Q1 2027 Arm Holdings PLC Earnings Call

July 29, 2026

Speaker #1: Thank you, and welcome to our first quarter fiscal 27 earnings call. On the call are Renny House, Arms Chief Executive Officer, and Jason Child, Arms Chief Financial Officer.

Ian Thornton: Thank you, and welcome to our Q1 fiscal 2027 earnings call. On the call are Rene Haas, Arm's Chief Executive Officer, and Jason Child, Arm's Chief Financial Officer. Today's call contains forward-looking information about the company and its financial results. While these statements represent our best current judgments, our business is subjected to many risks and uncertainties that could cause actual results to differ materially. Important risk factors that may affect our business and future financial results are described in our annual report on Form 20-F filed with the SEC. Arm assumes no obligation to update any forward-looking statements. We will also refer to non-GAAP financial measures.

Speaker #1: Today's call contains forward-looking information about the company and its financial results. While these statements represent our best current judgment, our business is subjected to many risks and uncertainties that could cause actual results to differ materially.

Speaker #1: Important risk factors that may affect our business and future financial results are described in our annual report on Form 20F via the SEC. I'll assume no obligation to update any forward-looking statements.

Speaker #1: Good day, and thank you for standing by. Welcome to the ARM first quarter fiscal year 2027 webcast and conference call. At this time, all participants are in a listen-only mode.

Speaker #1: We will also refer to non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in our shareholder letter.

Ian Thornton: Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in our shareholder letter, as can a discussion of certain projected non-GAAP financial measures that we are not able to reconcile without unreasonable efforts and supplemental financial information. Our earnings materials are available at investors.arm.com. With that, I'll turn the call over to Rene.

Speaker #1: After this speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press *1 and 1 on your telephone.

Speaker #1: As can a discussion of certain projected non-GAAP financial measures that we are not able to reconcile without unreasonable effort and supplemental financial information. Our earnings material are available at investors.arm.com, and with that, I'll turn the call over to Renny.

Speaker #1: You will then hear an automated message advising you are hand is raised. To withdraw your question, please press *1 and 1 again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to end the conference over to your first speaker today, Ian Thornton, Vice President of Investor Relations. Please go ahead.

Speaker #2: Thank you, Ian, and welcome everyone. ARM delivered a record-first quarter and a strong start to fiscal 2027. Our results reflect growing demand for the ARM Compute Platform as AI expands across cloud infrastructure, edge devices, and the physical world.

Rene Haas: Thank you, Ian, and welcome everyone. Arm delivered a record Q1 and a strong start to fiscal 2027. Our results reflect growing demand for the Arm Compute Platform as AI expands across cloud infrastructure, edge devices, and the physical world. Revenue reached $1.29 billion, up 22% year over year, driven by record Q1 licensing and royalty revenue. Royalty revenue grew 22% to $715 million, licensing revenue grew 23% to $574 million, and non-GAAP EPS increased 29% to $0.45, above the high end of our guidance. AI is changing where and how compute happens. We're seeing that in the data center, where the transition to Arm continues to accelerate. We're seeing it beyond the data center as AI expands into PCs, smartphones, and physical AI applications. Across each of these markets, customers are increasingly standardizing on the Arm Compute Platform.

Speaker #2: Thank you. And welcome to our first quarter fiscal 2027 earnings call. On the call are Rene Haas, ARM's Chief Executive Officer, and Jason Child, ARM's Chief Financial Officer.

Speaker #2: Today's call contains forward-looking information about the company and its financial results. While these statements represent our best current judgment, our business is subjected to many risks and uncertainties that could cause actual results to differ materially.

Speaker #2: Revenue reached $1.29 billion, up 22% year over year. Driven by record first-quarter licensing and royalty revenue, royalty revenue grew 22% to $715 million, licensing revenue grew 23% to $574 million, and non-GAAP EPS increased 29% to $45.

Speaker #2: Important risk factors that may affect our business and future financial results are described in our annual report on Form 20F Biography SEC. ARM assumes no obligation to update any forward-looking statements.

Speaker #2: Above the high end of our guidance. AI is changing where and how compute happens. We're seeing that in the data center, where the transition to ARM continues to accelerate.

Speaker #2: We will also refer to non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in our shareholder letter.

Speaker #2: And we're seeing it beyond the data center, as AI expands into PCs, smartphones, and physical AI applications. Across each of these markets, customers are increasingly standardizing on the ARM Compute Platform.

Speaker #2: As can, a discussion of certain projected non-GAAP financial measures that we are not able to reconcile without unreasonable effort and supplemental financial information. Our earnings material are available at investors.arm.com, and with that, I'll turn the call over to Rene.

Speaker #2: These trends are the driving demand for the ARM AGI CPU. We introduced the ARM AGI CPU in March, to give customers another way to deploy the ARM Compute Platform.

Rene Haas: These trends are the driving demand for the Arm AGI CPU. We introduced the Arm AGI CPU in March to give customers another way to deploy the Arm Compute Platform. Since that time, we've made significant progress. Initial product has now been delivered to multiple customers, and we have secured the manufacturing capacity needed to support the $1 billion opportunity we outlined last quarter across fiscal 2027 and fiscal 2028. Demand now exceeds $2 billion as we continue to add new customers, including multiple customers in the US and China, while the overall value of our pipeline has continued to strengthen. We're also working closely with our manufacturing and supply chain partners to expand capacity. Our confidence in achieving upside to our $1 billion opportunity for the Arm AGI CPU business has increased in the past 90 days.

Speaker #3: Thank you, Ian, and welcome, everyone. ARM delivered a record-first quarter and a strong start to fiscal 2027. Our results reflect growing demand for the ARM Compute Platform as AI expands across cloud infrastructure, edge devices, and the physical world.

Speaker #2: Since that time, we've made significant progress. Initial product has now been delivered to multiple customers, and we have secured the manufacturing capacity needed to support the $1 billion opportunity we outlined last quarter, across fiscal 2027 and fiscal 2028.

Speaker #3: Revenue reached $1.29 billion up 22% year over year. Driven by record first quarter licensing and royalty revenue, royalty revenue grew 22% to $715 million, licensing revenue grew 23% to $574 million, and non-GAAP EPS increased 29% to $45 cents.

Speaker #2: Demand now exceeds $2 billion. As we continue to add new customers, including multiple customers in the US and China, while the overall value of our pipeline has continued to strengthen.

Speaker #2: We're also working closely with our manufacturing and supply chain partners to expand capacity. Our confidence in achieving upside to our $1 billion opportunity for the ARM AGI CPU business has increased in the past 90 days.

Speaker #3: Above the high end of our guidance. AI is changing where and how compute happens. We're seeing that in the data center, where the transition to ARM continues to accelerate.

Speaker #2: This momentum is part of a much broader shift already taking place across our Neoverse business. Data center royalties more than doubled year over year once again, as adoption of ARM Neoverse continues to expand.

Speaker #3: And we're seeing it beyond the data center as AI expands into PCs, smartphones, and physical AI applications. Across each of these markets, customers are increasingly standardizing on the ARM Compute Platform.

Rene Haas: This momentum is part of a much broader shift already taking place across our Neoverse business. Data center royalties more than doubled year-over-year once again as adoption of Arm Neoverse continues to expand. The pace at which Arm is becoming the CPU foundation for AI infrastructure is accelerating. Arm Neoverse shipments have now surpassed 1.5 billion cores, with the most recent 500 million shipping in just the last 9 months, where the first 1 billion took 6 years. The world's leading AI infrastructure providers continue to validate that trend. NVIDIA has now brought Vera into production. Built on Arm, Vera delivers up to 50% higher CPU performance and 2 times greater energy efficiency than comparable x86 systems and will serve as the CPU foundation for NVIDIA's next generation AI infrastructure.

Speaker #2: This pace at which ARM is becoming the CPU foundation for AI infrastructure is accelerating. ARM Neoverse shipments have now surpassed 1.5 billion cores, with the most recent 500 million shipping in just the last 9 months.

Speaker #3: These trends are driving demand for the Arm AGI CPU. We introduced the Arm AGI CPU in March to give customers another way to deploy the Arm Compute Platform.

Speaker #3: Since that time, we've made significant progress. Initial product has now been delivered to multiple customers, and we have secured the manufacturing capacity needed to support the $1 billion opportunity we outlined last quarter, across fiscal 2027 and fiscal 2028.

Speaker #2: We're the first 1 billion took 6 years. The world's leading AI infrastructure providers continue to validate that trend. NVIDIA has now brought Verra into production.

Speaker #2: Built on ARM, Verra delivers up to 50% higher CPU performance and 2 times greater energy efficiency than comparable x86 systems. And we'll serve as the CPU foundation for NVIDIA's next-generation AI infrastructure.

Speaker #3: Demand now exceeds $2 billion. As we continue to add new customers, including multiple customers in the US and China, while the overall value of our pipeline has continued to strengthen.

Speaker #3: We're also working closely with our manufacturing and supply chain partners to expand capacity. Our confidence in achieving upside to our $1 billion opportunity for the Arm AGI CPU business has increased in the past 90 days.

Speaker #2: Google has stated that its ARM-based Axion CPU is a core component of its AI infrastructure strategy and the host CPU for its latest TPU AI systems.

Rene Haas: Google has stated that its Arm-based Axion CPU is a core component of its AI infrastructure strategy and the host CPU for its latest TPU AI systems. AWS announced plans to deploy tens of millions of Graviton5 cores to power agentic AI workloads. Microsoft expanded Azure Cobalt 200 virtual machines built on Arm Neoverse CSS. Additionally, Qualcomm has also announced plans to enter the AI data center CPU market with its Arm-based Dragonfly C1000. Each of these companies is approaching AI infrastructure differently, but they're all moving in the same direction. Arm-based CPUs are becoming central to next generation AI infrastructure. IDC reported that spending on Arm-based accelerated server platforms has nearly doubled in the past 2 quarters and has now surpassed x86 platforms. We're witnessing both the rapid expansion of AI infrastructure and Arm's growing role within it. Our opportunity extends well beyond the data center.

Speaker #2: AWS announced plans to deploy tens of millions of Graviton 5 cores to power agentic AI workloads. Microsoft expanded Azure Cobalt 200 virtual machines built on ARM Neoverse CSS.

Speaker #3: This momentum is part of a much broader shift already taking place across our neoverse business. Data center royalties more than doubled year over year, once again, as adoption of ARM neoverse continues to expand.

Speaker #2: Additionally, Qualcomm has also announced plans to enter the AI data center CPU market with its ARM-based Dragonfly C1000. Each of these companies is approaching AI infrastructure differently, but they're all moving the same direction.

Speaker #3: This pace at which ARM is becoming the CPU foundation for AI infrastructure is accelerating. ARM neoverse shipments have now surpassed $1.5 billion cores, with the most recent $500 million shipping in just the last nine months.

Speaker #2: ARM-based CPUs are becoming central to next-generation AI infrastructure. IDC reported that spending on ARM-based accelerated server platforms has nearly doubled in the past 2 quarters, and is now surpassed x86 platforms.

Speaker #3: We're the first $1 billion took six years. The world's leading AI infrastructure providers continue to validate that trend. NVIDIA has now brought Verra into production.

Speaker #3: Built on ARM, Verra delivers up to 50% higher CPU performance and two times greater energy efficiency than comparable x86 systems, and will serve as the CPU foundation for NVIDIA's next-generation AI infrastructure.

Speaker #2: We're witnessing both the rapid expansion of AI infrastructure and ARM's growing role within it. Our opportunity extends well beyond the data center. As AI moves into production, customers are increasingly focused on the economics of deploying AI at scale.

Rene Haas: As AI moves into production, customers are increasingly focused on the economics of deploying AI at scale. Whether AI runs across the cloud, the edge, or ultimately the physical world, efficient compute is becoming just as important as model capability. Bringing AI closer to where data is created improves performance, reduces latency, enhances privacy, and lowers infrastructure costs. This is where Arm has always differentiated itself. The result is a new generation of computing devices spanning into 2 distinct categories. Efficient AI PCs designed for mobility and more powerful agentic systems capable of running sophisticated models locally. NVIDIA introduced RTX Spark, the first agentic PC built on Arm's compute subsystems, enabling sophisticated AI agents and larger AI models which can run locally.

Speaker #3: Google has stated that its ARM-based Axion CPU is a core component of its AI infrastructure strategy, and the host CPU for its latest TPU AI systems.

Speaker #2: Whether AI runs across the cloud, the edge, or ultimately the physical world, efficient compute is becoming just as important as model capability. Bringing AI closer to where data is created improves performance, reduces latency, enhances privacy, and lowers infrastructure costs.

