Exhibit 99.2

Page 1

Arm will be hosting a conference call via an audio webcast to discuss earnings at 14:00 Pacific Time (17:00 Eastern
Time, 22:00 BST) on Wednesday, July 31, 2024. A replay of and a transcript of the call will be available the following
day.
The webcast and replay can be accessed at: https://edge.media-server.com/mmc/p/8vztamtt/
Dear Shareholder,
Arm delivered a fourth consecutive quarter of record results as we continue to build upon the world's most popular
compute platform. In Q1, we delivered record revenues and exceeded the high-end of our guidance range for both revenue
and non-GAAP EPS. License revenue hit a record level as the proliferation of AI everywhere is driving more companies tomake broad and long-term commitments to use Arm’s power-efficient technology in their future products. Year-over-year
growth in royalty revenue was also strong as rising adoption of Armv9 technology is lifting royalty revenue per device.
Arm’s long-term strategy promotes multiple growth drivers.
Increasing chip complexity is driving royalty revenue growth. AI-enabled devices need significantly increased
performance yet also require energy-efficiency and rapid time-to-market. These market trends are driving the need for Arm
compute platforms, based on Armv9, which enable more complex AI chips in smartphones, cloud servers, smart IoT, andnetworking devices.
Chips based on Armv9 technology now contribute around 25% of Arm’s royalty revenue, which is up from around 20%
last quarter. Increased Armv9 adoption in the mobile market drove smartphone royalty revenue up 50% year-over-year in
Q1. We expect the migration of AI from the cloud to edge devices to drive even higher compute demand per device overtime and Arm’s unprecedented share across all end markets means that Arm is uniquely positioned to benefit from thismigration, which will increase royalty revenue per chip.
AI everywhere is creating demand for more energy-efficient compute. AI's substantial energy requirements are driving
growth in Arm's compute platform, which is the most power efficient solution available. During the quarter, Microsoft
announced its first generation of Copilot+ PCs on Arm with double the battery life of the closest PC competitor and on parwith its Arm-based MacOS counterpart. Every major software application and developer tool now runs natively on
Windows on Arm, including Microsoft Office, Google Chrome, Slack, and GitHub runners, which results in a nocompromises experience for the end user.
Google’s recently announced AI-capable Axion products for the data center provide 50% better performance and up to
60% better energy-efficiency than legacy solutions. Early in Q2 of FYE25, AWS announced the general availability of thehigh-performance, energy-efficient Graviton4, which provides up to 30% better compute performance than Graviton3.
AWS has 50,000 customers, including all of their top 100 EC2 customers, on its Graviton's instances, which is up fromtens of thousands in less than a year. Initial customers include SAP, SmugMug, and Epic Games, who is using Graviton4
to deliver Fortnite. Today, ten of the world’s largest hyperscalers are developing and deploying Arm-based chips into theirdata centers, including AWS, Google, Microsoft, and Oracle Cloud, given Arm's superior performance and energy
efficiency.
During Q1, we also introduced the Arm Ethos-U85, which increases performance 4x for edge AI applications such as
factory automation, object detection, and image classification.
Compute Subsystems are speeding customers’ time-to-market. Driven by market demand, Arm is increasing
investments in Arm Compute Subsystems (CSS). These integrated and verified configurations of Arm technology
accelerate customers’ time-to-market and reduce development costs. Arm CSS solutions deliver significantly higher value
to the customer and increase our royalty revenue fee per chip.
During the quarter, Arm expanded its CSS offering and announced its latest CSS for Client, which will further AI
capabilities in next generation smartphones and PCs. CSS for Client combines the benefits of Armv9 acceleration featureswith production-ready implementations of newly announced Arm CPUs and GPUs on the leading edge 3 nanometer
manufacturing process to accelerate AI capabilities, improve performance and efficiency, and reduce time-to-market. Arm
introduced KleidiAI software libraries to improve performance of generative AI workloads on Arm-based devices.
KleidiAI can triple the speed for time-to-first token for Large Language Models (LLMs).

Page 2

In addition, we have started signing agreements for the Armv9-based CSS for Automotive, which we announced lastquarter. Customers are planning to combine CSS with Arm’s unmatched ecosystem of automotive virtual platforms,
software, and tools to create a software-defined vehicle system for Level2+ and Level3 autonomous vehicles. Tata
Technologies is enabling its automotive software solutions to work seamlessly with CSS for Automotive to accelerate thedevelopment timelines of high-performance vehicle computing systems.
Arm’s ecosystem of software and design partners is unique. Arm has the world’s largest compute ecosystem with morethan 20 million software developers, which is up from 15 million one year ago. We continue to increase investment acrossall market segments to accelerate software development on Arm. More Arm software developers drives demand for new
Arm compute platform solutions, which in turn drives an increase in software development and creates a virtuous cycle ofdemand.
New companies are joining Arm’s ecosystem and existing customers are leveraging their knowledge and experience ofArm technology into additional end markets. In the last few months, Google and Microsoft announced their first Armbased chips for the data center. During the quarter, Mediatek joined Arm Total Design, a fast-growing ecosystem that
accelerates the development of data center chips to meet the performance and efficiency needs of AI applications. Thistakes the total number of Arm Total Design partners to 25 since launch late last year. Also during the quarter, Google
announced new AI capabilities for Android phones, including integration of their Gemini AI model directly into Android.
Already, 70% of the AI-enabled apps on the Google Play Store run directly on the Arm CPU, and the addition of Gemini
will enable more apps to take advantage of the Arm compute platform.
All combined, we expect Arm’s long-term strategy to provide sustainable growth for years and decades to come.

