Key takeaways
- Arm’s second-quarter sales rose 27%, led by licensing rather than royalties.
- Shares were lower in a dated November 5 premarket snapshot.
- Higher spending and slower royalty growth complicate the AI growth story.
- Old option prices cannot establish today’s post-earnings opportunity.
ARM, Nov 5 at 06:24:52 ET
US$183.57
−4.29% vs Nov 4 close
Q2 revenue
US$1.443bn
+27% year over year
Q3 revenue guidance
US$1.49bn–1.59bn
Management forecast, not achieved sales
Displayed daily volume
8,537,944 shares
1.78× displayed average of 4,800,214
Post-results IV / current IV rank
Not verified
Dated IV snapshot discussed below
Next earnings: company calendar
February 3, 2027
Tentatively proposed, not confirmed
A record second quarter, not a uniform growth story
Arm reported fiscal second-quarter revenue of US$1.443 billion on November 4, up 27% from US$1.135 billion a year earlier. The quarter ended September 30, 2026. Revenue exceeded the US$1.43 billion upper end of Arm’s own guidance by US$13 million; that is not an analyst-consensus comparison. [1,2]
The stock’s November 4 regular-session close was US$191.80, down US$10.69, or 5.28%, before the earnings reaction. Yahoo Finance then displayed US$183.57 at 06:24:52 ET on November 5, down another US$8.23, or 4.29%, from that close. These are dated observations, not live executable prices. [3]
Yahoo’s quote page displayed daily volume of 8,537,944 shares against its displayed average of 4,800,214: about 1.78 times as much. That daily tally is not November 5 premarket turnover. The chart uses completed-session closing prices, not the premarket observation. [3,4]
ARM: 40 completed-session closes
Unadjusted daily closes, September 10–November 4, 2026; premarket trading excluded.
Source: Yahoo Finance daily chart [4], retrieved November 5, 2026 at 06:27 ET; prices rounded to US$0.01.
Why licensing and royalties deserve separate attention
License and other revenue climbed 50% to US$773 million, while royalties rose 8% to US$670 million. Licensing supplied US$258 million of the US$308 million year-over-year revenue increase, or 83.8%. Strong total growth therefore does not mean every revenue stream accelerated together. [1]
- Contract timing matters: Arm attributes licensing growth to demand, the size and timing of large agreements, and backlog. Its normalized annualized contract value rose 12%, slower than recognized licensing revenue. [1]
- End markets differ: Arm says data-center royalties doubled, partly offset by memory-pricing pressure on smartphones. That supports an uneven-demand explanation, not a claim that AI demand disappeared. [1]
- Peer context: AMD reported US$8.5 billion of third-quarter Data Center sales, up 97%. It sells different products with different economics; this is context, not an apples-to-apples valuation comparison. [5]
| Measure | Q2 reported | Q3 company outlook |
|---|---|---|
| Revenue | US$1.443bn | US$1.49bn–1.59bn |
| GAAP diluted EPS | US$0.12 | Not supplied here |
| Adjusted diluted EPS | US$0.52 | US$0.52–0.60 |
| Adjusted operating expenses | US$774m | About US$825m |
| GAAP / adjusted operating margin | 13.9% / 44.2% | Not supplied here |
GAAP diluted EPS fell to US$0.12 from US$0.22, while adjusted EPS rose to US$0.52 from US$0.39. The adjusted measure excludes specified costs included under GAAP, so the figures must not be interchanged. The next-quarter spending forecast is about 6.6% above Q2, creating another hurdle for profit growth. [1]
Arm also expressed greater confidence in achieving up to US$2 billion of AGI CPU revenue across fiscal 2027 and 2028 combined. First commercial deliveries remain targeted for fiscal Q4 2027. This is a management outlook, not booked sales or US$2 billion promised in each year. [1,2]
What it means for option sellers
Cboe’s saved pre-open snapshot displayed 30-day implied volatility of 77.322%, but its underlying last-trade field still pointed to November 4. It does not establish post-results IV, and a current IV rank was not verified. Falling IV can reduce a short option’s value, all else equal, but cannot prevent losses from a falling share price. [6–8]
For the wheel, a cash-secured put is a potential share purchase rather than just premium income. A covered call caps some upside while leaving substantial stock downside. Arm’s November 4 earnings have passed, but its next results date is only tentatively February 3, 2027; calendars can change. [7,8,11]
Hypothetical strikes, not a quoted setup
Imagine a November 20 US$175 put with an assumed US$3 premium and a 100-share multiplier. It would reserve US$17,500, collect US$300 gross and break even at US$172 before fees; the loss at a zero share price would be US$17,200. A US$200 covered call would cap share upside at that strike, plus its separate premium. These are educational assumptions, not verified bids, recommended strikes or promised fills. Check live prices before trading. [7,8]
The gap risk survives the earnings release
A weak royalty outlook or delivery disappointment could trigger another share-price gap. A put premium is only a limited cushion; rolling does not erase an economic loss. Assignment can require the full share purchase. [1,7]
A licensing surge is not the same thing as faster recurring royalties—or a safer short put.
