Share count
1.1Bpeak FY2026
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ARM, Arm Holdings plc
Semiconductors asset-light
The Company is a global leader in the semiconductor industry.
The Company's principal operations and activities are the licensing, marketing, research and development of central processing unit ("CPU") IP, graphics processing unit IP, 55 systems IP, compute subsystems ("CSS"), and associated software, tools and other related services.
Our agent for service of process in the United States is Arm, Inc.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2026
$4.9B
+22.8% YoY · 16% 4-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $4.9B 5-yr avg $3.5B
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What it is
- Revenue is Royalty (53%) and License and Other Revenue (47%).
- What moves the needle
- Gross margin has run about 96% and operating margin about 21% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. The operating margin has swung widely — from 3.4% to 25% — on a steadier 96% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. Read this kind of business on process leadership and the capex cycle. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has run in the teens (median 15%, above 15% in 2 of 5 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 25% of revenue reaches owners as cash, consistently. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 20-F →Revenue spreads across 2 lines, the largest Royalty at 53%.
Revenue by product line, FY2026
- Royalty53%$2.6B
- License and Other Revenue47%$2.3B
By geographyUnited States36%China18%Japan17%Taiwan14%South Korea8%Other countries8%
From the segment footnote of the company's own 20-F. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2022–2026
realized figures from each filing · older years to the left| 2022’22 | 2023’23 | 2024’24 | 2025’25 | 2026’26 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|
| Income statement | ||||||
| $2.7B | $2.7B | $3.2B | $4.0B | $4.9B | $4.9B | RevenueRevenue |
| 95% | 96% | 95% | 97% | 98% | 98% | Gross marginGross mgn |
| $633M | $671M | $111M | $831M | $900M | $900M | Operating incomeOp. inc. |
| 23.4% | 25.0% | 3.4% | 20.7% | 18.3% | 18.3% | Operating marginOp. mgn |
| $549M | $524M | $306M | $792M | $904M | $904M | Net incomeNet inc. |
| 17% | 22% | — | -10% | 22% | 22% | Effective tax rateTax rate |
| Cash flow & returns | ||||||
| $458M | $739M | $1.1B | $397M | $1.5B | $1.5B | Operating cash flowOp. cash |
| $185M | $170M | $162M | $183M | $249M | $249M | DepreciationDeprec. |
| ($276M) | $45M | $622M | ($578M) | $371M | $371M | Working capital & otherWC & other |
| $34M | $64M | $92M | $219M | $545M | $545M | CapexCapex |
| 1.3% | 2.4% | 2.8% | 5.5% | 11.1% | 11.1% | Capex / revenueCapex/rev |
| $424M | $675M | $998M | $178M | $1.3B | $1.3B | Owner earningsOwner earn. |
| 15.7% | 25.2% | 30.9% | 4.4% | 25.9% | 25.9% | Owner earnings marginOE mgn |
| $424M | $675M | $998M | $178M | $979M | $979M | Free cash flowFCF |
| 15.7% | 25.2% | 30.9% | 4.4% | 19.9% | 19.9% | Free cash flow marginFCF mgn |
| 15% | 21% | 3% | 17% | 13% | 13% | ROICROIC |
| 15% | 13% | 6% | 12% | 11% | 11% | Return on equityROE |
| 15% | 13% | 6% | 12% | 11% | 11% | Retained to equityRetained/eq |
| Balance sheet | ||||||
| — | $2.2B | $2.9B | $2.8B | $3.6B | $3.6B | Cash & investmentsCash+inv |
| — | $999M | $781M | $1.1B | $1.3B | $1.3B | ReceivablesReceiv. |
| — | $999M | $781M | $1.1B | $1.3B | $1.3B | Operating working capitalOper. WC |
| — | $3.5B | $4.2B | $4.8B | $6.2B | $6.2B | Current assetsCur. assets |
| — | $1.4B | $1.5B | $929M | $1.0B | $1.0B | Current liabilitiesCur. liab. |
| — | 2.6× | 2.8× | 5.2× | 6.0× | 6.0× | Current ratioCurr. ratio |
| — | $1.6B | $1.6B | $1.6B | $1.6B | $1.6B | GoodwillGoodwill |
| — | $6.9B | $7.9B | $8.9B | $10.7B | $10.7B | Total assetsAssets |
| — | ($2.2B) | ($2.9B) | ($2.8B) | ($3.6B) | ($3.6B) | Net debt / (cash)Net debt |
| $3.5B | $4.1B | $5.3B | $6.8B | $8.3B | $8.3B | Shareholders’ equityEquity |
| Per share | ||||||
| 1.03B | 1.03B | 1.04B | 1.06B | 1.07B | 1.06B | Shares out (diluted)Shares |
| $2.64 | $2.61 | $3.10 | $3.77 | $4.61 | $4.62 | Revenue / shareRev/sh |
