Analog Devices (ADI) Q1 2026 earnings summary

Executive summary

• Revenue reached $3.16 billion for Q1 FY26, up 30% year-over-year, with broad-based growth led by Industrial and Communications segments and strong demand across all end markets.

• Net income rose 112% year-over-year to $830.8 million, with diluted EPS of $1.69, up from $0.78, and adjusted EPS of $2.46, up 51% year-over-year.

• Operating income more than doubled to $997 million, with operating margin up to 31.6% (adjusted 45.5%).

• AI-related businesses (ATE and data center) now comprise about 20% of revenue, both growing rapidly.

• $1.0 billion was returned to shareholders via dividends and share repurchases in Q1, with a quarterly dividend raised 11% to $1.10, marking 22 consecutive years of increases.

Financial highlights

• Gross margin improved to 64.7% from 59.0% year-over-year; adjusted gross margin was 71.2%.

• Operating margin increased to 31.6% (adjusted 45.5%), up from 20.3% year-over-year.

• Free cash flow for the trailing twelve months was $4.6 billion, or 39% of revenue.

• Cash and cash equivalents at quarter-end were $2.91 billion, with total liquidity (including short-term investments) at $4.05 billion.

• Capital expenditures for the quarter were $109 million.

Outlook and guidance

• Q2 FY26 revenue is forecast at $3.5 billion, +/- $100 million, with operating margin at 47.5% midpoint (adjusted), and adjusted EPS projected at $2.88 +/- $0.15.

• Industrial segment expected to be up 20% sequentially and 50% year-over-year in Q2.

• Communications to be up high-single digits sequentially and about 60% year-over-year.

• Automotive expected flat to down sequentially, below seasonal, due to tariff and macro effects.

• Sufficient liquidity and cash flow are anticipated to fund operations, R&D, capital expenditures, and dividends for at least the next twelve months.