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Accelerates ADI's delivery of "Physical Intelligence", enabling systems to sense, reason, and act locally in real time within the constraints of the physical world Adds Alif's AI-native fusion processors, giving customers a scalable platform to quickly build full system solutions by combining next-generation digital with ADI's leading edge analog portfolio Expands ADI's total addressable market across industrial, data center infrastructure, defense, energy, robotics, digital health, and wearable applications by enabling complete, differentiated solutions , /PRNewswire/ -- Analog Devices, Inc. (NASDAQ: ADI) and Alif Semiconductor today announced that they have entered into a definitive agreement under which ADI will acquire Alif in an all-cash transaction for $1.35 billion.

Artificial intelligence is entering a new phase as models move beyond interpreting words and images to understanding context and interacting with the physical world. This transition requires systems that can reason from signals such as motion, sound, vibration, radio waves, and thermodynamics, and operate locally within demanding power, latency, security, and reliability constraints. At ADI, this is called Physical Intelligence.

Alif is redefining edge intelligence with a sophisticated platform of high-efficiency AI-native microcontrollers and fusion processors. Its heterogeneous architecture enables real-time sensor fusion, low-latency inference, and on-device AI, bringing advanced intelligence to demanding physical systems.

Combining ADI's leadership in sensing, signal processing, power, connectivity, and application software with Alif's leading-edge digital platform will accelerate the delivery of more complete Physical Intelligence solutions. Together, ADI and Alif can address a broader range of customers' most complex system-level challenges.

Commentary

"AI is moving out of the data center and into the physical world, where latency, power, and trust cannot be compromised. That is the domain ADI has mastered for decades, at the delicate electro-physical interface where real-world signals become actionable intelligence. By combining Alif's digital processing capabilities with our leadership in multi-modal sensing, signal processing, power, connectivity, and software, we can empower customers to create entirely new classes of secure, intelligent systems that sense, reason, and act locally in real time. This is the next frontier of AI: embodied and deterministic. This is Physical Intelligence in action," said Vincent Roche, CEO and Chair of ADI. "Alif was founded to reimagine what a microcontroller can be in the AI era. We engineered a heterogeneous architecture from the start, integrating dedicated low-power neural processing with connectivity, security, and intelligent power management that delivers compute resources precisely where they're needed. Combined with ADI's deep physical-domain expertise and broad analog system capabilities, we can expand our reach to deliver the solutions that can power the future of Physical Intelligence," said Reza Kazerounian, Co-Founder and President of Alif. Alif's silicon is already shipping in production, with design wins across leading consumer and industrial customers.

Transaction Details 
Under the terms of the agreement, which has been approved by the Boards of Directors of both companies, ADI will pay Alif's stockholders $1.35 billion of upfront consideration in cash, subject to the terms of the definitive agreement. In addition, ADI may pay an incremental contingent consideration of up to $200 million. The transaction is expected to close before the end of calendar year 2026, subject to customary closing conditions and the expiration of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

About Analog Devices, Inc.
Analog Devices, Inc. (NASDAQ: ADI) is a global semiconductor leader that bridges the physical and digital worlds to enable breakthroughs at the Intelligent Edge. ADI combines analog, digital, AI, and software technologies into solutions that combat climate change, reliably connect humans and the world, and help drive advancements in automation and robotics, mobility, healthcare, energy and data centers. With revenue of more than $11 billion in FY25, ADI ensures today's innovators stay Ahead of What's Possible. Learn more at www.analog.com and on LinkedIn and X. 

About Alif Semiconductor
Alif Semiconductor, headquartered in Pleasanton, California, is a provider of the next generation of secure, connected, highly power-efficient EdgeAI microcontrollers and fusion processors. Alif's architectures scale from single-core to multi-core systems featuring integrated neural processing units (NPUs) and advanced graphics acceleration. Learn more at alifsemi.com.

Advisors
PJT Partners is acting as financial advisor to ADI, and Wachtell, Lipton, Rosen & Katz as legal counsel. Qatalyst Partners is acting as financial advisor, and DLA Piper as legal counsel to Alif.

All trademarks and registered trademarks are the property of their respective owners.

Forward-Looking Statements
This press release contains forward-looking statements, which address a variety of subjects including, for example, the expected timetable for closing of the transaction between Analog Devices, Inc. and Alif Semiconductor; the expected benefits of the transaction; ADI's expected product offerings, product development, and technical advances resulting from the transaction; markets, market position, addressable markets, and growth opportunities; and other future events. Statements that are not historical facts, including statements about our beliefs, plans, and expectations, are forward-looking statements. Such statements are based on our current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: the risk that regulatory approvals may not be obtained or other closing conditions may not be satisfied in a timely manner or at all; the possibility that the transaction will not close or that closing may be delayed; unforeseen or unknown liabilities; costs or expenses related to the transaction; the inability to retain key personnel; difficulties in integrating the acquired business; the risk that expected benefits of the transaction may not be realized or may take longer to realize than expected; and uncertainty as to the long-term value of our common stock. For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to our filings with the Securities and Exchange Commission, including the risk factors contained in our most recent Annual Report on Form 10-K and our most recent Quarterly Report on Form 10-Q. Forward-looking statements represent management's current expectations and are inherently uncertain. Except as required by law, we do not undertake any obligation to update forward-looking statements made by us to reflect subsequent events or circumstances.

