Financial Data and Key Metrics Changes - Revenue for Q2 2026 reached $1.14 billion, up 34% year-on-year, marking the best second quarter ever and the third consecutive billion-dollar quarter [5][11] - Royalty revenue hit a record $620 million, up 21% year-on-year, driven by growth across all major markets [5][12] - Licensing revenue increased by 56% to $515 million, reflecting strong demand for next-generation architectures [5][12] - Non-GAAP operating income was $467 million, up 43% year-on-year, resulting in a non-GAAP operating margin of 41.1% [15][11] - Non-GAAP EPS was $0.39, exceeding the midpoint of guidance by 6 cents [15][11] Business Line Data and Key Metrics Changes - Royalty revenue from smartphones grew significantly, driven by higher royalty rates per chip, while data center royalties doubled year-on-year due to the deployment of Arm-based chips by hyperscaler companies [12][5] - The addition of five new CSS licenses brought the total to 19 across 11 companies, indicating strong demand for compute subsystems [8][12] - CSS has become a starting point for customers building next-generation silicon, with significant interest in the newly launched Lumix CSS platform [9][12] Market Data and Key Metrics Changes - The data center market saw unprecedented compute demand, with Arm's neoverse royalties more than doubling year-on-year [5][20] - China accounted for approximately 22% of sales in Q2, with strong demand driven by licensing deals [67][68] - The mix of royalty revenues from cloud and networking is expected to increase, potentially reaching 15-20% of total royalty revenues [52][55] Company Strategy and Development Direction - The company announced a strategic partnership with Meta to enhance AI efficiency across various compute layers [6][5] - Continued investment in R&D is prioritized to meet the increasing demand for Arm technology, particularly in AI and edge computing [11][15] - The company is exploring opportunities to expand beyond its current platform into additional compute subsystems, chiplets, or complex SOCs [10][11] Management's Comments on Operating Environment and Future Outlook - Management highlighted that power has become a bottleneck in data centers, driving the need for more efficient compute platforms [19][20] - The demand for compute is expected to grow as AI workloads transition from cloud to edge devices, presenting significant opportunities for Arm [63][64] - The company remains confident in its long-term growth trajectory and strategy to enable AI everywhere [16][11] Other Important Information - Non-GAAP operating expenses were $648 million, up 31% year-on-year, reflecting strong R&D investment [15][11] - The company signed a deal to acquire Dream Big Semiconductor, which will enhance its offerings in high-speed communications [24][11] Q&A Session Summary Question: AI opportunity and data center deals - Management expressed confidence in Arm's strategic positioning for AI deals, noting that power efficiency is critical and Arm's technology is about 50% more efficient than competitors [19][20] Question: Acquisition of Dream Big Semiconductor - The acquisition aims to enhance Arm's capabilities in scale-up and scale-out networking, which is crucial for data center demands [24][11] Question: Related party revenue and SoftBank relationship - Management indicated a significant increase in related party revenue, with ongoing collaboration with SoftBank providing opportunities for technology integration in data centers [26][27] Question: OPEX and go-to-market strategies - Management acknowledged the increase in OPEX but emphasized that revenue growth is outpacing OPEX increases, ensuring a balanced approach to investment [30][31] Question: SoftBank contribution and licensing pipeline - The contribution from SoftBank was approximately $178 million, with a strong licensing pipeline expected for the remainder of the year [36][37] Question: Revenue opportunity from Stargate - Management noted that the demand for compute has grown since the Stargate announcement, with expectations for significant revenue opportunities in the coming years [44][45] Question: Lumix CSS royalty revenues - Early royalty revenues from Lumix CSS were reported, indicating faster-than-expected adoption due to existing partnerships [46][47] Question: Chip demand and implications for Arm - Management highlighted the shift from cloud to edge computing, with increasing demand for Arm's scalable solutions for AI workloads [63][64] Question: Performance in China - Strong demand in China was attributed to significant licensing deals, with licensing being a larger driver than royalties this quarter [67][68]

The British semiconductor company's fiscal second-quarter profit more than doubled as revenue jumped, driven by demand for its compute platform. ...

