Arm reports revenue growth amid declining net profits

Arm reported a 27% increase in revenue for the second quarter of fiscal year 2027, reaching $1.44 billion. This growth is driven by the global shift toward energy-efficient processors and a 50% increase in IP licensing, which reflects manufacturer confidence in future products.

Despite the revenue rise, net profits fell to $130 million from $238 million in the previous period. Diluted earnings per share decreased by 45% to $0.12. The company attributed the profit compression to increased costs related to aggressive research, development, and commercial expansion.

Arm management has set a target of up to $2 billion in revenue from Arm AGI CPUs during the 2027-2028 period, betting on the demand for artificial intelligence processors. The company provided third-quarter revenue guidance of approximately $1.54 billion.