ARM Holdings drew 12 news stories in the 24 hours to 5 November, against a usual 1.1 a day. According to reports, shares fell sharply after the company's latest earnings release, with the revenue outlook cited as the reason. The filings show a company where cash and profit are moving at very different speeds, free cash flow rose 450.0% over the year while net income rose 14.1%, and that gap is what the numbers actually say.
Source: SEC EDGAR XBRL company facts. Latest period shown: FY26 Q4.
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| Period | Revenue growth, TTM YoY | Operating margin (TTM) | FCF margin (TTM) |
|---|---|---|---|
| FY23 Q4 | -0.9% | 25.0% | 25.2% |
| FY24 Q4 | 20.7% | 3.4% | 30.9% |
| FY25 Q4 | 23.9% | 20.7% | 4.4% |
| FY26 Q4 | 22.8% | 18.3% | 19.9% |
Profit is lagging sales
Cash is outrunning sales. Free cash flow rose 450.0% over the year to $979.0 million, while revenue grew 22.8% to $4.9 billion. Operating cash flow rose 283.9% to $1.5 billion, and capital spending was $545.0 million, or 11.1% of revenue. The free-cash-flow margin reached 19.9% of revenue, up 15.5 percentage points from a year earlier. Each dollar of sales is producing more cash than it did twelve months ago.
Profit is not keeping pace with that growth. Net income rose 14.1% to $904.0 million over the same period in which revenue rose 22.8%, so costs absorbed a larger share of each dollar. Operating margin stood at 18.3%, down 2.4 percentage points from a year earlier. Gross margin was 97.5% and net margin was 18.4%. The average diluted share count rose 0.5% over the year.
The growth rate itself is decelerating. The 22.8% revenue gain was down 1.2 percentage points from the rate a quarter earlier.
What ARM Holdings PLC's share price implies against our model
Our model is most sensitive to the growth rate. In our model, growth 5 percentage points lower would lower the value by 22.0%, while growth 5 percentage points higher would raise it by 28.1%. A free-cash-flow margin 1 percentage point lower would lower the value by 4.6%. These are model estimates, distinct from the analysts' average estimate, and the growth figure carries the larger sensitivity.
What the filings cannot tell you at ARM Holdings PLC
Our figures run to Q4 2026, from the company's own filings. They cannot confirm, explain or rule out anything in the reports. The revenue growth rate and the operating-margin figure are the two numbers that bear most directly on the revenue-outlook concern in the coverage.