Arm Holdings' Q4 2025: Navigating Contradictions in Royalties Growth, CSS Adoption, and Tariff Impacts

Royalties growth and CSS adoption, CSS customer split and market focus, v9 adoption progress and impact on growth, semiconductor industry slowdown and licensing growth, tariff impact on revenue are the key contradictions discussed in Arm Holdings' latest 2025Q4 earnings call.



Record Revenue and Royalty Growth:
- Arm Holdings plc reported revenue of $1.24 billion for Q4 2025 and $4 billion for the full year, with royalty revenue surpassing $2 billion for the first time.
- The growth was driven by strong demand for power-efficient AI compute from cloud to edge, especially in data centers and automotive sectors.

Shareholder Milestones and New Partnerships:
- Arm achieved record royalty of $607 million in Q4, with licensing revenue hitting an all-time high of $634 million.
- This was due to new partnerships such as a multi-year AI partnership with the Malaysian government and the deployment of Armv9 in major cloud providers like Google and Microsoft.

Custom Silicon and AI Platform Growth:
- Custom silicon licenses and AI platforms contributed significantly to royalty and licensing growth.
- The launch of the first Armv9 edge AI platform and collaborations like GM and NVIDIA's DRIVE AGX platforms drove this trend.

Automotive Sector Expansion:
- Arm's automotive sector showed strong double-digit growth, with a first automotive CSS license signed with a global EV leader.
- This expansion was supported by increased adoption of Arm-based platforms in automotive vehicles and the development of custom silicon for next-gen vehicles.