Grizzly Bulls
Financial research concept

Semiconductor IP Remaining Performance Obligations

measure contracted semiconductor IP revenue that has not yet been recognized, while excluding future usage-based royalties when the issuer applies the royalty exception.

By Lee BaileyPublished Sep 28, 2026
Research context

See what supports this page, how current it is, and where comparable or historical context is available.

Research date
Sep 28, 2026Use the dated article and cited sources for the definition, examples, and stated limitations.
Operating-model context
10 connected conceptsPart of the reviewed Semiconductor IP Licensing Economics; issuer definitions remain distinct where disclosed.
Company examples
1 reviewed companyRelationships reflect supported examples, not a normalized cross-company KPI ranking.
  1. RPO excludes a large part of the future economics
  2. Management can retire the KPI without making the accounting concept disappear
  3. Part of the Semiconductor IP Licensing Economics
  4. See It in Company Research
  5. Continue Research

Semiconductor IP remaining performance obligations, or RPO, represent contract value allocated to obligations that are still unsatisfied or partly unsatisfied.

Arm reported $2.071B of RPO at March 31, 2026. It expected roughly 28% to convert to revenue over the following 12 months, another 21% over months 13 through 24, and the remainder later.

RPO excludes a large part of the future economics

Arm excludes potential future royalty receipts from RPO. That is critical because royalty revenue can become the long tail of a successful license relationship.

RPO therefore answers a narrower question: how much contracted transaction price remains to be recognized from existing performance obligations? It does not estimate the future royalties that might arise if customer chips ship successfully.

This also separates RPO from annualized contract value. ACV annualizes committed active license fees; RPO follows accounting performance obligations and their remaining transaction price.

Management can retire the KPI without making the accounting concept disappear

Arm stopped reporting RPO as a quarterly operating metric beginning in Q1 FYE27, saying it had become less relevant to growth as the business expanded into production silicon. The annual financial statements still disclose the accounting balance and expected recognition timing.

That makes RPO useful, but with a boundary: investors should not assume an older quarterly KPI cadence will remain decision-useful forever.

Primary sources: Arm FYE26 Form 20-F, Arm Q4 FYE26 shareholder letter, and Arm Q1 FYE27 shareholder letter.

Part of the Semiconductor IP Licensing Economics

Connect committed license economics and revenue recognition with customer design wins, the lag to production, and shipment-driven royalty value capture and estimation.

Browse the full operating model in Company Analysis →
Where this concept fits
  • Contract base and licensing revenueCurrent relationship
    Portfolio and single-design license structures create committed fees, but ACV, remaining performance obligations, and recognized license revenue answer different questions about the same contract base. Future usage royalties sit outside both ACV and Arm's disclosed RPO.
    Annualized Contract ValueLicense and Other RevenuePortfolio License ModelRemaining Performance ObligationsCurrent concept
  • Design selection and time to production
    A design win marks customer selection of IP, which may occur under an existing portfolio license. The chip still has to move through tape-out, manufacturing and product ramp before the upstream licensing relationship becomes a downstream royalty stream.
    Design WinLicense-to-Royalty Lag
  • Shipment-driven royalty realization
    Royalty revenue combines shipped units with contract-specific per-chip economics and technology mix. Because customer shipment reports can lag the accounting close, issuers may accrue estimates and true them up later rather than waiting to recognize the economic shipment period.
    Per-Chip RoyaltyRoyalty AccrualRoyalty Rate MixRoyalty Revenue

See It in Company Research

These companies are examples of how the concept is reported or discussed in public filings. Definitions can differ by issuer; these links open company research rather than a normalized metric comparison.

Explore other companies in this operating model

These companies are linked to at least two other reviewed concepts in the same operating model, but are not currently linked to this concept. This is broader research navigation, not evidence that the company reports an equivalent metric.

Continue Research

Continue from the concept into the Grizzly Bulls research surface that best matches the next question. These links are research continuations, not recommendations or required steps.

Compare stocks

Compare contracted backlog

Compare contracted revenue obligations while separating accounting backlog from excluded future usage-based royalties.

Continue research

Explore more topics in the Financial Research Encyclopedia.