ANALOG DEVICES INC (ADI): Results of Operations and Financial Condition
ANALOG DEVICES INC (ADI) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Analog Devices Reports Record Fiscal Third Quarter 2026 Financial Results • Revenue of $4.02 billion, with year-over-year growth led by Data Center and Industrial • Operating cash flow of $5.5 billion and free cash flow of $4.9 billion on a trailing twelve-month basi
How this was made
The 30-second read
Why it matters
The earnings beat and updated guidance are likely to drive short‑term buying pressure and may influence sector ETFs.
Market read
First‑hand earnings release from a large‑cap chipmaker with strong growth, impacting semiconductor sector sentiment.
What to watch
Potential supply chain constraints or macro slowdown could temper growth expectations.
Analog Devices Reports Record Fiscal Third Quarter 2026 Financial Results
Revenue grew 40% year over year to a record $4,021,899, GAAP operating income rose 97%, adjusted operating margin reached 50.0%, and fourth-quarter revenue guidance of $4.3 Billion, +/- $100 Million was described as a record outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $4,021,899 | – | 40% |
| Gross marginGAAP | $2,707,544 | – | 51% |
| Gross margin percentageGAAP | 67.3% | – | 520 bps |
| Adjusted gross marginnon-GAAP | $2,916,736 | – | 46% |
| Adjusted gross margin percentagenon-GAAP | 72.5% | – | 330 bps |
| Operating expensesGAAP | $1,094,575 | – | – |
| Operating expenses percentage of revenueGAAP | 27.2% | – | – |
| Adjusted operating expensesnon-GAAP | $906,806 | – | – |
| Adjusted operating expenses percentage of revenuenon-GAAP | 22.5% | – | – |
| Operating incomeGAAP | $1,612,969 | – | 97% |
| Operating marginGAAP | 40.1% | – | 1,170 bps |
| Adjusted operating incomenon-GAAP | $2,009,930 | – | 65% |
| Adjusted operating marginnon-GAAP | 50.0% | – | 780 bps |
| Income before income taxesGAAP | $1,545,869 | – | – |
| Net incomeGAAP | $1,340,090 | – | – |
| Diluted earnings per shareGAAP | $2.74 | – | 163% |
| Adjusted diluted earnings per sharenon-GAAP | $3.45 | – | 68% |
| Effective income tax rateGAAP | 13.3% | – | – |
| Adjusted tax ratenon-GAAP | 13.1% | – | – |
| Net cash provided by operating activitiesGAAP | $1,603,959 | – | – |
| Free cash flownon-GAAP | $1,458,297 | – | – |
| Free cash flow percentage of revenuenon-GAAP | 36% | – | – |
| Trailing twelve-month net cash provided by operating activitiesGAAP | $5,545,325 | – | – |
| Trailing twelve-month free cash flownon-GAAP | $4,937,495 | – | – |
| Cash and cash equivalentsGAAP | $2,165,870 | – | – |
| Debt, currentGAAP | $1,344,855 | – | – |
| Commercial paper notesGAAP | $1,005,104 | – | – |
| Long-term debtGAAP | $6,771,624 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| IndustrialIndustrial represented 49% of revenue. | $1,971,926 | – | 53% |
| AutomotiveAutomotive represented 25% of revenue. | $998,227 | – | 16% |
| CommunicationsCommunications represented 16% of revenue. | $654,515 | – | 84% |
| ConsumerConsumer represented 10% of revenue. | $397,231 | – | 6% |
Fourth quarter of fiscal 2026, three months ending October 31, 2026 outlook
- Revenue$4.3 Billion (+/- $100 Million)
- Tax rate12% - 14% reported; 12% - 14% adjusted
- NoteReported operating margin: 42.6% (+/-150 bps)
- NoteAdjusted operating margin: 52.0% (+/-100 bps)
- NoteReported nonoperating expense: ~$80 Million
- NoteAdjusted nonoperating expense: ~$80 Million
- NoteReported earnings per share: $3.14 (+/- $0.15)
- NoteAdjusted earnings per share: $3.86 (+/- $0.15)
- NoteReported operating-margin reconciliation includes $405 million of adjustments related to acquisition related expenses.
