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British chip designer Arm Holdings has forecast third-quarter revenue slightly above market expectations, helped by strong demand for its
processor technology as companies increase spending on artificial intelligence infrastructure.
Arm expects revenue of 1.54 billion dollars for the quarter ending December, compared with analysts’ average estimate of 1.53 billion dollars, according to LSEG data cited by Reuters.
The company reported second-quarter revenue of 1.443 billion dollars for the three months ended September 30, up 27 per cent year-on-year and above its earlier guidance of 1.38 billion dollars.
Arm’s adjusted earnings stood at 52 cents per share, beating analysts’ expectation of 47 cents.
Licensing and other revenue rose 50 per cent to 773 million dollars, while royalty revenue increased 8 per cent to 670 million dollars. Arm said revenue from data centre royalties doubled from a year earlier, highlighting the growing use of its chip architecture in AI and cloud computing.
The company said its partners shipped more than 10 billion Arm-based chips during the quarter, a record for the company.
Arm also said its architecture accounted for more than half of server deployments at major cloud providers in 2025 and expects that share to rise above 60 per cent by the end of 2026. These figures are based on the company’s own estimates and projections.
The company is also expanding beyond licensing chip designs. Arm is developing its own data-centre processor, the Arm AGI CPU, and expects the product to generate up to 2 billion dollars in revenue across fiscal 2027 and 2028.
Arm said several customers have already placed orders extending through 2027, with the first commercial deliveries expected in the fourth quarter of fiscal 2027.
Despite the better-than-expected results and revenue outlook, Arm shares fell about 1 per cent in after-hours trading, Reuters reported.
The results highlight the growing competition among chipmakers to supply processors and infrastructure for the rapidly expanding AI computing market.
Arm expects revenue of 1.54 billion dollars for the quarter ending December, compared with analysts’ average estimate of 1.53 billion dollars, according to LSEG data cited by Reuters.
The company reported second-quarter revenue of 1.443 billion dollars for the three months ended September 30, up 27 per cent year-on-year and above its earlier guidance of 1.38 billion dollars.
Arm’s adjusted earnings stood at 52 cents per share, beating analysts’ expectation of 47 cents.
Licensing and other revenue rose 50 per cent to 773 million dollars, while royalty revenue increased 8 per cent to 670 million dollars. Arm said revenue from data centre royalties doubled from a year earlier, highlighting the growing use of its chip architecture in AI and cloud computing.
The company said its partners shipped more than 10 billion Arm-based chips during the quarter, a record for the company.
Arm also said its architecture accounted for more than half of server deployments at major cloud providers in 2025 and expects that share to rise above 60 per cent by the end of 2026. These figures are based on the company’s own estimates and projections.
The company is also expanding beyond licensing chip designs. Arm is developing its own data-centre processor, the Arm AGI CPU, and expects the product to generate up to 2 billion dollars in revenue across fiscal 2027 and 2028.
Arm said several customers have already placed orders extending through 2027, with the first commercial deliveries expected in the fourth quarter of fiscal 2027.
Despite the better-than-expected results and revenue outlook, Arm shares fell about 1 per cent in after-hours trading, Reuters reported.
The results highlight the growing competition among chipmakers to supply processors and infrastructure for the rapidly expanding AI computing market.
