Arm Q2 FYE26 revenue tops $1bn for third consecutive quarter

CEO Rene Haas reveals that Arm revenue topped $1 billion for the third successive quarter. He added that record royalties reflected a new high in demand for the Arm compute platform.

“As workload complexity accelerates with every new model and every new agent, Arm is the compute platform for the AI era – delivering high performance, power-efficient AI everywhere,” Haas said.

Arm second-quarter revenue was $1.14bn – up 34 per cent year-on-year and was above the high end of guidance. Non-GAP EPS ended above the high-end.

Royalty revenue increased 21 year cent year-on-year to $620 million - driven by the continued adoption of Arm technology with higher royalty rates per chip, such as Armv9 and Arm Compute Subsystems (CSS) and increased usage of Arm-based chips in data centres.

Three new Arm CSS licences were signed in the quarter, one each in smartphones, tablet, and data centres, bringing the total to 19 licences with 11 companies, with five customers already shipping CSS-based chips. Samsung will also leverage CSS for its Exynos family of chipsets, which means the top four Android phone vendors are now shipping CSS-powered devices.

In Q2, Arm launched the Lumex CSS platform, its most advanced smartphone platform to date, delivering up to 5x faster AI performance on a new generation of Arm C1 CPUs with Arm Scalable Matrix Extension 2 (SME2) and up to 3x the energy savings, alongside up to 2x AI and graphics performance through the integration with the new Arm Mali G1-Ultra GPU compared to the prior generations.

The ecosystem is already embracing Lumex, with leading applications, such as Alipay, Gmail, and YouTube, accelerating on-device inference and real-time personalisation, and partners, such as MediaTek, designing Lumex configurations into its next-generation chips for new flagship smartphones from Oppo and vivo.

Arm reported increasing momentum in Cloud AI, with over one billion Arm Neoverse CPU cores shipped to run the complex AI and hyperscaler workloads that define modern computing. Arm’s share of CPUs deployed by top hyperscalers is expected to reach nearly 50 per cent this year, reinforcing Arm’s position as the new unit of compute in the AI data centre.

Google has already migrated 30,000+ cloud applications to Arm, including Gmail and YouTube, and intends to migrate most of its 100,000+ applications, the company reveals.

In the quarter, Microsoft expanded the Arm-powered Cobalt 100 to 29 regions globally, and NVIDIA secured over half a trillion dollars in expected orders through 2026 as demand for its Arm-based Grace Blackwell superchips remained exceptionally strong.

The addition of five new Stargate AI data centre sites, all anchored on Arm as a strategic compute platform, underscored Arm’s role in powering AI at scale.

Haas said there was a lot more to come from Arm tech influencers across the whole ambit of compute in the coming weeks and months.