Speaker #3: AWS announced plans to deploy tens of millions of Graviton 5 cores to power agentic AI workloads. Microsoft expanded Azure Cobalt 200 virtual machines built on ARM neoverse CSS.

Speaker #2: This is where ARM has always differentiated itself. The result is a new generation of computing devices spanning the two distinct categories: efficient AI PCs designed for mobility, and more powerful agentic systems capable of running sophisticated models locally.

Speaker #3: Additionally, Qualcomm has also announced plans to enter the AI data center CPU market with its ARM-based Dragonfly C1000. Each of these companies is approaching AI infrastructure differently, but they're all moving in the same direction.

Speaker #2: NVIDIA introduced RTX Spark, the first agentic PC built on ARM's compute subsystems, enabling sophisticated AI agents and larger AI models which can run locally.

Speaker #3: ARM-based CPUs are becoming central to next-generation AI infrastructure. IDC reported that spending on ARM-based accelerated server platforms has nearly doubled in the past two quarters, and is now surpassed x86 platforms.

Speaker #2: For on-the-go AI PCs, those same OEMs continue to expand the Windows on ARM ecosystem with new Snapdragon-powered AI PCs, while Google's continued investment in AI-enabled Chromebooks is broadening access to on-device AI.

Rene Haas: For on-the-go AI PCs, those same OEMs continue expanding the Windows on Arm ecosystem with new Snapdragon-powered AI PCs, while Google's continued investment in AI-enabled Chromebooks is broadening access to on-device AI. As AI drives the transition to the next generation of personal computing, Arm's opportunity continues to grow across an expanding range of AI-enabled devices. The same economics extends to the physical world. Vehicles, robots, industrial systems, and autonomous machines increasingly rely on efficient, secure, and real-time Arm-based compute to sense, reason, and act autonomously. NVIDIA recently expanded its physical AI platform with Cosmos 3 and the Isaac GR00T humanoid robotics platform powered by Jetson Thor, which combines an Arm-based CPU with an NVIDIA Blackwell GPU. Arm's software ecosystem continues to expand and now supports more than 22 million developers worldwide.

Speaker #3: We're witnessing both the rapid expansion of AI infrastructure and ARM's growing role within it. Our opportunity extends well beyond the data center. As AI moves into production, customers are increasingly focused on the economics of deploying AI at scale.

Speaker #2: As AI drives the transition to next-generation of personal computing, ARM's opportunity continues to grow across an expanding range of AI-enabled devices. The same economics extends into the physical world.

Speaker #3: Whether AI runs across the cloud, the edge, or ultimately the physical world, efficient compute is becoming just as important as model capability. Bringing AI closer to where data is created improves performance, reduces latency, enhances privacy, and lowers infrastructure costs.

Speaker #2: Vehicles, robots, industrial systems, and autonomous machines increasingly rely on efficient, secure, and real-time ARM-based compute to sense, reason, and act autonomously. NVIDIA recently expanded its physical AI platform with Cosmos 3 and the Isaac Groot humanoid robotics platform powered by Jetson Thor, which combines an ARM-based CPU with an NVIDIA Blackwell GPU.

Speaker #3: This is where ARM has always differentiated itself. The result is a new generation of computing devices spanning into two distinct categories. Efficient AI PCs designed for mobility and more powerful agentic systems capable of running sophisticated models locally.

Speaker #2: ARM's software ecosystem continues to expand, and now supports more than 22 million developers worldwide. During the quarter, ARM introduced Performix with support from Microsoft, MongoDB, Redis, NSAP, helping developers and AI agents analyze and optimize workloads running on ARM-based infrastructure.

Speaker #3: NVIDIA introduced RTX Spark, the first agentic PC built on ARM's compute subsystems, enabling sophisticated AI agents and larger AI models, which can run locally.

Rene Haas: During the quarter, Arm introduced Arm Performix with support from Microsoft, MongoDB, Redis, and SAP, helping developers and AI agents analyze and optimize workloads running on Arm-based infrastructure. We also expanded our AI developer tools, including the Arm MCP Server, which has surpassed 10,000 Docker downloads and integrates Arm's expertise into leading AI developer environments. From cloud infrastructure to PCs and physical AI, developers can build on the same Arm architecture and software ecosystem. Customers can deploy Arm through IP, compute subsystems, or silicon, depending on what best fits your business. In every case, they're building on the same Arm Compute Platform, software ecosystem, and developer community. As AI becomes part of every cloud, every device, and every sector, the industry is increasingly converging on a common compute platform. We believe that convergence will define the next decade of computing.

Speaker #3: For on-the-go AI PCs, those same OEMs continue to expand the Windows on ARM ecosystem with new Snapdragon-powered AI PCs, while Google's continued investment in AI-enabled Chromebooks is broadening access to on-device AI.

Speaker #2: We also expanded our AI developer tools, including the ARM MCP Server, which has surpassed 10,000 Docker downloads and integrates ARM's expertise into leading AI developer environments.

Speaker #3: As AI drives the transition to the next generation of personal computing, Arm's opportunity continues to grow across an expanding range of AI-enabled devices. The same economics extend into the physical world.

Speaker #2: From cloud infrastructure to PCs and physical AI, developers can build on the same ARM architecture and software ecosystem. Customers can deploy ARM through IP, compute subsystems, or silicon, depending on what best fits your business.

Speaker #3: Vehicles, robots, industrial systems, and autonomous machines increasingly rely on efficient, secure, and real-time ARM-based compute to sense, reason, and act autonomously. NVIDIA recently expanded its physical AI platform with Cosmos 3 and the Isaac Groot humanoid robotics platform powered by Jetson Thor, which combines an ARM-based CPU with an NVIDIA Blackwell GPU.

Speaker #2: But in every case, they're building on the same ARM compute platform, software ecosystem, and developer community. As AI becomes part of every cloud, every device, and every sector, the industry is increasingly converging on a common compute platform.

Speaker #2: We believe that convergence will define the next decade of computing. AI is changing where and how compute happens. And ARM is at the center of it.

Speaker #3: ARM's software ecosystem continues to expand and now supports more than 22 million developers worldwide. During the quarter, ARM introduced Performix with support from Microsoft, MongoDB, Redis, and SAP, helping developers and AI agents analyze and optimize workloads running on ARM-based infrastructure.

Rene Haas: AI is changing where and how compute happens, Arm is at the center of it. With that, I'll turn it over to Jason.

Speaker #2: With that, I'll turn it over to Jason.

Speaker #3: Thank you, Renee. We have started fiscal year 2027 with another strong quarter delivering the highest first-quarter revenue in our history. Total revenue grew 22% year on year to $1.29 billion.

Jason Child: Thank you, Rene. We have started fiscal year 2027 with another strong quarter, delivering the highest Q1 revenue in our history. Total revenue grew 22% year-on-year to $1.29 billion. Royalty revenue grew 22% year-on-year to $715 million. Also, our highest ever figure for Q1. Once again, the largest driver of royalty growth was cloud AI. Data center royalty revenue continues to more than double year-on-year, reflecting our sustained momentum across the market. This is being driven by the continued ramp of Arm-based server chips at all the major hyperscalers, alongside increasing deployments of data center networking chips, particularly DPUs and SmartNICs, where Arm technology is deployed in nearly all leading products. Edge AI royalty revenue continued to grow despite a soft end market in smartphones.

Speaker #3: We also expanded our AI developer tools, including the ARM MCP Server, which has surpassed 10,000 Docker downloads and integrates ARM's expertise into leading AI developer environments.

Speaker #3: Royalty revenue grew 22% year on year to $715 million, also our highest ever figure for Q1. Once again, the largest driver of royalty growth was cloud AI.

Speaker #3: From cloud infrastructure to PCs and physical AI, developers can build on the same ARM architecture and software ecosystem. Customers can deploy ARM through IP, compute subsystems, or silicon, depending on what best fits your business.

Speaker #3: Data center royalty revenue continues to more than double year on year, reflecting our sustained momentum across the market. This is being driven by the continued ramp of ARM-based server chips at all the major hyperscalers, alongside increasing deployments of data center networking chips, particularly GPUs and smart NICs, where ARM technology is deployed in nearly all leading products.

Speaker #3: But in every case, they're building on the same ARM compute community. As AI becomes part of every cloud, every device, and every sector, the industry is increasingly converging on a common compute platform.

Speaker #3: Edge AI royalty revenue continued to grow despite a soft end market in smartphones. We continue to benefit from higher royalty rates as ARM B9 and compute subsystems continue to increase their penetration into smartphones, tablets, and other consumer electronic devices.

Jason Child: We continue to benefit from higher royalty rates as Armv9 and compute subsystems continue to increase their penetration into smartphones, tablets, and other consumer electronic devices. These drivers more than offset the decline in smartphone sales due to higher memory prices. Physical AI also made a strong contribution to royalty growth, supported by the continued secular expansion of ADAS and autonomous systems built on Arm technology. Turning now to licensing. License and other revenue was $574 million, up 23% year-on-year, also a record for Q1. Growth was driven by strong demand for next-generation architectures and deeper strategic engagements with key customers. This quarter, we signed multiple high-value agreements as existing customers renewed long-term licenses. Some of the world's largest hyperscalers, automotive and robotics companies, and handset OEMs all secured access to Arm's future roadmap for their next generation of products.

Speaker #3: We believe that convergence will define the next decade of computing. AI is changing where and how compute happens, and Arm is at the center of it.

Speaker #3: These drivers more than offset the decline in smartphone sales, due to higher memory prices. Physical AI also made a strong contribution to royalty growth.

Speaker #3: With that, I'll turn it over to Jason.

Speaker #2: Thank you, Rene. We have started fiscal year 27 with another strong quarter delivering the highest first-quarter revenue in our history. Total revenue grew 22% year-on-year to $1.29 billion.

Speaker #3: Supported by the continued secular expansion of ADAS and autonomous systems built on ARM technology. Turning now to licensing. Licensed and other revenue was $574 million, up 23% year on year, also a record for Q1.

Speaker #2: Royalty revenue grew 22% year-on-year to $715 million, also our highest ever figure for Q1. Once again, the largest driver of royalty growth was cloud AI.

Speaker #3: Growth was driven by strong demand for next-generation architectures, and deeper strategic engagements with key customers. This quarter, we signed multiple high-value agreements as existing customers renewed long-term licenses.

Speaker #2: Data center royalty revenue continues to more than double year-on-year, reflecting our sustained momentum across the market. This is being driven by the continued ramp of ARM-based server chips at all the major hyperscalers, alongside increasing deployments of data center networking chips, particularly DPUs and smart NICs, where ARM technology is deployed in nearly all leading products.

Speaker #3: Some of the world's largest hyperscalers, automotive and robotics companies, and handset OEMs all secured access to ARM's future roadmap for their next-generation of products.

Speaker #3: Of the 574 million dollars of license revenue, our agreement with SoftBank for technology licensing and design services contributed $193 million. We expect a quarterly run rate for the rest of the year to be around $200 million.

Jason Child: Of the $574 million of licensed revenue, our agreement with SoftBank for technology licensing and design services contributed $193 million. We expect the quarterly run rate for the rest of the year to be around $200 million. As always, licensing revenue varies quarter to quarter due to timing and size of high-value deals. We continue to focus on annualized contract value or ACV as a key indicator of the underlying licensing trend. ACV grew 13% year-on-year, maintaining strong momentum. This continues to be above our long-term expectations for licensed revenue growth. As Rene mentioned, customer demand for Arm AGI CPU remains very strong. In this quarter, even more customers have wanted to place orders with us. We've secured the manufacturing capacity needed to support the initial $1 billion opportunity, and we have made progress to secure additional supply, as well as optimizing our customer mix and commercial terms.

Speaker #2: Edge AI royalty revenue continued to grow despite a soft end market in smartphones. We continue to benefit from higher royalty rates as ARM v9 and compute subsystems continue to increase their penetration into smartphones, tablets, and other consumer electronic devices.

Speaker #3: As always, licensing revenue varies quarter to quarter due to timing and size of high-value deals. So we continue to focus on annualized contract value, or ACV.

Speaker #2: These drivers more than offset the decline in smartphone sales, due to higher memory prices. Physical AI also made a strong contribution to royalty growth.

Speaker #3: As a key indicator of the underlying licensing trend. ACV grew 13% year on year, maintaining strong momentum. This continues to be above our long-term expectations for license revenue growth.

