Arm Beats Revenue Estimates at $1.44 Billion as Licensing Surges

Arm Holdings beat Wall Street estimates for fiscal second quarter revenue on Wednesday, Nov. 4, 2026. The company reported revenue of $1.44 billion, ahead of the analysts average estimate of $1.38 billion compiled by LSEG, driven by higher royalty payments and licensing fees from customers deploying its chip architecture in AI related computing products.

Adjusted profit was 52 cents per share, surpassing estimates of 47 cents per share. The reported period ended September 30, 2026. Even with the beat on the top line and on profit, Arm shares fell 1.8 percent in extended trading on Wednesday, Seeking Alpha reported at 21:14 UTC, after the results and the guidance for the next quarter were published.

Licensing carried the quarter

Licensing revenue was $773 million, compared with estimates of $625.1 million. That result was well ahead of what analysts had expected and it carried the quarter.

Royalty revenue told a different story. Royalties rose 8 percent to $670 million for the second quarter, compared with estimates of $720.8 million. That was a miss on royalties, even as total revenue beat estimates. Readers weighing the report have to hold both facts at once: the licensing line came in far above the estimate, the royalty line came in below it, and the combined total still cleared the $1.38 billion estimate by $60 million.

Guidance just above estimates

Arm projected third quarter revenue of $1.54 billion, compared with the average analyst estimate of $1.53 billion. Seeking Alpha reported the guidance as $1.54 billion plus or minus $50 million, with adjusted earnings guidance of $0.52 to $0.60 per share against $0.55 expected.

The guidance range therefore sits close to the estimate rather than far above it. The middle of the revenue range matches the $1.54 billion figure Arm projected, and the earnings range runs from below the expected $0.55 to above it. That helps explain a muted market reaction on a day when the reported numbers themselves beat estimates.

Server chips and the legal backdrop

Arm said its server chip architecture accounted for more than 50 percent of deployments at major cloud providers in 2025 and is expected to exceed 60 percent by the end of 2026. That claim sits at the centre of the AI data centre demand that Reuters linked to the higher royalty payments and licensing fees in the quarter.

The results also arrived against a legal backdrop. Last month a Delaware jury found Arm breached parts of its licensing agreement with Qualcomm and interfered with Qualcomm relationship with Meta, but awarded only $2 in damages, leaving key disputes over royalties and future licensing terms to be decided by a judge. Those disputes concern the same royalty and licensing income that drove this quarter, so the court decision still to come matters for how Arm gets paid in future periods.

For now the record for the quarter ended September 30, 2026 is clear. Revenue beat, profit beat, licensing beat by a wide margin, royalties missed, guidance landed just above estimates, and the shares slipped 1.8 percent in extended trading.