Analog Devices, Inc. (ADI) Q2 2026 Financial Results Summary

Analog Devices, Inc. (Nasdaq: ADI) released its financial results for the fiscal second quarter of 2026 on May 20, 2026. The company reported robust performance across its sectors, which is indicative of sustained demand and market growth.

Key Financial Metrics

• Revenue:
  • $3.62 billion, an increase of 37% compared to $2.64 billion in Q2 2025.
• Gross Margin:
  • $2.44 billion, up 51% year-over-year from $1.61 billion.
  • Gross margin percentage rose to 67.3% from 61.0%, reflecting 630 basis points improvement.
• Operating Income:
  • $1.38 billion, which is a significant increase of 104% from $678 million in Q2 2025.
  • The operating margin improved to 38.1%, an increase of 1,240 basis points year-over-year from 25.7%.
• Diluted Earnings per Share (EPS):
  • $2.40, up 111% from $1.14 in the previous year.

Adjusted Results

• Adjusted Gross Margin:
  • $2.65 billion, a year-over-year growth of 44% from $1.83 billion.
  • Adjusted gross margin percentage increased to 73.0% from 69.4%, showing a 360 basis points increase.
• Adjusted Operating Income:
  • $1.77 billion, up 63% from $1.09 billion in Q2 2025.
  • Adjusted operating margin registered at 49.0%, an increase of 780 basis points year-over-year from 41.2%.
• Adjusted Diluted EPS:
  • $3.09, a growth of 67% from $1.85 in Q2 2025.

Cash Flow and Returns

• Operating Cash Flow:
  • $5.1 billion for the trailing twelve months, representing 40% of revenue.
• Free Cash Flow:
  • $4.6 billion, about 36% of revenue.
• Shareholder Returns:
  • Returned $1.3 billion to shareholders through dividends and share repurchases in Q2.

Dividend Declaration

• The Board of Directors declared a quarterly cash dividend of $1.10 per outstanding share of common stock.
• The dividend payment is scheduled for June 16, 2026, to shareholders of record by the close of business on June 2, 2026.

Market Segmentation Revenue

• Industrial:
  • $1.80 billion, up 56% year-over-year.
• Automotive:
  • $872 million, a modest increase of 2% compared to the same quarter last year.
• Communications:
  • $555 million, a substantial increase of 79% from $311 million.
• Consumer:
  • $398 million, which is a 23% increase over the previous year's revenue of $323 million.

Outlook for Q3 2026

• Revenue Forecast:
  • Expected to be approximately $3.9 billion, with a variation of +/- $100 million.
• Operating Margin Expectations:
  • Reported operating margin anticipated around 39.0%, with an adjusted operating margin forecast of approximately 49.0%.
• Earnings per Share Outlook:
  • Projected reported EPS of $2.60, and adjusted EPS of $3.30, each with a +/- $0.15 variance expected.

The strong results reflect Analog Devices’ strategic focus on innovation and operational excellence as it anticipates continued growth and demand in various end markets.

Here are the extracted tables from the press release:

ANALOG DEVICES, INC. CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

Three Months Ended	Six Months Ended	May 2, 2026	May 3, 2025	May 2, 2026	May 3, 2025
Revenue	$3,623,465	$2,640,068	$6,783,728	$5,063,242
Cost of sales	1,183,667	1,028,458	2,298,955	2,021,329
Gross margin	2,439,798	1,611,610	4,484,773	3,041,913
Operating expenses:
Research and development	509,323	441,837	976,723	844,729
Selling, marketing and administration	362,810	302,669	708,063	587,465
Amortization of intangibles	187,985	187,415	375,300	374,830
Special charges, net	—	1,745	47,982	65,632
Total operating expenses	1,060,118	933,666	2,108,068	1,872,656
Operating income	1,379,680	677,944	2,376,705	1,169,257
Nonoperating expense (income):
Interest expense	87,619	74,703	173,963	149,967
Interest income	-28,565	-21,725	-60,822	-45,212
Other, net	-4,202	-962	-7,135	2,998
Total nonoperating expense (income)	54,852	52,016	106,006	107,753
Income before income taxes	1,324,828	625,928	2,270,699	1,061,504
Provision for income taxes	148,478	56,158	263,523	100,418
Net income	$1,176,350	$569,770	$2,007,176	$961,086
Shares used to compute earnings per common share - basic	487,605	496,173	488,239	496,145
Shares used to compute earnings per common share - diluted	490,458	498,201	491,057	498,434
Basic earnings per common share	$2.41	$1.15	$4.11	$1.94
Diluted earnings per common share	$2.40	$1.14	$4.09	$1.93

ANALOG DEVICES, INC. CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

May 2, 2026	Nov. 1, 2025
ASSETS
Current Assets
Cash and cash equivalents	$2,436,916	$2,499,406
Short-term investments	1,002,392	1,152,915
Accounts receivable	2,051,733	1,436,075
Inventories	1,848,405	1,656,323
Prepaid expenses and other current assets	470,327	363,342
Total current assets	7,809,773	7,108,061
Non-current Assets
Net property, plant and equipment	3,292,288	3,315,696
Goodwill	26,973,180	26,945,180
Intangible assets, net	7,255,362	8,013,815
Deferred tax assets	1,729,558	1,867,102
Other assets	888,934	742,858
Total non-current assets	40,139,322	40,884,651
TOTAL ASSETS	$47,949,095	$47,992,712
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$598,640	$543,760
Income taxes payable	325,626	610,370
Debt, current	899,227	—
Commercial paper notes	550,198	446,639
Accrued liabilities	2,083,216	1,645,032
Total current liabilities	4,456,907	3,245,801
Non-current Liabilities
Long-term debt	7,235,424	8,145,066
Deferred income taxes	1,906,115	2,163,281
Income taxes payable	87,109	100,963
Other non-current liabilities	521,507	521,846
Total non-current liabilities	9,750,155	10,931,156
Shareholders’ Equity
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding	—	—
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 487,087,040 shares outstanding (489,654,097 on November 1, 2025)	81,183	81,611
Capital in excess of par value	22,287,095	23,349,185
Retained earnings	11,525,998	10,539,541
Accumulated other comprehensive loss	-152,243	-154,582
Total shareholders’ equity	33,742,033	33,815,755
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$47,949,095	$47,992,712

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