Speaker #2: Supported by the continued secular expansion of ADAS and autonomous systems built on Arm technology. Turning now to licensing: License and other revenue was $574 million, up 23% year-on-year—also a record for Q1.

Speaker #3: As Renee mentioned, customer demand for ARM AGI CPU remains very strong. And this quarter, even more customers have wanted to place orders with us.

Speaker #3: We've secured the manufacturing capacity needed to support the initial $1 billion opportunity, and we have made progress to securely additional supply, as well as optimizing our customer mix and commercial terms.

Speaker #2: Growth was driven by strong demand for next-generation architectures, and deeper strategic engagements with key customers. This quarter, we signed multiple high-value agreements as existing customers renewed long-term licenses.

Speaker #3: Our confidence in achieving more than $1 billion has increased in the past 90 days. We'll provide an update at our Q3 results, which is when we will have better visibility of Q4 2027 and fiscal 2028.

Speaker #2: Some of the world's largest hyperscalers, automotive and robotics companies, and handset OEMs all secured access to Arm's future roadmap for their next generation of products.

Jason Child: Our confidence in achieving more than $1 billion has increased in the past 90 days. We'll provide an update at our Q3 results, which is when we will have better visibility of Q4 2027 and fiscal 2028. Turning to operating expenses and profits. Non-GAAP operating expense was $733 million, up 18% year-on-year due to the ongoing R&D investment.

Speaker #2: Of the $574 million of license revenue, our agreement with SoftBank for technology licensing and design services contributed $193 million. We expect a quarterly run rate for the rest of the year to be around $200 million.

Speaker #3: Turning to operating expenses and profits. Non-GAAP operating expense was $733 million, up 18% year on year, due to the ongoing R&D investment. This was about $27 million below our guidance due to timing as our spending plan for the year remains largely unchanged, where we are expanding our engineering teams to support increasing customer demand, while advancing the technologies that will underpin future growth, including next-generation architectures, compute subsystems, and the ARM AGI CPU product family.

Jason Child: This was about $27 million below our guidance due to timing, as our spending plan for the year remains largely unchanged. We are expanding our engineering teams to support increasing customer demand while advancing the technologies that will underpin future growth, including next-generation architectures, compute subsystems, and the Arm AGI CPU product family. Non-GAAP operating income was $531 million, resulting in a non-GAAP operating margin of about 41%, up 200 basis points year-on-year. Non-GAAP EPS was $0.45, driven by both higher revenue and slightly lower OpEx than expected. More importantly, even at these elevated levels of investment, we generated free cash flow of $665 million for the quarter and $1.4 billion over the trailing 12 months, giving us the flexibility to continue to invest for long-term growth. Turning now to guidance. For Q2, we expect revenue of $1.38 billion ±$50 million.

Speaker #2: As always, licensing revenue varies quarter to quarter due to timing and size of high-value deals. So we continue to focus on annualized contract value, or ACV.

Speaker #2: As a key indicator of the underlying licensing trend. ACV grew 13% year-on-year, maintaining strong momentum. This continues to be above our long-term expectations for license revenue growth.

Speaker #3: Non-GAAP operating income was $531 million, resulting in a non-GAAP operating margin of about 41%, up 200 basis points year on year. Non-GAAP EPS was $45 cents, driven by both higher revenue and slightly lower opex than expected.

Speaker #2: As Rene mentioned, customer demand for ARM AGI CPU remains very strong. In this quarter, even more customers have wanted to place orders with us.

Speaker #2: We've secured the manufacturing capacity needed to support the initial $1 billion opportunity, and we have made progress to secure additional supply, as well as optimizing our customer mix and commercial terms.

Speaker #3: More importantly, even at these elevated levels of investment, we generated free cash flow of $665 million per quarter and $1.4 billion over the trailing 12 months.

Speaker #2: Our confidence in achieving more than $1 billion has increased in the past 90 days. We'll provide an update at our Q3 results, which is when we will have better visibility of Q4 27 and fiscal 28.

Speaker #3: Giving us the flexibility to continue to invest for long-term growth. Turning now to guidance. For Q2, we expect revenue of $1.38 billion plus or minus $50 million.

Speaker #3: At the midpoint, this represents revenue growth of about 22% year on year. We expect licensed and other revenue to be up about 30% year on year, and royalty revenue to be up in the low teens year on year.

Speaker #2: Turning to operating expenses and profits. Non-GAAP operating expense was $733 million, up 18% year-on-year, due to the ongoing R&D investment. This was about $27 million below our guidance due to timing as our spending plan for the year remains largely unchanged.

Jason Child: At the midpoint, this represents revenue growth of about 22% year-on-year. We expect license and other revenue to be up about 30% year-on-year, and royalty revenue to be up in the low teens year-on-year. We expect our non-GAAP operating expense to be approximately $780 million, and our non-GAAP EPS to be $0.47 ±$0.04. Looking ahead, we continue to see strong customer demand across our business. Combined with the expansion of our technology portfolio and deepening strategic customer relationships, this gives us confidence in our long-term growth outlook. With that, I'll turn the call back to the operator for Q&A.

Speaker #3: We expect our non-GAAP operating expense to be approximately $780 million, and our non-GAAP EPS to be $47 cents plus or minus 4 cents. Looking ahead, we continue to see strong customer demand across our business.

Speaker #2: We are expanding our engineering teams to support increasing customer demand, while advancing the technologies that will underpin future growth, including next-generation architectures, compute subsystems, and the Arm AGI CPU product family.

Speaker #3: Combined with the expansion of our technology portfolio and deepening strategic customer relationships, this gives us confidence in our long-term growth outlook. With that, I'll turn the call back to the operator for Q&A.

Speaker #2: Non-GAAP operating income was $531 million, resulting in a non-GAAP operating margin of about 41%, up year-on-year. Non-GAAP EPS was $45 cents, driven by both higher revenue and slightly lower opex than expected.

Speaker #4: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone, and wait for your name to be announced.

Operator: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. We will now go to our first question. One moment, please. Our first question today comes from the line of Joe Quatrochi from Wells Fargo. Please go ahead.

Speaker #4: To withdraw your question, please press star 1 and 1 again. We will now go to our first question. One moment, please. And our first question today comes from the line of Joe Katraki from Wells Fargo.

Speaker #2: More importantly, even at these elevated levels of investment, we generated free cash flow of $665 million the quarter and $1.4 billion over the trailing 12 months.

Speaker #2: Giving us the flexibility to continue to invest in long-term growth. Turning now to guidance: For Q2, we expect revenue of $1.38 billion, plus or minus $50 million.

Speaker #4: Please go ahead.

Speaker #5: Yeah. Thanks for taking the question. Maybe just first, can you give us a little bit more detail on just the confidence that's increased in terms of the upside to the $1 billion for AGI revenue?

Joe Quatrochi: Thanks for taking the questions. Maybe just first, can you give us a little bit more detail on just the confidence that's increased in terms of the upside to the $1 billion for AGI revenue? Is there any clarity you can provide just on, is it better wafer supply? Customers getting access to memory? Any help there?

Speaker #2: At the midpoint, this represents revenue growth of about 22% year-on-year. We expect license and other revenue to be up about 30% year-on-year, and royalty revenue to be up in the low teens year-on-year.

Speaker #5: Is there any clarity you can provide just on is it better wafer supply, customers getting access to memory, any help there? Yeah. I'll take that question.

Speaker #2: We expect our non-GAAP operating expense to be approximately $780 million, and our non-GAAP EPS to be $47 cents, plus or minus 4 cents. Looking ahead, we continue to see strong customer demand across our business.

Jason Child: I'll take that question. I think in general, it's all of the above. If I look back to the call we had 90 days ago, we had committed to the supply of $1 billion. We talked about demand pipeline of $2 billion, and we were working to secure supply for that delta between 1 and 2. 90 days later, the demand picture has even gotten better, as Jason mentioned, north of $2 billion. Our ability to secure that supply for the north of $1 billion, our confidence has increased in the last 90 days, and I would say it's across all of those areas. Making a chip is complex relative to supply chain. You have wafers, you have substrates, you have test capacity, you have memory. All of those areas, our confidence level in being able to secure the supply necessary has gotten better.

Speaker #5: I think in general, it's all of the above. If I look back to the call we had 90 days ago, we had committed to supply of a billion dollars we talked about demand pipeline of $2 billion and we were working to secure supply for that delta between 1 and 2.

Speaker #2: Combined with the expansion of our technology portfolio and deepening strategic customer relationships, this gives us confidence in our long-term growth outlook. With that, I'll turn the call back to the operator for Q&A.

Speaker #5: 90 days later, the demand picture has even gotten better as Jason mentioned, north of $2 billion. But our ability to secure that supply for the north of $1 billion are confidence has increased.

Speaker #3: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone, and wait for your name to be announced.

Speaker #3: To withdraw your question, please press star 1 and 1 again. We will now go to our first question. One moment, please. And our first question today comes from the line of Joe Katraki from Wells Fargo.

Speaker #5: In the last 90 days, and I would say it's across all of those areas. Making a chip is complex relative to supply chain. You have wafers, you have substrates, you have test capacity, you have memory.

Speaker #3: Please go ahead.

Speaker #5: And all of those areas, our confidence level in being able to secure supply necessary has gotten better. And that's the commentary we're stating at this time.

Speaker #4: Yeah, thanks for taking the questions. Maybe just first, can you give us a little bit more detail on the increased confidence in the upside to the $1 billion for AGI revenue?

Jason Child: That's the commentary we're stating at this time.

Speaker #5: And maybe just as a follow-up to that, I mean, on top of the extra above billion dollars of AGI revenue that you now think you can do, how do we think about the gross margin structure relative to kind of what you were thinking about for the original billion dollars?

Joe Quatrochi: Maybe just as a follow-up to that, on top of the extra above $1 billion of AGI revenue that you now think you can do, how do we think about the gross margin structure relative to what you were thinking about for the original $1 billion?

Speaker #4: Is there any clarity you can provide just on is it better wafer supply, customers getting access to memory, any help there?

Speaker #1: Yeah, I'll take that question. I think, in general, it's all of the above. If I look back to the call we had 90 days ago, we had committed to supply of $1 billion. We've talked about a demand pipeline of $2 billion, and we were working to secure supply for that delta between $1 and $2 billion.

Speaker #3: Yeah. No change at this time. We said that I think last quarter we said there was probably going to be somewhere in the high 30% range, maybe low 40s for the first generation for really in the Q4 of this year as well as for next year.

Jason Child: Yeah. No change at this time. I think last quarter we said that it was probably going to be somewhere in the high 30% range, maybe low 40s for the first generation for really in Q4 of this year as well as for next year. As I said, over the next couple of years, we do expect to get to 50%, but that's going to basically just entail us actually bringing more of some of the work that maybe an ASIC has helped us with in the past and bring some of that work in-house. That'll probably take a couple of years. Those are our initial expectations, no real change from last quarter. Obviously, with some of the price increases and things that have happened, we're just kind of working through how to digest those and what needs to affect our pricing.

Speaker #3: As I said, over the next couple of years, we do expect to get to 50%, but that's going to basically just entail us actually bringing more of some of the work that maybe an ASIC has helped us with in the past and bring some of that work in-house.

Speaker #1: Ninety days later, the demand picture has even gotten better—as Jason mentioned, north of $2 billion. But our ability to secure that supply for north of $1 billion, our confidence has increased in the last 90 days.

Speaker #1: And I would say it's across all of those areas. Making a chip is complex relative to the supply chain. You have wafers, you have substrates, you have test capacity, you have memory.

Speaker #3: So that'll probably take a couple of years. Those are our initial expectations. So no real change from last quarter. Obviously, with some of the price increases and things that have happened, we're just kind of working through how to digest those and what needs to be kind of what needs to affect our pricing.

Speaker #1: And in all of those areas, our confidence level in being able to secure the supply necessary has improved. That's the commentary we're providing at this time.

Speaker #3: So those are some of the things that we're going to work through and as I said in my prepared remarks, we'll provide a much more detailed update for both the revenue and margin profile before we go into Q4.

Jason Child: Those are some of the things that we're going to work through, and as I said in my prepared remarks, we'll provide a much more detailed update for both the revenue and margin profile before we go into Q4. We'll do that at the end of Q3.

Speaker #4: And maybe just as a follow-up to that, I mean, on top of the extra above billion dollars of AGI revenue that you now think you can do, how do we think about the gross margin structure relative to kind of what you were thinking about for the original billion dollars?

Speaker #3: So we'll do that at the end of Q3.

Speaker #5: Thank you.

Joe Quatrochi: Thank you.

