Arsenal's latest financial results show a record £110.5m spent on players, and an increase in turnover to £191.1m, for the six months ending 30 November 2016.
The club's profit before tax was £12.6m, compared to a loss of £6.2m for the same period in 2015.
Arsenal's cash reserves stand at £100.5m, down from £135.9m a year ago.
The results were announced as speculation continues over the future of manager Arsene Wenger following last week's 5-1 defeat by Bayern Munich in the Champions League.
Gunners chairman Sir Chips Keswick said: "The financial results for the first half of the year are robust. As expected, increased Premier League broadcasting revenues have had a direct impact on player costs both in terms of transfer prices and player wage demands.
"We have invested in our playing squad at record levels. It has also been exciting to see more young players emerging from our academy.
"We are very focused on producing a positive and exciting closing run and with the support of our fans, I believe together we can achieve a successful and memorable end to the season."