"AI demand and rising CSS adoption across major market segments drove record revenue," said Rene Haas, CEO. "As
the energy needs of AI continue to escalate, so does the demand for the high-performance, power-efficient Arm compute
platform."

Sincerely,
Rene Haas,

Jason Child,

Chief Executive Officer

Chief Financial Officer

Investor Contacts

Media Contact

Jeff Kvaal

Phil Hughes

Investor.Relations@arm.com

Global-PRteam@arm.com

Page 3

First Quarter Highlights• Revenues of $939 million, up 39% year-over-year, with record license revenue and strong growth in royalty revenue.
• License and other revenue of $472 million, up 72% year-over-year, was due to multiple high-value license agreements
being signed as thought-leading companies make long-term commitments to deploy Arm-based technology in their
future products.
• Royalty revenue of $467 million, up 17% year-over-year, was driven by the rapidly increasing penetration of Armv9based chips which typically command a higher royalty rate, and strong growth in premium smartphones.
• Strong non-GAAP operating income growth to $448 million resulting in a 47.7% non-GAAP operating margin, and a
non-GAAP earnings per share of $0.40 up 67% year-over-year.
Guidance and Results
Q1 FYE25
Guidance

Q1 FYE25
Results

Q2 FYE25
Guidance$875m - $925m$939m$780m - $830m~$475m$467m~$500m

Non-GAAP fully diluted earnings per share (1)$0.32 - $0.36$0.40$0.23 - $0.27

Annual Guidance

FYE25 Prior
Guidance

FYE25
ChangeFYE25 Current
Guidance$3,800m - $4,100m

No change$3,800m - $4,100m

Non-GAAP operating expense (1)~$2,050m

No change~$2,050m

Non-GAAP fully diluted earnings per share (1)$1.45 - $1.65

No change$1.45 - $1.65

Quarterly Guidance & Results
Revenue
Non-GAAP operating expense (1)Revenue(1) For more information and definitions of the non-GAAP measures see the “Key Financial and Operating Metrics” section below. A reconciliation ofeach of the projected non-GAAP operating expense and non-GAAP fully diluted earnings per share, which are forward-looking non-GAAP financial
measures, to the most directly comparable GAAP financial measure, is not provided because Arm is unable to provide such reconciliation without
unreasonable effort. The inability to provide each reconciliation is due to the unpredictability of the amounts and timing of events affecting the items
we exclude from the non-GAAP measure.

Page 4

Results for Q1 fiscal year ending 2025
Financial Metrics (1) (Unaudited)$ million, unless statedTotal revenue
License and other revenue
Royalty revenue
Cost of sales
Gross profit
Gross margin (%)
Operating expenses
Operating income (loss)
Operating margin (%)
Net income
Diluted earnings per share ($)
Non-GAAP free cash flow (2)Non-GAAP free cash flow trailingtwelve months ("TTM")
Remaining performance obligations("RPO")Q1 FYE25
939
472
467
(33)
906
96.5%
(724)
182
19.4%
223
0.21

GAAP
Q1 FYE24
675
275
400
(31)
644
95.4%
(533)
111
16.4%
105
0.10

Y/Y %
39%
72%
17%
6%
41%
36%
64%
112%
110%

Non-GAAP (1)Q1 FYE25 Q1 FYE24
939
675
472
275
467
400
(24)
(24)
915
651
97.4%
96.4%
(467)
(379)
448
272
47.7%
40.3%
419
246
0.40
0.24
(348)
(150)
709

2,168

1,681

724

Y/Y %
39%
72%
17%
—%
41%
23%
65%
70%
67%
nm
(2)%

29%

(1) For more information, definitions, and reconciliations of Non-GAAP measures see the “Key Financial and Operating Metrics” section below.
Percentage changes that are considered not meaningful are presented as "nm."(2) Non-GAAP free cash flow for Q1 FYE 25 includes a working capital payment of $593m primarily due to payroll taxes related to share-based
compensation. The funds related to the employees' portion of the payment came from employees' shares sold for taxes in Q4 FYE24.

