Arm Holdings vs Volkswagen: Revenue, Profit and Business Model
Arm Holdings reported $4.9B of revenue in FY2026 and $904M of net income. Volkswagen reported ~$363.8B of revenue in FY2025 and ~$7.5B of net income.
Latest financial snapshot
Arm Holdings
- Latest revenue
- $4.9B (FY2026)
- Net income
- $904M
- Net margin
- 18.4%
- Revenue growth
- +19.4% a year, FY2021–FY2026
Volkswagen
- Latest revenue
- ~$363.8B (FY2025)
- Net income
- ~$7.5B
- Net margin
- 2.1%
- Revenue growth
- +6.5% a year, FY2021–FY2025
Financial summary
Arm Holdings
Arm makes nearly all of its gross profit from intellectual property, so its cost of sales is small: fiscal 2026 revenue of $4,920 million produced $4,799 million of gross profit, a margin above 97%. Revenue comes in two lines. License and other revenue, $2,307 million in fiscal 2026 and up 25%, is charged upfront or across milestones when a customer takes access to Arm designs. Royalty revenue, $2,613 million and up 21%, is collected per chip once partners ship, which makes it a long tail from designs licensed years earlier. Spending is concentrated in engineering: research and development cost $2,776 million in fiscal 2026, about 56% of revenue, which held operating income to $900 million and net income to $904 million. Arm ended the year with $2,751 million of cash and cash equivalents plus $850 million of short-term investments, and $2,071 million of remaining performance obligations, about 28% of which it expects to recognise as revenue within twelve months. The most recent reported quarter, the three months to June 30, 2026, was a record: revenue rose 22% year over year to $1.29 billion on record first-quarter royalty and licensing revenue, with data center royalties again more than doubling.
Volkswagen
Volkswagen Group reported ~$364 billion (EUR 321.9 billion) in 2025 sales revenue, slightly below ~$367 billion (EUR 324.7 billion) in 2024, and an operating result of ~$10.1 billion (EUR 8.9 billion), a 2.8% margin. Earnings were held down by U.S. tariffs, restructuring provisions, the cost of Porsche's product strategy change, and weaker results from the Chinese joint ventures. Deliveries were broadly stable at 8.984 million vehicles. The December 2024 agreement with IG Metall for the Volkswagen brand in Germany avoids compulsory redundancies but plans to cut more than 35,000 jobs by 2030 through attrition and early retirement, and to reduce German plant capacity. In the first half of 2026 sales revenue was about $179 billion (EUR 158.1 billion), roughly flat, while the operating result fell 11.6% to about $6.67 billion (EUR 5.9 billion) (3.8% margin). In September 2026 Volkswagen cut its full-year forecast to about $356 billion (EUR 315 billion) in sales revenue and an operating margin of up to 1%, citing China, a faster shift to EVs, a roughly $6.78 billion (EUR 6 billion) goodwill impairment on the Porsche segment, and extra restructuring and China impairments.
Revenue and profit by year
Arm Holdings
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2026 | $4.9B | $904M | 18.4% | +22.8% | Source |
| FY2025 | $4B | $792M | 19.8% | +23.9% | Source |
| FY2024 | $3.2B | $306M | 9.5% | +20.7% | Source |
| FY2023 | $2.7B | $524M | 19.6% | -0.9% | Source |
| FY2022 | $2.7B | $549M | 20.3% | +33.3% | Source |
| FY2021 | $2B | $388M | 19.1% | — | Source |
Volkswagen
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | ~$363.8B | ~$7.5B | 2.1% | -0.8% | Source |
| FY2024 | ~$366.9B | ~$12.1B | 3.3% | +0.7% | Source |
| FY2023 | ~$364.2B | ~$18B | 4.9% | +15.5% | Source |
| FY2022 | ~$315.3B | ~$16.8B | 5.3% | +11.5% | Source |
| FY2021 | ~$282.7B | ~$16.8B | 5.9% | — | Source |
Where the revenue comes from
Arm Holdings
- Royalty Revenue53%
Royalties were $2,613 million of Arm's $4,920 million fiscal 2026 revenue, up 21% year over year. Arm collects a per-unit royalty on substantially every chip its partners ship that uses its designs, so the line reflects designs licensed in earlier years; rates generally step down as unit volumes rise, subject to an agreed minimum per chip. Mobile application processors supplied about 43% of fiscal 2026 royalty revenue, while data center royalties more than doubled year over year. Arm attributes part of the growth to a mix shift toward Armv9 designs, which carry higher rates per chip.
- License and Other Revenue47%
License and other revenue was $2,307 million in fiscal 2026, up 25%, and covers licensing, software development tools, design services, training and support. Customers choose among Compute Subsystems, Arm Total Access, which bundles the current portfolio for an annual fee, Arm Flexible Access, which gives cheaper access to older designs with a fee due at tape-out, technology licence agreements and architecture licences. The line is lumpy because a small number of high-value agreements can land in any quarter: revenue from related parties alone rose 141% in fiscal 2026. Remaining performance obligations were $2,071 million at March 31, 2026, about 28% of which Arm expects to recognise within twelve months.
