Strong Q1 Performance: Arm reported total revenue of $1.05 billion in Q1 FY 2026, marking its highest revenue quarter to date. Royalty revenue was $585 million, an increase of 25% year-on-year, benefiting from robust growth in AI workloads across various end markets, including smartphones, data centers, automotive, and IoT.

Licensing Revenue Trends: Licensing revenue was $468 million, a slight decrease of 1% year-on-year. However, the annualized contract value (ACV) increased by 28% year-on-year, indicating strong underlying growth despite fluctuations due to timing and size of license agreements.

AI and Compute Demand: The strong momentum in AI workloads is driving unprecedented demand for Arm's compute solutions. Over 70,000 enterprises now use Arm Neoverse data center chips, marking a 40% year-over-year increase. The company anticipates that its market share among hyperscalers will approach 50% this year, up from approximately 18% a year ago.