CONTACT:
Jeff Ambrosi
Senior Director, Investor Relations
Analog Devices
[email protected]
(781) 461-3282

Ferda Millan
Global PR and External Communications
Analog Devices
[email protected]
(408) 373-1854

SOURCE Analog Devices, Inc.

Key Takeaways Analog Devices' automotive revenues rose 16% year over year, reaching 25% of quarterly revenues.ADI is gaining share across combustion and electric vehicles, with strength in ADAS and infotainment.Automotive revenues are expected to grow at a low-single-digit rate in the fiscal fourth quarter. Analog Devices’ (ADI - Free Report) automotive business delivered strong growth in the third quarter of fiscal 2026. Automotive accounted for 25% of ADI’s quarterly revenues and increased 14% sequentially and 16% year over year. This was a meaningful contribution to the company’s broad-based growth, as ADI reported total quarterly revenues of $4.02 billion.

The growth in automotive was stronger than the underlying vehicle market. ADI said its higher content and share positions globally continued to drive growth well above the seasonally adjusted annual rate of vehicle sales. This suggests that ADI is benefiting not only from higher vehicle production but also from increasing semiconductor content per vehicle.

One important growth area is next-generation advanced driver-assistance systems (ADAS). As vehicles become more intelligent, they require more sensing, signal processing, power management and other semiconductor content. ADI specifically highlighted next-generation ADAS and infotainment systems as areas where it is seeing strength across customers and products, and it is winning more business.

Electric powertrains are another important opportunity for the automotive business. ADI reported diversified strength in electric powertrains, alongside ADAS and infotainment. The company also said it is gaining share across different types of vehicles, including both combustion-engine vehicles and electric vehicles. This gives the automotive business exposure to the broader shift toward greater electronic content in vehicles rather than relying on a single vehicle technology.

Looking ahead, ADI expects automotive revenues to increase at a low-single-digit rate in the fourth quarter. Although this is slower than the 16% year-over-year growth achieved in the third quarter, the company continues to see opportunities across infotainment, electrification, autonomous, ADAS and safety applications.

How Competitors Fare Against Analog DevicesAnalog Devices competes with Texas Instruments (TXN - Free Report) and STMicroelectronics (STM - Free Report) in the Automotive segment. Texas Instruments competes with ADI in Analog sensors, power ICs, in-vehicle networking and driver assistance electronics.

In the second quarter of 2026, Texas Instruments’ automotive sales rose by the mid-teens on a year-over-year basis. STMicroelectronics competes in sensors like MEMS and inertial, analog front ends, interface ICs and microcontrollers. Both Texas Instruments and STMicroelectronics compete with ADI across the broader Industrial and communication segment.

ADI’s Price Performance, Valuation and EstimatesShares of ADI have gained 36.9% year to date compared with the Semiconductor - Analog and Mixed industry’s growth of 32%.

ADI YTD Performance ChartPerformance
Image Source: Zacks Investment Research

From a valuation standpoint, ADI trades at a forward price-to-sales ratio of 10.15X, higher than the industry’s average of 7.83X.

ADI Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings implies year-over-year growth of 66.4%. The consensus estimate for fiscal 2026 has been revised upward by 44 cents in the past seven days.

Image Source: Zacks Investment Research

ADI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

B. Metzler seel. Sohn & Co. AG purchased a new stake in shares of Analog Devices, Inc. (NASDAQ:ADI – Free Report) during the second quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The institutional investor purchased 138,570 shares of the semiconductor company’s stock, valued at approximately $55,036,000.

Other institutional investors and hedge funds also recently made changes to their positions in the company. Banque Transatlantique SA bought a new position in Analog Devices in the 4th quarter worth approximately $25,000. Contravisory Investment Management Inc. bought a new stake in Analog Devices during the 2nd quarter valued at $25,000. Hilton Head Capital Partners LLC bought a new stake in Analog Devices during the 4th quarter valued at $26,000. Gordian Capital Singapore Pte Ltd purchased a new stake in shares of Analog Devices during the fourth quarter worth $27,000. Finally, Evolution Wealth Management Inc. purchased a new stake in shares of Analog Devices during the first quarter worth $30,000. Institutional investors own 86.81% of the company’s stock.

