Analog Devices Posts Record Fiscal Q3, Raises Q4 Outlook and Declares Dividend

Analog Devices (NASDAQ: ADI) reported record financial results for its fiscal third quarter ended August 1, 2026, delivering substantial year-over-year top-line and margin improvements that exceeded the midpoint of its own guidance.

The company posted revenue of $4.02 billion for the quarter, driven by strong demand in its Data Center and Industrial segments, marking a significant increase from $2.88 billion in the comparable period a year earlier.

Gross margin expanded to 67.3%, up from 62.1% a year ago. Operating income nearly doubled to $1.61 billion, yielding an operating margin of 40.1%, compared to 28.4% in the prior-year period. Diluted GAAP EPS rose to $2.74 from $1.04, a 163% increase.

On a non-GAAP basis, adjusted gross margin reached 72.5%, adjusted operating margin stood at 50.0%, and adjusted EPS came in at $3.45, up from $2.05 a year earlier.

Trailing twelve-month operating cash flow was $5.545 billion (40% of revenue), and free cash flow totaled $4.937 billion (36% of revenue). In the third quarter alone, ADI returned $1.692 billion to shareholders through $535 million in dividends and $1.157 billion in share repurchases.

Looking ahead, for fiscal fourth quarter 2026, Analog Devices forecasts revenue of $4.3 billion ± $100 million. At the midpoint, the company expects reported operating margin of approximately 42.6% (±150 bps), adjusted operating margin of around 52.0% (±100 bps), GAAP EPS of $3.14 (±$0.15) and adjusted EPS of $3.86 (±$0.15).

The board also declared a quarterly cash dividend of $1.10 per share, payable on September 15, 2026, to shareholders of record as of September 1, 2026.

Why it Matters

Analog Devices’ Q3 performance demonstrates sustained momentum across its core markets with notably robust free cash flow generation. The upgraded Q4 outlook underscores management’s confidence in continuing strength, particularly as AI-related demand supports data center and industrial applications.

Additionally, the $1.10 dividend reinforces ADI’s commitment to shareholder returns through both capital allocation and buybacks.

What’s Next

Investors will be monitoring the earnings conference call held on August 19 to gauge commentary on AI demand trends, supply chain factors, and margin outlook going into fiscal 2027.

Key metrics to watch include Q4 actual performance relative to the raised guidance, future cash returns, and any updates on strategic initiatives such as AI power delivery solutions.

While the verified live stock price as of August 28 was $361.78, down 3.3%, any direct link between these results and the stock’s intraday or weekly performance requires separate confirmation from trading data or market reports.