ARM Holdings Q2 FY2026 Revenue $1.44B Up 27% YoY; Net Income $130M
ARM Holdings reported Q2 FY2026 total revenue of $1.443 billion, up 27% year-over-year from $1.135 billion in Q2 FY2025, beating prior guidance midpoint. License and other revenue increased 50% year-over-year to $773 million, while royalty revenue rose 8% to $670 million. Net income was $130 million versus $238 million in the prior year period, impacted by higher R&D and SBC expenses. For the six months ended September 30, 2026, total revenue was $2.732 billion, up 25% year-over-year, with net income of $400 mil...
Key takeaways
Revenue: Q2 FY2026 total revenue $1.443B (+27% YoY); H1 FY2026 revenue $2.732B (+25% YoY)
License and other revenue Q2 $773M (+50% YoY) driven by strong demand for Arm IP and timing of high-value license agreements
Royalty revenue Q2 $670M (+8% YoY) supported by improved mix of higher-rate products like Armv9 and Arm CSS, partially offset by smartphone memory pricing impact
Operating income Q2 $201M (+23% YoY) with 14% operating margin; H1 operating income $292M (+5% YoY) with 11% margin
Net income Q2 $130M (-45% YoY) impacted by increased R&D ($857M, +24%) and SBC ($376M, +42%); H1 net income $400M (+9% YoY)
Diluted EPS Q2 $0.12 versus $0.22 in prior year; H1 diluted EPS $0.37 versus $0.34
Cash flow from operations H1 $1.109B (+23% YoY); cash and equivalents $3.251B as of September 30, 2026
Key metrics
Disclosure changes
- Acquisitions
ARM acquired DreamBig Semiconductor Inc. on July 1, 2026 for $265.3 million, adding advanced networking capabilities and $93 million in goodwill.
Strategic acquisition expands ARM's networking portfolio and capabilities - Customer concentration
Arm China revenue was $208.9 million in Q2 FY2026 versus $243.1 million in Q2 FY2025, representing a 14% year-over-year decrease due to timing fluctuations in license agreements.
Arm China is a significant related party; changes in revenue impact total company results - Subsequent events
In October 2026, ARM entered non-cancellable purchase commitments of $672 million for semiconductor products through 2027. In November 2026, ARM entered a Customer Advance Payment Agreement requiring $200 million in advance payments during H1 2027 to reserve manufacturing capacity through 2029.
Significant future purchase commitments and capacity reservations represent material forward-looking obligations - Equity investments
Equity investments increased to $599 million as of September 30, 2026 from $387 million as of March 31, 2026, including $243 million in publicly listed companies and $186 million in non-marketable equity securities.
Significant increase in equity investment portfolio represents material asset change - Related party transactions
Revenue from SoftBank Group affiliates was $208.7 million in Q2 FY2026 versus $177.9 million in Q2 FY2025 under consulting agreements. Accounts receivable from Arm China was $277.3 million net as of September 30, 2026.
Significant related party revenue and receivables represent concentration risk - Purchase obligations
In April 2026, ARM amended a cloud computing purchase commitment by $305 million through 2029, bringing total commitment to a material amount.
Increased purchase obligations represent material future cash outflows
Primary source
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