Key Headlines Impacting Analog Devices Here are the key news stories impacting Analog Devices this week:

Positive Sentiment: Strong Q3 beat and upbeat outlook: Fiscal third-quarter revenue reached a record $4.02 billion, up approximately 40% year over year and above the roughly $3.91 billion consensus estimate. Non-GAAP EPS of $3.45 also exceeded expectations. Management guided for fourth-quarter revenue of $4.2 billion-$4.4 billion and EPS of $3.71-$4.01, both ahead of Wall Street forecasts. Analog Devices Reports Record Fiscal Third Quarter 2026 Financial Results Positive Sentiment: AI and data-center demand are accelerating: Growth in data-center power-management and optical products, along with industrial demand, is supporting momentum into fiscal 2027. ADI says a potential 100-gigawatt data-center buildout by 2031 could represent a significant long-term opportunity. Analog Devices Sees 100 GW Data Center Buildout Positive Sentiment: Analysts raised targets: JPMorgan lifted its target to $500 and maintained an Overweight rating. Needham raised its target to $450, while TD Cowen reaffirmed Buy with a $460 target; Susquehanna also reiterated Buy with a $475 target. These revisions indicate improving confidence in ADI’s AI infrastructure growth. Analog Devices Is Cashing in on the AI Boom Positive Sentiment: Shareholder returns remain supportive: ADI declared a quarterly dividend of $1.10 per share, payable September 15 to shareholders of record September 1, and returned approximately $1.7 billion through dividends and repurchases during the quarter. Neutral Sentiment: ADI is increasingly being viewed as a dividend-paying way to participate in the AI boom, potentially broadening its appeal to income-oriented investors. 3 Buy-Rated Dividend Stocks to Play the AI Boom Negative Sentiment: Valuation and AI-trade concerns are limiting the reaction: One analyst argued that the stock’s elevated valuation and multiple contraction could overshadow the strong fundamentals, warning that investor enthusiasm around AI may be creating additional downside risk. Analog Devices Earnings Reaction Warning Wall Street Analyst Weigh In Several equities analysts have recently weighed in on the company. The Goldman Sachs Group reiterated a “buy” rating and issued a $480.00 price target on shares of Analog Devices in a research report on Wednesday. Argus set a $460.00 target price on Analog Devices in a research note on Tuesday, May 26th. Cantor Fitzgerald reaffirmed an “overweight” rating and set a $550.00 target price on shares of Analog Devices in a report on Monday. Needham & Company LLC upped their price target on Analog Devices from $440.00 to $450.00 and gave the company a “buy” rating in a research report on Thursday. Finally, Robert W. Baird increased their price target on shares of Analog Devices from $365.00 to $450.00 and gave the stock an “outperform” rating in a report on Thursday, May 21st. Two research analysts have rated the stock with a Strong Buy rating, twenty-five have given a Buy rating and three have issued a Hold rating to the stock. According to MarketBeat, Analog Devices currently has an average rating of “Moderate Buy” and an average target price of $447.13. View Our Latest Report on ADI

Insider Activity at Analog Devices In other Analog Devices news, SVP Martin Cotter sold 17,594 shares of the business’s stock in a transaction that occurred on Tuesday, June 2nd. The shares were sold at an average price of $418.00, for a total value of $7,354,292.00. Following the completion of the transaction, the senior vice president owned 56,332 shares of the company’s stock, valued at $23,546,776. The trade was a 23.80% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, Director Ray Stata sold 1,432 shares of the stock in a transaction on Tuesday, June 9th. The stock was sold at an average price of $400.83, for a total transaction of $573,988.56. Following the completion of the transaction, the director directly owned 120,175 shares in the company, valued at $48,169,745.25. The trade was a 1.18% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 75,274 shares of company stock valued at $30,343,386 in the last ninety days. 0.36% of the stock is currently owned by company insiders.

Analog Devices Trading Down 0.8% Shares of ADI stock opened at $370.24 on Friday. The company has a debt-to-equity ratio of 0.20, a quick ratio of 1.34 and a current ratio of 1.25. Analog Devices, Inc. has a 52-week low of $223.47 and a 52-week high of $445.91. The company has a market capitalization of $180.34 billion, a PE ratio of 43.92, a price-to-earnings-growth ratio of 0.97 and a beta of 1.20. The business’s fifty day moving average is $389.14 and its 200 day moving average is $371.10.

Analog Devices (NASDAQ:ADI – Get Free Report) last posted its earnings results on Wednesday, August 19th. The semiconductor company reported $3.45 EPS for the quarter, topping the consensus estimate of $3.34 by $0.11. The business had revenue of $4.02 billion during the quarter, compared to analysts’ expectations of $3.92 billion. Analog Devices had a return on equity of 16.39% and a net margin of 29.79%.The firm’s revenue was up 39.2% on a year-over-year basis. During the same period in the previous year, the business earned $2.05 earnings per share. Analog Devices has set its Q4 2026 guidance at 3.710-4.010 EPS. On average, equities research analysts anticipate that Analog Devices, Inc. will post 12.42 EPS for the current fiscal year.

