Arm Earnings Reach Record as AGI CPU Demand Lifts Outlook

Arm Holdings plc reported record earnings for the fourth quarter, the company said on May 6, 2026, and issued upbeat first-quarter revenue guidance, attributing the strength to rising AI data-center demand.

Quarterly Results and Full-Year Cash Flow

Arm’s fourth-quarter revenue for the period ended March 31, 2026, reached $1.5 billion, up 20.0% year-over-year, driven by licensing revenue of $819 million and royalty revenue of $671 million, the SEC Form 6-K showed. Non-GAAP diluted earnings per share (EPS) rose to $0.60 from $0.55 a year earlier. GAAP profit was $313 million, or $0.29 a share. The company reported a GAAP gross margin of 97.5%, a non-GAAP gross margin of 98.2%, and a non-GAAP operating margin of 49.1%, down from 52.8% a year earlier. Non-GAAP operating expenses were about $734 million, slightly below prior guidance near $745 million.

For fiscal 2026, Arm reported revenue of $4.9 billion, up 23.0% year-over-year, with royalties totaling $2.6 billion and licensing and other revenue of $2.3 billion. Non-GAAP diluted EPS was $1.77. GAAP operating margin for the year was 18.3%, while non-GAAP operating margin declined to 43.0% from 46.7% the prior year.

Operating cash flow totaled $1.5 billion, and non-GAAP free cash flow was $882 million. Cash, equivalents, and short-term investments amounted to $3.6 billion, including roughly $2.8 billion in cash and equivalents and $850 million in short-term investments. Annualized contract value rose 22.0% year-over-year to $1.7 billion, while remaining performance obligations fell 7.0% to $2.1 billion.

AGI CPU Demand and Revenue Guidance

Arm launched the Arm AGI CPU, its first Arm-designed data-center processor for agentic AI, and disclosed more than $2.0 billion of customer demand across fiscal 2027 and 2028. The company also forecasted a $15.0 billion long-term opportunity for its data-center silicon business. Data-center royalties rose more than 100.0% year-over-year in the prior quarter.

For the first quarter of fiscal 2027, Arm projected revenue between $1.2 billion and $1.3 billion and non-GAAP diluted EPS of $0.36 to $0.44. The company said this outlook reflects strong AI data-center demand offset by smartphone seasonality. In its shareholder letter, management wrote, "The direction is clear: customers want Arm at the center of the AI data center," positioning the new CPU as central to its data-center strategy.