Speaker #3: Thank you.

Speaker #4: Thanks. Thank you. We will now take the next question. And the question comes from the line of Sebastian Naji from William Blair. Please go ahead.

Jason Child: Thank you.

Operator: Thank you. We will now take the next question. The question comes from the line of Sebastien Naji from William Blair. Please go ahead.

Speaker #2: Yeah, no change at this time. We said that I think last quarter we said there was probably going to be somewhere in the high 30% range, maybe low 40s for the first generation for really in the Q4 of this year, as well as for next year.

Speaker #5: Thank you. And good afternoon. My question is on the smartphone market because of the much higher memory handset cost handset OEMs are absorbing meaningfully more BOM inflation.

Sebastien Naji: Thank you. Good afternoon. My question is on the smartphone market. Because of the much higher memory handset cost, handset OEMs are absorbing meaningfully more BOM inflation. They're starting to raise prices. I think, given that smartphone royalties remain a significant portion of your overall royalty base, can you maybe just talk a little bit about what you're seeing in terms of unit demand and mix, and how this impacts your royalty revenue outlook for the fiscal year?

Speaker #2: As I said, over the next couple of years, we do expect to get to 50%, but that's going to basically just entail us actually bringing more of some of the work that maybe an ASIC has helped us with in the past and bringing some of that work in-house.

Speaker #5: They're starting to raise prices. I think given that smartphone royalties remain a significant portion of your overall royalty base, can you maybe just talk a little bit about what you're seeing in terms of unit demand and mix and how this impacts your royalty revenue outlook for the fiscal year?

Speaker #2: So that'll probably take a couple of years. Those are our initial expectations. So no real change from last quarter. Obviously, with some of the price increases and things that have happened, we're just kind of working through how to digest those and what needs to be kind of what needs to affect our pricing.

Speaker #3: Yeah. So I think the first part of the question that Jason and talk about some of the details around the numbers generally speaking, we have been somewhat isolated from the negative growth of the smartphone market because of the fact that we have moved the vast majority of the customers to V9.

Jason Child: Yeah. I'll take the first part of the question and let Jason then talk about some of the details around the numbers. Generally speaking, we have been somewhat isolated from the negative growth of the smartphone market because of the fact that we have moved the vast majority of the customers to Armv9.

Speaker #2: So those are some of the things that we're going to work through and, as I said in my prepared remarks, we'll provide a much more detailed update for both the revenue and margin profile before we go into Q4.

Speaker #3: In some cases, CSS and in some cases, the second version of CSS. And what that's all contributed to has been an increase in royalty growth.

Rene Haas: CSS and in some cases, the second version of CSS. What that's all contributed to has been an increase in royalty growth. Whereas the smartphone market has been going, projected to be down by some level of double digits, we are projecting double-digit growth in royalties in the smartphone market. Vis-a-vis exactly how that translates to the forward guidance and forecast, I'll let Jason go into more color.

Speaker #2: So we'll do that at the end of Q3.

Speaker #4: Thank you.

Speaker #3: So whereas the smartphone market has been going projected to be down by some level of double digits, we are projecting double digit growth in royalty and smartphone market.

Speaker #2: Thank you.

Speaker #3: Thank you. Thank you. We will now take the next question. The question comes from the line of Sebastian Naji from William Blair. Please go ahead.

Speaker #3: Vis-a-vis exactly how that translates to the forward guidance and forecast, I'll let Jason go into some more color.

Speaker #1: Thank you, and good afternoon. My question is on the smartphone market. Because of the much higher memory handset costs, handset OEMs are absorbing meaningfully more BOM inflation.

Speaker #2: Yeah. I think there's obviously others that are reporting this week and key partners that will learn more from. But when we look at our forecast, we mostly try to look at the industry projections across all the entire industry, IDC is, of course, one of the things that we look at.

Jason Child: I think there's obviously others that are reporting this week and key partners that we'll learn more from. When we look at our forecast, we mostly try to look at the industry projections across the entire industry. IDC is, of course, one of the things we look at. Then, of course, we update for partner mix, where we have slightly different royalties based on whether it's CSS or v9 or v8 or et cetera. When we add all that together, we have seen some incremental slowdowns versus what was expected at the beginning of the year. I think the new piece was initially the expectation was just going to affect the lower end of the market, and now we are seeing all parts of the market, even some upper and mid-tier being affected. That's maybe an incremental for us.

Speaker #1: They're starting to raise prices. I think, given that smartphone royalties remain a significant portion of your overall royalty base, can you maybe just talk a little bit about what you're seeing in terms of unit demand and mix, and how this impacts your royalty revenue outlook for the fiscal year?

Speaker #2: And then of course, we update for partner mix, where we have slightly different royalties based on whether it's CSS or V9 or V8 or etc.

Speaker #2: Yeah, so I think the first part of the question that Jason and talk about some of the details around the numbers. Generally speaking, we have been somewhat isolated from the negative growth of the smartphone that we have moved the vast majority of the customers to V9.

Speaker #2: So when we add all that together, we have seen some incremental slowdowns versus what was expected at the beginning of the year. And I think the new piece was initially the expectation was just going to affect the lower end of the market, and now we are seeing all parts of the market, even some upper and mid-tier being affected.

Speaker #2: In some cases, CSS, and in some cases, the second version of CSS. And what that's all contributed to has been an increase in royalty growth.

Speaker #2: And so that's maybe an incremental for us. And so as a result, I would say I think going into the year, we probably thought we were I think we said last quarter that we're expecting somewhere around 20% year on year for the next few years in royalties, including this year.

Speaker #2: So whereas the smartphone market has been projected to be down by some level of double digits, we are projecting double-digit growth in royalties in the smartphone market.

Jason Child: As a result, I would say, I think going into the year, we probably thought I think we said last quarter that we're expecting somewhere around 20% year-on-year for the next few years in royalties, including this year. Right now, if I had to guess, that's probably somewhere closer to the high teens right now, but hard to say until we learn more about the next couple of quarters. I'd say right now, we do think royalties will come down a bit in this next quarter. We guided to kind of the low to mid-teens for Q2, and we'll give you a better update next quarter. I think the one thing I would make sure you don't lose sight of is the good news is the over-performance that we've been seeing in cloud AI continues to help offset that.

Speaker #2: Vis-a-vis exactly how that translates to the forward guidance and forecast, I'll let Jason go into some more color.

Speaker #2: Right now, if I had to guess, that's probably somewhere closer to the high teens right now. But hard to say until we learn more about the next couple of quarters.

Speaker #5: Yeah, I think there's obviously others that are reporting this week, and key partners that we'll learn more from. But when we look at our forecast, we mostly try to look at the industry projections across the entire industry. IDC is, of course, one of the things that we look at.

Speaker #2: I'd say right now the we do think royalties will come down a bit. In this next quarter, we got it to kind of the low to mid-teens.

Speaker #2: For Q2 and we'll give you a better update next quarter. But I think the one thing I would make sure you don't lose sight of is the good news is the overperformance that we've been seeing in cloud AI continues to help offset that.

Speaker #5: And then of course, we update for partner mix, where we have slightly different royalties based on whether it's CSS or V9 or V8 or etc.

Speaker #2: And so while there is weakness on the smartphone side, the AI business continues to accelerate. And that's the piece that gives us confidence in full year and next year's numbers.

Jason Child: While there is weakness on the smartphone side, the over-performance on the cloud AI business continues to accelerate. That's the piece that gives us confidence in full year and next year's numbers. Again, we'll give you more updates over the next couple of quarters.

Speaker #5: So, when we add all that together, we have seen some incremental slowdowns versus what was expected at the beginning of the year. And I think the new piece was, initially, the expectation was it was just going to affect the lower end of the market, and now we are seeing all parts of the market—even some upper and mid-tier—being affected.

Speaker #2: But again, we'll give you more updates over the next couple of quarters.

Speaker #5: And so that's maybe an incremental for us. And so as a result, I would say I think going into the year, we probably thought we were I think we said last quarter that we're expecting somewhere around 20% year on year for the next few years in royalties, including this year.

Speaker #5: Great. Okay. That's very helpful. I appreciate all the color.

Sebastien Naji: Great. Okay. That's very helpful. I appreciate all the color.

Speaker #4: Thank you. As a reminder, if you would like to ask a question, please press star one and one on your telephone in the interest of time.

Operator: Thank you. As a reminder, if you would like to ask a question, please press star one and one on your telephone. In the interest of time, please limit yourself to one question only, rejoin the queue for any follow-ups. Thank you. We will now go to the next question. The next question today comes from the line of Gary Mobley from StoneX Group. Please go ahead.

Speaker #4: Please limit yourself to one question only and rejoin the queue for any follow-up. Thank you. We will now go to the next question. And the next question today comes from the line of Gary Mobley from Stonex Group.

Speaker #5: Right now, if I had to guess, that's probably somewhere closer to the high teens. But it's hard to say until we learn more about the next couple of quarters.

Speaker #5: I'd say right now that we do think royalties will come down a bit. In this next quarter, we guide to kind of the low to mid-teens for Q2.

Speaker #4: Please go ahead.

Speaker #5: Hi everybody. Thanks for taking my question. You highlighted maybe a little bit of upside to the demand profile for the next two years, 2 billion plus.

Gary Mobley: Hi, everybody. Thanks for taking my question. You highlighted maybe a little bit of upside to the demand profile for the next 2 years, $2 billion plus, I think, to paraphrase correctly. What about the demand pipeline for the out years, fiscal year 2029 through 2031? I assume the $15 billion in projected AGI revenue expected for 2031 contemplates all the supply chain-related headwinds. That's a supply served revenue, correct?

Speaker #5: And we'll give you a better update next quarter. But I think the one thing I would make sure you don't lose sight of is, the good news is the overperformance that we've been seeing in cloud AI continues to help offset that.

Speaker #5: I think to paraphrase, correctly, but what about the demand pipeline for the out year's fiscal year '29 through '31? And I assume the 15 billion in projected AGI revenue expected for '31 contemplates all the supply chain-related headwinds.

Speaker #5: And so while there is weakness on the smartphone side, the overperformance on the cloud AI business continues to accelerate. And that's the piece that gives us confidence in full year and next year's numbers.

Speaker #5: That's a supply-served revenue, correct?

Speaker #3: Yeah. I'll let Jason comment further in terms of any forward-looking comments he wants to make. But I'll say what is changed since March is that to your point, clearly supply is an issue across a number of different factors.

Rene Haas: Yeah. I'll let Jason comment further in terms of any forward-looking comments he wants to make, I'll say what has changed since March is that, to your point, clearly supply is an issue across a number of different factors. The outlook that we gave at that time was based upon our view of the supply picture. On the flip side, we did say at that event that the CPU TAM we thought was about $100 billion in those outer years. Going back, you may recall that prior to that, most folks were talking about a number of around 50 to 60. When we talked about the $100 billion number in March, there was some surprise around it and there was a lot of back and forth in terms of justifying that number.

Speaker #5: But again, we'll give you more updates over the next couple of quarters.

Speaker #1: Great. Okay, that's very helpful. I appreciate all the color.

Speaker #3: Thank you. As a reminder, if you would like to ask a question, please press star one and one on your telephone in the interest of time.

Speaker #3: The outlook that we gave at that time was based upon our view of the supply picture. On the flip side, we did say at that event that the CPU TAM, we thought was about 100 billion dollars in those outer years.

Speaker #3: Please limit yourself to one question only, and we join the queue for any follow-up. Thank you. We will now go to the next question.

Speaker #3: And the next question today comes from the line of Gary Mobley from Stonex Group. Please go ahead.

Speaker #3: And going back, you may recall that prior to that, most folks were talking about a number of around 50 to 60. So when we talked about the 100 billion dollar number in March, there were some surprise around it and there was a lot of back and forth in terms of justifying that number.

Speaker #1: Hi everybody. Thanks for taking my question. You highlighted maybe a little bit of upside to the demand profile for the next two years—$2 billion plus.

Speaker #1: I think to paraphrase, correctly, but what about the demand pipeline or the out-year's fiscal year 29 through 31? And I assume the $15 billion in projected AGI revenue expected for 31 contemplates all the supply chain-related headwinds.

Speaker #3: Since that time, a number of my peers have talked about numbers quite a bit bigger than that. In some cases, up to 200 billion dollars.

