$ARM (+2.84%) Holdings Q2 Earnings Highlights:

🔹 Revenue: $855M (Est. $808M) 🟢; UP +5% YoY

🔹 EPS: $0.30 (Est. $0.26) 🟢

Q3 Guidance

🔹 Revenue: $920M - $970M (Est. $945M)😐

🔹 Non-GAAP EPS: $0.32 - $0.36 (Est. $0.34)😐

Q2 Performance

🔹 Royalty Revenue: $514M; UP +23% YoY, driven by strong adoption of Armv9 architecture

🔹 License and Other Revenue: $330M; DOWN -15% YoY, reflecting timing of high-value agreements

🔹 Gross Profit: $820M; Gross Margin at 97.2%

🔹 Operating Income: $326M; Operating Margin at 39%, DOWN from 48% YoY due to increased investment in engineering

Segment and Strategic Highlights

🔹 CSS: Strong demand, with licensing growth from major partners in automotive and mobile, including new Dimensity 9400 processor based on Armv9

🔹 Automotive and IoT: Increased adoption of Armv9 for AI-driven applications across automotive, smartphones, and IoT sectors

🔹 Cloud and Data Center: Partnerships with Microsoft and Google on Arm-based Azure Cobalt 100 and Axion chips, enhancing energy efficiency and cost-effectiveness in data centers

Operational Metrics

🔹 Annualized Contract Value (ACV): $1.25B; UP +13% YoY, driven by strong license renewals and new agreements

🔹 RPO: $2.39B, maintaining stability with a slight decrease YoY

🔹 Free Cash Flow: $(65)M, impacted by deal-specific payment structures

CEO Rene Haas' Commentary

🔸 "Demand for high-performance Armv9 and CSS compute platforms continues to exceed expectations, fueled by AI proliferation from cloud to edge. Our strategic focus on energy-efficient compute solutions positions us well across sectors."