Arm Holdings plc
Arm Holdings plc designs and licenses processor architectures, CPU cores, and related intellectual property used in semiconductors and computing devices. Its technology is embedded across mobile, cloud, automotive, industrial, and edge applications through a broad network of chipmakers and ecosystem partners.
Fiscal year 2026 · change from previous year
Development 2022–2026
Business
Share of revenueRights to use Arm instruction sets and CPU architectures in chip designs.
Standardized CPU cores and related IP blocks used in semiconductor designs.
Ongoing fees tied to customer shipments of chips incorporating Arm IP.
Engineering support, enablement, and ecosystem collaboration for licensees.
Products
Reported · share of revenue- Royalty53.1 %
- License and Other Revenue46.9 %
Source: 20-F FY2026, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.
Customers
Arm sells to semiconductor companies, device makers, cloud platform participants, and other technology firms that design chips or build products around Arm-based compute. Its model depends on large customers licensing its IP for future chip programs, while downstream royalty revenue is tied to the volume of devices shipped by those customers. The reports also indicate meaningful concentration among top customers, including Arm China and SoftBank Group Corp.
Chip designers and foundries license Arm architecture and core IP for new processors.
Companies shipping Arm-based chips that generate recurring royalty revenue.
Infrastructure companies using Arm compute for power-efficient server and AI workloads.
OEMs and suppliers using Arm IP in embedded and connected systems.
Mobile and connected-device makers that buy Arm-based designs for volume products.
Strategy
Arm focuses on extending its architecture across more compute categories and on preserving its position as a low-power standard in semiconductors. The company emphasizes close alignment with customers and ecosystem partners so that Arm-based designs are adopted early in chip development cycles and continue to earn royalties over time. Its strategy also depends on sustained R&D investment to keep pace with next-generation workloads and emerging market requirements.
More design wins increase long-run royalty-bearing chip volume.
Energy efficiency is a core selling point in customer roadmaps.
Early collaboration improves design adoption and royalty durability.
Competitive relevance depends on new architectures and enhancements.
Geography
2026Arm's business is global, with customers and ecosystem partners spread across North America, Europe, and Asia. The company does not manufacture chips itself; instead, its geography reflects where chip designers, device makers, and royalty-generating end markets are located. Its exposure to Asia is especially important because a large share of semiconductor design and manufacturing activity sits there.
Share of the revenue the company reports by geography.
Risks
Arm is exposed to customer concentration, architecture competition, and the risk that partners or customers develop alternative compute platforms. Because its revenue depends on design wins and downstream chip shipments, any slowdown in customer adoption or loss of major accounts can affect future royalty streams. The business also faces standard semiconductor risks such as rapid technology change, regulatory scrutiny, and the need for sustained R&D spending.
- Customer concentrationImpact: HighLikelihood: High
A small number of customers generate a large share of revenue.
Exposure: Top five customers were about 57% of net revenue
- Competitive displacementImpact: HighLikelihood: Medium
Customers may move to alternative or proprietary architectures.
Exposure: Core CPU IP and compute platform adoption
- R&D execution riskImpact: HighLikelihood: Medium
The business must keep improving architecture to stay relevant.
Exposure: Next-generation products and applications
- End-market demand shiftsImpact: MediumLikelihood: Medium
Royalty revenue depends on the pace of customer chip shipments.
Exposure - Regulatory and partner scrutinyImpact: MediumLikelihood: Medium
Broader product offerings may create conflicts with key partners.
Exposure: Ecosystem relationships and licensing model
Accounting
Judgemental itemsArm's mix of license and royalty revenue affects timing and volatility.
Impact: Quarterly revenue and deferred revenue balances
Equity investments measured at fair value can create gains or losses.
Impact: Other income and asset values
Employee awards are a meaningful non-cash operating expense.
Impact: Operating margin and diluted EPS
Acquired intangibles depend on future performance assumptions.
Impact: Potential non-cash impairment charges
Global operating structure requires judgment on tax positions and rates.
Impact: Tax expense and effective tax rate
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Last updated: 28/09/2026