Analog Devices Dividend Announcement The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, September 15th. Stockholders of record on Tuesday, September 1st will be issued a dividend of $1.10 per share. The ex-dividend date of this dividend is Tuesday, September 1st. This represents a $4.40 annualized dividend and a dividend yield of 1.2%. Analog Devices’s payout ratio is presently 65.38%.

Analog Devices Profile (Free Report)

Analog Devices, Inc (NASDAQ: ADI) is a multinational semiconductor company that designs, manufactures and markets a broad portfolio of analog, mixed-signal and digital signal processing integrated circuits. Founded in 1965 by Ray Stata and Matthew Lorber, the company has grown into a leading supplier of components that convert, condition and process real-world signals for electronic systems. Analog Devices is headquartered in Massachusetts and serves customers around the world across multiple end markets.

The company’s product lineup includes data converters (ADCs and DACs), amplifiers, power management ICs, radio-frequency (RF) and microwave components, sensors and MEMS devices, signal chain and isolation products, timing and clocking solutions, and embedded processors and software for system-level design.

See Also Five stocks we like better than Analog Devices 3 Energy Stocks Raising Dividends as the Sector Surges 5 Reasons the S&P 500 Could Keep Rallying Through Year-End Walmart’s Post-Earnings Drop Could Be a Buying Opportunity The Trade Desk’s Earnings Miss Raises a Bigger Question About Its AI Future Want to see what other hedge funds are holding ADI? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Analog Devices, Inc. (NASDAQ:ADI – Free Report).

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Key Takeaways Analog Devices guides Q4 revenues of $4.3B and adjusted EPS of $3.86.ADI expects data center revenues to rise 10% sequentially and strong double-digit growth through FY30.ADI expects the Q4 gross margin near 74%, aided by mix, absorption and pricing; more pricing lands in Q1'27. Analog Devices, Inc. (ADI - Free Report) used its third-quarter fiscal 2026 call to emphasize a widening AI infrastructure opportunity, with power availability, optical connectivity and energy systems central to its long-term growth strategy.

The company also entered the fiscal fourth quarter with a record outlook after revenues of $4.02 billion and adjusted earnings of $3.45 per share exceeded the Zacks Consensus Estimate of $3.92 billion and $3.33, respectively.

ADI Sets Stronger Q4 BaselineExecutive vice president and CFO Richard Puccio guided fiscal fourth-quarter revenues of $4.3 billion, plus or minus $100 million, with an adjusted operating margin of 52%, plus or minus 100 basis points.

Adjusted earnings are expected to be $3.86 per share, plus or minus $0.15. Puccio added that communications should lead sequential growth, with data center revenues rising 10%.

Puccio said that industrial and consumer are expected to rise in the high single digits sequentially, while automotive is projected to increase in the low single digits.

Analog Devices Expands Grid-to-Chip PushCEO and chair Vincent Roche centered his remarks on a grid-to-chip strategy designed around AI infrastructure's rising energy and data-density requirements.

Roche said that ADI's opportunity spans grid monitoring, energy storage, rack and processor power, telemetry, and optical control. The company's 2030 data center and energy serviceable market opportunity has more than doubled from its estimate a year ago.

Roche added that optical circuit-switching revenues are positioned to roughly double this year, with a similar growth target for fiscal 2027, backed by design wins and customer commitments.

ADI Sees Multi-Year Data Center GrowthPuccio said that data center now represents 80% of communications revenues, while both optical and power revenues grew more than 100% year over year in the quarter.

A Bernstein analyst pressed management on whether that pace could extend into fiscal 2027. Roche declined to provide a specific annual growth rate but said that he expects strong double-digit data center growth through at least 2030.

A Stifel analyst asked whether the analog industry's growth profile is shifting higher. Roche stated that the analog business could compound at double-digit rates for several years as AI raises analog content and solution complexity.

Analog Devices Defends Margin DurabilityA JPMorgan analyst focused on the expected step-up in the gross margin. Puccio expected the fiscal fourth-quarter gross margin to rise 150 basis points to 74%.

Puccio attributed the improvement to a favorable mix, higher fixed-cost absorption and pricing actions. He added that the full effect of announced pricing will not be captured until first-quarter fiscal 2027.

A TD Cowen analyst asked whether roughly 74% can be sustained. Puccio stated that the level can be maintained with the expected revenues and mix, while flagging seasonal shutdowns, inflation and growth investments as offsets.

ADI Builds Supply for Accelerating DemandA Cantor Fitzgerald analyst asked whether supply capacity could constrain continued growth. Puccio said that ADI has delivered above-seasonal growth for nine straight quarters and is guiding to a 10th.

Puccio informed that management is adding tools internally, securing more external wafers and building inventory. He said that book-to-bill remains above 1, while lead times have begun to extend in parts of the industry.

Roche stated that ADI is jointly planning with external manufacturing partners across process nodes and continues to expand its hybrid manufacturing model to support longer-term demand.

