Arm Holdings plc. - ADR

Strong Q1 FY27 results (record quarter) - Revenue $1.29B, up 22% YoY (highest Q1 in Arm’s history). - Royalty revenue $715M, up 22% YoY (also highest ever Q1); driven primarily by cloud AI/data center adoption plus continued growth in networking/DPUs/SmartNICs. - Licensing revenue $574M, up 23% YoY (record Q1). - Non-GAAP EPS $0.45, up 29% YoY, above the top end of guidance; FCF $665M in the quarter.

Guidance for Q2 FY27 remains strong (but smartphone drag persists) - Revenue forecast: $1.38B ± $50M (midpoint ~22% YoY growth). - License & other: up ~30% YoY. - Royalties: up in the low teens YoY (management indicated Q2 royalty growth ~13%), reflecting incremental weakness in smartphones due to memory/BOM cost pressures. - Non-GAAP OpEx: ~$780M; Non-GAAP EPS: $0.47 ± $0.04. - Big takeaway: Arm expects cloud AI outperformance to offset smartphone weakness, rather than a broad slowdown.

Arm AGI CPU momentum improved; confidence increased on the $1B-plus opportunity - Arm introduced the Arm AGI CPU in March; “initial product delivered” to multiple customers. - Management says it secured manufacturing capacity for the initial $1B opportunity and now sees demand > $2B, with increased confidence to achieve >$1B (confidence improved over the last ~90 days). - Asked about what enables extra ramp: CEO said confidence improved across the stack—wafers, substrates, test capacity, memory, etc. (supply chain constraints remain the key limiter).