Arm Q2 revenue grew 27%, with AI demand driving data center business expansion.

On November 5, according to Bloomberg, financial results showed Arm (ARM.O) achieved revenue of $1.44 billion in Q2 FY2026, a 27% year-over-year increase, surpassing market expectations of $1.38 billion. Adjusted EPS came in at $0.52, above the expected $0.47. The company forecasts Q3 revenue of approximately $1.54 billion, roughly in line with market expectations of $1.53 billion. Growth in the data center business offset weakness in the smartphone market. As Arm transitions from a chip architecture licensor to a chip manufacturer, its self-developed CPUs are expected to contribute up to $2 billion in combined revenue in FY2027 and FY2028.

CEO Haas stated that the company is more confident in reaching this revenue target, but supply capacity continues to constrain growth. Q2 licensing revenue grew 50% year over year to $773 million, while royalty revenue increased 8% to $670 million. Following the earnings release, Arm's after-hours stock price fluctuated; it had initially surged over 4% but is now down 3.8%.