ARM Holdings (ARM) First Take Results and guidance above the Street

Equity Research 29 July 2026 | 4:23PM EDT

ARM Holdings (ARM): First Take: Results and guidance above the Street

Key stock takeaways: We expect the stock to trade modestly higher following James Schneider, Ph.D. | revenue and EPS guidance that were above the Street. We believe investor Goldman Sachs & Co. LLC expectations were elevated heading into the quarter, given recent bullish targets and Anmol Makkar positive market sentiment for ARM’s Datacenter CPU revenue ramp. On the | conference call, we expect investors to focus on : (1) update on supply availability for Goldman Sachs & Co. LLC

AGI CPUs; (2) visibility into smartphone market recovery; (3) updated thoughts on Luya You | share gains in Datacenter business and (4) margin trajectory. Goldman Sachs & Co. LLC

Quarterly results above the Street: ARM reported revenue of $1.29 bn, above GS Khalil Fenina | and the Street (VA) at $1.26 bn, and operating margin of 41.2% was above GS at Goldman Sachs & Co. LLC 38.4% and the Street at 38.0%. Operating EPS of $0.45 was above GS and the Street at $0.41. Licensing and other revenue of $574 mn was above GS at $561 mn and the Street at $562 mn. Royalty revenue of $715 mn was above GS at $701 mn and the Street at $702 mn.

FY2Q guidance is above the Street. ARM guided FY2Q revenue and operating EPS above the Street. Revenue was guided to $1.38 bn at the midpoint, which is above GS at $1.30 bn and the Street at $1.34 bn. Operating expense was guided to $780 mn, below GS at $797 mn and the Street at $793 mn. Operating EPS guidance of $0.47 was above GS at $0.41 and the Street at $0.44.

Price target and risks: We are Sell rated on ARM. Our 12-month price target of $150 is based on 50x our normalized EPS estimate of $3.00. Key upside risks: (1) stronger-than-expected Datacenter ramp; (2) better-than-expected operating leverage; (3) better-than-expected execution on chip manufacturing.

Exhibit 1: ARM - Variance summary FY1Q27 Financials ($ mn, except EPS) Actual GS Street Actual/GS Actual/Street Licensing Revenue % 2.1% Royalty Revenue % 1.9% Total Revenue 1,289 1,262 1,266 2.1% 1.8% QoQ -13.5% -15.3% -15.0% YoY 22.4% 19.9% 20.2% Gross Margin (excl. SBC) 98.1% 98.6% 98.3% -54 bps -15 bps Operating Income (excl. SBC) % 10.4% Operating Margin (%) 41.2% 38.4% 38.0% +284 bps +322 bps EPS (excl. SBC) $0.45 $0.41 $0.41 10.4% 11.0%

Source: Company data, Goldman Sachs Global Investment Research, Visible Alpha Consensus Data

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs ARM Holdings (ARM)

Exhibit 2: ARM - Guidance FY2Q27E Financials ($ mn, except EPS) Low High Guidance (midpoint) GS Street Guidance/GS Guidance/Street Total Revenue 1,330 1,430 1,380 1,300 1,339 6.2% 3.1% QoQ 7.1% 3.0% 5.7% YoY 21.6% 14.5% 17.9% Operating expense (ex SBC) % -1.6% EPS (excl. SBC) $0.41 $0.44 14.8% 6.9%

Source: Company data, Goldman Sachs Global Investment Research, Visible Alpha Consensus Data

ARM 12m Price Target: $150.00 Price: $244.74 Downside: 38.7%

Sell GS Forecast 3/26 3/27E 3/28E 3/29E Market cap: $261.6bn Revenue ($ mn) 4,920.0 5,895.8 7,839.7 9,917.9 Enterprise value: $258.4bn EBITDA ($ mn) 2,364.0 2,839.5 3,694.0 4,692.2 3m ADTV: $3.2bn EBIT ($ mn) 2,115.0 2,555.5 3,410.0 4,408.2 United States EPS ($) Americas Semiconductors & IT P/E (X) Services EV/EBITDA (X) M&A Rank: 3 FCF yield (%) 0.7 0.2 0.4 0.8 Dividend yield (%) 0.0 0.0 0.0 0.0 Net debt/EBITDA (X) (1.2) (1.2) (1.2) (1.4)

3/26 6/26E 9/26E 12/26E EPS ($)

Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 28 Jul 2026 close.