What changed
On November 4, 2026, Arm (NASDAQ: ARM) announced its second quarter fiscal year 2027 results, revealing a 27% year-over-year revenue increase to $1.44 billion. This marks the highest revenue recorded for Arm in a second quarter. The growth was fueled by a 50% year-over-year rise in licensing and other revenue to $773 million, alongside a doubling of royalty revenue to $670 million, with data center royalties seeing significant growth.
What this means in practice
The company's partners shipped over 10 billion Arm-based chips during the quarter, a 1.5 billion increase year-over-year, highlighting the platform's scale. Arm's business is divided into two main areas: the IP business, where partners are investing heavily in Arm technology, and the new silicon business, where demand for the Arm AGI CPU is strong. Arm AGI CPU revenue is projected to reach up to $2 billion over FYE27 and FYE28, with purchase orders secured from multiple customers through calendar 2027. The first commercial deliveries are expected in Q4 FYE27.
Limitations and availability
Arm-based server market share at top hyperscalers more than tripled from 15% in 2024 to over 50% in 2025, with expectations of exceeding 60% by the end of 2026. Oracle Cloud Infrastructure plans to offer Arm AGI CPU instances in 2027. Independent testing showed Arm AGI CPU delivering approximately 2x the performance per rack versus AMD EPYC 9755. Arm also introduced the Arm Neoverse CSS N4, offering up to 2x performance per socket and 25% better performance per watt than the prior generation.