| $0.54 | $0.51 | $0.29 | $0.75 | $0.85 | $0.85 | EPS (diluted)EPS |
| $0.41 | $0.66 | $0.96 | $0.17 | $1.19 | $1.20 | Owner earnings / shareOE/sh |
| $0.41 | $0.66 | $0.96 | $0.17 | $0.92 | $0.92 | Free cash flow / shareFCF/sh |
| $0.03 | $0.06 | $0.09 | $0.21 | $0.51 | $0.51 | Cap. spending / shareCapex/sh |
| $3.46 | $3.94 | $5.07 | $6.43 | $7.76 | $7.79 | Book value / shareBVPS |
Per-share growththe realized rate an owner's share compounded
| 4-yr | 5-yr | |
|---|---|---|
| Revenue / share | +15.0%/yr | +15.0%/yr (4-yr) |
| Owner earnings / share | +30.3%/yr | +30.3%/yr (4-yr) |
| EPS | +12.1%/yr | +12.1%/yr (4-yr) |
| Capital spending / share | +98.1%/yr | +98.1%/yr (4-yr) |
| Book value / share | +22.4%/yr | +22.4%/yr (4-yr) |
The record, charted
FY2022–2026Each measure over its full record; the current point and the worst year marked.
ROIC
13%low FY2024
Gross margin
98%low FY2022
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
$1.3Bowner earningsvs.$904Mnet incomelow FY2025
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
FY2022FY2026
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2026 the business earned $1.3B of owner earnings, the operating cash left after the $249M it takes just to hold its position. It put $296M more into growth; free cash flow, after that spending, was $979M.
| FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | |
|---|---|---|---|---|---|
| Reported net income | $904M | $792M | $306M | $524M | $549M |
| Depreciation & amortizationnon-cash charge added back | +$249M | +$183M | +$162M | +$170M | +$185M |
| Working capital & othertiming of cash in and out, other non-cash items | +$371M | −$578M | +$622M | +$45M | −$276M |
| Cash from operations | $1.5B | $397M | $1.1B | $739M | $458M |
| Maintenance capital expenditurethe spending needed just to hold position and volume | −$249M | −$219M | −$92M | −$64M | −$34M |
| Owner earnings | $1.3B | $178M | $998M | $675M | $424M |
| Growth capital expenditurediscretionary; spent to get bigger, not to stand still | −$296M | — | — | — | — |
| Free cash flow | $979M | $178M | $998M | $675M | $424M |
| Owner-earnings marginowner earnings ÷ revenue | 26% | 4% | 31% | 25% | 16% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $249M, roughly its depreciation, the rate its assets wear out). The other $296M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2026 20-F · source on SEC EDGAR →
Will it survive?
- No meaningful interest burdenLittle or no interest expense reported
What this means
Little or no interest expense reported, the business isn't leaning on lenders to operate.
- Net cash, debt-freeCash $2.8B + ST investments $850M − debt $0
What this means
Cash and short-term investments exceed every dollar of debt by $3.6B, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- Not enough dataIndustry peers: median 7%
What this means
The filing data didn't include the inputs for this check.
- High through the cycle5-yr median margin, range 4%–31%; latest $1.3B = operating cash $1.5B − maintenance capex $249MIndustry peers: median 19%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 26% of revenue this year, a 25% median across 5 years. It chose to put $296M more into growth, so free cash flow this year was $979M — the gap is investment, not weakness.
- Cash-backedCash from ops $1.5B ÷ net income $904M
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? 2.19×ExpandingCapex $545M ÷ depreciation $249M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 3 of 4 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size PassRevenue ≥ $2B · $4.9B
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity PassCurrent ratio ≥ 2× · 6.00×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Earnings stability PassA profit every year (5-yr record) · no losses
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · none paid
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.63/share (latest year $0.85), the averaged base the calculator's gate runs on, and book value is $7.79/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2022–2026
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 5 of 5
What this means
Never lost money over the record, the earnings stability Graham insisted on.
