Analog Devices (ADI) investor relations material

Executive summary

• Achieved record Q3 revenue of $4.02 billion, up 40% year-over-year, led by strong demand in data center and industrial segments, with broad-based growth across all end markets.

• Net income surged 158% year-over-year to $1.34 billion, with diluted EPS at $2.74 and adjusted EPS at $3.45, up 68% year-over-year.

• Free cash flow reached $4.9 billion on a trailing twelve-month basis, representing 36% of revenue.

• Strategic R&D and investments in hybrid manufacturing enhanced supply chain agility and enabled above-seasonal growth for over two years.

• Returned $1.7 billion to shareholders through dividends and share repurchases in the quarter.

Financial highlights

• Q3 revenue was $4.02 billion, up 11% sequentially and 40% year-over-year.

• Gross margin reached 72.5% (adjusted), up 330 basis points year-over-year; reported gross margin was 67.3%.

• Operating margin was 50% (adjusted), up 780 basis points year-over-year; reported operating margin was 40.1%.

• EPS hit a record $3.45 (adjusted), up 68% year-over-year; reported EPS was $2.74.

• Free cash flow over the trailing 12 months was $4.9 billion, or 36% of revenue.

Outlook and guidance

• Q4 revenue expected at $4.3 billion ±$100 million; adjusted operating margin at 52%; adjusted EPS forecasted at $3.86 ±$0.15.

• Gross margin expected to rise to about 74% in Q4, driven by favorable mix, higher fixed cost absorption, and price adjustments.

• Quarterly dividend of $1.10 per share declared for Q4, payable September 15, 2026.

• Management anticipates brisk growth in 2027, supported by secular and cyclical tailwinds, with strong double-digit growth projected for data center and energy through 2030.

• Continued commitment to R&D and capital expenditures between 4% and 6% of fiscal 2026 revenue.