VALUFOURYoY+$236M · +22.4%
QoQ−$201M · −13.5%
NASDAQ · ARM
Arm
CPU architecture · IP licensing · Royalties
- Earnings release date
- 2026.07.29
- Market data date
- 2026.10.13
- Last checked
- 2026.10.13
PUBLICATION GATEOfficial Facts MatchedThe key facts shown on this page match issuer IR/SEC materials and market data.
View Matched Facts
Official sources and filing dateMatchedRevenueMatchedTTM revenueMatchedShares outstandingMatchedClosing price and market-data dateMatched
01
EARNINGS & GROWTH
Revenue · Profitability · Key Metrics
YoY+$130M · +22.2%
QoQ+$44M · +6.6%
YoY+$106M · +22.6%
QoQ−$245M · −29.9%
YoY0.0%p
QoQ−0.7%p
02
EARNINGS ANALYSIS
Stock Analysis · Growth Drivers · Business Model
License Timing Lowered Sequential Revenue
Revenue declined sequentially after a large amount of license revenue was recognized in the prior quarter, while year-over-year growth continued. Rising royalty revenue helped offset some of the quarterly volatility created by large license agreements.
Royalty Engine Strengthened
Royalty revenue grew even as total revenue eased, highlighting a relatively steadier source of growth. Wider data-center adoption and higher-value architectures matter because they can increase both shipment volume and royalty value per product.
License Timing Drove Volatility
The size and recognition timing of large agreements contributed to the sequential decline in license revenue. The contract base is better assessed alongside annual contract value (ACV) and whether customer designs progress into production and ultimately ship.
High-Margin Economics Remained Intact
Gross margin eased modestly sequentially but continued to reflect the strong economics of Arm’s IP-led business. At the same time, expansion into Production Silicon introduces a different cost structure from the traditional licensing and royalty model.
03
VALUATION · RETURN CALCULATOR
P/E · Multiples · Long-Term Investing
$255.39 × 1.07B
See calculation
FY2026 Q2 Revenue $1.135B
+ FY2026 Q3 Revenue $1.242B
+ FY2026 Q4 Revenue $1.490B
+ FY2027 Q1 Revenue $1.289B
= TTM $5.156B
- Current market cap
- $272.8B
- TTM revenue
- $5.156B
$272.8B ÷ $5.156B = 52.9x
- Current market cap
- $272.8B
- GAAP TTM net income
- $1.044B
$272.8B ÷ $1.044B = 261.3x
GAAP TTM net margin 20.2%TTM vs. Annualized Revenue
Recent-quarter and guidance annualizations are simple quarter-revenue ×4 comparisons, not forecasts for the next 12 months.
View high-point comparison
HIGH-POINT COMPARISON
Sources and calculations checkedAll-Time Closing High
2026-06-18Quarter revenue $1.490B ×4
Guidance revenue midpoint $1.260B ×4
At peakCurrentChange
TTM revenue$4.920B$5.156B+4.8%
Latest quarter$1.490B$1.289B-13.5%
Public guidance$1.260B$1.380B+9.5%
Only information available at the peak is used. FY2027 Q1 results announced after the peak are not applied retroactively. The comparison uses only FY2026 results and FY2027 Q1 guidance that were public at the time.
At the peak, investors had access to annual revenue, royalty and license growth, including the increase in data-center royalties. The timing variability of license revenue and the effect of R&D investment on GAAP margins also remained important considerations.
The P/S and GAAP P/E at the time had to be assessed against both the durability of the disclosed growth and the degree of future margin expansion required.
Close $439.46 × 1.07B shares outstanding = approximately $469.4B market cap at the peak.
CURRENT MARKET CAP REQUIREMENTS
Current Market Cap BasisRequirements Implied by the Current Market Cap
Implied 2030 Revenue CAGR10.7% annuallyTTM revenue growth +25.1% YoY
This is the 2030 revenue implied by the current market cap under the displayed valuation assumptions.
Share-count changes and dividends are not included in this calculation.