Non-Financial Metrics (1) (Unaudited)
Q1 FYE25

Q1 FYE24

Y/Y %$1,193 million$1,048 million

14%

Arm Total Access licenses

33

20

Arm Flexible Access licenses (2)

241

211

Total number of employees

7,320

6,229

Engineers as a percentage of total employees

83%

80%

Annualized contract value ("ACV")

18%(1) For more information and definitions of Non-Financial Metrics see the “Key Financial and Operating Metrics” section below.
(2) For the quarter ended June 30, 2023 (Q1 FYE24), the number of Flexible Access agreements has been adjusted to 211 from 214 (as previously
reported in our final prospectus filed with the SEC on September 14, 2023) to account for certain customer license terminations and a consolidation ofcustomer licenses due to an acquisition.
(3) The metric "Chips reported as shipped" will no longer be reported, see the "Number of Arm-based chips reported as shipped" section below.

Page 5

Q1 FYE25 Financial Overview(US GAAP unless otherwise stated)
Total revenue
Total revenue was a record $939 million, up 39% year-over-year and 1% sequentially.
Royalty revenue
Royalty revenue was $467 million, up 17% year-over-year, with the largest contribution from smartphones driven byincreased penetration of Armv9 combined with the overall market recovery and a higher premium tier mix compared with ayear ago. Automotive saw growth driven by chips with higher royalty rates going into advanced applications such as inadvanced driver assistance systems and the digital cockpit. In cloud compute we continue to see the early benefits from theadoption of Armv9-based server chips. IoT/embedded declined year-over-year due to the continued inventory correctionin the broader market.
License and other revenue
License and other revenue was $472 million, up 72% year-over-year due to customers continuing to make new long-term
commitments to use Arm’s power-efficient technology in their future products, and also due to contributions from backlog
into the current quarter.
Annualized contract value
ACV at quarter-end was $1,193 million, up 14% year-over-year and up 1% sequentially driven by major deals signed in thecurrent and prior quarters.
Remaining performance obligations
RPO at quarter-end was $2,168 million, up 29% year-over-year, and down 13% sequentially due to the contribution torevenue from backlog during the quarter. We expect to recognize approximately 22% of RPO as revenue over the next 12months, 14% over the subsequent 13-to-24-month period, and the remainder thereafter.
Licenses signed
During the quarter, Arm signed two additional Arm Total Access agreements, taking the total number of extant licenses to33, which includes more than half of our top 30 customers. The Arm Flexible Access program now has 241 customers,
with adoption benefiting from the introduction of the program into China, where previously it was only available to the restof the world.
Gross profit and margin
GAAP cost of sales was $33 million, with a GAAP Gross Profit of $906 million, representing a GAAP Gross Margin of
96.5%. Non-GAAP cost of sales was $24 million, with non-GAAP Gross Profit of $915 million, representing a non-GAAP
Gross Margin of 97.4%.
Non-GAAP adjustments primarily relate to SBC and employer taxes related to SBC, net of research and development("R&D") incentives (see table in "GAAP to Non-GAAP Reconciliation").
Operating expenses and margin
GAAP operating expenses were $724 million. Non-GAAP operating expenses were $467 million, up 23% year-over-year,
driven by an 18% year-over-year increase in headcount.
GAAP R&D expense was $485 million. Non-GAAP R&D expense was $298 million, representing 32% of revenue
compared with 36% in the same period a year ago, and up 24% year-over-year, driven by a 23% year-over-year increase inengineering headcount.

Page 6GAAP selling, general and administrative ("SG&A") expense was $239 million. Non-GAAP SG&A expense was$169 million, representing 18% of revenue compared with 20% in the same period a year ago, and up 22% year-over-year,
driven by a bad debt expense, salaries and professional fees, partially offset by lower bonus costs.
GAAP operating income was $182 million, representing an operating margin of 19.4% compared with 16.4% in the same
period a year ago.
Non-GAAP operating income was $448 million, up 65% year-over-year, and representing a non-GAAP operating marginof 47.7% compared with 40.3% in the same period a year ago.
Non-GAAP adjustments primarily relate to SBC and employer taxes related to SBC, net of R&D incentives (see table in"GAAP to Non-GAAP Reconciliation").
Effective tax rate, net income, earnings per share (EPS), and share count
GAAP effective tax rate was 8.6%. Non-GAAP effective tax rate was 13.8%, and we expect this to remain in the mid-teens
going forward.
GAAP net income was $223 million. Non-GAAP net income was $419 million, up 70% year-over-year.
GAAP fully diluted earnings per share ("EPS") was $0.21 compared with $0.10 in the same period a year ago. Non-GAAP
fully diluted EPS was $0.40 compared with $0.24 in the same period a year ago.
GAAP and a non-GAAP basic and fully diluted weighted average share count was 1,044 million and 1,060 million,
respectively.
Non-GAAP free cash flow
Non-GAAP free cash flow ("FCF") was $(348) million for the quarter, compared with $(150) million in the same period ayear ago, and for the trailing 12-months was $709 million, down 2% year-over-year. Q1 has historically been our lowest
seasonal quarter for FCF as we pay the annual corporate bonus for the preceding fiscal year. Additionally, as noted lastquarter, Q4 FYE24 experienced a $573 million change in working capital benefit that was primarily due to cash held for
payroll tax liabilities related to the IPO share vesting event. As expected, this benefit subsequently reversed in Q1 FYE25.
Since we do not expect this event to reoccur, we expect this dynamic to impact the comparability of FCF for FYE25
relative to the prior fiscal year.
At quarter-end, cash and cash equivalents, and short-term investments, totaled $2,465 million, down 16% from$2,923 million in the prior quarter and up 20% year-over-year.

