Arm Holdings Shares Move Lower Following Q1 Earnings: Revenue Miss, EPS In Line, Soft Q2 Earnings Guidance

Arm Holdings Plc ARM reported financial results for the first quarter of fiscal 2026 on Wednesday after the bell. Here’s what you need to know from the print.

Q1 Earnings: Arm reported fiscal first-quarter revenue of $1.053 billion, missing analyst estimates of $1.055 billion. The chip designer reported first-quarter adjusted earnings of 35 cents per share, in line with analyst estimates, according to Benzinga Pro.

First-quarter revenue was up 12% year-over-year. Royalty revenue climbed 25% year-over-year to $585 million, driven by the adoption of the Armv9 architecture, the ramp of chips based on Arm CSS and increased usage of Arm-based chips in data centers. The company said license and other revenue declined 1% year-over-year.

Annualized contract value (ACV) was up 28% year-over-year to approximately $1.53 billion. Arm said it generated $332 million of operating cash flow and $150 million of free cash flow in the first quarter.

The company ended the period with $2.91 billion in cash, cash equivalents and short-term investments.

“Arm is powering AI workloads everywhere with unmatched performance and energy efficiency,” said Rene Haas, CEO of Arm Holdings.

“Our Q1 FYE26 results exceeded $1 billion in revenue for the second straight quarter as royalties grew across all target end markets, demonstrating the strength of Arm as the AI platform of choice — from the cloud to the smallest edge devices.”

Outlook: Arm expects second-quarter revenue of $1.01 billion to $1.11 billion versus estimates of $1.056 billion. The company anticipates second-quarter adjusted earnings of 29 cents to 37 cents per share versus estimates of 35 cents per share.

Management will discuss the quarter on an earnings call slated for 5 p.m. ET.

ARM Price Action: Arm shares were down 8.31% in Wednesday’s after-hours session, trading at $149.75 at the time of publication, according to Benzinga Pro.

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