- NoteGuidance includes $53 million of tax effects associated with the adjustment for acquisition related expenses.
- NoteAdjusted EPS includes $0.72 of adjustments related to the net impact of acquisition related expenses and the tax effects on those items.
Capital returns
- Returned $1.7 billion to shareholders via dividends and share repurchases in the third quarter.
- Dividend paid: $(535) million for the three months ended Aug. 1, 2026; $(2,043) million on a trailing twelve-month basis.
- Stock repurchases: $(1,157) million for the three months ended Aug. 1, 2026; $(3,127) million on a trailing twelve-month basis.
- Total cash returned: $(1,692) million for the three months ended Aug. 1, 2026; $(5,170) million on a trailing twelve-month basis.
- The Board declared a quarterly cash dividend of $1.10 per outstanding share of common stock, payable on September 15, 2026 to shareholders of record at the close of business on September 1, 2026.
What drove it
- Management said demand continued to strengthen across its product portfolio and regions throughout the third quarter.
- Revenue growth was led by Data Center and Industrial, according to the release headline.
- Industrial revenue grew 53% year over year and Communications revenue grew 84% year over year.
- Gross-margin and operating-margin expansion accompanied the 40% year-over-year revenue growth.
- Management cited innovation, deep customer collaboration, manufacturing agility, disciplined execution, and targeted growth investments.
Concerns
- The release identifies economic, geopolitical, demand, business-cycle, supply-chain, tariff, trade-restriction, export-regulation, manufacturing, product-availability, acquisition, cybersecurity, artificial-intelligence, tax-rate, indebtedness, dividend, and share-repurchase risks.
- Adjusted results exclude acquisition related expenses, acquisition related transaction costs, special charges, net, and tax related items.
- Third-quarter acquisition related transaction costs were $23,391, and nine-month payments for acquisitions, net of cash acquired were $(1,536,049).
- Current debt was $1,344,855 and commercial paper notes were $1,005,104 at Aug. 1, 2026.
What to watch
- Delivery against fourth-quarter revenue guidance of $4.3 Billion, +/- $100 Million.
- Delivery against reported operating-margin guidance of 42.6%, +/-150 bps, and adjusted operating-margin guidance of 52.0%, +/-100 bps.
- Whether demand continues to strengthen across the product portfolio and regions, as management stated.
- End-market trends in Industrial, Communications, Automotive, and Consumer.
- The impact of acquisition related expenses and related tax effects on the gap between reported and adjusted earnings.
- Capital deployment following $1.7 billion returned to shareholders in the third quarter and $(1,500,174) of quarterly acquisition payments, net of cash acquired.
Balance sheet and cash flow
- Cash and cash equivalents were $2,165,870 at Aug. 1, 2026, versus $2,499,406 at Nov. 1, 2025.
- Short-term investments were $159,064 at Aug. 1, 2026, versus $1,152,915 at Nov. 1, 2025.
- Accounts receivable were $2,389,577 and inventories were $1,931,496 at Aug. 1, 2026.
- Debt, current was $1,344,855, commercial paper notes were $1,005,104, and long-term debt was $6,771,624 at Aug. 1, 2026.
- Quarterly capital expenditures were $(145,662); trailing twelve-month capital expenditures were $(607,830).
- Nine-month payments for acquisitions, net of cash acquired were $(1,536,049), including $(1,500,174) in the third quarter.
- Nine-month repurchases of common stock were $(2,446,409), and nine-month dividend payments to shareholders were $(1,556,028).