Page 7

Arm Holdings plc
Condensed Consolidated Income Statements(in millions, except per share amounts)(Unaudited)Three Months Ended June 30,
2024

2023

Revenue:
Revenue from external customers$

Revenue from related parties
Total revenue

815

$

535

124

140

939

675

Cost of sales

(33)

(31)

Gross profit

906

644

Research and development

(485)

(337)

Selling, general and administrative

(239)

(196)

(724)

(533)

182

111

Operating expenses:

Total operating expense
Operating income (loss)
Income (loss) from equity investments, net

24

(7)

Interest income, net

32

24

6

(1)

Income (loss) before income taxes

Other non-operating income (loss), net

244

127

Income tax benefit (expense)

(21)

(22)

Net income (loss)

$

223

$

105

Basic

$

0.21

$

0.10

Diluted

$

0.21

$

0.10

Net income (loss) per share attributable to ordinary shareholders

Weighted average ordinary shares outstanding
Basic

1,044

1,025

Diluted

1,060

1,029

Page 8

Arm Holdings plc
Condensed Consolidated Balance Sheets(in millions, except par value)(Unaudited)
As ofJune 30, 2024

March 31, 2024

Assets:Current assets:
Cash and cash equivalents$

Short-term investments

1,465

$

1,923

1,000

1,000

Accounts receivable, net (including receivables from related parties of $146 and $182 as of June 30,2024 and March 31, 2024, respectively)

804

781

Contract assets (including contract assets from related parties of $13 and $22 as of June 30, 2024
and March 31, 2024, respectively)

455

336

Prepaid expenses and other current assets

116

157

3,840

4,197

Property and equipment, net

231

215

Operating lease right-of-use assets

233

205

Total current assets
Non-current assets:

Equity investments (including investments held at fair value of $573 and $573 as of June 30, 2024
and March 31, 2024, respectively)

800

741

1,625

1,625

Intangible assets, net

159

152

Deferred tax assets

324

282

Non-current portion of contract assets

363

240

Other non-current assets

305

270

Total non-current assets

4,040

3,730

Goodwill

Total assets

$

7,880

$

7,927

97

$

298

Liabilities:
Current liabilities:
Accrued compensation and benefits$

Tax liabilities

182

147

Contract liabilities (including contract liabilities from related parties of $114 and $107 as of June 30,2024 and March 31, 2024, respectively)

209

198

Operating lease liabilities

28

27

Other current liabilities (including payables to related parties of $6 and $7 as of June 30, 2024 andMarch 31, 2024, respectively)
Total current liabilities

549

835

1,065

1,505

Non-current liabilities:
Non-current portion of accrued compensation

20

20

Deferred tax liabilities

142

135

Non-current portion of contract liabilities

715

717

Non-current portion of operating lease liabilities

221

194

Other non-current liabilities

54

61

Total non-current liabilities

1,152

1,127

Total liabilities

2,217

2,632

Page 9

Arm Holdings plc
Condensed Consolidated Balance Sheets(in millions, except par value)(Unaudited)
As ofJune 30, 2024

March 31, 2024

Shareholders’ equity:
Ordinary shares, $0.001 par value; 1,088 shares authorized and 1,048 shares issued and outstanding asof June 30, 2024; and 1,088 shares authorized and 1,040 shares issued and outstanding as of March 31,
2024
Additional paid-in capital
Accumulated other comprehensive income
Retained earnings
Total shareholders’ equity

2

2

2,316

2,171

371

371

2,974

2,751

5,663

Total liabilities and shareholders’ equity$

Page 10

7,880

5,295
$

7,927

Arm Holdings plc
Condensed Consolidated Statements of Cash Flows(in millions)(Unaudited)Three Months Ended June 30,
2024

2023

Cash flows provided by (used for) operating activities:
Net income (loss)

$

223

$

105

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization

43

41

Deferred income taxes

2

(13)

(Income) loss from equity investments, net

(24)

7

Share-based compensation cost

182

140

Operating lease expense

98

Other non-cash operating activities, net

1—

Accounts receivable, net (including receivables from related parties)

(23)

102

Contract assets, net (including contract assets from related parties)

(242)

(32)

Changes in assets and liabilities:

Prepaid expenses and other assets

61

Accrued compensation and benefits

(201)

(447)

Contract liabilities (including contract liabilities from related parties)

924

Tax liabilities

(4)

12

Operating lease liabilities

(11)

(4)

Other liabilities (including payables to related parties)