What to watch next
The macro backdrop remains relevant to growth-sensitive shares. The November 3 BLS release put September job openings at 7.5 million and the openings rate at 4.5%, both little changed. That is historical labor data, not proof of what caused Arm’s move. [9]
- November 5, 08:30 ET: preliminary third-quarter productivity and costs; November 6, 08:30 ET: October employment. Both are still upcoming at this pre-open writing. [10]
- November 10, 08:30 ET: October CPI, before the illustrative November 20 expiry. New macro data can change the broader market backdrop. [10]
- February 3, 2027: tentatively proposed Arm Q3 earnings. Watch royalty growth, licensing conversion and spending; the date is not yet confirmed. [11]
Hero: archival Arm I building in Cambridge, not the earnings event. Cmglee’s stitched photograph is cropped and resized under CC BY-SA 3.0; source and author, with the adaptation under the same licence. [12,13]
For information and education, not personal financial advice. Options and shares can lose substantial value; examples exclude fees and taxes.
Sources
- [1]Q2 FYE27 shareholder letter — Arm · Accessed 2026-11-05T06:08:23.036098-05:00 · Tier 1
- [2]November 4 results highlights — Arm · Accessed 2026-11-05T06:09:38.434839-05:00 · Tier 1
- [3]ARM premarket quote and daily volume — Yahoo Finance · Accessed 2026-11-05T06:27:01.673454-05:00 · Tier 3
- [4]ARM daily closing prices — Yahoo Finance · Accessed 2026-11-05T06:27:01.092236-05:00 · Tier 3
- [5]Q3 2026 results — AMD · Accessed 2026-11-05T06:11:29.855902-05:00 · Tier 1
- [6]ARM delayed options snapshot — Cboe · Accessed 2026-11-05T06:27:01.747570-05:00 · Tier 1
- [7]Cash-secured put — Options Industry Council · Accessed 2026-11-05T06:27:01.315523-05:00 · Tier 1
- [8]Covered call — Options Industry Council · Accessed 2026-11-05T06:27:01.208537-05:00 · Tier 1
- [9]September job openings, November 3 release — U.S. Bureau of Labor Statistics · Accessed 2026-11-05T06:27:01.036996-05:00 · Tier 1
- [10]November release calendar — U.S. Bureau of Labor Statistics · Accessed 2026-11-05T06:27:01.001094-05:00 · Tier 1
- [11]Tentative earnings dates — Arm · Accessed 2026-11-05T06:13:07.323128-05:00 · Tier 1
- [12]Cambridge Arm building photograph — Wikimedia Commons · Accessed 2026-11-05T06:27:01.250246-05:00 · Tier 3
- [13]CC BY-SA 3.0 licence — Creative Commons · Accessed 2026-11-05T06:27:01.353041-05:00 · Tier 1
This content is for informational and educational purposes only and is not financial advice. Options involve risk and are not suitable for every investor. Do your own research before trading.
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