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Arm Q2 Beat Fueled by Data Center Royalties; Q3 Guidance Cautious

Nov 4, 2026, 4:57 PM EST1 sourcesAI-analyzed

Why it may matterVerify against the original reporting

Beat on EPS/revenue but Q3 guidance lower than consensus, plus after-hours selling pressure signal near-term headwinds despite positive long-run trends.

AI summary

What happened, with direct paths to the underlying reporting

Arm beat Q2 expectations with EPS of 0.52 and revenue of $1.44B, led by data-center royalties that nearly doubled YoY. Royalty revenue rose to $715M (+22%), ACV reached $1.732B (+13%), and license revenue climbed 23% to $574M. While the guidance signals continued AI infrastructure demand, Q3 revenue guidance of $1.49B below consensus pressured shares after hours.

Q2 FY2027 EPS 0.52 beat est 0.47; revenue 1.44B beat 1.38B.
Data center royalties more than doubled YoY to drive growth.
Royalty revenue 715M (+22%); ACV 1.732B (+13% YoY).
License and other revenue 574M (+23% YoY).
Q3 guidance: EPS 0.52–0.60; revenue 1.49B (below est 1.53B).

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