(260)

(58)

(290) $

(114)

Purchase of short-term investments

(50)

(260)

Proceeds from maturity of short-term investments

50

120

Purchases of equity investments

(36)

(11)

Purchases of intangible assets(9)—

Purchases of property and equipment

(29)

(26)

(74) $(177)

Payment of intangible asset obligations

(20)

(10)

Other financing activities, net

(4)

(5)

Net cash provided by (used for) operating activities$

Cash flows provided by (used for) investing activities

Net cash provided by (used for) investing activities$

Cash flows provided by (used for) financing activities

Payment of withholding tax on vested shares
Net cash provided by (used for) financing activities$

Effect of foreign exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period

(72)

—

(96) $

(15)

2

—

(458)

(306)

1,923

Cash and cash equivalents at the end of the period$

Page 11

1,465

1,554
$

1,248

Key Financial and Operating Metrics
We use the following key performance indicators and non-GAAP financial measures to analyze our business performanceand financial forecasts and to develop strategic plans, which we believe provide useful information to the market to aid inunderstanding and evaluating our results of operations in the same manner as our management team. Certain judgments andestimates are inherent in our processes to calculate these metrics. These key performance indicators and non-GAAP
financial measures are presented for supplemental informational purposes only, should not be considered a substitute forfinancial information presented in accordance with GAAP, and may differ from similarly titled metrics or measurespresented by other companies.
The following table sets forth a summary of the key financial and operating metrics:
Three Months Ended June 30,(in millions, except for Number of extant Arm Total Access and Arm Flexible Access licenses, andTotal number of employees, engineers and non-engineers)
Total revenue

2024
$

2023
939

$

675

License and other revenue

472

275

Royalty revenue

467

400

Operating income (loss)

182

111

Non-GAAP operating income (loss) (1)

448

272

Net income (loss)

223

105

Non-GAAP net income (loss)

(1)

419

246

Net cash provided by (used for) operating activities

(290)

(114)

Non-GAAP free cash flow (1)

(348)

(150)

Non-GAAP free cash flow TTM (1)

709

724

As of June 30,
Operating metrics:

2024

2023

Number of extant Arm Total Access licenses (2)3320Number of extant Arm Flexible Access licenses (2)

241

211

Annualized contract value

$

1,193

$

1,048

Remaining performance obligation

$

2,168

$

1,681

Total number of employees (at end of period)

7,320

6,229

Total number of engineers

6,102

4,977

Total number of non-engineers

1,218

1,252

(1) Non-GAAP operating income (loss), Non-GAAP net income, Non-GAAP free cash flow, and Non-GAAP free cash flow TTM are non-GAAP
financial measures. For more information regarding our use of these measures and a reconciliation of these measures to the most directly comparable
GAAP financial measures, see “—GAAP to Non-GAAP Reconciliation” below.
(2) As of the last day of the applicable period. For the quarter ended June 30, 2023 (Q1 FYE24), the number of Arm Flexible Access agreements has
been adjusted to 211 from 214 (as previously reported in our final prospectus filed with the U.S. Securities and Exchange Commission (the “SEC”)
on September 14, 2023) pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Securities Act”), relating to our Registration
Statement on Form F-1) to account for certain customer license terminations and a consolidation of customer licenses due to an acquisition.

Page 12

Total revenue
Our major product offerings consist of the following:
License and other revenue•

Intellectual property license — We generally license IP under non-exclusive license agreements that provide
usage rights for specific applications for a finite or perpetual term. These licenses are made available
electronically to address the customer-specific business requirements. These arrangements generally have distinct
performance obligations that consist of transferring the licensed IPs, version extensions of architecture IP orreleases of specified IPs, and support services. Support services consist of a stand-ready obligation to provide
technical support, patches, and bug fixes over the support term. Revenue allocated to the IP license is recognized
at a point in time upon the delivery or beginning of the license term, whichever is later. Revenue allocated to
distinct version extensions of architecture IP or releases of specified IP, excluding when-and-if-available minor
updates over the support term, are recognized at a point in time upon the delivery or beginning of license term,
whichever is later.
Certain license agreements provide customers with the right to access a library of current and future IPs on an
unlimited basis over the contractual period depending on the terms of the applicable contract. These licensing
arrangements represent stand-ready obligations in that the timing of the delivery of the underlying IPs is within
the control of the customer and the extent of use in any given period does not diminish the remaining performanceobligation. The contract consideration related to these arrangements is recognized ratably over the term of thecontract in line with when the control of the performance obligations is transferred.
Certain subscription license agreements include unspecified future IPs that are provided on a when-and-ifavailable basis, representing a stand-ready obligation. The contract consideration allocated to the stand-readyobligation is recognized on a ratable basis over the term of the contract, commencing upon the later of theeffective date of the agreement and the transfer of the initial available IP license.

•

Software sales, including development systems — Sales of software, including development systems, which are
not specifically designed for a given license (such as off-the-shelf software), are recognized upon delivery whencontrol has been transferred and customer can begin to use and benefit from the license.