Analysis
ADI reported a record fiscal third quarter, with revenue of $4,021,899, up 40% from $2,880,348 a year earlier. The company said it exceeded the midpoint of its revenue, margin, and earnings outlook. Demand strengthened across the portfolio and regions, according to management, while the release identified Data Center and Industrial as the leading sources of year-over-year growth.
The end-market results show broad year-over-year expansion. Industrial, ADI's largest reported end market at 49% of revenue, grew 53% to $1,971,926. Communications increased 84% to $654,515, while Automotive grew 16% to $998,227 and Consumer rose 6% to $397,231. The mix remained concentrated in Industrial and Automotive, which together represented 74% of quarterly revenue based on the reported end-market percentages.
Profitability expanded substantially. GAAP gross margin was 67.3%, up 520 bps year over year, and GAAP operating margin was 40.1%, up 1,170 bps. On a non-GAAP basis, adjusted gross margin was 72.5% and adjusted operating margin was 50.0%. GAAP diluted EPS rose 163% to $2.74, while adjusted diluted EPS rose 68% to $3.45. The reported-to-adjusted gap includes acquisition related expenses, acquisition related transaction costs, special charges, net, and tax related items.
Cash generation was strong, with $1,603,959 of quarterly operating cash flow and $1,458,297 of free cash flow. Trailing twelve-month operating cash flow was $5,545,325, or 40% of revenue, and free cash flow was $4,937,495, or 36% of revenue. ADI returned $(1,692) million during the quarter through dividends and share repurchases, while also recording $(1,500,174) of quarterly acquisition payments, net of cash acquired. Cash and cash equivalents were $2,165,870 at quarter end; current debt, commercial paper notes, and long-term debt were $1,344,855, $1,005,104, and $6,771,624, respectively.
For the fiscal fourth quarter, ADI forecast revenue of $4.3 Billion, +/- $100 Million, with reported operating margin of 42.6%, +/-150 bps, adjusted operating margin of 52.0%, +/-100 bps, reported EPS of $3.14, +/- $0.15, and adjusted EPS of $3.86, +/- $0.15. The guide calls for a record fourth-quarter revenue outlook and continued margin expansion relative to the third-quarter reported results. Investors will focus on execution against that outlook, the persistence of Industrial and Communications strength, and the effect of acquisition-related items on reported earnings.
Management, verbatim
ADI delivered a strong third quarter, exceeding the midpoint of our revenue, margin, and earnings outlook as we capitalized on broad-based demand.
Vincent Roche, CEO and Chair
We continue to extend our leadership through a powerful combination of innovation, deep customer collaboration, and manufacturing agility.
Vincent Roche, CEO and Chair
Demand continued to strengthen across our product portfolio and regions throughout the third quarter, which is reflected in our record fourth quarter outlook
Richard Puccio, CFO
Not in the filing
stated, not guessed- Previous-quarter outlook was not provided, so no comparison of reported results with prior guidance is available.
- Fourth-quarter gross-margin guidance was not provided.
- Fourth-quarter operating-expense guidance was not provided.
- Quarterly adjusted net income was not provided.
- Sequential changes for end-market revenue, income-statement metrics, and EPS were not provided.
- Product-line or geographic revenue detail was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Analog Devices filed an SEC Form 8‑K reporting its fiscal Q3 2026 results and outlook for Q4.
Ticker impact
Analog Devices reported record Q3 2026 revenue of $4.02B, 40% YoY growth, and issued Q4 guidance of $4.3B revenue with EPS $3.14.
potential price increase
Revenue and margin beat expectations; guidance above prior outlook indicates continued growth, likely attracting buying pressure.
Market effects
Positive signal for the broader semiconductor sector, especially data center and industrial segments.
Boosts US tech market sentiment; may lift related stocks on Nasdaq.
Reinforces global demand for AI-enabled chips, supporting worldwide semiconductor demand.
Counterpoint
Some investors may view the high valuation multiples as overbought despite earnings beat.
Key entities
- CompanyAnalog Devices Inc.
Global semiconductor leader reporting Q3 results.