- Operating margin 24% → 20% (2-yr avg ends)
What this means
Through the cycle the operating margin slipped — about 24% early to 20% lately, median 21% — competition or costs are biting in.
- Owner earnings growth +7%/yr
What this means
Owner earnings grew about 7% a year over the record.
- Worst year 2024 · 3.4% op. margin
What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count +1.0%/yr
What this means
The share count is rising, dilution works against you on a per-share basis.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
In its own filing Raised, but not as a competitor
The filing raises AI among its risks, but in other terms (security, regulation, energy or the like), not as a competitor to its product; it frames AI mainly as a capability.
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Mar 31, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$6.2B
- Cash & short-term investments$3.6B
- Receivables$1.3B
- Other current assets$1.3B
Current liabilities$1.0B
- Other current liabilities$1.0B
Current ratio6.00×all current assets ÷ what's due · Graham looked for 2×
Quick ratio—inventory untagged this quarter, so withheld rather than shown equal to the current ratio
Cash ratio3.46×strictest: cash alone against what's due
Working capital$5.2Bthe cushion left after near-term bills
Deeper floors
Tangible book value$6.4Bequity stripped of goodwill & intangibles
Net current asset value$3.8BGraham's net-net: current assets less all liabilities
Debt incl. operating leases$39M$39M of it operating leases
Deferred revenue$294Mcustomer cash collected before delivery; operating float
From the company's latest filing.
How the cash was used, 2022–2026
Over the record, the business generated $4.2B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.
- Reinvested$954M · 23%
- Retained (debt / cash)$3.3B · 77%
- Net change in share count3.8%
The diluted count rose from 1025M to 1064M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
- Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
- Return on what it retained4%
Of the earnings it kept rather than paid out ($3.1B over the span), annual owner earnings (first three years vs last three) grew $118M, so each retained $1 added about 0.04 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Inverting the record
Invert: instead of why Arm Holdings plc is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2022–2026.
1 of the 3 tests turned up something to look into; the other 2 came back clean.
- Look hereDid the share count rise anyway?3.8%
Diluted shares grew 3.8% over 2022–2026. Owners were diluted on net; each share owns less of the business than it did. Read the buyback line beside this one, not on its own.
And these came back clean
- Is it less profitable than it was?
- Did reported profit become cash?
Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.
Peers, Semiconductors
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| MRVLMarvell Technology Inc. | $8.2B | 50% | -8.7% | -2% | 19% |
| ONON Semiconductor Corporation | $6.0B | 37% | 13.4% | 14% | 15% |
| ARMArm Holdings plc | $4.9B | 96% | 20.7% | 15% | 25% |
| QQnity Electronics Inc. | $4.8B | 46% | 20.1% | 7% | 20% |
| MCHPMicrochip Technology Incorporated | $4.7B | 61% | 15.9% | 7% | 31% |
| SWKSSkyworks Solutions Inc. | $4.1B | 47% | 27.8% | 23% | 28% |
| QRVOQorvo Inc. | $3.7B | 40% | 6.1% | 3% | 19% |
| NXTNextpower Inc. | $3.6B | 26% | 16.4% | 59% | 11% |
| Group median | — | 47% | 16.1% | 11% | 19% |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the US price, in dollars: the NYSE/Nasdaq quote you hold. Per the filing's own cover, “American Depositary Shares, each representing one Ordinary”; Arm Holdings plc reports in USD, so every figure in this tool is stated per ADS so your dollar quote reconciles exactly. The record tables elsewhere on this page remain as filed.
Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Arm Holdings plc has delivered.
$
Through the cycle, Arm Holdings plc earns about $1.2B on its 25.2% median owner-earnings margin. This year’s 25.9% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth · ’22→’26+1%/yr
Owner-earnings growth · ’22→’26+7%/yr
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’24–’26)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Free cash flow $979M on 1064M shares outstanding, per the 20-F cover, as of 2026-03-31; net cash $3.6B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($545M) runs well above depreciation ($249M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $1.3B, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "Arm Holdings plc (ARM), the owner's record," https://ownerscorecard.com/c/ARM, data as of 2026-07-09.
Manual order: ← ARIS its page in the Manual ARQQ →
Industry order: ← AOSL the Semiconductors chapter ARRY →