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- **Record Q2 Growth**: $1.14 billion revenue (+34% YoY), driven by 21% YoY royalty growth and 56% YoY licensing surge.
- **AI Compute Dominance**: Neoverse data center royalties double YoY; Google's Arm-based Axion chip outperforms x86 by 65%.
- **Strategic Expansion**: 5 new Stargate sites, 3 new CSS licenses, and $178 million SoftBank-related revenue highlight ecosystem expansion.
- **Future Outlook**: Q3 guidance for $1.225 billion revenue (+25% YoY), with accelerating R&D investment in AI and edge computing.
- **China Momentum**: 22% of Q2 revenue from China, fueled by large license deals and strong smartphone/automotive adoption.

**【CEO Summary Section】**
- Q2 revenue reached $1.14 billion, up 34% year-over-year, with record royalty revenue of $620 million (+21% YoY) and licensing revenue of $515 million (+56% YoY).
- Neoverse data center royalties doubled YoY, driven by hyperscale partners like Google (Axion chip delivers 65% better price-performance and 60% less energy use).
- 5 new Stargate sites added, expanding visibility into AI capacity; 3 new CSS licenses signed in smartphones, tablets, and data centers, bringing total to 19 across 11 companies.
- Lumex CSS launched, enabling real-time AI on mobile devices; OPPO and vivo flagships expected to ship later in the year.
- Strategic partnership with Meta to scale AI efficiency across all compute layers.
- Automotive AI5 chip delivers 40x faster performance for Tesla's next-gen vehicles.
- Developer ecosystem grows to 22 million, representing 80% of global developers.

**【CFO Financial Commentary】**
- Non-GAAP EPS of $0.39, $0.06 above midpoint of guidance, driven by higher revenue and lower OpEx.
- Operating expenses $648 million (+31% YoY), with R&D investment accelerating for CSS, chiplets, and SoCs.
- ACV grew 28% YoY, well above long-term expectations.
- Q3 guidance: $1.225 billion revenue (+25% YoY), royalties +20% YoY, licensing +25-30% YoY.
- Related-party revenue with SoftBank increased by $52 million QoQ to $178 million, reflecting design services and IP licensing.

**【Q&A Key Highlights】**
- **AI & Data Center Growth**: Arm's 50% efficiency advantage over competitors is driving hyperscale adoption; all new announced compute capacity is Arm-based.
- **Stargate & SoftBank Collaboration**: $500 billion Stargate project accelerates infrastructure build-out; Arm's role in power-efficient compute is central to SoftBank's ecosystem.
- **Lumex CSS Success**: Early licensee already generating royalties, with 40% AI performance improvement for Samsung Exynos.
- **China Market Strength**: China contributed 22% of Q2 revenue, with large license deals and strong royalty growth.
- **Future Product Strategy**: Exploring chiplets and SoCs; potential announcements when tape-out, samples, and customer orders are confirmed.
- **Networking Penetration**: Arm-based solutions in DPU, switches (e.g., Mellanox BlueField), and routers now account for ~15-20% of royalty revenue, up from 10% last fiscal year.

Arm Holdings plc (ARM) Q2 2026 Earnings Call Transcript

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