Conditional Business Scenarios
Conservative · Base · OptimisticCurrent TTM$5.2B
Latest-quarter annualized$5.2B
Guidance-midpoint annualized$5.5B
Assumed 2030 revenue$8.7BRevenue CAGR from TTM 14.0%
CAGR from annualized latest-quarter revenue 14.0%CAGR from annualized guidance midpoint 12.0%
- Assumed 2030 net margin
- 21.0%Current 20.2%
- Assumed 2030 P/E
- 140.0xCurrent 261.3x
- Converted P/S
- 29.4x
Conditional Shareholder Return BridgeImplied Share Value Change Shareholder Return Components
Conditional Market Cap$255.8BVs. current -6.2%Conditional market cap is calculated from the revenue, net margin, and multiple assumptions.
Conditional Projected Shares1.10BVs. current +2.6%Reflects company-specific share-count assumptions.
Conditional Implied Share Value$233.38Current $255.39 · -8.6%Conditional market cap and conditional projected shares determine implied share value.
Conditional Total Shareholder Return-8.6%Implied Share Value Change -8.6% · Dividend Contribution +0.0 ppAnnualized -2.2%
View Conditional Shareholder Return Details
Shows the relationship among market cap, share count, implied share value, and shareholder return.
- Market Cap
- $272.8B$255.8B
- Shares
- 1.07B1.10B
- Implied Share Value Change
- -8.6%
- Implied Share Value Change
- -8.6%
- Dividend Contribution
- +0.0 pp
- Conditional Total Shareholder Return
- -8.6%
Arm architecture adoption continues across data center, PC, automotive and other markets, but R&D also rises substantially with revenue, limiting the reduction in cost intensity.
Assumed 2030 revenue$9.5BRevenue CAGR from TTM 16.5%
CAGR from annualized latest-quarter revenue 16.5%CAGR from annualized guidance midpoint 14.5%
- Assumed 2030 net margin
- 26.0%Current 20.2%
- Assumed 2030 P/E
- 160.0xCurrent 261.3x
- Converted P/S
- 41.6x
Conditional Shareholder Return BridgeImplied Share Value Change Shareholder Return Components
Conditional Market Cap$395.2BVs. current +44.9%Conditional market cap is calculated from the revenue, net margin, and multiple assumptions.
Conditional Projected Shares1.10BVs. current +2.6%Reflects company-specific share-count assumptions.
Conditional Implied Share Value$360.58Current $255.39 · +41.2%Conditional market cap and conditional projected shares determine implied share value.
Conditional Total Shareholder Return+41.2%Implied Share Value Change +41.2% · Dividend Contribution +0.0 ppAnnualized +9.0%
View Conditional Shareholder Return Details
Shows the relationship among market cap, share count, implied share value, and shareholder return.
- Market Cap
- $272.8B$395.2B
- Shares
- 1.07B1.10B
- Implied Share Value Change
- +41.2%
- Implied Share Value Change
- +41.2%
- Dividend Contribution
- +0.0 pp
- Conditional Total Shareholder Return
- +41.2%
License and royalty revenue grows as Arm gains architecture share in new markets. R&D continues to rise, but revenue grows faster, lowering cost intensity and creating operating leverage.
Assumed 2030 revenue$10.0BRevenue CAGR from TTM 18.0%
CAGR from annualized latest-quarter revenue 18.0%CAGR from annualized guidance midpoint 16.0%
- Assumed 2030 net margin
- 30.0%Current 20.2%
- Assumed 2030 P/E
- 180.0xCurrent 261.3x
- Converted P/S
- 54.0x
Conditional Shareholder Return BridgeImplied Share Value Change Shareholder Return Components
Conditional Market Cap$540.0BVs. current +98.0%Conditional market cap is calculated from the revenue, net margin, and multiple assumptions.
Conditional Projected Shares1.10BVs. current +2.6%Reflects company-specific share-count assumptions.
Conditional Implied Share Value$492.70Current $255.39 · +92.9%Conditional market cap and conditional projected shares determine implied share value.
