$ARM · ARM HOLDINGS PLC /UK
Arm Holdings filed its Q2 FY2027 (three and six months ended September 30, 2026) quarterly report on Form 6-K. Total revenue grew 27.1% YoY to $1.443B, with gross margin at 97.1% and operating margin at 13.9%. Net income dropped 45% YoY to $130M ($0.12 diluted EPS) as R&D expense jumped 24% to $857M and SG&A rose 36% to $343M.
- Total revenue rose 27.1% YoY to $1.443B in Q2 FY2027.
- Net income fell 45% YoY to $130M, or $0.12 diluted EPS.
- R&D expense climbed 24% YoY to $857M; SG&A rose 36% to $343M.
- Six-month operating cash flow increased $210M to $1.109B.
- Cash and equivalents ended the period at $3.251B, up from $2.751B.
Extended-hours trading shows ARM at $185.70, down 3.18% vs the $191.80 regular close, signaling investors are weighing the profit decline against strong revenue growth.
Arm's strong revenue growth is being offset by a sharp profit decline from heavy AI-related R&D spending, a key signal on the cost of its chip ambitions.
Arm's 27% revenue growth and heavy R&D investment into AGI CPUs and chiplets reflect the broader AI-semiconductor arms race, where top-line expansion is being funded by aggressive spending that pressures near-term margins.
Rising R&D and SG&A costs are compressing profitability, with net income down 45% YoY despite strong revenue growth. Arm also cites dependence on a limited number of customers and SoftBank's controlling-shareholder interests as key risks.