ARM Reports Record Q1 Earnings Amid Cloud AI Growth and Supply Constraints
ARM Holdings PLC (NASDAQ:ARM) reported record first-quarter fiscal 2027 results with revenue rising 22% year over year to $1.29 billion, driven by strong performance in cloud AI infrastructure and edge devices. Non-GAAP earnings per share increased 29% to $0.45, exceeding guidance. Licensing and royalty revenues both reached record levels at $574 million and $715 million respectively. Cloud AI was the largest growth driver with data-center royalty revenue more than doubling as hyperscalers like NVIDIA, Google, AWS, and Microsoft expanded Arm-based deployments. However, smartphone market weakness and elevated memory prices led to a downward revision of full-year royalty-growth expectations from around 20% to the high teens. The company also highlighted growing demand for its new AGI CPU, with potential revenue exceeding $2 billion by fiscal years 2027–2028. Despite this optimism, supply constraints in wafers, substrates, testing, and memory remain a challenge.
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Topics: ai_infrastructure cloud_ai guidance_update revenue_growth royalty_revenue