### At a Glance Arm’s fiscal first-quarter results exceeded expectations, with management emphasizing that AI demand is driving the expansion of Arm’s computing platform across data centers, edge devices, and the physical world, while expressing increased confidence in the newly launched Arm AGI CPU business.
Total revenue grew 22% year-over-year to $1.29 billion, a record for the fiscal first quarter; non-GAAP EPS rose 29% year-over-year to $0.45, above the high end of guidance. Royalty revenue increased 22% year-over-year to $715 million, with data center royalty revenue again more than doubling year-over-year, offsetting weakness in the smartphone market.
On business progress, Arm Neoverse shipments have surpassed 1.5 billion cores, with the latest 500 million cores shipped in just nine months, compared to six years for the first 1 billion. Major AI infrastructure providers, including NVIDIA, Google, AWS, and Microsoft, have all expanded their deployments of Arm-based CPUs. The newly launched Arm AGI CPU has delivered initial products to multiple customers and secured the manufacturing capacity needed to support the initial $1 billion opportunity. Management stated that over the past 90 days, confidence has increased in achieving over $1 billion in revenue from this business, with current demand exceeding $2 billion and new customers continuing to be added.
Looking ahead, fiscal second-quarter revenue guidance is $1.38 billion (±$50 million), representing approximately 22% year-over-year growth. Management expects full-year royalty revenue growth may decline from the previously anticipated ~20% to the high teens, primarily due to weakness in the smartphone market, though continued outperformance in the cloud AI business provides an offset.
Positive factors explicitly cited by management include: accelerated AI deployment in data centers, strong demand for Arm AGI CPUs with improved supply prospects, and the software ecosystem expanding to over 22 million developers. On the risk side, the smartphone market is experiencing demand slowdown due to rising memory prices, which could impact royalty revenue growth.