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Arm Holdings reported record second-quarter revenue of $1.44 billion for fiscal 2027, an increase of 27% year over year, as demand for its chip designs and computing technology continued to benefit from investment in artificial intelligence infrastructure.
The results, announced on November 4 for the quarter ended September 30, mark the company’s fifth consecutive quarter of revenue growth above 20%. Arm said its licensing business strengthened during the period, while royalties from data-centre products doubled compared with the same quarter last year.
Licensing Revenue Leads Quarterly Growth
Arm reported licensing and other revenue of $773 million, up 50% year over year. Royalty revenue reached $670 million, supported by higher demand for processors based on the company’s technology.
Licensing revenue reflects payments from companies that use Arm’s intellectual property to develop their own chips, while royalty revenue is generated as partners ship products containing Arm technology. The two streams provide different indications of demand across the semiconductor ecosystem.
Arm also said its partners shipped more than 10 billion Arm-based chips during the quarter, an increase of 1.5 billion units from the same period a year earlier.
AI Infrastructure Supports Data Centre Demand
The company attributed part of its growth to rising demand for computing capacity used in AI workloads. Data-centre operators are expanding infrastructure to support increasingly demanding applications, creating opportunities for processor architectures designed to balance performance and power efficiency.
Arm said data-centre royalty revenue doubled year over year. It also reported continued demand for its Arm AGI CPU, its move into supplying its own processor silicon rather than relying exclusively on licensing designs to partners.
The company said purchase orders for Arm AGI CPU extended through calendar 2027, with initial commercial deliveries expected in the fourth quarter of fiscal 2027. Its stated ambition of up to $2 billion in revenue from the product across fiscal 2027 and fiscal 2028 remains a forward-looking target rather than revenue already recognised.
Broader Adoption Across Computing Markets
Arm’s technology is used in smartphones, personal computers, servers, automotive systems and other connected devices. The company said Arm-based processors accounted for approximately 20% of global PC shipments, while demand for automotive and physical AI applications also contributed to growth.
The results reinforce Arm’s position in a semiconductor market increasingly shaped by AI infrastructure investment. However, future performance will depend on partner shipments, customer adoption of its new processor products and the ability to sustain demand across different computing markets.
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