2026 06 03 ARM Holdings ARM Q4 Fy2026 Earnings Call

Summary

ARM Q4 FY2026 record quarter: revenue $1.49B (+20% YoY), datacenter royalties doubled YoY. Full-year FY2026 revenue $4.9B (+23%). AGI CPU demand now $2B+ across FY2027-28. CEO Haas: "by the end of the decade, the largest market share by CPU type will be Arm." FY2031 target: $25B total revenue ($15B AGI chips + $10B IP). Licensing +29%, royalties +11%.

Transcript

Rene Haas: "Revenue this quarter was $1.49 billion, up 20%, our highest quarterly revenue quarter ever."

"Data center royalties more than doubled year-over-year."

"Agentic AI workloads require CPUs to coordinate tasks, move data, manage memory, enforce security and orchestrate work."

"More than 50 leading companies are supporting the expansion of the ARM compute platform into silicon, including the very biggest names in the industry."

"We now have more than $2 billion of customer demand across fiscal 2027 and fiscal 2028 [for AGI CPU]," representing a doubling from launch projections.

"SAP will move their core database and business application workloads to Arm."

"Cloudflare will deploy Arm across its global network."

Jason Child: "Non-GAAP EPS was $0.60, driven by both higher revenue and slightly lower OpEx than expected."

"Revenue growth of 23% exceeded 20% for the third straight year and lifted fiscal '26 revenue to $4.9 billion."

"ACV grew 22% year-on-year, maintaining strong momentum."

"SoftBank contributed $200 million to licensing revenue."

"We now have line of sight to more than $2 billion of demand across fiscal '27 and '28. However, we are maintaining our outlook of $1 billion while we pursue supply chain capacity."

"For Q1, we expect revenue of $1.26 billion, plus or minus $50 million."

"By FYE31, we will be generating $15 billion in AGI CPU revenue and $10 billion in IP revenue for a total of $25 billion."

Andrew Gardiner (Citi): "How demand doubled to $2 billion within six weeks and about supply chain access."

Rene Haas: "One of the beauties of the product that we announced is the fact that the CPU can come in a number of different flavors, including finished racks from partners like Supermicro."

"A lot of the software work has been completed. So the work required in terms of bringing on new compute capacity that's Arm-based, there isn't a lot of friction."

Joe Quatrochi (Wells Fargo): "Royalty growth drivers and smartphone market exposure."

Jason Child: "Mobile unit growth would be flattish, maybe slightly negative."

"Any negative impact we do see, we expect that to be more than offset by demand in Cloud AI or specifically in the data center."

Vivek Arya (Bank of America): "Competitive positioning in a $100-120 billion TAM."

Rene Haas: "I'm actually confident that by the end of the decade, I believe the largest market share by CPU type will be Arm."

"Whether it's NVIDIA, whether it's Amazon, whether it's Google, the very largest and most prevalent accelerators by volume is the TPU, it's Trainium and it's Ruben today...Those all connect to Arm. And increasingly, they are going to be 100% Arm."

Timm Schulze-Melander (Rothschild): "100% Arm CPU attachment rates with accelerators."

Rene Haas: "My expectation is that for the training platform over time, TPUs over time and NVIDIA's accelerated over time, I believe that the vast majority of the market share there will be Arm."

"Every single partner we asked said yes. We had probably over 50 different partners...all of them."

Jason Child: "I expect that the royalty growth is going to be in the roughly 20-ish percent for the year, with licensing a little bit back-end weighted...about 60% probably second half versus 40% front half."

Krish Sankar (TD Cowen): "CPU-to-GPU ratios."

Rene Haas: "While the ratios may not go to more CPUs than GPUs from a chip standpoint, they probably will from a core count standpoint."

"Could I see those core counts doubling or quadrupling over the next number of years? Absolutely. Could I see those core counts doubling or quadrupling over the next number of years? Absolutely."

Harlan Sur (JPMorgan): "OpEx attribution to the chip business and timeline for profitability."

Jason Child: "The incremental costs and OpEx that we're having to add to the chip business is not that significant. It's a team that's in the probably in the dozens of people, not hundreds."

"You can assume that it's operating profit positive next year, projecting 65% operating margin for IP and 35-ish percent for chips by fiscal 2031."

Lee Simpson (Morgan Stanley): "Whether CPU cores map 1:1 to agentic flows."

Rene Haas: "Each of these agents are running a batch or running a job themselves...It's actually pretty good for a single core design to handle that as opposed to having multi-cores having to run that all together in unison."

"The more cores you have, in theory, the more batches you can run. So our viewpoint is very much one of more cores is better."

Rene Haas (Closing): "We have 2 growth vectors that will drive this. The Arm AGI chip...we're now seeing over $2 billion of demand over the next 2 years alongside IP business projected to double again year-on-year."

"Both vectors represent structural growth for Arm that is very, very strong and very sustainable."