Arm Holdings plc

Good day and thank you for standing by. Welcome to the Arm fourth quarter fiscal year 2026 webcast and conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jeff Cavile, Head of Investor Relations. Please go ahead.

Thank you, Sharon, and welcome to our fourth quarter fiscal 26 earnings call. On the call are Rene Haas, Arms Chief Executive Officer, and Jason Child, Arms Chief Financial Officer. Today's call contains forward-looking information about the company and its financial results. While these statements represent our best current judgment, our business is subjected to many risks and uncertainties that could cause actual results to differ materially. Important risk factors that may affect our business and future financial results are described in our annual report on Form 20F filed with the SEC. ARM assumes no obligation to update any forward-looking statements. We will also refer to non-GAAP financial measures during the calls. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in our shareholder letter, as can a discussion of certain projected non-GAAP financial measures that we are not able to reconcile without unreasonable effort and supplemental financial information. Our earnings materials are available at investors.arm.com. With that, I'll turn the call to Rene.

Thank you, Jeff, and welcome, everyone. Arm delivered a record quarter and record fiscal year. Revenue this quarter was 1.49 billion, up 20%, our highest quarterly revenue quarter ever, and above the midpoint of our guidance. Licensing revenue grew 29% year over year to 819 million, driven by strong demand for the Arm platform. Royalty revenue grew 11% to 671 million, with growth across Edge AI, Physical AI, and Cloud AI, where our data center royalty has more than doubled year over year. That drove record non-GAAP EPS of $0.60, even while we continued to increase investment in R&D. For the full year, revenue reached a record $4.92 billion, up 23% year on year. Royalty revenue was up $2.61 billion, up 21%, and licensing revenue was $2.31 billion, up 25%. Non-GAAP EPS was also a record at $1.77. Fiscal 2026 was our third consecutive year since going public of more than 20% revenue growth, demonstrating the strength of our business and the increasing relevance of Arm in the highest growth areas of compute. This quarter was driven by key highlights, including the expansion of Arm's product strategy and our continued momentum in Cloud AI. As AI is moving from human-based queries to continuous agent-driven workloads, this shift is expanding the role of the CPU. These agentic workloads require CPUs to coordinate tasks, move data, manage memory, enforce security, and orchestrate work around accelerators. As agentic AI scales, data centers will require more than four times today's CPU capacity, creating a data center CPU market opportunity of more than $100 billion. by 2030. The Arm AGI CPU, which we launched at our Arm Everywhere event last quarter, and is purpose-built for agentic AI, addresses this need directly. Our first production silicon product for the data center will deliver more than two times the performance per rack compared with x86 platforms, with the potential to reduce AI data center capital expenditure by up to $10 billion per gigawatt. Meta is our lead partner and co-developer. and is working with us on a multi-generation roadmap to support personal superintelligence for more than 3 billion users. The ARM AGI CPU expands how customers can work with ARM. Customers can now deploy ARM compute through IP, compute subsystems, or silicon. One compute platform, one software ecosystem. That is unique to ARM. IP and CSS remain the foundation of our royalty growth, silicon extends the ARM platform and gives customers another way to build AI infrastructure. Ecosystem support has been significant. More than 50 leading companies are supporting the expansion of the ARM compute platform into silicon, including the very biggest names in the industry. Customer response to the ARM AGI CPU has been very strong. We now have more than $2 billion of customer demand across fiscal 2027 and fiscal 2028. This is more than double what we stated at launch. We are on track towards our forecast of $15 billion at this business, as stated at our Arm Ever event. And soon, the data center will be Arm's largest business. The direction is clear. Customers want Arm at the center of the AI data center. Customers need ARM where agentic applications run, and they need ARM where accelerators scale. For example, SAP will move their core database and business application workloads to ARM, starting with AWS Graviton and expanding to the ARM AGI CPU. This represents a significant strategic shift. Cloudflare will deploy ARM across its global network to support traffic management, security, and AI inference closer to users. We have also secured design wins with key network infrastructure providers, including F5 and SK Telecom. AI infrastructure needs CPUs and accelerators working together efficiently at scale. NVIDIA, Amazon, and Google are already using ARM-based CPUs as head nodes along the accelerator-based systems. Cerebrus, OpenAI, Rebellions, and Positron are doing the same with the ARM AGI CPU. This momentum builds on our existing scale in the cloud. That scale is increasingly driven by ARM Neoverse CSS and ARM-based compute, which now represents about 50% market share with top hyperscalers. Recent announcements from key customers show that AI infrastructure is being built around ARM-based custom silicon. At Google Cloud Next, Google announced TPU 8T for training and TPU 8i for inference, in both cases replacing x86 host processors with custom ARM Axion CPUs. The increased performance at 50% less power enables an 80% improvement over the previous x86 solution. AWS continues to scale its custom silicon strategy with ARM-based Graviton alongside Tranium and Nitro, while Microsoft is advancing its ARM-based strategy with Cobalt. designed to deliver high performance and energy efficient compute for Azure workloads. And at NVIDIA GTC, NVIDIA announced VERA, the next generation ARM-based CPU built for agentic AI and building a standalone rack integrating 256 VERA CPUs. Across the largest AI platforms, ARM-based CPUs are becoming central to performance, efficiency, and cloud economics. Our opportunity does not stop at the data center. AI is moving to every device and every physical system. Phones, PCs, vehicles, factories, robots, cameras, sensors, and connected devices all need efficient, secure compute with software that scales. These AI workloads will all run on ARM. With over 350 billion chips shipped and over 22 million developers, The ARM Compute Platform is the most comprehensive in history, and we are positioned to bring AI from cloud infrastructure to the edge and to the physical world through a common compute platform and ecosystem. We enter fiscal 2027 with record results, strong customer demand, and a larger opportunity ahead of us. Our strategy is clear. Grow royalties through IP and CSS, and add silicon as a new growth vector and scale the Arm platform across the next generation of AI workloads. With that foundation in place, our focus is execution and continuing to build the future of AI on Arm. And with that, I will hand it over to Jason.