Rene Haas: Since that time, a number of my peers have talked about numbers quite a bit bigger than that, in some cases, up to $200 billion. I think all of that is really being driven by the increase of overall compute capacity, which will be inference-based, and all of that inference-based compute is going to largely be running agentic workloads. The agentic workloads are essentially capacity constrained in terms of throughput by the number of CPUs you have. As inference demand goes up, which it clearly is, and as agentic demand goes up, as it clearly is, that means an increase in CPU demand. We're not changing the numbers at all, but there are a lot of indicators that the numbers that we talked about back in March, relative to our view of the TAM, may have been conservative. Jason, do you want to add anything to that?

Speaker #3: I think all of that is really being driven by the increase of overall compute capacity, which will be inference-based, and all of that inference-based compute is going to largely be run agentic workloads.

Speaker #1: That's a supply-served revenue, correct?

Speaker #2: Yeah, I'll let Jason comment further in terms of any forward-looking comments he wants to make. But I'll say what has changed since March is that, to your point, clearly supply is an issue across a number of different factors.

Speaker #3: And the agentic workloads are essentially capacity-constrained in terms of throughput by the number of CPUs you have. So as inference demand goes up, which is clearly is, and as agentic demand goes up, as it clearly is, that means an increase in CPU demand.

Speaker #2: The outlook that we gave at that time was based upon our view of the supply picture. On the flip side, we did say at that event that the CPU TAM, we thought was about 100 billion dollars in those outer years.

Speaker #3: So we're not changing the numbers at all, but there are a lot of indicators that the numbers that we talked about back in March relative to our view of the TAM may have been conservative on Jason, if you want to add anything to that.

Speaker #2: And going back, you may recall that prior to that, most folks were talking about a number of around 50 to 60. So when we talked about the $100 billion number in March, there was some surprise around it, and there was a lot of back and forth in terms of justifying that number.

Speaker #2: Yeah. Yeah. I think in general, as Renee said, yeah, the TAM at the back when we did the event, when we took it up to 100 billion, we said 100 billion plus.

Jason Child: I think, in general, as Rene said, the TAM at the back when we did the event, when we took it up to $100 billion, we said $100 billion plus. Obviously, it's gone up to, I think now the most recent estimate is $220 billion, depending on from a variety of sources. I think our expectation is if you flow through the same kind of market share that we were expecting at 100, could it be much higher if in fact the market's at $200 plus? Well, certainly it could be. The constraints over the next couple of years, so say for us FY27 or calendar 2026 or FY28

Speaker #2: Obviously, it's gone up, so I think now the most recent estimate is 220 billion sitting on what from a variety of sources. So I think our expectation is if you flow through the same kind of market share that we were expecting at 100, could it be much higher if in fact the market's at 200 plus?

Speaker #2: Since that time, a number of my peers have talked about numbers quite a bit bigger than that. In some cases, up to 200 billion dollars.

Speaker #2: I think all of that is really being driven by the increase of overall compute capacity, which will be inference-based, and all of that inference-based compute is going to largely be run agentic workloads.

Speaker #2: We'll certainly it could be. The constraints over the next couple of years, I would say the for us, FY27 or calendar '26 or FY28, which is I guess calendar '27, supply chain's pretty tight.

Jason Child: 2028, which is, I guess, calendar 2027. The supply chain's pretty tight, maybe there's upside to get to this $2 billion or $2 billion plus, and we'll provide updates on that over the next couple of quarters. To go beyond that, the supply chain is going to loosen or at least expand quite a bit as we get it into calendar 2028 and 2029, or for us, FY29 and 2030. Right now, if you look at wafer capacity and memory capacity, you probably know as well as I do, I think there's estimates that the capacity's going up somewhere between 70% to 100%, depending on your assumptions on wafer and some of the different partners that can help there, and even more so on the memory side. Our expectations are there certainly is potential to beat the number that we give externally.

Speaker #2: And the agentic workloads are essentially capacity constrained, in terms of throughput, by the number of CPUs you have. So, as inference demand goes up—which it clearly is—and as agentic demand goes up, as it clearly is, that means an increase in CPU demand.

Jason Child: The supply chain's pretty tight, maybe there's upside to get to this $2 billion or $2 billion plus, and we'll provide updates on that over the next couple of quarters. To go beyond that, the supply chain is going to loosen or at least expand quite a bit as we get it into calendar 2028 and 2029, or for us, FY29 and 2030. Right now, if you look at wafer capacity and memory capacity, you probably know as well as I do, I think there's estimates that the capacity's going up somewhere between 70% to 100%, depending on your assumptions on wafer and some of the different partners that can help there, and even more so on the memory side. Our expectations are there certainly is potential to beat the number that we give externally.

Speaker #2: And so we're maybe there's upside to get to this 2 billion or 2 billion plus and we'll provide updates on that over the next couple of quarters.

Speaker #2: But to go beyond that, the supply chain is going to loosen or at least expand quite a bit as we get into calendar '28 and '29 or for us, FY29 and '30.

Speaker #2: So we're not changing the numbers at all, but there are a lot of indicators that the numbers that we talked about back in March relative to our view of the TAM may have been conservative on Jason, if you want to add anything to that.

Speaker #2: Right now, if you look at wafer capacity and memory capacity, you probably know as well as I do. I think there's estimates that the capacity is going up somewhere between 70 to 100 percent depending on your assumptions on wafer and some of the different some of the different partners that can help there.

Speaker #5: Yeah, yeah, I think in general, as Renee said, yeah, the TAM at the back when we did the event, when we took it up to 100 billion, we said 100 billion plus.

Speaker #5: Obviously, it's gone up to, I think, now the most recent estimate is 220 billion. Sitting on from a variety of sources. So I think our expectation is if you flow through the same kind of market share that we were expecting at 100, could it be much higher if, in fact, the market's at 200 plus?

Speaker #2: And even more so on the memory side. So our expectations are there's certainly potential to beat the number that we give at externally, certainly internally.

Jason Child: Certainly, internally, we do have higher targets. Until we start to see the supply chain capacity come online, we're mostly focused on just trying to get to the $2 billion number next year. We'll provide updates, of course, later, as we learn more.

Speaker #2: We do have higher targets. But until we start to see the supply chain capacity come online, we're mostly focused on just trying to get to the 2 billion dollar number next year.

Speaker #5: Well, certainly it could be. The constraints over the next couple of years, I would say for us, FY27 or calendar '26, or FY28, which is, I guess, calendar '27, supply chain is pretty tight.

Speaker #2: And we'll provide updates of course later as we learn more.

Speaker #4: Thank you. Our next question today. Comes from the line of Tom O'Malley from Barclays. Please go ahead.

Operator: Thank you. Our next question today comes from the line of Tom O'Malley from Barclays. Please go ahead.

Speaker #5: And so, maybe there's upside to get to this $2 billion or $2 billion plus, and we'll provide updates on that over the next couple of quarters.

Speaker #6: Hey guys. Thanks for taking my question. Last week, AMD hosted an analyst day and talked about a 220 billion dollar TAM by the end of the decade.

Speaker #5: But to go beyond that, the supply chain is going to loosen or at least expand quite a bit as we get into calendar 28 and 29 or for us, FY 29 and 30.

Tom O'Malley: Hey, guys. Thanks for taking my question. Last week, Advanced Micro Devices hosted an analyst day and talked about a $220 billion TAM by the end of the decade, and kind of underneath that, the largest contributor was agentic AI. They kind of laid out traditional CPU, they laid out head nodes, and then agentic applications. I was curious, when you look at your silicon business longer term, where do you see that fitting in? Is that going to cover all three of those sub-buckets? In your early wins and your early pipeline, is there one way that that's leaning or another? Just would like to get a flavor of what you foresee for that silicon business.

Speaker #6: And kind of underneath that, the largest contributor was agentic AI that kind of laid out traditional CPU. They laid out head nodes and then agentic applications.

Speaker #5: Right now, if you look at wafer capacity and memory capacity, you probably know as well as I do. I think there's estimates that the capacity is going up somewhere between 70 to 100 percent, depending on your assumptions on wafer and some of the different some of the different partners that can help there.

Speaker #6: So I was curious, when you look at your silicon business longer term, where do you see that fitting in? Is that going to cover all three of those sub-buckets?

Speaker #6: In your early wins and your early pipeline, is there one way that that's leaning or another? Just would like to get a flavor of what you foresee for that silicon business.

Speaker #5: And even more so on the memory side. So our expectations are that there’s certainly this potential to beat the number that we give out externally, certainly internally as well.

Speaker #5: Yeah. And I'm sorry, could you repeat those three categories so I make sure I've got the definitions right?

Jason Child: Yeah. I'm sorry, could you repeat those 3 categories so I make sure I've got the definitions right?

Speaker #6: Yeah. Traditional server, and then you have head nodes, and then you have agentic applications.

Tom O'Malley: Yeah. Traditional server, and then you have head nodes, and then you have agentic applications.

Speaker #5: We do have higher targets. But until we start to see the supply chain capacity come online, we're mostly focused on just trying to get to the 2 billion dollar number next year.

Speaker #5: Got it. Yeah. Our AGI CPU is going to play in all three. When we talked about the customers that we had signed up back at the arm ever event, we had folks like Cerebras and OpenAI, which were largely around head node type applications.

Jason Child: Got it. Yeah. Our Arm AGI CPU is going to play in all three. When we talked about the customers that we had signed up back at the Arm Everywhere event, we had folks like Cerebras and OpenAI, which were largely around head node type applications. We also talked about Meta and Cloudflare, which are around agentic applications, but also general purpose server. We've also just talked about OCI Oracle. The Arm AGI CPU is a very good fit for all of those, to be quite candid, which is why we are very optimistic about the demand. We did talk about quite a number of customers that day, and we were very specific about inside the cloud, the agentic workloads.

Speaker #5: And we'll provide updates of course later, as we learn more.

Speaker #3: Thank you. Our next question today comes from the line of Tom O'Malley from Barclays. Please go ahead.

Speaker #5: We also talked about Meta, and Cloudflare, which are around agentic applications, but also general purpose server. We've also just talked about OCI Oracle. So the ARM AGI those to be quite candid.

Speaker #6: Hey guys, thanks for taking my question. Last week, AMD hosted an Analyst Day and talked about a $220 billion TAM by the end of the decade.

Speaker #6: And kind of underneath that, the largest contributor was agentic AI that kind of laid out traditional CPU, they laid out head nodes, and then agentic applications.

Speaker #5: Which is why we are very, very optimistic about the demand. And we did talk about quite a number of customers that day. And we were very specific about inside the cloud, the agentic workloads it's a pretty broad term because the agents are running through the head node, but they're also running through the general purpose racks that sit inside the data center.

Speaker #6: So I was curious, when you look at your silicon business longer term, where do you see that fitting in? Is that going to cover all three of those sub-buckets?

Speaker #6: In your early wins and your early pipeline, is that leaning one way or another? Just would like to get a flavor of what you foresee for that silicon business.

Jason Child: It's a pretty broad term because the agents are running through the head node, but they're also running through the general purpose racks that sit inside the data center. Short answer is, those three categories that you defined, as described earlier, the Arm AGI CPU is a great fit for all three, and we have customers in all three.

Speaker #1: Yeah, and I'm sorry, could you repeat those three categories so I make sure I've got the definitions right?

Speaker #5: So short answer is those three categories that you defined. As described earlier, the ARM AGI CPUs is a great fit for all three. And we have customers in all three.

Speaker #6: Yeah, traditional server, and then you have head nodes, and then you have agentic applications.

Speaker #1: Got it. Yeah, ARM AGI CPU is going to play in all three. When we talked about the customers that we had signed up back at the ARM, every event, we had folks like Cerebras and OpenAI, which were largely around head node type applications.

Speaker #4: Thank you. Your next question. Comes from the line of Vivek Aiya from Bank of America. Please go ahead.

Operator: Thank you. Your next question comes from the line of Vivek Arya from Bank of America. Please go ahead.

Speaker #7: Thanks for taking my question. I had a near and a long-term question on your AGI CPU. Near term, I'm very curious what is preventing ARM from securing supply for just one more billion.

Vivek Arya: Thanks for taking my question. I had a near and a long-term question on your AGI CPU. Near term, I'm very curious, what is preventing Arm from securing supply for just $1 billion? I mean, it's a $50 billion market, right? There are a number of foundries who can make it. I'm just curious what is preventing Arm from getting that extra $1 billion a year from now. Longer term, Rene, when I look at the three players that have Arm-based CPUs in AI, whether it's NVIDIA or Amazon or Google, they each have their proprietary accelerators also, which are often co-designed with the CPU. Don't you think that restricts Arm's opportunity given that you have a CPU-only offering, or is your intention to add other things to that CPU-only offering over time? Thank you.

