Arm Holdings plc reported its first-quarter fiscal year 2026 results on July 30, 2025, with adjusted earnings per share of 35 cents and revenue of $1.05 billion, both in line with analyst estimates. However, net income for the quarter fell 42% to $130 million, or 12 cents per share, compared to $223 million, or 21 cents per share, a year earlier, primarily due to increased engineering spending.
For the second fiscal quarter, Arm provided guidance for adjusted earnings between 29 cents and 37 cents per share, and revenue between $1.01 billion and $1.11 billion, which was largely in line with consensus estimates. The company's non-GAAP operating expenses reached $619 million in Q1 FY26, reflecting aggressive investments in research and development.
CEO Rene Haas confirmed the company's strategic consideration of designing its own processors, stating, 'We're looking now at the viability of moving beyond the current platform to additional subsystems, chiplets or possibly full solutions.' This strategic pivot, alongside the lower profit and in-line guidance, contributed to a decline in shares following the announcement, as investors weighed the execution risks and potential impact on its licensing model.
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