Analog Devices Balances Growth & RisksDuring Q&A, a Bank of America analyst asked about fiscal 2027. Roche said that management expects a brisk growth year, citing AI, defense, cyclical recovery, pricing and Maxim-related synergies.

Roche also identified macro conditions, geopolitical risks, potential rate hikes, financial-market volatility and a slowdown in AI capital spending as factors that could alter the trajectory.

Puccio's closing emphasis remained on balancing execution discipline with targeted growth investment as ADI moves into fiscal 2027, with record quarterly revenues and a fiscal fourth-quarter outlook.

ADI's Zacks Signals Stay MixedAnalog Devices currently carries a Zacks Rank #2 (Buy), which indicates favorable earnings-estimate-revision trends over the Zacks Rank's one- to three-month horizon. However, its Value Score of D, Momentum Score of D and VGM Score of D are weaker than the A or B grades favored alongside top Zacks Ranks.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Its Growth Score of C is comparatively stronger but still below the preferred A or B range. The combination points to a positive Rank signal moderated by weaker Style Scores, and the Zacks Rank can change as analysts revise estimates following the just-reported results.

Revenue of $4.02 billion, with year-over-year growth led by Data Center and Industrial Operating cash flow of $5.5 billion and free cash flow of $4.9 billion on a trailing twelve-month basis or 40% and 36% of revenue, respectively Returned $1.7 billion to shareholders via dividends and share repurchases in the third quarter , /PRNewswire/ -- Analog Devices, Inc. (Nasdaq: ADI), a global semiconductor leader, today announced financial results for its fiscal third quarter 2026, which ended August 1, 2026.

"ADI delivered a strong third quarter, exceeding the midpoint of our revenue, margin, and earnings outlook as we capitalized on broad-based demand," said Vincent Roche, CEO and Chair.  "We continue to extend our leadership through a powerful combination of innovation, deep customer collaboration, and manufacturing agility.  Our investments in these foundational areas, combined with the trust we have built over decades, provide a unique advantage to create, deliver, and capture value in the AI era – for customers and investors alike."

"Demand continued to strengthen across our product portfolio and regions throughout the third quarter, which is reflected in our record fourth quarter outlook" said Richard Puccio, CFO. "We believe our balance of disciplined execution and targeted growth investments will enable us to finish the year strongly and carry that momentum into fiscal 2027." 

Performance for the Third Quarter of Fiscal 2026 

Results Summary(1)

(in millions, except per-share amounts and percentages)

Three Months Ended

Aug. 1, 2026

Aug. 2, 2025

Change

Revenue

$            4,022

$            2,880

40 %

Gross margin

$            2,708

$            1,790

51 %

Gross margin percentage

67.3 %

62.1 %

520 bps

Operating income

$            1,613

$               818

97 %

Operating margin

40.1 %

28.4 %

1,170 bps

Diluted earnings per share

$              2.74

$              1.04

163 %

Adjusted Results(2)

Adjusted gross margin

$            2,917

$            1,995

46 %

Adjusted gross margin percentage

72.5 %

69.2 %

330 bps

Adjusted operating income

$            2,010

$            1,215

65 %

Adjusted operating margin

50.0 %

42.2 %

780 bps

Adjusted diluted earnings per share

$              3.45

$              2.05

68 %

Three Months
Ended

Trailing Twelve
Months

Cash Generation

Aug. 1, 2026

Aug. 1, 2026

Net cash provided by operating activities

$            1,604

$            5,545

% of revenue

40 %

40 %

Capital expenditures

$              (146)

$              (608)

Free cash flow(2)

$            1,458

$            4,937

% of revenue

36 %

36 %

Three Months
Ended

Trailing Twelve
Months

Cash Return

Aug. 1, 2026

Aug. 1, 2026

Dividend paid

$              (535)

$            (2,043)

Stock repurchases

(1,157)

(3,127)

Total cash returned

$           (1,692)

$            (5,170)

(1) The sum and/or computation of the individual amounts may not equal the total due to rounding.

(2) Reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures are provided
in the financial tables included in this press release. See also the "Non-GAAP Financial Information" section for additional information.

Outlook for the Fourth Quarter of Fiscal Year 2026

For the fourth quarter of fiscal 2026, we are forecasting revenue of $4.3 billion, +/- $100 million. At the midpoint of this revenue outlook, we expect reported operating margin of approximately 42.6%, +/-150 bps, and adjusted operating margin of approximately 52.0%, +/-100 bps. We are planning for reported EPS to be $3.14, +/-$0.15, and adjusted EPS to be $3.86, +/-$0.15.  

Our fourth quarter fiscal 2026 outlook is based on current expectations and actual results may differ materially as a result of, among other things, the important factors discussed at the end of this release. The statements about our fourth quarter fiscal 2026 outlook supersede all prior statements regarding our business outlook set forth in prior ADI news releases, and ADI disclaims any obligation to update these forward-looking statements.