Conditional Total Shareholder Return+92.9%Implied Share Value Change +92.9% · Dividend Contribution +0.0 ppAnnualized +17.9%
View Conditional Shareholder Return Details
Shows the relationship among market cap, share count, implied share value, and shareholder return.
- Market Cap
- $272.8B$540.0B
- Shares
- 1.07B1.10B
- Implied Share Value Change
- +92.9%
- Implied Share Value Change
- +92.9%
- Dividend Contribution
- +0.0 pp
- Conditional Total Shareholder Return
- +92.9%
Arm architecture share and license and royalty revenue grow strongly. Revenue outpaces R&D growth, reducing cost intensity further and producing greater operating leverage.
This analysis presents long-term valuation scenarios. Scenario inputs are conditional assumptions and are not company guidance or market consensus.
Conditional Shareholder Return Calculator
P/E and P/S are linked through the assumed net margin.
Conditional Shareholder Return BridgeImplied Share Value Change Shareholder Return Components
Conditional Market Cap$395.2BVs. current +44.9%Conditional market cap is calculated from the revenue, net margin, and multiple assumptions.
Conditional Projected Shares1.10BVs. current +2.6%Reflects company-specific share-count assumptions.
Conditional Implied Share Value$360.58Current $255.39 · +41.2%Conditional market cap and conditional projected shares determine implied share value.
Conditional Total Shareholder Return+41.2%Implied Share Value Change +41.2% · Dividend Contribution +0.0 ppAnnualized +9.0%
View Conditional Shareholder Return Details
Shows the relationship among market cap, share count, implied share value, and shareholder return.
- Market Cap
- $272.8B$395.2B
- Shares
- 1.07B1.10B
- Implied Share Value Change
- +41.2%
- Implied Share Value Change
- +41.2%
- Dividend Contribution
- +0.0 pp
- Conditional Total Shareholder Return
- +41.2%
This is a conditional arithmetic result based on the displayed assumptions, not a forecast of future share price.
Original Sources
Official Arm IR/SEC materials and market data.
Methodology, Terms and Operating Principles
What is GAAP?
GAAP refers to U.S. generally accepted accounting principles. GAAP financial results include items such as stock-based compensation and amortization that companies may adjust out of non-GAAP measures.
Company-Specific Valuation Assumptions
VALUFOUR does not apply the same valuation multiples to every company. Conditional scenarios are analytical assumptions based on each company’s business model, revenue scale, growth rate, profitability, durability of growth and historical valuation range. They are not forecasts or recommendations.
VALUFOUR Operating Principles
- We provide the same information to every user.
- We do not recommend buying, selling or holding a security.
- We do not provide personalized investment advice.
- Valuation and shareholder-return results are conditional calculations based on input assumptions.
- We distinguish facts disclosed in filings from analytical assumptions.
- Advertising and affiliate relationships do not influence the analysis results.
- Official filings and each user’s own judgment should take precedence over VALUFOUR’s analysis.
Advertising and Use of Index Names
Analysis cards are clearly separated from advertising, and we do not place affiliate ads that encourage purchases of specific securities. Index names, exchange names and company names are used only as references to describe the subjects of analysis and sources. We do not use wording or logos that imply official affiliation, endorsement or sponsorship.
ACV
The annualized contract value of active license agreements. It is not the same as license revenue recognized in the current period; rather, it indicates the durability and scale of the active licensing base.
License
Revenue generated when a customer contracts for the right to use Arm architecture or design IP. If the resulting design advances to volume production, it can later generate royalty revenue.
Royalty
Recurring revenue earned when customers ship chips incorporating Arm technology.
RPO
Contracted consideration that has not yet been recognized as revenue. It provides a backlog-like indicator of future License & Other revenue.
CPU architecture
The foundational rules and structure that determine how a CPU processes instructions. Rather than mass-producing chips itself, Arm licenses this architecture and related IP to customers.
CSS
Arm's pre-integrated compute subsystem, which combines more components than a CPU core alone. It can reduce customers' development work and create opportunities for higher-value license and royalty revenue.
R&D
Research and development spending on future products, including next-generation architectures, CPUs and CSS.