•

Professional services — Services (such as training and professional and design services) that we provide, which
are not essential to the functionality of the IP, are separately stated and priced in the contract and accounted forseparately. Training revenue is recognized as services are performed. Revenue from professional and design
services are recognized over time using the input method based on engineering labor hours expended to daterelative to the estimated total effort required. For such professional and design services, we have an enforceable
right to payment for performance completed to date, which includes a reasonable profit margin and theperformance of such services do not create an asset with an alternative use.

•

Support and maintenance — Support and maintenance is a stand-ready obligation to the customer that is bothprovided and consumed simultaneously. Revenue is recognized on a straight-line basis over the period for which
support and maintenance is contractually agreed pursuant to the license.

Royalty revenue
For certain IP license agreements, royalties are collected on products that incorporate our IP. Royalties are recognized onan accrual basis in the quarter in which the customer ships their products, based on our technology that it contains. Thisestimation process for the royalty revenue accrual is based on a combination of methodologies, including the use ofhistorical sales trends and macroeconomic factors for predictive analysis, the analysis of customer royalty reports and theirsales trends and forecasts, as well as data and forecasts from third-party industry research providers. Data considered
includes revenue, unit shipments, average selling price, product mix, market share and market penetration. Adjustments torevenue are required in subsequent periods to reflect changes in estimates as new information becomes available, primarily
resulting from actual amounts subsequently reported by the licensees in the period following the accrual.

Page 13

Royalty technology mix
Royalty mix by architecture such as Armv9 is estimated at the system-on-a-chip ("SoC") level based on the architecture of
the primary CPU or an approximation of the IP mix and is subject to change based on the availability of additional productdetail.
Number of Arm-based chips reported as shipped
Each quarter, most of our customers, and those contracted through Arm Technology (China) Co. Limited ("Arm China"),furnish us (directly or via Arm China) with royalty reports setting forth the actual number of Arm-powered chips they
shipped in the immediately preceding quarter. Royalty reports received in the 12-month period from April 1 to March 31 ofeach year relate to chip shipments made in the period from January 1 to December 31 of each year. We also perform
various procedures to assess customer data related to royalties for reasonableness, and our license agreements generally
include rights for us to audit the books and records of our customers to verify certain types of customer data.
We previously considered the number of chips reported as shipped by our customers as a key performance indicatorbecause it represented the acceptance of our products by companies who use chips in their products (e.g., our customers’
customers). As we shift our focus to higher-value, lower-volume markets such as data center servers, AI accelerators andsmartphone applications processors, the number of chips reported as shipped is less representative of our performance as
the growth in royalty revenue is concentrated in a smaller number of chips. Therefore, acceptance of our products is notmeasured by the volume of Arm-based chips reported as shipped. As such, starting in Q1 FYE25, we are no longer
reporting the number of Arm-based chips reported as shipped.
Number of extant Arm Total Access and Arm Flexible Access licenses
Each quarter, we track the number of extant Arm Total Access and Arm Flexible Access licenses with our customers, andthose contracted through Arm China. We believe that, over time, many of our customers will transition to either an Arm
Total Access or Arm Flexible Access license to access our products. This transition enables us and our customers to focus
less on contract negotiations and more on how our products can be deployed in our customers’ future chips.
We consider the number of extant Arm Total Access and Arm Flexible Access licenses as key performance indicators as
they represent the increasing collaboration between us and our customers, which could be a leading indicator to more chips
being designed with our products and, accordingly, more recurring royalty revenue in the future, improving our long-term
market share.
Annualized contract value ("ACV")
Each quarter, we track the ACV relating to licensing agreements signed with our customers and those contracted through
Arm China per the aggregate license fee as shared under the Intellectual Property License Agreement with Arm China. We
define ACV as the total annualized committed fees, excluding any potential future royalty revenue, for all signed
agreements deemed to be active through the last day of each applicable reporting period. Arm Total Access agreements and
ALAs are deemed to be active for, and annualized over, the number of years in the contract. Any other license agreements,
including single use and limited use licenses issued under an Arm Flexible Access agreement or Technology License
Agreement, are deemed to be active for, and annualized over, three years based on the historical licensing patterns of ourcustomers. The aggregate license fee shared by Arm China is also deemed to be active for, and annualized over, three
years.
ACV is an operational metric based on committed fees, excluding royalties, not recognized revenue, and therefore is notreconcilable to, nor a substitute for, revenue reported under GAAP. However, we consider ACV to be a key operational
metric that we use to track existing licensing commitments with our customers. Bookings of new licenses and recognizedrevenue may fluctuate materially from quarter to quarter due to customer buying patterns, timing of subscription renewals
and as a function of contract duration. As a result, we believe ACV provides an additional understanding of our businessperformance and long-term trends.

