Arm reaches $1.44 billion in quarterly revenue as data-center royalties double

Arm’s growing data-center business helped deliver a record second quarter, but its revenue beat was not a royalty beat. In results published November 4, the chip designer posted $1.44 billion in fiscal 2027 second-quarter revenue, up 27%. Licensing and other revenue rose 50%, while total royalties fell below the consensus cited before earnings.

Licensing carries the revenue beat

The quarter ended September 30, 2026, and marked Arm’s fifth consecutive quarter with revenue growth above 20%. Total sales exceeded the $1.38 billion consensus reported by Moomoo Insights ahead of the release by about $60 million. That preview said the consensus matched Arm’s prior revenue guidance, putting the result above both reference points.

The mix explains the uneven result. Licensing and other revenue reached $773 million, while royalties contributed $670 million. Moomoo had cited a $706 million royalty consensus, leaving that business $36 million below the estimate. Its licensing consensus was $668 million, although Arm’s reported category also includes other revenue.

Within royalties, data centers were a stronger spot: Arm said revenue there doubled from a year earlier. That answers one question raised in the earnings preview—whether the business could sustain its recent pace. It does not mean total royalties doubled. Arm described the licensing increase separately as a leading indicator of future royalty growth.

$773 millionLicensing and other revenue

Up 50% from a year earlier.

$670 millionRoyalty revenue

Below the $706 million consensus cited by Moomoo before earnings.

Processor orders now extend through 2027

Arm also used the earnings update to describe progress in a different business: selling its own processor directly to customers. Its AGI CPU, a central processing unit, sits alongside the intellectual-property business through which partners use Arm technology in their chips. Arm says both businesses draw on the same computing platform and software ecosystem.

The company said it has secured purchase orders from multiple AGI CPU customers extending through calendar 2027. First commercial deliveries remain on track for the fourth quarter of fiscal 2027. That timetable is a delivery plan, not a completed shipment milestone; the orders describe business Arm expects to fulfill rather than sales already recorded in this quarter.

Arm said its confidence in achieving up to $2 billion in AGI CPU revenue across fiscal 2027 and fiscal 2028 had increased over the past 90 days. It pointed to additional supply and customer mix.

A larger server footprint behind the outlook

The existing partner business continues to operate at a much larger shipment scale. Arm said partners shipped more than 10 billion Arm-based chips during the quarter, an increase of 1.5 billion from a year earlier. That figure covers Arm-based chips broadly, not just data-center processors or the company’s own AGI CPU.

For servers at the largest cloud operators, Arm described a rapid shift toward its architecture. It put Arm-based server share at top hyperscalers at 15% in calendar 2024 and above 50% in 2025. Based on current deployments across AWS, Google, Microsoft and Nvidia platforms, the company expects that share to exceed 60% by the end of 2026.

For its direct silicon business, Arm highlighted Oracle Cloud Infrastructure’s plans to offer AGI CPU instances in 2027. That planned cloud offering provides a named deployment destination for the processor.