ARM HOLDINGS PLC /UK Earnings Summary — Q4 2026

• Revenue reached $1,490 million for Q4 2026, marking a 20.06% YoY increase driven by Armv9 royalty rates.
• Net income surged 49.05% YoY to $313 million, showing significant operating leverage as scale increases.
• Gross margins remain exceptionally high at 97.85%, reflecting the asset-light royalty and licensing model.
• Research & Development expenses rose to $698 million, up from $546 million a year ago, reflecting continued investment in AI-centric compute.
• Operating margin rebounded sharply to 29.40% from 14.90% in the previous quarter (Q3 2026).
• Diluted EPS grew 45% YoY to $0.29, matching basic EPS and indicating robust per-share performance.
• Free Cash Flow remained stable at $186 million, though lower than the mid-year peak due to timing of licensing payments.

Management emphasizes a 'virtuous cycle' created by a 15 million-strong developer ecosystem and the high-value pivot into the data center with Neoverse cores.

Improving

A significant recovery in operating margins and net income growth compared to the prior two quarters suggests the v9 transition is accelerating profitably.

Arm is well-positioned to benefit from the AI boom and increased royalty rates per chip as 'Armv9' architecture commands double the royalty rates of its predecessor. Continued expansion into automotive and data centers provides long-term growth runways beyond mobile.