The adjusted results and adjusted anticipated results above are financial measures presented on a non-GAAP basis. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures are provided in the financial tables included in this release. See also the "Non-GAAP Financial Information" section for additional information.

Dividend Payment

The ADI Board of Directors has declared a quarterly cash dividend of $1.10 per outstanding share of common stock. The dividend will be paid on September 15, 2026 to all shareholders of record at the close of business on September 1, 2026.

Conference Call Scheduled for Today, Wednesday, August 19, 2026 at 10:00 am ET

ADI will host a conference call to discuss our third quarter fiscal 2026 results and short-term outlook today, beginning at 10:00 am ET. Investors may join via webcast, accessible at investor.analog.com.

Non-GAAP Financial Information

This release includes non-GAAP financial measures that are not in accordance with, nor an alternative to, U.S. generally accepted accounting principles (GAAP) and may be different from non-GAAP measures presented by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. These non-GAAP measures have material limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP and should not be considered in isolation from, or as a substitute for, the Company's financial results presented in accordance with GAAP. The Company's use of non-GAAP measures, and the underlying methodology when including or excluding certain items, is not necessarily an indication of the results of operations that may be expected in the future, or that the Company will not, in fact, record such items in future periods. You are cautioned not to place undue reliance on these non-GAAP measures. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures are provided in the financial tables included in this release.

Management uses non-GAAP measures internally to evaluate the Company's operating performance from continuing operations against past periods and to budget and allocate resources in future periods. These non-GAAP measures also assist management in evaluating the Company's core business and trends across different reporting periods on a consistent basis. Management also uses these non-GAAP measures as primary performance measurements when communicating with analysts and investors regarding the Company's earnings results and outlook and believes that the presentation of these non-GAAP measures is useful to investors because it provides investors with the operating results that management uses to manage the Company and enables investors and analysts to evaluate the Company's core business. Management also believes that free cash flow, a non-GAAP liquidity measure, is useful both internally and to investors because it is indicative of the Company's ability to pay dividends, purchase common stock, make investments and fund acquisitions and, in the absence of refinancings, to repay its debt obligations.  

The non-GAAP financial measures referenced by ADI in this release include: adjusted gross margin, adjusted gross margin percentage, adjusted operating expenses, adjusted operating expenses percentage, adjusted operating income, adjusted operating margin, adjusted nonoperating expense (income), adjusted income before income taxes, adjusted provision for income taxes, adjusted tax rate, adjusted diluted earnings per share (EPS), free cash flow, and free cash flow revenue percentage. 

Adjusted gross margin is defined as gross margin, determined in accordance with GAAP, excluding: certain acquisition related expenses1, which are described further below. Adjusted gross margin percentage represents adjusted gross margin divided by revenue. 

Adjusted operating expenses is defined as operating expenses, determined in accordance with GAAP, excluding: certain acquisition related expenses1, acquisition related transaction costs2, and special charges, net3, which are described further below. Adjusted operating expenses percentage represents adjusted operating expenses divided by revenue.

Adjusted operating income is defined as operating income, determined in accordance with GAAP, excluding: acquisition related expenses1, acquisition related transaction costs2, and special charges, net3, which are described further below. Adjusted operating margin represents adjusted operating income divided by revenue. 

Adjusted nonoperating expense (income) is defined as nonoperating expense (income), determined in accordance with GAAP, excluding: certain acquisition related expenses1, which is described further below.   

Adjusted income before income taxes is defined as income before income taxes, determined in accordance with GAAP, excluding: acquisition related expenses1, acquisition related transaction costs2, and special charges, net3, which are described further below.   

Adjusted provision for income taxes is defined as provision for income taxes, determined in accordance with GAAP, excluding tax related items4, which are described further below. Adjusted tax rate represents adjusted provision for income taxes divided by adjusted income before income taxes. 

Adjusted diluted EPS is defined as diluted EPS, determined in accordance with GAAP, excluding: acquisition related expenses1, acquisition related transaction costs2, special charges, net3, and tax related items4, which are described further below.

Free cash flow is defined as net cash provided by operating activities, determined in accordance with GAAP, less additions to property, plant and equipment, net. Free cash flow revenue percentage represents free cash flow divided by revenue.  

1Acquisition Related Expenses: Expenses incurred as a result of current and prior period acquisitions and primarily include expenses associated with the fair value adjustments to debt, property, plant and equipment and amortization of acquisition related intangibles, which include acquired intangibles such as purchased technology and customer relationships. We excluded these costs from our non-GAAP measures because they relate to specific transactions and are not reflective of our ongoing financial performance.

2Acquisition Related Transaction Costs: Costs directly related to the acquisition of Empower Semiconductor, Inc., including legal, accounting and other professional fees as well as integration-related costs. We exclude these costs from our non-GAAP measures because they relate to a specific transaction and are not reflective of our ongoing financial performance.

