← Back

Analog Devices: Analog Devices' Q1 FY2026 Earnings: Strong Execution and Growth

Analog Devices reported revenue of $3.16 billion for the first quarter of fiscal year 2026, representing a 3% sequential increase and a 30% year-over-year growth. The company's gross margin was 71.2%, up 140 basis points sequentially and 240 basis points year-over-year. Operating margin was 45.5%, above the high end of guidance, with EPS coming in at $2.46, up 9% sequentially and 51% year-over-year, beating analyst estimates of $2.31. As highlighted by CEO Vincent Roche, the company's investments in artificial intelligence are generating substantial returns, particularly in automated test equipment and data center businesses.

ADI

USD 345.3

-0.31%

A-Score: 5.3/10

Publication date: February 18, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Revenue Growth Q1 FY2026 revenue reached $3.16 billion, up 3% sequentially and 30% year-over-year.
  • Industrial Segment Strength Industrial revenue (47% of total) rose 5% sequentially and 38% year-over-year, driven by broad-based demand.
  • Communications Surge Communications revenue (15% of total) jumped 20% sequentially and 63% year-over-year, led by data center growth.
  • Margin Expansion Gross margin hit 71.2% (up 140 bps sequentially), and operating margin reached 45.5% (up 500 bps year-over-year).
  • Shareholder Returns Dividend increased 11%, extending a 19-year streak, with $2.88 adjusted EPS guidance for Q2 and 100% FCF payout commitment.

Segment Performance

The industrial segment represented 47% of revenue, finishing up 5% sequentially and 38% year-over-year, driven by broad-based strength across all segments. Automotive represented 25% of revenue, finishing down 8% sequentially but up 8% year-over-year, with continued year-over-year growth for connectivity and functionally safe power portfolios. Communications represented 15% of revenue, finishing up 20% sequentially and 63% year-over-year, led by the data center business.

Growth Prospects and Guidance

For the second quarter, ADI expects revenue to be $3.5 billion, plus or minus $100 million, with an operating margin of 47.5%, plus or minus 100 basis points. The company remains committed to returning 100% of its free cash flow to shareholders over the long term. With a current P/E Ratio of 62.56 and an EV/EBITDA of 31.74, the market is pricing in high expectations for the company's future growth. Analysts estimate next year's revenue growth at 8.9%, which may be a challenging target given the company's current momentum.

Valuation and Dividend

The company's dividend yield is currently at 1.14%, with an 11% increase to this year's dividend, extending its track record of annual dividend growth. The P/B Ratio is 5.01, indicating a premium valuation relative to its book value. The ROIC is 6.4%, and the ROE is 7.92%, indicating a relatively efficient use of capital. The Net Debt / EBITDA ratio is 1.05, suggesting a manageable level of debt.

Analog Devices's A-Score