Market Overview - Major U.S. indices rose, with the Dow Jones up 225.76 points (0.48%) closing at 47,311 points, Nasdaq up 151.16 points (0.65%) at 23,499.8 points, and S&P 500 up 24.74 points (0.37%) at 6,796.29 points [1] - European indices also saw gains, with Germany's DAX30 up 102.18 points (0.43%) at 24,047.82 points, and the UK's FTSE 100 up 61.29 points (0.63%) at 9,776.25 points [2] Employment Data - The ADP report indicated an increase of 42,000 jobs in October, surpassing the Dow Jones estimate of 22,000 jobs, while September's data was revised to a loss of 29,000 jobs [5] - The ISM reported that the non-manufacturing PMI rose from 50.0 in September to 52.4 in October, indicating a recovery in service sector activity, although employment remains weak with the employment index at 48.2 [6] Commodity Prices - Crude oil prices fell, with light crude down $0.96 to $59.60 per barrel (1.59% drop) and Brent crude down $0.92 to $63.52 per barrel (1.43% drop) [2] - Gold prices increased by over 1%, reaching $3,979.05 [4] Company News - Google will assist Apple in running Siri, with Apple expected to pay approximately $1 billion annually for Google's AI technology [9] - ARM Holdings reported Q3 revenue of $1.135 billion, a 34% year-over-year increase, with adjusted EPS of $0.22 compared to $0.10 last year [9] - Qualcomm's Q4 revenue for fiscal year 2025 was $11.27 billion, a 10% increase year-over-year, despite a net loss of $3.117 billion due to a one-time tax expense [10]

Market Overview - The market is experiencing a rebound with the Dow up more than 300 points, S&P 500 up about 0.7%, and NASDAQ rallying about 1% [2][50] - Trade-sensitive stocks, including automakers and apparel retailers, are seeing gains following Supreme Court hearings regarding President Trump's tariff policies [2][10] Supreme Court Hearing on Tariffs - The Supreme Court justices, including Chief Justice John Roberts, expressed skepticism towards the Trump administration's legal arguments for tariffs, suggesting they may be viewed as taxes on Americans [6][7][10] - The questioning from both liberal and conservative justices indicates a potential challenge to the legality of Trump's blanket tariffs, which could impact market expectations [5][10][13] Labor Market and Federal Reserve Policy - ADP reported a surprising addition of 42,000 jobs in October, reversing a decline from September, which may influence Federal Reserve policy discussions [14] - Fed Governor Steven Myron indicated that the labor market poses a greater risk than inflation, suggesting a more cautious approach to monetary policy [15][16] AI and Technology Sector Insights - Concerns are emerging regarding AI valuations, with analysts cautious about the sustainability of current business models and potential market corrections [20][21][22] - Companies are underweight in AI-related stocks, favoring investments in European markets due to attractive valuations [23][24] Scott's Miracle Grow Performance - Scott's Miracle Grow reported a decrease in net sales but improved gross margins and market share, indicating a recovery phase [28][30] - The lawn and garden sector is described as recession-resistant, with strong consumer demand and growth in DIY projects [33][34] Qualcomm's Financial Results - Qualcomm's Q4 results showed earnings per share of $3, beating expectations, with revenue at $11.27 billion, also above estimates [54][57] - The company is diversifying into automotive and IoT markets, with a focus on AI chip development to enhance growth potential [59][66] Robinhood's Earnings Report - Robinhood's Q3 earnings showed a beat on both top and bottom lines, with significant net deposit growth, although initial stock reactions were negative due to high expectations [83][88] - The company is exploring opportunities in prediction markets, which could diversify revenue streams and enhance long-term growth potential [90][92] ARM Holdings Performance - ARM reported earnings per share of 39 cents, beating estimates, with revenue of $1.14 billion, also exceeding expectations [70][72] - The company is well-positioned in the chip industry, with strong demand for its designs across various markets, including data centers and IoT [79][80]

