Arm Revenue Rises 27% to $1.44 Billion, but Shares Slip After Hours
Arm Holdings reported fiscal Q2 revenue of $1.44 billion, up 27%, and adjusted EPS of $0.52, above estimates. Shares fell about 2% in extended trading.
Arm Holdings reported revenue of $1.44 billion for its fiscal second quarter on Wednesday, November 4, 2026, up 27% from a year earlier and ahead of Wall Street's forecast. Even so, the chip designer's shares fell 1.8% in extended trading, Seeking Alpha reported shortly after the results; Grafa put the decline at about 2%.
Results vs. expectations
Measure | Reported | Analyst estimate |
|---|---|---|
Revenue | $1.44 billion (+27%) | $1.38 billion |
Adjusted EPS | $0.52 | $0.47 |
Royalty revenue | $670 million (+8%) | $720.8 million |
Licensing revenue | $773 million (+50%) | $625.1 million |
Reported figures and the revenue and EPS estimates are as reported by Seeking Alpha and Grafa. The royalty and licensing estimates are LSEG figures cited by Grafa.
Why the stock slipped on a beat
The table shows the likely tension. Arm earns money two ways: upfront licensing fees when a chipmaker signs up to use its designs, and ongoing royalties on every chip shipped. Licensing beat estimates by a wide margin, but royalties, which track actual chip sales and tend to be steadier, grew only 8% and came in below the LSEG estimate, according to Grafa. Investors often watch royalties as the better gauge of long-term demand.
Grafa said demand from AI and data centers for energy-efficient processors drove the quarter.
Outlook
For the fiscal third quarter, Arm guided to revenue of about $1.54 billion, plus or minus $50 million, and adjusted EPS of $0.52 to $0.60, according to Seeking Alpha. Analysts had expected $1.53 billion and $0.55.
Arm also said it can achieve up to $2 billion in revenue from its AGI CPU across fiscal 2027 and 2028, and that its confidence in that had increased over the past 90 days, Seeking Alpha reported.
What it means for investors
A company can beat forecasts and still see its stock fall when the details, or the guidance, fall short of what investors had already priced in. Our guide on how to read an earnings report explains what to look at beyond the headline numbers, and what is market cap covers how a company's size affects how its stock reacts. For the wider chip sector, see our story on Qualcomm's fiscal fourth quarter.
This article is for information only and is not investment advice.
Sources
This article is for information only and is not investment advice. Do your own research before buying or selling any asset.