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How Arm Holdings (ARM) makes money

Arm Holdings (ARM) made $1.4B of revenue in the second quarter fiscal 2027 (Q2 FY27), +27% from a year earlier. Revenue from external customers brought in $1.0B (71%); Revenue from related parties brought in $424M (29%). Of every dollar of revenue, 97¢ was left as gross profit, 14¢ was left as operating profit, 9¢ was left as net earnings.

Drawing the Sankey…

Arm Holdings revenue by segment, Q2 FY27Arm Holdings revenue by segment, Q2 FY27Revenue from external customers$1.0BRevenue from related parties$424M
Arm Holdings revenue by quarterArm Holdings revenue by quarter$844MQ2 FY25$983MQ3 FY25$1.1BQ1 FY26$1.1BQ2 FY26$1.2BQ3 FY26$1.3BQ1 FY27$1.4BQ2 FY27
Arm Holdings: where each dollar of revenue goesArm Holdings: where each dollar of revenue goesCost of revenue3¢Gross profit97¢Operating expenses83¢Operating profit14¢Income tax5¢Net earnings9¢Operating cash flow14¢Free cash flow9¢

Revenue by segment, Q2 FY27

SegmentRevenueShareQ/QY/Y
Revenue from external customers$1.0B70.6%—+43%
Revenue from related parties$424M29.4%—+0.5%

Where each dollar of revenue goes

LineQ2 FY27% of revenue
Revenue$1.4B100.0%
Cost of revenue$42.0M2.9%
Gross profit$1.4B97.1%
Operating expenses$1.2B83.2%
Operating profit$201M13.9%
Income tax$78.0M5.4%
Net earnings$130M9.0%
Operating cash flow$207M14.3%
Free cash flow$135M9.4%

Revenue, quarter by quarter

QuarterRevenueY/Y
Q2 FY27$1.4B+27%
Q1 FY27$1.3B+22%
Q3 FY26$1.2B+26%
Q2 FY26$1.1B+34%
Q1 FY26$1.1B+12%
Q3 FY25$983M+19%
Q2 FY25$844M+5%

From Arm Holdings' 6-K filed Nov 4, 2026 (on EDGAR).

Questions

How does Arm Holdings make money?

Arm Holdings (ARM) made $1.4B of revenue in the second quarter fiscal 2027 (Q2 FY27), +27% from a year earlier. Revenue from external customers brought in $1.0B (71%); Revenue from related parties brought in $424M (29%). Of every dollar of revenue, 97¢ was left as gross profit, 14¢ was left as operating profit, 9¢ was left as net earnings.

What is Arm Holdings' biggest business?

Revenue from external customers: $1.0B in the second quarter fiscal 2027, 71% of revenue, +43% from a year earlier.

What is Arm Holdings' profit margin?

Net earnings were $130M, 9.0% of revenue, in the second quarter fiscal 2027; the operating margin was 13.9%.

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Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.