01—Abstract
Summary
Summary of the 10-Q filed May 20, 2026. Cited figures are marked; the original filing is the authoritative source.
Analog Devices, Inc. (ADI) reported exceptionally strong financial results for the period ending May 2, 2026.
The company demonstrated robust top-line growth, with revenue increasing by 37%a year-over-year for the three-month period and 34% for the six-month period. This growth was driven by broad-based demand across its key end markets, particularly in Industrial and Communications sectors, with significant contributions from AI-driven infrastructure investments. Profitability saw a substantial improvement, with net income more than doubling year-over-year for both periods, reflecting strong revenue growth and improved gross margins.
The company's operational efficiency is highlighted by a significant increase in gross margin percentage, attributed to higher manufacturing utilization and a favorable product mix. While Research and Development (R&D) and Selling, Marketing, General, and Administrative (SMG&A) expenses increased in absolute terms, they decreased as a percentage of revenue, showcasing improved operating leverage. ADI also continued its disciplined capital allocation, with substantial common stock repurchases and a recently declared quarterly dividend, signaling confidence in its financial health and future prospects.
02—Key points
Key Highlights
- Revenue surged by 37% year-over-year to $3.62 billion for the three months ended May 2, 2026, and by 34% to $6.78 billion for the six months ended May 2, 2026.
- Net income more than doubled, increasing by 106% to $1.18 billion for the three-month period and by 109% to $2.01 billion for the six-month period.
- Gross margin percentage significantly improved to 67.3% for the quarter and 66.1% for the six months, up from 61.0% and 60.1% respectively in the prior year.
- Strong revenue growth was observed across Industrial (48-56% Y/Y for six months), Communications (65% Y/Y for six months), and Consumer (25% Y/Y for six months) end markets.
- Diluted Earnings Per Share (EPS) saw a substantial increase, reaching $2.40 for the quarter and $4.09 for the six months, up from $1.14 and $1.93 in the prior year, respectively.
- The company repurchased approximately $1.29 billion of common stock during the six-month period, demonstrating a commitment to returning capital to shareholders.
- Operating income showed remarkable growth, increasing by 100% to $1.38 billion for the quarter and by 102% to $2.38 billion for the six months.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Analog Devices kept $0.32.
- Revenue$3.62B100.0%
- Cost of revenue−$1.18B32.7%
- Gross profit$2.44B67.3%
- Operating costs−$1.06B29.3%
- Operating income$1.38B38.1%
- Interest, other & tax−$203.3M5.6%
- Net income$1.18B32.5%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed May 20, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $3.62B$2.64B | +37.2% |
| Cost of Revenue | $1.18B$1.03B | +15.1% |
| Gross Profit | $2.44B$1.61B | +51.4% |
| R&D Expenses | $509.32M$441.84M | +15.3% |
| SG&A Expenses | $362.81M$302.67M | +19.9% |
| Operating Expenses | $1.06B$933.67M | +13.5% |
| Operating Income | $1.38B$677.94M | +103.5% |
| Net Income | $1.18B$569.77M | +106.5% |
| EPS (Basic) | $2.41$1.15 | +109.6% |
| EPS (Diluted) | $2.40$1.14 | +110.5% |
| Shares Outstanding (Basic) | 487.61M496.17M | −1.7% |
| Shares Outstanding (Diluted) | 490.46M498.20M | −1.6% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Analog Devices' revenue growth in this quarter?
Analog Devices experienced a broad-based increase in demand across its product portfolio. Key drivers included strong performance in the Industrial sector, particularly in test equipment and aerospace/defense sub-markets, significant growth in the Communications sector fueled by AI-driven infrastructure investments, and robust demand in the Consumer sector.
How did Analog Devices manage its expenses and improve profitability?
The company saw significant improvements in gross margin due to higher manufacturing utilization and a favorable product mix. While R&D and SMG&A expenses increased in dollar amounts, they declined as a percentage of revenue, indicating improved operating leverage. This combination of strong revenue growth and enhanced gross margins, alongside controlled operating expenses, led to a substantial increase in net income and EPS.
What is the outlook for Analog Devices' financial performance based on this report?
The report indicates a very strong operational and financial performance. The significant year-over-year increases in revenue, gross margin, and net income, coupled with growth across major end markets, suggest a positive outlook. The company's focus on R&D for future innovations and its continued capital allocation strategies, including dividends and share repurchases, further support a confident outlook, though broader economic factors remain a consideration.
Are there any significant risks or concerns highlighted in the filing?
While the results are strong, the company acknowledges ongoing risks, including economic, political, and regulatory uncertainties, changes in demand for semiconductor products, supply chain disruptions, competition, and the potential material adverse effect of an ongoing IRS assessment related to transfer pricing. Investors should refer to the 'Risk Factors' section for a comprehensive overview.
06—Continue