Earnings Call
May 6, 2026
Q1 FY2026
EPS Estimate
0.58
EPS Actual
0.35
Post-Earnings Close
$213.31
Earnings Reaction
-10.1%
Arm opened fiscal year 2026 with its best-ever Q1, posting $1.05 billion in total revenue, the second consecutive quarter above the $1 billion threshold, driven by what management described as insatiable AI compute demand across the full power spectrum from edge devices to hyperscale data centers. Royalty revenue of $585 million grew 25% year-on-year and hit a Q1 record, with strength broad-based across smartphones, data center, automotive, and IoT. Licensing revenue of $468 million declined 1% year-on-year as expected following an exceptionally strong prior-year comparable, though annualized contract value surged 28%, well above the company's long-term mid-to-high single-digit licensing growth framework, driven by a combination of next-generation CSS upgrades, a multigenerational GPU deal with a major smartphone OEM, and a materially expanded licensing and design services relationship with SoftBank. Non-GAAP EPS of $0.35 came in above the midpoint of guidance, absorbing a $0.01 FX headwind.
Report generated on May 5, 2026
AI-generated earnings analysis. Not investment advice.
Chief Executive Officer
The quarter's results reflected a combination of company-specific execution and broader sector dynamics, with management addressing several of the key debates that analysts had flagged heading into the print. Guidance commentary pointed to continued momentum in the core segments, while questions on margins and capital allocation drew more nuanced responses from the leadership team over the course of the call.
The quarter's results reflected a combination of company-specific execution and broader sector dynamics, with management addressing several of the key debates that analysts had flagged heading into the print. Guidance commentary pointed to continued momentum in the core segments, while questions on margins and capital allocation drew more nuanced responses from the leadership team over the course of the call.
The quarter's results reflected a combination of company-specific execution and broader sector dynamics, with management addressing several of the key debates that analysts had flagged heading into the print. Guidance commentary pointed to continued momentum in the core segments, while questions on margins and capital allocation drew more nuanced responses from the leadership team over the course of the call.
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