Arm reported record fiscal Q3 FY2026 results (quarter ended December 31, 2025), with revenue up 26% year-on-year to $1.242 billion—its fourth consecutive quarter above $1 billion. Royalty revenue rose 27% to a record $737 million, while licensing and other revenue increased 25% to $505 million; Arm attributed growth to higher-royalty technologies such as Armv9 and Arm Compute Subsystems (CSS), plus expanding usage in data centers, smartphones, and edge AI.
Arm’s Q3 non-GAAP EPS increased to $0.43 as the company continued to raise R&D spending, and it guided fiscal Q4 FY2026 revenue to about $1.47 billion (±$50 million) with non-GAAP EPS of $0.58 (±$0.04). Arm also reported annualized contract value (ACV) of $1.62 billion (+28% YoY) and remaining performance obligations (RPO) of $2.148 billion (-8% YoY).
On product and ecosystem momentum, Arm said it now has 21 CSS licenses across 12 companies, with five customers shipping CSS-based chips, and it highlighted scaling adoption of Arm-based CPUs in cloud infrastructure—citing more than one billion Arm Neoverse cores deployed and an expectation that Arm’s share among top hyperscalers will approach 50%. Arm also pointed to higher-core-count server CPUs from AWS, Microsoft, NVIDIA, and Google as examples of the trend toward CPU-heavy orchestration for always-on, agent-based inference workloads.
- Q3 FY2026 revenue: $1.242B (+26% YoY); royalty revenue: $737M (+27% YoY); licensing and other: $505M (+25% YoY).
- Non-GAAP EPS: $0.43; Q4 FY2026 guidance: revenue ~$1.47B (±$50M), non-GAAP EPS ~$0.58 (±$0.04).
- CSS momentum: 21 licenses across 12 companies; five customers shipping CSS-based chips.
- Cloud/AI positioning: Arm cited >1B Neoverse cores deployed and growing hyperscaler penetration tied to power-efficiency and higher core counts.
“Arm delivered a record revenue quarter as demand for AI computing on our platform continues to accelerate” said Rene Haas, CEO. “Record royalty results in the third quarter reflect the growing scale of our ecosystem, as customers design the Arm compute platform into next-generation systems across cloud, edge, and physical environments to deliver high-performance, power-efficient AI. The fundamentals of the Arm business have never been stronger.”
🌐 Analysis: Arm is explicitly framing “agent-based inference” as a CPU-led orchestration problem, which aligns with hyperscalers pushing higher core-count general-purpose processors alongside GPU and DPU roadmaps. The next competitive question is how quickly Arm-based server platforms expand beyond first-party hyperscaler silicon (e.g., Graviton, Cobalt, Axion) into broader OEM and enterprise server ecosystems where x86 incumbents and emerging RISC-V initiatives continue to invest.
