Arm reported revenue of $844 million for Q2 2025, showing a 5% year-on-year increase, but a decline from $939 million in the previous quarter, breaking a year-long streak of rising revenues.
The major highlight for Arm was the growth in royalty revenue, reaching $514 million, which marked a 23% increase year-on-year, driven largely by the rising adoption of Armv9 architecture in smartphones.
CFO Jason Child emphasized that smartphone royalties saw an approximate 40% year-on-year increase, despite only a mid-single-digit rise in smartphone shipments, showcasing Arm’s strategy of maximizing royalty rates.
Arm's future focus is heavily tied to AI, as Chief Executive Rene Haas highlighted during the earnings call, discussing the significant opportunities AI presents for Arm's chip architecture.
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