Arm's Q1 Revenue Grew 22% Year-on-Year, Exceeding Expectations; Data Center Royalty Revenue Doubled

Odaily Odaily reported that Arm released its financial report for the first fiscal quarter of FY2027, with revenue reaching $1.29 billion, a 22% year-on-year increase, surpassing the market expectation of $1.26 billion. Adjusted earnings per share were $0.45, a 29% year-on-year increase, beating the market consensus of $0.40.

The financial statement shows that Arm's adjusted net profit was $480 million, up 28% year-on-year; licensing revenue stood at $574 million, up 23% year-on-year; royalty revenue was $715 million, up 22% year-on-year, with data center royalty revenue more than doubling year-on-year.

Arm stated that the AI and data center businesses continue to grow. Since the launch of the AGI CPU in March, the expected order book from customers has risen from approximately $1 billion to over $2 billion. Cumulative shipments of Arm Neoverse data center processors have exceeded 1.5 billion cores.

Additionally, Nvidia's Vera has entered full production, AWS has reached a multi-year agreement with Meta to deploy tens of millions of Graviton5 cores, and Qualcomm also plans to launch the Arm-based data center CPU, Dragonfly C1000.

Arm expects second fiscal quarter revenue of approximately $1.38 billion and adjusted earnings per share of around $0.47, both above average market expectations. The company also noted that growth in smartphone royalty revenue will slow down, causing its after-hours stock price to fall by about 7%.