Speaker #1: We also talked about Meta, and Cloudflare, which are around agentic applications, but also general purpose server. We've also just talked about OCI Oracle. So the ARM AGI CPU is a very good fit for all of those to be quite candid.

Speaker #7: I mean, it's a 50 billion dollar market, right? And there are a number of foundries who can make it. So I'm just curious what is preventing ARM from getting that extra billion a year from now.

Speaker #7: And then longer term, Renee, when I look at the three players that have ARM-based CPUs in AI, whether it's NVIDIA or Amazon or Google, they each have their proprietary accelerators also, which are often co-designed with the CPU.

Speaker #1: Which is why we are very, very optimistic about the demand and we did talk about quite a number of customers that day and we were very specific about inside the cloud the agentic workloads it's a pretty broad term because the agents are running through the head node but they're also running through the general purpose racks that sit inside the data center.

Speaker #7: So don't you think that restricts ARM's opportunity given that you have a CPU only offering? Or is your intention to add other things to that CPU only offering over time?

Speaker #1: So short answer is those three categories that you defined. As described earlier, the ARM AGI CPUs is a great fit for all three and we have customers in all three.

Speaker #7: Thank you.

Speaker #5: Yeah. So let's take both parts of that question, Jason. You can add on. I'm glad you think a billion dollars is not a big number.

Jason Child: Yeah. I'll take both parts of that question. Jason, you can add on. I'm glad you think $1 billion is a big number. There are a lot of folks just trying to secure extra supply up to $50 million. It is a very tight market across everything. Whether it's memory, whether it's test equipment, whether it's substrates, whether it's TSMC wafers, it's a very tight world. I think even my compatriots who are in the CPU business for a living and have their own fabs have not been able to supply the demand. We are more optimistic than we were 90 days ago, which is great. Demand has increased, we feel better about the supply side. On the proprietary accelerators, if I understood your question correctly, a couple of proof points that is an area that we can certainly play in.

Speaker #5: There are a lot of folks just trying to secure extra supply up to 50 million dollars. It is a very, very tight market across everything.

Speaker #3: Thank you. Your next question comes from the line of Vivek Arya from Bank of America. Please go ahead.

Speaker #5: Whether it's memory, whether it's test equipment, whether it's substrates, whether it's TSMC wafers, it's a very, very, very tight world. I think even my compatriots who are in the CPU business for a living and have their own fabs have not been able to supply the demand.

Speaker #4: Thanks for taking my question. I had a near and a long-term question on your AGI CPU. Near-term, I'm very curious what is preventing ARM from securing supply for just one more billion.

Speaker #4: I mean, it's a 50 billion dollar market, right? And there are a number of foundries who can make it. So I'm just curious what is preventing ARM from getting that extra billion a year from now.

Speaker #5: So we are more optimistic than we were 90 days ago, which is great. Demand has increased, but we feel better about supply side. On the proprietary accelerators, if I understood your question correctly, a couple of proof points that that is an area that we can certainly play in.

Speaker #4: And then longer term, Renee, when I look at the three players that have ARM-based CPUs in AI, whether it's Nvidia or Amazon or Google, they each have their proprietary accelerators also, which are often co-designed with the CPU.

Speaker #5: First off, at Google, they have used Axion. As an interface into their TPUs, away from x86. So clearly there's a space for ARM to exist with custom accelerators.

Jason Child: First off, at Google, they have used Axion as an interface into their TPUs, away from x86. Clearly there's a space for Arm to exist with custom accelerators. If your question was around the Arm AGI CPU specifically, there has been some announcements made by NVIDIA about NVLink Fusion, it's a very interesting platform approach where they're offering a mix and match where you could take a Vera CPU and plug it into a proprietary accelerator

Speaker #4: So don't you think that restricts ARM's opportunity given that you have a CPU only offering? Or is your intention to add other things to that CPU only offering over time?

Speaker #5: If your question was around the ARM AGI CPU specifically, there has been some announcements made by NVIDIA about NVLink Fusion. And it's a very interesting platform approach where they're offering a mix and match where you could take a Vera CPU and plug it into a proprietary accelerator, or you could take a CPU made by someone else in the ARM family and connect it into a Rubin accelerator.

Speaker #4: Thank you.

Speaker #1: Yeah, so let's take both parts of that question. Jason, you can add on. I'm glad you think a billion dollars is not a big number.

Speaker #1: There are a lot of folks just trying to secure extra supply up to 50 million dollars. It is a very, very tight market across everything.

Speaker #1: Whether it's memory, whether it's test equipment, whether it's substrates, whether it's TSMC wafers, it's a very, very, very tight world. I think even my compatriots who are in the CPU business for a living and have their own fabs have not been able to supply the demand.

Rene Haas: You could take a CPU made by someone else in the Arm family and connect it into a Rubin accelerator. We don't have anything to announce around that today, there are absolutely paths for Arm to connect to custom accelerators, whether it's through a self-hosted design done internally and/or connecting to something like Ansys or Fusion.

Speaker #5: So we don't have anything to announce around that today. But there are absolutely paths for ARM to connect to custom accelerators, whether it's through a self-hosted design done internally, and/or connecting to something through something like NVLink Fusion.

Speaker #1: So we are more optimistic than we were 90 days ago, which is great. Demand has increased, but we feel better about supply side. On the proprietary accelerators, if I understood your question correctly, a couple of proof points that that is an area that we can certainly play in.

Speaker #4: Thank you. Your next question today. Comes from the line of Vijay Rakesh from Mizuho. Please go ahead.

Operator: Thank you. Next question today comes from the line of Vijay Rakesh from Mizuho. Please go ahead.

Speaker #1: First off, at Google, they have used Axion as an interface into their TPUs, away from x86. So clearly there's a space for ARM to exist with custom accelerators.

Speaker #7: Yeah. Hey, Renee and Jason. Good to hear you guys got some capacity on the agentic AI CPU side. I was wondering when you look at your agentic AI CPUs, are they mostly in the 128-core kind of core count is important.

Vijay Rakesh: Yeah. Hey, Rene and Jason. Good to hear you guys got some capacity on the agentic AI CPU side. I was wondering, when you look at your agentic AI CPUs, are they mostly in the 128 core? I know core count is important, so when do you expect the next 192 or 256 core CPUs coming out, and if any color on the ASIC side as well? For Jason, do you expect to start breaking out the silicon side of revenues, the agent CPU side? That seems to be becoming bigger and bigger, I guess. Thanks.

Speaker #1: If your question was around the ARM AGI CPU specifically, there has been some announcements made by Nvidia about NVLink Fusion and it's a very interesting platform approach where they're offering a mix and match where you could take a Vera CPU and plug it into a proprietary accelerator or you could take a CPU made by someone else in the ARM family and connect it into a Rubin accelerator.

Speaker #7: So are you looking at when do you expect the next 192 or 256-core CPUs coming out? And if any color on the ASIC side, as well.

Speaker #7: And for Jason, do you expect to start breaking out the silicon side of revenues, the CPU side? Because that seems to be becoming bigger and bigger, I guess.

Speaker #7: Thanks.

Speaker #5: Yeah. So thank you for the question. On the product side, nothing to tell you specifically today about the roadmap and where we're going with that.

Rene Haas: Yeah. Thank you for the question. On the product side, nothing to tell you specifically today about the roadmap, and where we're going with that. The Arm AGI CPU today is 128 core based design. There are instances in the market, using Arm, that are better, or actually greater number of cores, and that's Graviton4, which is 192 cores. Certainly the direction of travel is more cores. The reason for that is for running agentic workloads, more cores is a better outcome, because the software overhead is simpler. You can run virtual machines or virtual jobs on single cores, and they're going to be much more efficient in terms of throughput.

Speaker #1: So we don't have anything to announce around that today. But there are absolutely paths for ARM to connect to custom accelerators, whether it's through a self-hosted design done internally and/or connecting to something through something like NVLink Fusion.

Speaker #5: So the ARM AGI CPU today is a 128-core based design. There are instances in the market using ARM that are better or actually a greater number of cores.

Speaker #5: And that's Graviton 5, which is 192 cores. Certainly the direction to travel is more cores. And the reason for that is for running agentic workloads, more cores is a better outcome because the software overhead is simpler.

Speaker #3: Thank you. Your next question today comes from the line of Vijay Rakesh from Mizuho. Please go ahead.

Speaker #5: Yeah, hey, Renee and Jason. Good to hear you guys got some capacity on the agentic AI CPU side. I was wondering when you look at your agentic AI CPUs, are they mostly in the 128 core and a core count is important.

Speaker #5: You can run virtual machines or virtual jobs on single cores. And there are going to be much more efficient in terms of throughput. So while I don't have anything to talk about today in terms of the roadmap and the core count, it's not a stretch to think that the next generation designs are going to have more and more cores because that's clearly the direction to travel.

Rene Haas: While I don't have anything to talk about today in terms of the roadmap and the core count, it's not a stretch to think that the next generation designs are going to have more and more cores because that's clearly the direction of travel. I'll let Jason comment on the second part of the question.

Speaker #5: So, are you looking at—or when do you expect—the next 192- or 256-core CPUs coming out? And any color on the ASIC side as well?

Speaker #5: I'll let Jason comment on the second part of the question.

Speaker #5: And for Jason, do you expect to start breaking out the silicon side of revenues, the CPU side? Because that seems to be becoming bigger and bigger, I guess.

Speaker #6: Yeah. On the revenue breakout, well, first, as soon as we start shipping, which will be at the end of this year, that's the first milestone.

Jason Child: Yeah. On the revenue breakout, well first, as soon as we start shipping, which will be at the end of this year, that's the first milestone. Once it becomes at least 10% of revenue, we'll break it out separately as a third line. Separate from license, separate from royalties, lastly, there'll be silicon revenue. I would expect that, based on our forecast, that should be broken out then in FY2028.

Speaker #6: And then once it becomes at least 10% of revenue, we'll break it out separately as a third line. So separate from license, separate from royalties, lastly there'll be some revenue.

Speaker #5: Thanks.

Speaker #1: Yeah, so thank you for the question. On the product side, nothing to tell you specifically today about the roadmap and where we're going with that.

Speaker #6: So I would expect that based on our forecast, that that should be broken out then in FYE 28.

Speaker #1: So the ARM AGI CPU today is a 128 core-based design. There are instances in the market using ARM that are better or actually a greater number of cores.

Speaker #4: Thank you. Your next question today. Comes from the line of Charles Hsu from Needham & Company. Please go ahead.

Operator: Thank you. Next question today comes from the line of Charles Xu from Needham & Company. Please go ahead.

Speaker #1: And that's Graviton 5, which is 192 cores. Certainly, the direction to travel is more cores. And the reason for that is, for running agentic workloads, more cores is a better outcome because the software overhead is simpler.

Speaker #8: Hi. Thanks for taking my question. Jason, I think if I hear you correctly, you are talking about maybe royalty revenue growth. This year instead of 20%, probably going to be high teens.

Charles Xu: Hi. Thanks for taking my question. Jason, I think if I hear correctly, you are talking about maybe royalty revenue growth this year instead of 20%, probably going to be high teens, because of all the things happening in the smartphone, incremental weakness, et cetera. Anything we should be looking at at the moment, let's say on the licensing side, that can show up with a little bit upside to offset the incremental weakness on the royalty side? Maybe on that topic, what's the early view on maybe FY29, which is largely CY28, do you think a 20% royalty is still a good number? I want to get some thoughts there. Thank you.

Speaker #1: You can run virtual machines or virtual jobs on single cores, and they're going to be much more efficient in terms of throughput. So, while I don't have anything to talk about today in terms of the roadmap and the core count, it's not a stretch to think that the next generation designs are going to have more and more cores, because that's clearly the direction to travel.

Speaker #8: Because of all the things happening in the smartphone incremental weakness, etc. Anything we should be looking at at the moment? Let's say on the licensing side, that can show up with a little bit of upside to offset the incremental weakness on the royalty side.

Speaker #1: I'll let Jason comment on the second part of the question.

Speaker #8: And maybe on that topic, what's the early view on maybe FYE 29, which is largely CY 28 and do you think a 20% royalty is still a good number?

Speaker #2: Yeah, on the revenue breakout—well, first, as soon as we start shipping, which will be at the end of this year—that's the first milestone.

Speaker #2: And then once it becomes at least 10% of revenue, we'll break it out separately as a third line. So separate from license, separate from royalties, lastly there'll be somewhat revenue.

Speaker #8: And I want to get some thoughts there. Thank you.

