027
• Negative Sentiment: Investors remained concerned about soft smartphone demand, a key market for Arm, and whether handset-related business can sustain growth. The strong quarter did not fully ease those concerns. Arm Stock Has an Apple and Android Problem
• Negative Sentiment: Intel’s warning about shortages of packaging substrates raised supply concerns for Arm’s planned AGI CPU, while weakness in Qualcomm and broader worries about returns on AI spending weighed on semiconductor sentiment. Arm’s rich valuation may also leave little room for disappointment. Arm Sinks as Intel’s Warning Hits Chip Stocks

ARM Company Profile

Arm Holdings plc (NASDAQ: ARM) is a semiconductor and software design company that develops central processing unit (CPU) architectures and related intellectual property. Rather than manufacturing chips itself, Arm licenses its designs and instruction-set architectures to semiconductor companies and technology manufacturers, which incorporate them into their own products.

The company’s offerings include CPU processor cores, graphics processing units through its Mali product family, system IP, development tools and software.