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Remaining performance obligations ("RPO")
RPO represents the transaction price allocated to performance obligations that are unsatisfied, or partially unsatisfied,
which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods.
Arm has elected to exclude potential future royalty receipts from the disclosure of RPO. Revenue recognition occurs upondelivery or beginning of license term, whichever is later.
Non-GAAP financial measures
In addition to our results determined in accordance with GAAP, we utilize and present financial measures that are notcalculated and presented in accordance with GAAP. Our non-GAAP financial measures include non-GAAP cost of sales,
non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development operating expenses, non-GAAP
selling, general and administrative operating expenses, non-GAAP impairment of long-lived assets operating expenses,
non-GAAP disposal, restructuring and other operating expense, net, non-GAAP operating expense, non-GAAP operating
income (loss), non-GAAP operating margin, non-GAAP income (loss) from equity investments, net, non-GAAP interest
income, net, non-GAAP other non-operating income (loss), net, non-GAAP income before income taxes, net, non-GAAP
net income (loss), non-GAAP basic and diluted net income per share attributable to ordinary shareholders, non-GAAP free
cash flow, and non-GAAP free cash flow TTM. We believe these non-GAAP financial measures provide useful
information to investors and others in understanding and evaluating our results of operations, as well as provide a usefulmeasure for period-to-period comparisons of our business performance. Moreover, we have included these non-GAAP
financial measures because they are key measurements used by our management internally to make operating decisions,
including those related to analyzing operating expenses, evaluating performance, and performing strategic planning andannual budgeting. We believe that the presentation of our non-GAAP financial measures, when viewed holistically, is
helpful to investors in assessing the consistency and comparability of our performance in relation to prior periods andfacilitates comparisons of our financial performance relative to our competitors, particularly with respect to competitorsthat present similar non-GAAP financial measures in addition to their GAAP results.
Non-GAAP financial measures are presented for supplemental information purposes only, should not be considered a
substitute for financial information presented in accordance with GAAP, and may not align with similar financial measurespresented by our competitors, which may limit the ability of investors to assess our performance relative to certain peer
companies.
Non-GAAP financial measures presented herein exclude acquisition-related intangible asset amortization, share-based
compensation ("SBC") cost associated with equity-classified awards where our intent is to issue equity upon vesting (inlieu of cash settlement), employer taxes related to SBC equity-classified awards, net of the research and development("R&D") tax incentives associated with these taxes, one-time employee benefit related to the Arm Limited All Employee
Plan 2019 (“2019 AEP”), costs associated with disposal activities, impairment of long-lived assets, restructuring andrelated costs, public company readiness costs, other operating income (expenses), net, (income) loss from equity method
investments, gain on disposal of business, and income tax effect on non-GAAP adjustments. We exclude these items fromour non-GAAP financial measures because they are non-cash or non-recurring in nature, or because the amount and timingof these items is unpredictable and not driven by core results of operations, which renders comparisons with prior periods
and competitors less meaningful.
Investors should consider non-GAAP financial measures alongside other financial performance measures, including
operating income, net income and our other GAAP results. For more information regarding our use of these measures and areconciliation to the most directly comparable GAAP financial measure, see “—GAAP to Non-GAAP Reconciliation.”

Page 15

Arm Holdings plc
GAAP to Non-GAAP Reconciliation(Unaudited)
The following is a reconciliation of GAAP to Non-GAAP results:
Three Months Ended June 30, 2024

GAAP
Results(in millions, except per share amounts)
Total revenue

Employer
Share-basedtaxes relatedcompensation to SBC, net ofcost (equity
R&D tax
settled) (1)incentives (2)

$

939

$

(Income) loss
from equity
methodinvestments,
net

Income tax
effect on nonGAAP
adjustments

Non-GAAP
Results

— $

— $

— $

— $

Cost of sales

(33)

6

3

—

—

939
(24)

Gross profit

906

6

3

—

—

915

Gross margin

96.5 %

97.4 %

Operating expenses:
Research and development

(485)

129

58

—

—

(298)

Selling, general and administrative

(239)

47

23

—

—

(169)

Total operating expense

(724)

176

81

—

—

(467)

Operating income (loss)

182

182

84

—

—

Operating margin19.4 %

448
47.7 %

Income (loss) from equity investments, net

24

—

—

(24)

—

—

Interest income, net

32

—

—

—

—

32

Other non-operating income (loss), net

6

—

—

—

—

6

Income (loss) before income taxes

244

182

84

(24)

—

486

Income tax benefit (expense)

(21)

—

—

—

(46)

(67)

182 $

84 $

(24) $(46) $

419

Net income (loss)

$

223

$

Basic

$

0.21

$

0.40

Diluted

$

0.21

$

0.40

Net income (loss) per share attributable toordinary shareholders

Weighted average ordinary shares
outstanding
Basic

1,044

1,044

Diluted

1,060

1,060

(1) Total SBC cost was $182 million for the three months ended June 30, 2024, of which all are equity-classified awards.
(2) Represents employer taxes related to SBC for equity-classified awards, net of the R&D tax incentives associated with these taxes.