Speaker #6: Yeah. In terms of guidance for Q2, we did lower, I think, maybe what our expectations were a couple of quarters ago. We didn't guide to it, but I think our expectations were there were going to be a little higher.

Speaker #2: So, I would expect that, based on our forecast, that should be broken out then in '28.

Jason Child: Yeah. In terms of guidance for Q2, we did lower, I think maybe what our expectations were a couple of quarters ago. We didn't guide to it, but I think our expectations were they were going to be a little higher. We're now guiding to 13% royalty growth in Q2, we also increased our license growth. Overall, on a combined basis, we're actually ahead of where we'd expected to be. I would expect similar trends for the rest of the year, and that is any softness or weakness that we experience in royalties will be at, I would say, at least as much license revenue to overcome that. I don't really expect overall to be any sort of a slowdown. Now, the thing that could change is we continue to see the cloud AI business overperform.

Speaker #3: Thank you. Your next question today. Comes from the line of Charles Hsu from Needham and Company. Please go ahead.

Speaker #6: And so we're now guiding to 13% royalty growth in Q2. But then we also increased our license growth. So overall, on a combined basis, we're actually ahead of where we'd expected to be.

Speaker #6: Hi, thanks for taking my question. Jason, I think if I hear you correctly, you are talking about maybe royalty revenue growth this year—instead of 20%, it's probably going to be in the high teens.

Speaker #6: I would expect similar trends for the rest of the year. And that is any softness or weakness that we experience in royalties, we'll be at, I would say, at least as much license revenue to overcome that.

Speaker #6: Because of all the things happening in the smartphone space—incremental weakness, etc.—is there anything we should be looking at at the moment? Let's say, on the licensing side, that could show up with a little bit of upside to offset the incremental weakness on the royalty side.

Speaker #6: So I don't really expect overall to be any sort of a slowdown. Now, the thing that could change is we continue to see the cloud AI business overperform.

Speaker #6: And in particular, we're really seeing strong deployments from some of our partners like Google with their Axion as it's carrying with all the new TPU deployments.

Jason Child: In particular, we're really seeing strong deployments from some of our partners like Google with their Axion, as it's branded, with all the new TPU deployments. Certainly Amazon, certainly with Vera at NVIDIA, Amazon with Graviton, we have other hyperscalers that are also exceeding their plans and increasing their trajectory and their velocity. There is certainly some possible upsides on royalties throughout the year. If I had to say right now, I would not expect there to be weakness across the overall business. It just might be some weakness in the smartphone side of the business, we'll just have to wait and see how the cloud AI business, if it's able to overcome all of it or just some of it. We'll have to update you as we go later into the year.

Speaker #6: And maybe on that topic, what's the early view on maybe FYE '29, which is largely CY '28, and do you think a 20% royalty is still a good number? I wanted to get some thoughts there.

Speaker #6: Certainly, Amazon and then certainly with Vera, at NVIDIA, Amazon with Graviton, and then we have other hyperscalers that are also exceeding their plans. And increasing their trajectory and their velocity.

Speaker #6: Thank you.

Speaker #2: Yeah, in terms of guidance for Q2, we did lower, I think, maybe what our expectations were a couple of quarters ago. We didn't guide to it, but I think our expectations were that they were going to be a little higher.

Speaker #6: So there is certainly some possible upsides on royalties throughout the year. But if I had to say right now, I would not expect there to be weakness across the overall business.

Speaker #2: And so we're now guiding to 13% royalty growth in Q2, but then we also increased our license growth. So overall, on a combined basis, we're actually ahead of where we expected to be.

Speaker #6: It just might be some weakness in the smartphone side of the business. And we'll just have to wait and see how the cloud AI business, if it's able to overcome all of it or just some of it, we'll have to update you as we go later into the year.

Speaker #2: I would expect similar trends for the rest of the year, and that is, any softness or weakness that we experience in royalties, we'll have, I would say, at least as much license revenue to overcome that.

Speaker #6: And then in terms of 29, sorry, 28 and 29, yeah, I think the 20% plus royalty growth that we provided I think that's very much still intact.

Jason Child: In terms of 2029, sorry, 2028 and 2029. Yeah, I think the 20% plus royalty growth that we provided, I think that's very much still intact. The things that are happening right now, the only real weakness in royalties is really on the smartphone side, in particular to some of the memory issues there. While they're certainly having a tough year this year, I think most of the partners that we talk to seem to think that there's going to be stronger recovery in the back half of the year. I would expect that the year-on-year growth rates by next year should be back in line as we start to lap some of these challenges.

Speaker #2: So, I don't really expect, overall, there to be any sort of a slowdown. Now, the thing that could change is if we continue to see the cloud AI business overperform.

Speaker #6: The things that are happening right now, the only real weakness in royalties is really on the smartphone side in particular to some of the memory issues there.

Speaker #2: And in particular, we're really seeing strong deployments from some of our partners like Google with their Axion, as it's carrying with all the new TPU deployments.

Speaker #6: And while there certainly haven't a tough year this year, I think most of the partners that we talked to seem to think that there's going to be stronger recovery in the back half of the year.

Speaker #2: Certainly, Amazon and then certainly with Vera, Nvidia, Amazon with Graviton, and then we have other hyperscalers that are also exceeding their plans. And increasing their trajectory and their velocity.

Speaker #6: And so I would expect that the year-on-year growth rates by next year should be kind of back in line, as we start to lap some of these challenges.

Speaker #6: And then, of course, as we continue to see the AI deployments continue to. Grow at the level they have been, that we should be able to, again, be in that 20% range next year and beyond.

Speaker #2: So, there are certainly some possible upsides on royalties throughout the year. But if I had to say right now, I would not expect there to be weakness across the overall business.

Jason Child: Of course, as we continue to see the AI deployments continue to grow at the level they have been, that we should be able to, again, be in that 20% range next year and beyond.

Speaker #2: It just might be some weakness in the smartphone side of the business. And we'll just have to wait and see how the cloud AI business, if it's able to overcome all of it or just some of it, we'll have to update you as we go later into the year.

Speaker #4: Thank you. Your next question today. Comes from the line of Chris Sanker from TD Cowan. Please go ahead.

Operator: Thank you. Our next question today comes from the line of Krish Sankar from TD Cowen. Please go ahead.

Speaker #7: Hi. Thanks for taking my question. This is Steven calling on behalf of Krish. Renee had a question on low-cost AI models. Just with the recent cycle of headlines around low-cost AI, whether from China or elsewhere, do you see the proliferation of low-cost AI being a net positive or negative for your AGI CPU franchise given your market positioning?

[Analyst] (TD Cowen): Hi. Thanks for taking my question. This is Steven calling on behalf of Krish. Rene, I had a question on low-cost AI models. Just with the recent cycle of headlines around low-cost AI, whether from China or elsewhere, do you see the proliferation of low-cost AI being a net positive or negative for your AGI CPU franchise, given your market positioning? Also, if you could also walk us through how low-cost AI might be a pro or con for your IP business, like for both data center and the edge side of things. Thank you.

Speaker #2: And then in terms of '29—sorry, '28 and '29—yeah, I think the 20% plus royalty growth that we provided, I think that's very much still intact.

Speaker #2: The things that are happening right now, the only real weakness in royalties is really on the smartphone side in particular to some of the memory issues there.

Speaker #7: And also, if you could also walk us through how low-cost AI might be a pro or con for your IP business, for both data center and the edge side of you.

Speaker #2: And while there certainly hasn't been a tough year this year, I think most of the partners that we talked to seem to think that there's going to be a stronger recovery in the back half of the year.

Speaker #5: Yeah. Thank you for the question. I'm going to presume that when you say low-cost AI, you're referring to open-source models. Open weights, etc. If the world moves to something that's more open-source-based, a.k.a.

Rene Haas: Yeah. Thank you for the question. I'm going to presume that when you say low-cost AI, you're referring to open source models, open weights, et cetera. If the world moves to something that's more open source based, AKA open weights, for us, I think it's somewhere between a net neutral to a net positive. I start with net neutral from the perspective of we're somewhat agnostic relative to whether it's a closed frontier model or an open source model. Those models all require CPUs. They all require the IP that we deliver for people to build custom chips. Whether it's an opportunity for Arm AGI CPU or the IP or compute subsystems, we're going to be required independent of what those models are. Just frankly, just given the nature of the workloads that need to get run, they're kind of independent of the hardware underneath it.

Speaker #2: And so, I would expect that the year-on-year growth rates by next year should be kind of back in line as we start to lap some of these challenges.

Speaker #2: And then, of course, as we continue to see the AI deployments continue to grow at the level they have been, that we should be able to, again, be in that 20% range next year and beyond.

Speaker #5: open weights, for us, I think it's somewhere between a net neutral to a net positive. And I start with net neutral from the perspective of we're somewhat agnostic relative to whether it's a closed frontier model or an open-source model.

Speaker #3: Thank you. Your next question today comes from the line of Chris Sanker from TD Cowen. Please go ahead.

Speaker #5: Those models all require CPUs. They all require the IP that we deliver for people to build custom chips. So whether it's an opportunity for ARM AGI CPU or the IP or compute subsystems, we're going to be required independent of what those models are.

Speaker #7: Hi, thanks for taking my question. This is Steven calling on behalf of Krish. Rene had a question on low-cost AI models. With the recent cycle of headlines around low-cost AI, whether from China or elsewhere, do you see the proliferation of low-cost AI being a net positive or negative for your AGI CPU franchise given your market positioning?

Speaker #5: Just frankly, just given the nature of the workloads that need to get run, they're kind of independent of the hardware underneath it. You need CPUs to run agents, whether that's open source or closed source.

Speaker #7: And also, if you could walk us through how low-cost AI might be a pro or con for your IP business, both for the data center and the edge side of things.

Rene Haas: You need CPUs to run agents, whether that's open source or closed source. There's a very interesting argument about to be made relative to the potential of those open source models being much more differentiated, smaller, more efficient, that could run in different edge footprints. If that were to happen, it'd be a great thing for Arm, just given the footprint that we have in smaller edge devices. Right now, the most sophisticated models that are the closed models all are literally 100% cloud based. The RTX Spark that was announced is a very interesting product where you could potentially run some smaller models locally. I think open source has traditionally shown that whether it's in this area or any other software domain, widely broadens the choice relative to how you run different things. In other words, open source leads to higher innovation and differentiation.

Speaker #5: There's a very interesting argument about, to be made relative to the potential of those open-source models being much more differentiated, smaller, more efficient, that could run in different edge footprints.

Speaker #7: Thank you.

Speaker #1: Yeah, thank you for the question. I'm going to presume that when you say low-cost AI, you're referring to open source models. Open weights, etc.

Speaker #5: If that were to happen, it'd be a great thing for ARM, just given the footprint that we have in smaller edge devices. Right now, the most sophisticated models that are the closed models all are literally 100% cloud-based.

Speaker #1: If the world moves to something that's more open source-based, a.k.a. open weights, for us, I think it's somewhere between a net neutral to a net positive.

Speaker #1: And I start with net neutral from the perspective of we're somewhat agnostic relative to whether it's a closed frontier model or an open-source model.

Speaker #5: The RTX Spark that was announced is a very interesting product where you could potentially run some smaller models locally. I think open source has traditionally shown that whether it's in this area or any other software domain, widely brightens the choice relative to how you run different things.

Speaker #1: Those models all require CPUs. They all require the IP that we deliver for people to build custom chips. So whether it's an opportunity for ARM AGI CPU or the IP or compute subsystems, we're going to be required independent of what those models are.

Speaker #5: In other words, open source leads to higher innovation and differentiation. So I think it's either neutral to a positive, depending on where it goes at the edges.

Rene Haas: I think it's either neutral to a positive, depending on where it goes at the edges, but probably the most important thing to remember about Arm, and it applies here as well, is we're pretty agnostic to the top layer. All of that will need to run on our CPUs and our IP.

Speaker #1: Just frankly, just given the nature of the workloads that need to get run, they're kind of independent of the hardware underneath it. You need CPUs to run agents, whether that's open source or closed source.

Speaker #5: But probably the most important thing to remember about ARM, and it applies here as well, is we're pretty agnostic to the top layer. All of that will need to run on our CPUs and our IP.

Speaker #1: There's a very interesting argument about, to be made relative to the potential of those open source models being much more differentiated, smaller, more efficient, that could run in different edge footprints.

Speaker #4: Thank you. We will now take our final question for today. And our final question comes from the line of Tim Schultz and Melanda from Rothschild & Co.

Operator: Thank you. We will now take our final question for today. Our final question comes from the line of Tim Horan from Rothschild & Co. Please go ahead.