Volkswagen
- Passenger vehicle sales
- Premium and luxury vehicle sales
- Commercial vehicles
- Parts and aftersales
- Financial services
- Leasing and fleet services
- Software and mobility services
Business model and strategy
Arm Holdings
How it makes money
Arm licenses intellectual property. It spends heavily on R&D to design power-efficient processor architectures, then licenses the designs to companies such as Apple, Qualcomm and Samsung, which customize them and have them manufactured by a foundry such as TSMC. Arm charges an upfront license fee and an ongoing royalty on each chip shipped.
Growth strategy
With more than 99% of mobile application processors already on its architecture, Arm is pushing into markets where the chip value per unit is higher. Neoverse designs target cloud and AI infrastructure and are the basis of Amazon Graviton, Google Axion, Microsoft Cobalt and Nvidia Grace; Arm says data center royalties more than doubled in fiscal 2026.
Competitive advantage
Arm's moat is the software built around its architecture. iOS, Android and millions of mobile apps are written for the Arm instruction set, so a rival architecture such as Intel's x86 would need developers to rework that software to enter smartphones. Decades of focus on power efficiency, which extends battery life, also give Arm a technical lead in mobile.
Volkswagen
How it makes money
Volkswagen earns most of its revenue by selling new cars, vans, trucks and buses through brand groups: Core (Volkswagen, Skoda, SEAT/CUPRA, Volkswagen Commercial Vehicles), Progressive (Audi, Bentley, Lamborghini, Ducati), Sport Luxury (Porsche) and TRATON (Scania, MAN, International, Volkswagen Truck & Bus).
Growth strategy
Volkswagen's growth strategy centers on cost reduction, platform simplification, brand accountability, premium profitability, China-specific EV development, battery and software investment, hybrid and combustion optimization where demand remains strong, and selective partnerships such as Rivian and XPeng.
Competitive advantage
Volkswagen's advantage is industrial scale plus brand breadth. Few competitors can cover entry-level European cars, global volume SUVs, Audi premium vehicles, Porsche sports cars, Lamborghini supercars, Bentley luxury cars, Ducati motorcycles, Scania and MAN trucks, and a major financial services arm. The purchasing leverage and installed dealer base are hard to replicate.
Questions about Arm Holdings vs Volkswagen
Which company has higher revenue — Arm Holdings or Volkswagen Aktiengesellschaft?
Arm Holdings reported $4.9B (FY2026), while Volkswagen Aktiengesellschaft reported ~$363.8B (FY2025). By last reported revenue, Volkswagen Aktiengesellschaft is the larger business, with Arm Holdings reporting a smaller revenue base. Note: these are from different fiscal years and are not a direct like-for-like comparison.
What is the market cap of Arm Holdings vs Volkswagen Aktiengesellschaft?
Arm Holdings's market capitalisation stands at $309.4B, while Volkswagen Aktiengesellschaft's is $35.5B. Arm Holdings carries the higher market valuation, reflecting investors' expectations of its future earnings power relative to Volkswagen Aktiengesellschaft.
Which is more financially efficient — Arm Holdings or Volkswagen Aktiengesellschaft?
Arm Holdings generates $513k / employee in revenue per employee, while Volkswagen Aktiengesellschaft generates $549k / employee. Volkswagen Aktiengesellschaft shows higher revenue efficiency per headcount, though this reflects business model differences — capital-light software companies routinely outperform labour-intensive manufacturers on this metric.
How do Arm Holdings and Volkswagen Aktiengesellschaft make money?
Arm Holdings and Volkswagen Aktiengesellschaft generate revenue in fundamentally different ways. Arm Holdings: Arm licenses intellectual property. Volkswagen Aktiengesellschaft: Volkswagen earns most of its revenue by selling new cars, vans, trucks and buses through brand groups: Core (Volkswagen, Skoda, SEAT/CUPRA, Volkswagen Commercial Vehicles), Progressive (Audi, Bentley, Lamborghini, Ducati), Sport Luxury (Porsche) and TRATON (Scania, MAN, International, Volkswagen Truck & Bus).
Which company is valued higher relative to revenue — Arm Holdings or Volkswagen Aktiengesellschaft?
On a price-to-sales (P/S) basis, Arm Holdings trades at 62.9x P/S and Volkswagen Aktiengesellschaft at 0.1x P/S. Arm Holdings commands a higher revenue multiple, typically indicating that investors expect faster growth or higher future margins compared to Volkswagen Aktiengesellschaft. A higher multiple is not inherently better — it may also signal that the stock is priced for perfection.
Is Arm Holdings bigger than Volkswagen Aktiengesellschaft?
By last reported revenue, Volkswagen Aktiengesellschaft (~$363.8B (FY2025)) is the larger company compared to Arm Holdings ($4.9B (FY2026)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the Arm Holdings vs Volkswagen overview