3Special Charges, Net: Expenses, net, incurred in connection with facility closures, consolidation of manufacturing facilities, severance, other accelerated stock-based compensation expense and other cost reduction efforts or reorganizational initiatives. We excluded these expenses from our non-GAAP measures because apart from ongoing expense savings as a result of such items, these expenses have no direct correlation to the operation of our business in the future.

4Tax Related Items: Income tax effect of the non-GAAP items discussed above. We excluded the income tax effect of these tax related items from our non-GAAP measures because they are not associated with the tax expense on our current operating results.

About Analog Devices, Inc.

Analog Devices, Inc. (NASDAQ: ADI) is a global semiconductor leader that bridges the physical and digital worlds to enable breakthroughs at the Intelligent Edge. ADI combines analog, digital, AI, and software technologies into solutions that combat climate change, reliably connect humans and the world, and help drive advancements in automation and robotics, mobility, healthcare, energy and data centers. With revenue of more than $11 billion in FY25, ADI ensures today's innovators stay Ahead of What's Possible. Learn more at www.analog.com and on LinkedIn and X.

Forward-Looking Statements

This press release contains forward-looking statements, which address a variety of subjects including, for example, our statements regarding future financial performance; economic uncertainty; macroeconomic, geopolitical, demand and other market conditions, business cycles, and supply chains; our capital allocation strategy, including future dividends, share repurchases, capital expenditures, investments, and free cash flow returns; expected revenue, operating margin, nonoperating expenses, tax rate, earnings per share, and other financial results; expected market and technology trends and acceleration of those trends; markets, market position, addressable markets, and growth opportunities; expected product solutions, offerings, technologies, capabilities, and applications; the value and importance of, and other benefits related to, our product solutions, offerings, and technologies to our customers; benefits related to our hybrid manufacturing model; benefits related to acquisitions; statements related to seasonality; and other future events. Statements that are not historical facts, including statements about our beliefs, plans and expectations, are forward-looking statements. Such statements are based on our current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: economic, political, legal and regulatory uncertainty or conflicts; recently announced and future tariffs and other trade restrictions; changes in export classifications, import and export regulations or duties and tariffs; changes in demand for semiconductor products; performance of independent distributors; manufacturing delays, product and raw materials availability and supply chain disruptions; products may be diverted from our authorized distribution channels; our development of technologies and research and development investments; our ability to compete successfully in the markets in which we operate; our future liquidity, capital needs and capital expenditures;  our ability to recruit and retain key personnel; risks related to acquisitions or other strategic transactions; security breaches or other cyber incidents; risks related to the use of artificial intelligence in our business operations, products, and services; adverse results in litigation matters; reputational damage; changes in our estimates of our expected tax rates based on current tax law; risks related to our indebtedness; the discretion of our Board of Directors to declare dividends and our ability to pay dividends in the future; factors impacting our ability to repurchase shares; and uncertainty as to the long-term value of our common stock. For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to our filings with the Securities and Exchange Commission, including the risk factors contained in our most recent Annual Report on Form 10-K. Forward-looking statements represent management's current expectations and are inherently uncertain. Except as required by law, we do not undertake any obligation to update forward-looking statements made by us to reflect subsequent events or circumstances.

Analog Devices and the Analog Devices logo are registered trademarks or trademarks of Analog Devices, Inc. All other trademarks mentioned in this document are the property of their respective owners.

ANALOG DEVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended

Nine Months Ended

Aug. 1, 2026

Aug. 2, 2025

Aug. 1, 2026

Aug. 2, 2025

Revenue

$     4,021,899

$     2,880,348

$    10,805,627

$     7,943,590

Cost of sales

1,314,355

1,090,600

3,613,309

3,111,929

Gross margin

2,707,544

1,789,748

7,192,318

4,831,661

Operating expenses:

   Research and development

533,480

454,251

1,510,203

1,298,980

   Selling, marketing, general and administrative

397,326

325,706

1,105,389

913,171

   Amortization of intangibles

187,985

187,415

563,285

562,245

   Special charges, net

(24,216)

4,348

23,766

69,980

Total operating expenses

1,094,575

971,720

3,202,643

2,844,376

Operating income

1,612,969

818,028

3,989,675

1,987,285

Nonoperating expense (income):

   Interest expense

88,728

79,592

262,692

229,559

   Interest income

(25,377)

(27,083)

(86,199)

(72,295)

   Other, net

3,749

2,110

(3,386)

5,108

Total nonoperating expense (income)

67,100

54,619

173,107

162,372

Income before income taxes

1,545,869

763,409

3,816,568

1,824,913

Provision for income taxes

205,779

244,891

469,302

345,309

Net income

$     1,340,090

$        518,518

$      3,347,266

$     1,479,604

Shares used to compute earnings per common share - basic

486,021

494,390

487,500

495,560

Shares used to compute earnings per common share - diluted

488,837

496,726

490,317

497,865

Basic earnings per common share

$              2.76

$              1.05

$               6.87

$              2.99

Diluted earnings per common share

$              2.74

$              1.04

$               6.83

$              2.97

ANALOG DEVICES, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)

