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 across all end markets, especially industrial and communications, driven by cyclical recovery and strong execution.

• 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.

• Strategic investments are focused on mega trends like autonomy, healthcare, energy transition, immersive experiences, and AI-driven computing, with AI-related businesses now comprising close to 20% of revenue.

• Record levels of capital are being invested in innovation and customer engagement, while maintaining a commitment to return 100% of free cash flow to shareholders.

• Quarterly dividend was 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% from 20.3% year-over-year; adjusted operating margin was 45.5%.

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

• Operating cash flow for the trailing twelve months was $5.1 billion, 43% of revenue.

• Cash and short-term investments at quarter-end were $4 billion.

Outlook and guidance

• Q2 revenue expected at $3.5 billion ±$100 million, with operating margin at 47.5% midpoint (adjusted) and reported at 36.4%.

• Adjusted EPS for Q2 projected at $2.88 ±$0.15; reported EPS guidance is $2.19 ±$0.15.

• Industrial segment expected to lead Q2 growth, up 20% sequentially and 50% year-over-year.

• Quarterly dividend of $1.10 per share to be paid on March 17, 2026.

• CapEx for fiscal 2026 expected to be 4%-6% of revenue.