Financial Highlights - Total revenue reached $1135 million, a 34% year-over-year increase[11, 24] - Royalty revenue grew to $620 million, up 21% year-over-year, driven by Arm technology adoption and increased usage in data centers[24] - License and other revenue increased significantly to $515 million, a 56% year-over-year increase, due to the timing of high-value license agreements[24] - Non-GAAP operating income was $467 million, resulting in a non-GAAP operating margin of 41%[44] - Trailing twelve months Non-GAAP free cash flow was $1073 million[11] Market and Technology Trends - Arm forecasts its market share with top hyperscalers will approach 50% in 2025[13] - The cumulative number of Arm-based chips shipped since 1990 exceeds 325 billion[12] - Armv9 architecture adoption is driving royalty growth, commanding higher royalties per chip compared to previous architectures[25, 28] - Semiconductor industry revenue is forecasted to grow at a CAGR of 8%[17] Compute Subsystems (CSS) - Arm signed another three CSS licenses in the quarter, for chips used in smartphones, PCs, and AI data centers[14] - CSS substantially increases Arm's royalty revenue per chip[41]

Core Insights - Arm Holdings Plc. reported strong second-quarter earnings, surpassing both revenue and earnings estimates, leading to a positive stock movement [1][2]. Financial Performance - Quarterly earnings were reported at 39 cents per share, exceeding the consensus estimate of 33 cents [2]. - Revenue for the quarter reached $1.13 billion, beating the analyst consensus estimate of $1.06 billion and showing a significant increase from $844 million in the same period last year [2]. - Royalty revenue grew by 21% year-over-year to $620 million [5]. - Licensing and other revenue increased by 56% year-over-year to $515 million [5]. - Annualized contract value (ACV) rose by 28% year-over-year to $1.6 billion [5]. Stock Performance - Following the earnings report, Arm Holdings stock rose by 4.41%, reaching a price of $167.25 in extended trading [3].

SAN FRANCISCO (Reuters) -Chip technology provider Arm Holdings (ARM) gave a fiscal third-quarter forecast on Wednesday that topped Wall Street's expectations, boosted by the boom in artificial intelligence computing. Shares of Arm ​rallied 6% in premarket trading on Thursday as investors digested the surprise outlook. For the current fiscal quarter, Arm ‌forecast revenue of $1.23 billion at the midpoint of its guidance, which exceeded the average analyst estimate of $1.1 billion, according to LSEG data. ...

Core Insights - Arm Holdings, a chip technology provider, has issued a fiscal third-quarter forecast that exceeds Wall Street's expectations, driven by the surge in artificial intelligence computing [1] Company Summary - The fiscal third-quarter forecast from Arm Holdings indicates strong performance, attributed to the increasing demand for AI computing solutions [1]

Earnings Reports Overview - A busy earnings week begins on Wednesday with notable companies such as Novo Nordisk A/S and McDonald's Corporation reporting pre-market [1] - Technology and semiconductor companies including Applovin Corporation, QUALCOMM Incorporated, and Arm Holdings plc are scheduled to report after market close on the same day [1] - Thursday will feature earnings from AstraZeneca PLC and ConocoPhillips pre-market, while Friday will highlight reports from Constellation Energy Corporation, KKR & Co. Inc., and Enbridge Inc, focusing on utilities and financial sectors [1] - The following Monday and Tuesday are expected to have fewer major market movers, indicating a potential slowdown in earnings announcements [1]

Core Insights - SoftBank Group's shares fell by 10% in Japan, reflecting broader concerns over inflated valuations in AI-related stocks, resulting in a loss of approximately $13 billion from CEO Masayoshi Son's net worth [1][2]. Group 1: Market Trends - The decline in SoftBank's stock is part of a larger trend affecting AI-linked companies, with investors expressing apprehension about inflated valuations in the market's most popular trade [2]. - On a single day, the AI market experienced a significant downturn, erasing over $500 billion in market value, despite strong earnings from Palantir Technologies [4]. Group 2: Company Performance - SoftBank Group holds a majority stake in Arm Holdings, which saw its shares drop by 4.71% amid market concerns [3]. - Samsung Electronics and SK Hynix also experienced declines in their shares, with decreases of 4.1% and 1.19%, respectively [3]. Group 3: Industry Reactions - CEO Alex Karp of Palantir criticized short-sellers for betting against profitable companies in the AI sector, arguing that it is illogical to bet against firms driving the industry [5]. - Industry experts, such as Dan Ives from Wedbush, dismissed warnings from short-sellers as misinterpretations of the long-term direction of companies in the AI space [6].