Jul. 31, 2025 –
On the day when newly listed Ambiq Micro saw its stock price soar on its Nasdaq IPO, veteran processor company Arm said yesterday in its Q1 2026 earnings that its quarterly revenue exceeded $1 billion for the second quarter in a row, and royalty revenue grew 25% year-on-year to $585 million.
With Arm holding its annual partner meeting next week in Cambridge, U.K., the Q1 earnings for fiscal year 2026 must have given Arm a nice story to bring to its extensive partner ecosystem. I can just imagine the CEO opening with, “Arm is at the heart of AI, we have over 22 million software developers building on Arm, and nine million apps running on Arm.” [Editor’s note: those figures were taken from their earnings press release].
It’s also the gist of what Rene Haas, CEO of Arm, said on yesterday’s earnings call. He commented, “We began fiscal year 2026 with strong momentum, fueled by the insatiable compute demands of AI. From smart centers in homes and factories to the world’s most advanced AI supercomputers, AI workloads are being deployed everywhere. This is driving unprecedented demand for compute that’s not only performant, but also energy efficient.”
During the call, Haas talked about the growth in royalties and how Armv9 and CSS were driving more value in the end device – evidence of Arm seeing the value of moving up the stack to drive growth. In fact, in a response to one analyst’s question about Arm going into full end solutions and ASICs, and why the company thinks it could be successful, Haas didn’t rule it out (see below). He also talked about growth from data centers with Arm Neoverse, and the China growth (21 percent of revenue in Q1).
Haas said, “One of the things that we’re seeing with newer customers such as CSPs (cloud service providers) and OEMs and also even traditional customers, is that they are asking for a better starting point as they develop their SoCs. And this is largely driven by the complexity of these chips and the time it takes to develop them. This led us to CSS, our compute subsystem, which have been successful beyond our expectations.”
He cited that many of the chiplets being developed today are mostly Arm IP, and the company’s support for chiplet development through its Arm Total Design ecosystem. He continued, “With that, we’re looking now at the viability of moving beyond the current platform to additional subsystems, chiplets or possibly full solutions.”
He said that within Arm, it has the expertise or can access it externally to deliver the expertise and technologies needed to design, implement and have a chiplet, for example, manufactured...