Arm Holdings posts record quarterly revenue, and the stock falls anyway

The chip designer grew revenue 27% to $1.44 billion, but a royalty miss and modest guidance sent shares lower Arm Holdings just delivered the biggest quarter in its history. Investors responded by selling the stock. The British chip designer reported fiscal second-quarter 2027 revenue of $1.44 billion on November 4, 2026, up 27% from a year earlier. Shares slid in after-hours trading and kept sliding over the following sessions, with declines ranging from approximately 5% to 11% at various points. The numbers behind the record This marks the fifth straight quarter in which Arm grew revenue by more than 20% year over year. The standout was licensing and other revenue, which jumped 50% to $773 million. Royalty revenue rose a more modest 8% to $670 million. Licensing revenue is what companies pay upfront for access to the blueprints. Royalties are the small fee Arm collects on every chip that eventually ships using its designs. On the profit side, adjusted earnings per share climbed 33% to $0.52, beating Wall Street consensus. GAAP net income, however, fell to $130 million despite the top-line growth. Why Wall Street hit the sell button Royalty revenue missed estimates, and that is th...