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Arm Holdings plc
GAAP to Non-GAAP Reconciliation (continued)(Unaudited)Three Months Ended June 30, 2023

GAAP
Results(in millions, except per share amounts)
Total revenue$

675

Acquisitionrelated
intangible
asset
amortization$

Share-based
compensation
cost (equity
settled) (1)Publiccompany
readiness
costs(Income) loss
from equity
methodinvestments,
net

Income tax
effect on nonGAAP
adjustments

Non-GAAP
Results

— $

— $

— $

— $

— $

Cost of sales

(31)

1

6

—

—

—

675
(24)

Gross profit

644

1

6

—

—

—

651

Gross margin

95.4 %

96.4 %

Operating expenses:
Research and development

(337)

—

96

—

—

—

(241)

Selling, general and administrative

(196)

—

44

14

—

—

(138)

Total operating expense

(533)

—

140

14

—

—

(379)

Operating income (loss)

111

1

146

14

—

—

272

Operating margin16.4 %

40.3 %

Income (loss) from equity investments, net

(7)

—

—

—

7

—

—

Interest income, net

24

—

—

—

—

—

24

Other non-operating income (loss), net

(1)

—

—

—

—

—

(1)

Income (loss) before income taxes

127

1

146

14

7

—

295

Income tax (expense) benefit

(22)

—

—

—

—

(27)

(49)

1 $

146 $

14 $

7 $

(27) $

246

Net income (loss)

$

105

$

Basic

$

0.10

$

0.24

Diluted

$

0.10

$

0.24

Net income (loss) per share attributable toordinary shareholders

Weighted average ordinary shares
outstanding
Basic

1,025

1,025

Diluted

1,029

1,029

(1) Total SBC cost, including both cash and equity settled awards, was $158 million for the three months ended June 30, 2023. For non-GAAP purposes, we adjusted for those awards that were liability-classified prior
to the Company’s initial public offering of ADSs (the “IPO”) but were equity settled after the IPO. Liability-classified awards were remeasured at the end of each reporting period through the date of settlement toensure that the expense recognized for each award was equivalent to the amount paid in cash or equity settled after the initial public offering.

Page 17

Arm Holdings plc
GAAP to Non-GAAP Reconciliation (continued)(Unaudited)
The following is a reconciliation of Non-GAAP free cash flow to Net cash provided by (used for) operating activities, the most directly comparable GAAP cash flow
measure:Three Months Ended June 30,(in millions)
Net cash provided by (used for) operating activities

2024
$

2023
(290) $

(114)

Purchases of property and equipment

(29)

(26)

Purchases of intangible assets(9)—

Payment of intangible asset obligations

(20)

(10)

(348) $

(150)

Adjusted for:

Non-GAAP free cash flow$

Page 18

Forward-Looking Statements
This shareholder letter contains forward-looking statements that reflect our plans, beliefs, expectations and current
views with respect to, among other things, future events and financial performance. These statements involve known andunknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performanceor achievements to be materially different from the information expressed or implied by these forward-looking statements.
There are many factors that could cause or contribute to such differences, including, but not limited to, those identified
below and those discussed in “Item 3. Key Information—D. Risk Factors” in our Annual Report on Form 20-F for the fiscal
year ended March 31, 2024, filed with the SEC on May 29, 2024.
This shareholder letter contains forward-looking statements within the meaning of Section 27A of the Securities Act
and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation
Reform Act of 1995. All statements other than statements of historical fact could be deemed forward-looking statements,
including without limitation, statements relating to our future operations, results of operations and other matters that are
based on our current expectations, estimates, assumptions and projections. In some cases, you can identify forward-looking
statements because they contain words such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “is/are likely
to,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “continue,”“ongoing” or similar words or phrases, or the negative of these words or phrases. The inclusion of forward-looking
statements in this shareholder letter should not be regarded as a representation by us or any other person that the futureplans, estimates or expectations contemplated by us will be achieved or that we have conducted an exhaustive inquiry into,or review of, all potentially available relevant information. The forward-looking statements included in this shareholder
letter are based on management’s current beliefs, assumptions and expectations of our future economic performance,
considering the information currently available to management. While we believe such information forms a reasonablebasis for such statements, such information may be limited or incomplete. Accordingly, there are, or will be, importantfactors that could cause our actual results to differ materially from those indicated in these statements. All such factors are
difficult to predict, represent uncertainties that may materially affect actual results and may be beyond our control. New
risk factors emerge from time to time, and it is not possible for management to predict all such risk factors or to assess theimpact of each such risk factor on the Company. Any forward-looking statement in this shareholder letter speaks only as ofthe date hereof, and we do not undertake any obligation to update any forward-looking statement to reflect events orcircumstances after the date of this shareholder letter except as required by applicable law. If one or more risks or
uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materiallyfrom what we may have expressed or implied by these forward-looking statements. We caution that you should not place
undue reliance on any of our forward-looking statements.

Page 19