Arm (ARM) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 revenue of $844 million, up 5% year-over-year, driven by 23% royalty growth and strong Armv9 adoption, especially in smartphones and cloud.

• Net income for the quarter was $107 million, reversing a prior-year loss, with gross margin at 96%.

• Cumulative Arm-based chip shipments surpassed 300 billion, reinforcing leadership in CPU architecture.

• AI demand and ecosystem partnerships are fueling growth across all major end markets.

• Over 50% of licensees now on ATA contracts, with annual price increases of ~7%.

Financial highlights

• Royalty revenue: $514 million, up 23% year-over-year, matching highest quarter to date.

• Licensing revenue: $330 million, down 15% year-over-year but better than expected.

• Non-GAAP gross margin reached 97%; non-GAAP operating margin was 39%.

• Non-GAAP net income for Q2 FYE25 was $317 million, with non-GAAP diluted EPS of $0.30.

• Cash and cash equivalents at quarter-end: $1,498 million.

Outlook and guidance

• Q3 revenue expected between $920–$970 million, midpoint implies 15% year-over-year growth.

• FY25 revenue guidance reiterated at $3.8–$4.1 billion, 18–27% year-over-year growth.

• Full-year royalty revenue growth expected in the high teens.

• Non-GAAP operating expenses for FY25 expected at $2.05 billion, up 19% year-over-year.

• Non-GAAP EPS guidance for FY25: $1.45–$1.65.