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Arm Holdings' Licensing Momentum Continues to Power Revenue Growth
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Key Takeaways
ARM's total revenues rose 20% year over year to $1.49 billion in fiscal Q4 2026.
Arm's licensing and other revenues increased 29% to $819 million in the latest quarter.
ARM's royalty revenues grew 11% to $671 million, aided by Armv9 and data center adoption.
Arm Holdings (ARM - Free Report) continues to benefit from strong demand for its intellectual property, and the company’s latest results suggest that licensing activity remains a major driver of growth.
During the fourth quarter of fiscal 2026, total revenues climbed 20% year over year to $1.49 billion. While ARM’s royalty business remains an important contributor, the most striking development was the continued strength in licensing and other revenues.
The performance highlights ongoing demand for Arm Holdings’ technology across a broad range of end markets. As semiconductor companies increasingly develop custom chips for artificial intelligence, cloud computing, mobile devices, and other advanced applications, access to ARM’s architecture remains critical to product development. This dynamic continues to support a healthy pipeline of licensing agreements and long-term customer commitments.
Importantly, the company’s licensing business has shown significant growth over time. Licensing and other revenues increased 29% year over year to $819 million in the latest quarter, helping drive a substantial increase in total revenues. The results also benefited from contributions from previously signed agreements and the timing of multiple high-value licensing contracts.
Meanwhile, Arm Holdings’ royalty business continues to provide a powerful recurring revenue stream. Royalty revenues increased 11% year over year to $671 million, supported by growing adoption of Armv9 technology, Arm CSS and the increasing use of Arm-based chips in data center workloads.
For investors, the key takeaway is clear: strong licensing demand continues to reinforce Arm Holdings’ competitive position. As customers expand investments in next-generation computing and AI infrastructure, the company appears well-positioned to benefit from both new licensing opportunities and a growing royalty base, creating multiple avenues for sustained growth.
How AppLovin Compares With Key U.S. Peers
The Trade Desk (TTD - Free Report) operates a demand-side platform focused on programmatic advertising, with a strong focus on data-driven targeting. While The Trade Desk benefits from premium brand exposure, its margin profile is more sensitive to advertising cycles than AppLovin. The Trade Desk emphasizes reach and transparency, whereas AppLovin emphasizes performance. As a result, TTD competes more on scale than efficiency.
Unity Software (U - Free Report) also intersects with advertising through its real-time 3D and monetization tools. However, Unity Software’s ad business is closely tied to developer ecosystems and remains more volatile. Unlike AppLovin, Unity Software is still balancing growth with profitability, making AppLovin’s margin stability a key differentiator among these peers.
ARM’s Price Performance, Valuation, Estimates
The stock has surged a massive 273.5% year to date, significantly underperforming the industry’s 52.5% rally.
Image Source: Zacks Investment Research
From a valuation standpoint, ARM trades at a forward price-to-sales ratio of 68.41X, well above the industry’s 9.49X. It carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for the company’s fiscal 2027 earnings has remained unchanged over the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Arm Holdings' Licensing Momentum Continues to Power Revenue Growth
Key Takeaways
Arm Holdings (ARM - Free Report) continues to benefit from strong demand for its intellectual property, and the company’s latest results suggest that licensing activity remains a major driver of growth.
During the fourth quarter of fiscal 2026, total revenues climbed 20% year over year to $1.49 billion. While ARM’s royalty business remains an important contributor, the most striking development was the continued strength in licensing and other revenues.
The performance highlights ongoing demand for Arm Holdings’ technology across a broad range of end markets. As semiconductor companies increasingly develop custom chips for artificial intelligence, cloud computing, mobile devices, and other advanced applications, access to ARM’s architecture remains critical to product development. This dynamic continues to support a healthy pipeline of licensing agreements and long-term customer commitments.
Importantly, the company’s licensing business has shown significant growth over time. Licensing and other revenues increased 29% year over year to $819 million in the latest quarter, helping drive a substantial increase in total revenues. The results also benefited from contributions from previously signed agreements and the timing of multiple high-value licensing contracts.
Meanwhile, Arm Holdings’ royalty business continues to provide a powerful recurring revenue stream. Royalty revenues increased 11% year over year to $671 million, supported by growing adoption of Armv9 technology, Arm CSS and the increasing use of Arm-based chips in data center workloads.
For investors, the key takeaway is clear: strong licensing demand continues to reinforce Arm Holdings’ competitive position. As customers expand investments in next-generation computing and AI infrastructure, the company appears well-positioned to benefit from both new licensing opportunities and a growing royalty base, creating multiple avenues for sustained growth.
How AppLovin Compares With Key U.S. Peers
The Trade Desk (TTD - Free Report) operates a demand-side platform focused on programmatic advertising, with a strong focus on data-driven targeting. While The Trade Desk benefits from premium brand exposure, its margin profile is more sensitive to advertising cycles than AppLovin. The Trade Desk emphasizes reach and transparency, whereas AppLovin emphasizes performance. As a result, TTD competes more on scale than efficiency.
Unity Software (U - Free Report) also intersects with advertising through its real-time 3D and monetization tools. However, Unity Software’s ad business is closely tied to developer ecosystems and remains more volatile. Unlike AppLovin, Unity Software is still balancing growth with profitability, making AppLovin’s margin stability a key differentiator among these peers.
ARM’s Price Performance, Valuation, Estimates
The stock has surged a massive 273.5% year to date, significantly underperforming the industry’s 52.5% rally.
From a valuation standpoint, ARM trades at a forward price-to-sales ratio of 68.41X, well above the industry’s 9.49X. It carries a Value Score of F.
The Zacks Consensus Estimate for the company’s fiscal 2027 earnings has remained unchanged over the past 30 days.
ARM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.