Arm Holdings stock weighs record revenue against royalty pressure

Arm reported record fiscal second-quarter revenue on November 4, while the growth mix sharpened the divide between strong licensing demand and slower smartphone-linked royalties. AD HOC NEWS reported that revenue for the quarter ended September 30 rose 27 percent year over year to 1.44 billion US dollars.

Arm Holdings stock traded at 163.40 euros on Lang & Schwarz at 16:34 CET on Tuesday, November 10, 2026. That was 2.39 percent below the 167.40 euro quote cited in the latest own report on November 9 at 16:15 CET. The separate comparison reflects the move since that report.

Licensing leads while royalties lag

Licensing and other revenue increased 50 percent to 773 million US dollars. Royalty revenue rose 8 percent to 670 million US dollars, with data-center royalties doubling year over year.

Physical AI royalty revenue increased 50 percent as adoption expanded in advanced driver-assistance and in-vehicle infotainment systems. Higher memory costs affected smartphone volumes, and management expects weaker edge AI demand to limit near-term royalty growth.

AGI CPU orders extend outlook

Purchase orders from multiple customers for the Arm AGI CPU extend through calendar 2027. First commercial deliveries remain on track for fiscal fourth quarter 2027, while management has raised its confidence in generating up to 2 billion US dollars of AGI CPU revenue across fiscal 2027 and 2028.

Oracle Cloud Infrastructure plans to offer Arm AGI CPU instances in 2027. The initiative could broaden Arm's business beyond intellectual-property licensing, but investors will also watch manufacturing, supply-chain execution and the conversion of licensing activity into recurring royalties.

Next quarter keeps pressure visible

Arm expects fiscal third-quarter revenue of 1.54 billion US dollars, plus or minus 50 million, implying year-over-year growth of approximately 24 percent at the midpoint. Licensing and other revenue is expected to rise by slightly more than 50 percent, while royalty revenue is forecast to grow at a low-single-digit rate.

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