01—Abstract
Summary
Summary of the 10-Q filed February 18, 2026. Cited figures are marked; the original filing is the authoritative source.
Analog Devices Inc. (ADI) reported a robust fiscal first quarter for 2026, with significant year-over-year growth across key financial metrics.
Revenue surged by 30% to $3.16 billiona, driven by strong demand in industrial, automotive, and communications end markets, with particular strength noted in datacenters and test equipment. The company also saw a substantial improvement in profitability, with net income more than doubling to $830.8 million, translating to a diluted EPS of $1.69, a significant increase from $0.78 in the prior year's comparable quarter. This performance was underpinned by a notable expansion in gross margin to 64.7%, up from 59.0%, attributed to higher factory utilization and a favorable product mix.
Operationally, ADI demonstrated strong cash flow generation, with net cash provided by operating activities increasing to $1.37 billionb. The company maintained a healthy liquidity position with $4.0 billion in cash, cash equivalents, and short-term investments.
ADI continued its commitment to shareholder returns through active share repurchases and dividend payments, further signaling financial strength and confidence in its future outlook. The company also highlighted strategic investments in R&D to fuel future growth and innovation.
02—Key points
Key Highlights
- Revenue increased 30% year-over-year to $3.16 billion, driven by broad-based demand across industrial, automotive, and communications end markets.
- Net income more than doubled to $830.8 million, a 112% increase from the prior year's quarter.
- Diluted EPS rose significantly to $1.69, a 117% increase compared to $0.78 in the prior year.
- Gross margin expanded by 570 basis points to 64.7% due to higher factory utilization and favorable product mix.
- Net cash provided by operating activities increased to $1.37 billion, demonstrating strong operational cash generation.
- The company announced a cash dividend of $1.10 per share, payable in March 2026, reflecting a commitment to shareholder returns.
- ADI repurchased approximately $516.5 million of its common stock during the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Analog Devices kept $0.26.
- Revenue$3.16B100.0%
- Cost of revenue−$1.12B35.3%
- Gross profit$2.04B64.7%
- Operating costs−$1.05B33.2%
- Operating income$997.0M31.5%
- Interest, other & tax−$166.2M5.3%
- Net income$830.8M26.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed February 18, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $3.16B$2.42B | +30.4% |
| Cost of Revenue | $1.12B$992.87M | +12.3% |
| Gross Profit | $2.04B$1.43B | +43.0% |
| R&D Expenses | $467.40M$402.89M | +16.0% |
| SG&A Expenses | $345.25M$284.80M | +21.2% |
| Operating Expenses | $1.05B$938.99M | +11.6% |
| Operating Income | $997.03M$491.31M | +102.9% |
| Net Income | $830.83M$391.32M | +112.3% |
| EPS (Basic) | $1.70$0.79 | +115.2% |
| EPS (Diluted) | $1.69$0.78 | +116.7% |
| Shares Outstanding (Basic) | 488.87M496.12M | −1.5% |
| Shares Outstanding (Diluted) | 491.66M498.67M | −1.4% |
05—Questions
Frequently Asked Questions
What were the main drivers of revenue growth in this quarter?
Revenue growth of 30% was driven by a broad-based increase in demand for ADI's products. Key contributors included strong performance in the wireline sub-markets of the Communications end market, supporting datacenter expansion, the test equipment sub-market within the Industrial end market, and portable consumer products in the Consumer end market.
How did gross margin improve, and what was the impact on profitability?
The gross margin percentage increased significantly by 570 basis points to 64.7% compared to the prior year's quarter. This improvement was primarily attributed to higher utilization of factories due to increased customer demand and a favorable mix of products sold into end markets. This enhanced gross margin, combined with strong revenue growth, led to net income more than doubling year-over-year.
What is the company's liquidity position and how is it managing capital?
As of January 31, 2026, ADI reported $4.0 billion in cash, cash equivalents, and short-term investments. The company generated $1.37 billion in cash from operating activities during the quarter. ADI continues to fund operations, capital expenditures, and shareholder returns through existing cash, operational cash flow, and available financing facilities.
Are there any significant charges or impairments noted in the report?
Special charges, net, decreased by 25% year-over-year, primarily due to reduced charges related to Global Repositioning Actions. However, the company did record a $15.6 million impairment charge related to its leased facilities in San Jose, California, as a result of a sublease transaction.
06—Continue