Arm Holdings plc American Depositary Shares Q3 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Arm Holdings Q3 FY2026 Earnings Summary

Financial Highlights (YoY vs. Q3 FY2025)

  • Total Revenue: $1.24 billion, +26% YoY (fourth consecutive quarter above $1B).
  • Royalty Revenue: Record $737 million, +27% YoY; driven by smartphones (higher rates per chip) and data center (triple-digit growth, now >100% YoY). Data center royalties expected to become largest segment in 2-3 years, surpassing mobile (~40-45% of total today).
  • License & Other Revenue: $505 million, +25% YoY; includes $200 million from SoftBank (full-quarter run rate going forward; prior quarter $178M).
  • Non-GAAP Operating Income: $505 million, +14% YoY; operating margin ~41%.
  • Non-GAAP EPS: $0.43 (near high end of guidance).
  • Non-GAAP Operating Expenses: $716 million, +37% YoY (R&D investment in architectures, CSS, chiplets/SoCs).
  • Annualized Contract Value (ACV): +28% YoY (consistent with Q1/Q2; above long-term mid-to-high single-digit license growth target).

Key Business & Strategic Updates

  • Organized into three units: Edge AI (smartphones/IoT), Physical AI (auto/robotics), Cloud AI (data center/networking).
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Operator: Good day, and thank you for standing by. Welcome to the Arm Holdings plc American Depositary Shares third quarter fiscal year 2026 Webcast and Conference Call. At this time, all participants to ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jessica Vall, Head of Investor Relations. Please go ahead. Jessica Vall: Thank you very much, and welcome to our third quarter fiscal 2026 earnings call. On the call are Rene Haas, Arm Holdings plc American Depositary Shares' Chief Executive, and Jason Child, Arm Holdings plc American Depositary Shares' Chief Financial Officer. During the call, Arm Holdings plc American Depositary Shares will discuss forecasts, targets, and other forward-looking information about the company and its financial results. While these statements represent our best current judgment about future results, our business is subject to many risks and uncertainties that could cause actual results to differ materially. In addition to any risks that we highlight during this call, important risk factors that may affect our future results and performance are described in a registration statement on Form 20-F filed with the SEC. Arm Holdings plc American Depositary Shares
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