Speaker #4: Please go ahead.

Speaker #8: Yeah, great. Thanks for taking my questions. I had two one was a more kind of operational question, maybe for Jason. Just talking about the timing and the sequential quarter-to-quarter cadence of R&D, you talked about how it had come in below your expectations.

Tim Horan: Yeah. Great. Thanks for taking my questions. I had two. One was a more kind of operational question, maybe for Jason. Just talking about the timing and the sequential quarter-to-quarter cadence of R&D. You talked about how it had come in below your expectations, and I just wonder maybe if you could talk about how that kind of comes to pass. Is it kind of a milestone-based thing, and that maybe they're not met and so that the cost slips a quarter or two? Is it a capitalization issue? Just what are the things that dictate the timing of R&D cost in the P&L? I had a quick follow-up on the CPU.

Speaker #1: If that were to happen, it'd be a great thing for ARM, just given the footprint that we have in smaller edge devices. Right now, the most sophisticated models that are the closed models all are literally 100% cloud-based.

Speaker #1: The RTX Spark that was announced is a very interesting product where you could potentially run some smaller models locally. I think open source has traditionally shown that, whether it's in this area or any other software domain, it widely broadens the choice relative to how you run different things.

Speaker #8: And I just want to maybe if you could talk about how that kind of comes to pass. Is it kind of a milestone-based thing?

Speaker #8: And maybe they're not met, and so the cost slips a quarter or two? Is it a capitalization issue? Just how does what are the things that dictate the timing of R&D cost in the P&L?

Speaker #1: In other words, open source leads to higher innovation and differentiation. So I think it's either neutral to a positive, depending on where it goes at the edges, but probably the most important thing to remember about ARM, and it applies here as well, is we're pretty agnostic to the top layer.

Speaker #8: And then I had a quick follow-up on the CPU.

Speaker #6: Sure. So with OPEX, we did come in a little bit lower when it comes to OPEX. You have to break out R&D. You have to break it down into really two buckets.

Jason Child: Sure. With OpEx, we did come in a little bit lower. When it comes to OpEx, you have to break out R&D. You have to break it down into really two buckets. You have the people or developer costs, and then you have the tools that they're using, which is typically emulation, cloud spend, et cetera. In this last quarter, we did come in a little bit below, and that would be more not on the people side, because that was pretty much right in line. I would say it was really more on kind of the tools that were utilized and necessary versus what our forecast was. I think for the most part, you should think about kind of banking that savings that we delivered in Q1. Going forward, our estimates, I think, are pretty similar, maybe a little bit lower.

Speaker #6: So you have the people or developer costs, and then you have the tools that they're using, which is typically emulation, cloud spend, etc. And so in this last quarter, we did come in a little bit below.

Speaker #1: All of that will need to run on our CPUs and our IP.

Speaker #3: Thank you. We will now take our final question for today. And our final question comes from the line of Tim Schultz and Melanda from Rothschild & Co.

Speaker #6: And that would be more not on the people side because that was pretty much right in line. I would say it was really more on kind of the tools that were utilized and necessary versus what our forecast was.

Speaker #3: Please go ahead.

Speaker #4: Yeah, great. Thanks for taking my questions. I had two—one was a more operational question, maybe for Jason. Just talking about the timing and the sequential quarter-to-quarter cadence of R&D; you talked about how it had come in below your expectations.

Speaker #6: So I think for the most part, you should think about kind of banking that savings that we delivered in Q1 and then going forward, our estimates, I think are pretty similar maybe a little bit lower.

Speaker #6: So overall, again, you can bank the savings from Q1 and then assume that for the rest of the year just at a high level, it's going to grow by kind of mid-single digit percentage, order on quarter, the overall OPEX.

Jason Child: Overall again, you can bank the savings from Q1 and then assume that for us, they are just at a high level, it's going to grow by kind of mid-single digit percentage quarter on quarter, the overall OpEx. The things that can move, it's less around the total number of engineers, because that number is one that we can forecast and we're pretty consistent with. It's really just about what is the tool utilization that's necessary. Certainly with things like emulation and cloud spend, that's going to flex a little bit based on what are we learning on the latest developments and do we need to increase some of our testing or are we kind of done? As a result, we're getting better and better at forecasting this. It does move around a little bit.

Speaker #4: And I just want to—maybe if you could talk about how that kind of comes to pass. Is it kind of a milestone-based thing, and then maybe they're not met, and so the cost slips a quarter or two?

Speaker #6: And the things that can move it's less around the total number of engineers because that number is one that we can forecast and we're pretty consistent with.

Speaker #4: Is it a capitalization issue? Just—what are the things that dictate the timing of R&D costs in the P&L? And then I had a quick follow-up on the CPU.

Speaker #6: It's really just about what is the tool utilization that's necessary and so certainly with things like emulation and cloud spend, that's going to flex a little bit based on what are we learning on the latest developments and do we need to do we need to increase some of our testing or are we kind of done?

Speaker #2: Sure. So with OPEX, we did come in a little bit lower when it comes to OPEX. You have to break out R&D. You have to break it down into really two buckets.

Speaker #2: So you have the people, or developer cost, and then you have the tools that they're using, which is typically emulation, cloud spend, etc. And so, in this last quarter, we did come in a little bit below.

Speaker #6: And so as a result, we're getting better and better at forecasting this, but it does move around a little bit because we really only been doing this now for the last year or two.

Speaker #2: And that would be more not on the people side, because that was pretty much right in line. I would say it was really more on the tools that were utilized and necessary versus what our forecast was.

Rene Haas: Because we've really only been doing this now for the last year or two. I would expect our variance probably to get smaller going forward.

Speaker #6: And so I would expect our variance probably to get smaller going forward.

Speaker #8: Got it. Got it. And then just to circle back on the AGI CPU conversion of customer engagement and interest and as you've described, being able to kind of bring that across the Rubicon and book it as a firm order.

Tim Horan: Got it. Just to circle back on the Arm AGI CPU conversion of customer engagement and interest, and as you've described, being able to bring that across the Rubicon and book it as a firm order. Just wanted to understand and just circle back to confirm what we are talking about here. We are talking about maybe early calendar 2027 as you come into the December Q4 report that you should have more visibility. I guess one of the things I am just thinking about is there a concern or is it possible or probable that you get into a kind of golden screw type situation, that you have 99% covered, but because there is tightness, you are missing one small component that could kind of stymie that? Or is it really not quite that vulnerable to one single sort of small component to be missing? Thank you.

Speaker #2: So I think, for the most part, you should think about kind of banking that savings that we delivered in Q1, and then going forward, our estimates I think are pretty similar, maybe a little bit lower.

Speaker #2: So overall, again, you can bank the savings from Q1 and then assume that for us, they are just at a high level, it's going to grow by kind of mid-single digit percentage, order on quarter, the overall OPEX.

Speaker #8: Just wanted to understand and just kind of circle back to just confirm what we're talking about here. So we're talking about maybe early calendar 27 as you come into the December quarter report that you should have more visibility.

Speaker #2: And the things that can move are less around the total number of engineers, because that number is one that we can forecast and we're pretty consistent with.

Speaker #8: And I guess one of the things I'm just thinking about is, is there a concern or is it possible or probable that you get into a kind of golden screw type situation that you've got 99% covered, but because there's tightness, you're missing one small component that could kind of stymie that?

Speaker #2: It's really just about what is the tool utilization that's necessary and so certainly with things like emulation and cloud spend, that's going to flex a little bit based on what are we learning on the latest developments and do we need to do we need to increase some of our testing or are we kind of done?

Speaker #8: Or is it really not quite that vulnerable to one single sort of small component to be missing? Thank you.

Speaker #2: And so, as a result, we're getting better and better at forecasting this, but it does move around a little bit. Because we've really only been doing this now for the last year or two, and so I would expect our variance probably to get smaller going forward.

Speaker #5: If I can make sure I answer your question, that is, as we get closer to fulfilling the demand for the product, is there still some risk at the 11th hour that one critical component that we haven't secured could tip the whole thing over?

Rene Haas: If I make sure I answer your question, is as we get closer to fulfilling the demand for the product, is there still some risk at the 11th hour that one critical component that we have not secured could tip the whole thing over? No, there's not a concern of that. We are very confident in terms of the partners we are working with. We have a very good understanding of their capabilities and their upside capabilities. There isn't one single point of failure that, to your point, of the 1% that could cause an issue.

Speaker #4: Got it. Got it. And then just to circle back on the AGI CPU conversion of customer engagement and interest and as you've described, being able to kind of bring that across the Rubicon and book it as a firm order.

Speaker #5: No, there's not a concern of that. We are very confident in terms of the partners we're working with. We have a very good understanding of their capabilities and their upside capabilities.

Speaker #4: Just wanted to understand and just kind of circle back to just confirm what we're talking about here. So we're talking about maybe early calendar 27, as you come into the December quarter report, that you should have more visibility.

Speaker #5: So there isn't one single point of failure to your point of the 1% that could cause an issue.

Speaker #4: Thank you. This concludes today's Q&A. I will now hand back to Renee for closing remarks.

Operator: Thank you. This concludes today's Q&A. I will now hand back to Rene for closing remarks.

Speaker #4: And I guess one of the things I'm just thinking about is, is there a concern or is it possible or probable that you get into a kind of golden screw type situation that you've got 99% covered, but because there's tightness, you're missing one small component that could kind of stymie that?

Speaker #5: Thank you. The quarter for us is really a tale of two stories. One is the core business itself, the IP business, continues to perform extremely well.

Rene Haas: Thank you. The quarter for us is really a tale of two stories. One is the core business itself. The IP business continues to perform extremely well. A record Q1, we are guiding ahead of expectations, as Jason had mentioned, and our results were beyond expectations. The growth is really being driven by the data center. Arm continues to increase its market share, and we have many key customers now shipping Neoverse cores, which as I mentioned before have now surpassed 1.5 billion. We also now have our new business, the Arm AGI CPU business, which we just announced back in March. The confidence level we have in the success of that product only continues to increase. As we talked about, the demand is greater than what we shared 90 days ago. At the same time, our confidence to fulfill that demand has also increased.

Speaker #5: A record-first quarter. And we are guiding ahead of expectations as Jason had mentioned. And our results were beyond expectations. The growth is really being driven by the data center.

Speaker #4: Or is it really not quite that vulnerable to one single sort of small component being missing? Thank you.

Speaker #1: If I can make sure I answer your question, that is, as we get closer to fulfilling the demand for the product, is there still some risk at the 11th hour that one critical component that we haven't secured could tip the whole thing over?

Speaker #5: ARM continues to increase its market share. And we have many key customers now shipping Neoverse cores which, as I mentioned before, have now surpassed 1.5 billion.

Speaker #5: But we also now have our new business, the ARM AGI CPU business, which we just announced back in March. The confidence level we have in the success of that product only continues to increase.

Speaker #1: No, there's not a concern with that. We are very confident in the partners we're working with. We have a very good understanding of their capabilities and their upside potential.

Speaker #5: And as we talked about, the demand is greater than what we shared 90 days ago. And at the same time, our confidence to fulfill that demand has also increased.

Speaker #1: So there isn't one single point of failure to your point of the 1% that could cause an issue.

Speaker #5: So all in all, very proud of the results that we've achieved, a great quarter for the company. And thank you all for your interesting questions.

Rene Haas: All in all, very proud of the results that we've achieved, a great quarter for the company. Thank you all for your interest and questions.

Speaker #3: Thank you. This concludes today's Q&A. I will now hand back to Rene for closing remarks.

Rene Haas: All in all, very proud of the results that we've achieved, a great quarter for the company. Thank you all for your interest and questions.

Speaker #1: Thank you. The quarter for us was really a tale of two stories. One is the core business itself—the IP business—which continues to perform extremely well.

Speaker #1: A record first quarter, and we are guiding ahead of expectations, as Jason had mentioned. Our results were beyond expectations. The growth is really being driven by the data center.

Speaker #1: ARM continues to increase its market share. And we have many key customers now shipping Neoverse cores which, as I mentioned before, have now surpassed 1.5 billion.

Speaker #1: But we also now have our new business, the ARM AGI CPU business, which we just announced back in March. The confidence level we have in the success of that product only continues to increase.

Speaker #1: And as we talked about, the demand is greater than what we shared 90 days ago. At the same time, our confidence to fulfill that demand has also increased.

Speaker #1: So all in all, very proud of the results that we've achieved, a great quarter for the company, and thank you all for your interest and questions.

Q1 2027 Arm Holdings PLC Earnings Call

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