Aug. 1, 2026

Nov. 1, 2025

ASSETS

Current Assets

Cash and cash equivalents

$          2,165,870

$          2,499,406

Short-term investments

159,064

1,152,915

Accounts receivable

2,389,577

1,436,075

Inventories

1,931,496

1,656,323

Prepaid expenses and other current assets

426,523

363,342

Total current assets

7,072,530

7,108,061

Non-current Assets

Net property, plant and equipment

3,351,981

3,315,696

Goodwill

27,988,737

26,945,180

Intangible assets, net

7,468,220

8,013,815

Deferred tax assets

1,689,972

1,867,102

Other assets

852,977

742,858

Total non-current assets

41,351,887

40,884,651

TOTAL ASSETS

$        48,424,417

$        47,992,712

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Accounts payable

$             682,167

$             543,760

Income taxes payable

461,804

610,370

Debt, current

1,344,855

—

Commercial paper notes

1,005,104

446,639

Accrued liabilities

2,162,324

1,645,032

Total current liabilities

5,656,254

3,245,801

Non-current Liabilities

Long-term debt

6,771,624

8,145,066

Deferred income taxes

1,837,959

2,163,281

Income taxes payable

90,723

100,963

Other non-current liabilities

516,960

521,846

Total non-current liabilities

9,217,266

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, 484,565,465 shares
outstanding (489,654,097 on November 1, 2025)

80,762

81,611

Capital in excess of par value

21,288,447

23,349,185

Retained earnings

12,330,779

10,539,541

Accumulated other comprehensive loss

(149,091)

(154,582)

Total shareholders' equity

33,550,897

33,815,755

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$        48,424,417

$        47,992,712

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

Three Months Ended

Nine Months Ended

Aug. 1, 2026

Aug. 2, 2025

Aug. 1, 2026

Aug. 2, 2025

Cash flows from operating activities:

  Net income

$   1,340,090

$      518,518

$   3,347,266

$   1,479,604

  Adjustments to reconcile net income to net cash provided by operations:

       Depreciation

104,455

102,542

315,298

301,323

       Amortization of intangibles

389,765

384,750

1,160,358

1,202,179

       Stock-based compensation expense

96,255

84,703

263,651

235,108

       Deferred income taxes

(161,011)

52,052

(281,941)

(97,318)

       Other

(24,104)

(5,699)

(19,377)

(1,496)

       Changes in operating assets and liabilities

(141,491)

28,239

(940,740)

(8,008)

   Total adjustments

263,869

646,587

497,249

1,631,788

Net cash provided by operating activities

1,603,959

1,165,105

3,844,515

3,111,392

Cash flows from investing activities:

  Purchases of short-term available-for-sale investments

—

(1,150,240)

—

(1,150,240)

  Maturities of short-term available-for-sale investments

842,840

—

990,657

372,778

  Additions to property, plant and equipment, net

(145,662)

(79,153)

(392,677)

(318,399)

  Proceeds from sale of property, plant and equipment, net

—

—

—

58,892

  Proceeds from sale of a subsidiary, net

96,592

—

96,592

—

  Payments for acquisitions, net of cash acquired

(1,500,174)

—

(1,536,049)

(45,652)

  Other

(8,543)

(715)

(32,425)

(13,595)

Net cash used for investing activities

(714,947)

(1,230,108)

(873,902)

(1,096,216)

Cash flows from financing activities:

  Proceeds from debt

—

1,490,785

—

1,490,785

  Debt repayments

—

—

—

(399,998)

  Proceeds from commercial paper notes

5,906,409

2,551,168

13,061,198

6,867,508

  Payments of commercial paper notes

(5,451,502)

(2,551,223)

(12,502,732)

(6,866,581)

  Repurchase of common stock

(1,157,008)

(1,075,152)

(2,446,409)

(1,484,166)

  Dividend payments to shareholders

(535,309)

(490,161)

(1,556,028)

(1,437,521)

  Proceeds from employee stock plans

61,684

42,767

121,171

104,329

  Other

15,668

41,775

18,651

40,317

Net cash (used for) provided by financing activities

(1,160,058)

9,959

(3,304,149)

(1,685,327)

Net (decrease) increase in cash and cash equivalents

(271,046)

(55,044)

(333,536)

329,849

Cash and cash equivalents at beginning of period

2,436,916

2,376,235

2,499,406

1,991,342

Cash and cash equivalents at end of period

$   2,165,870

$   2,321,191

$   2,165,870

$   2,321,191

ANALOG DEVICES, INC.
REVENUE TRENDS BY END MARKET
(Unaudited)
(In thousands)

The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the "sold to" customer information, the "ship to" customer information and the end customer product or application into which our product will be incorporated. The assignment of products to end markets may change over time. When this occurs, we reclassify revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market.

Three Months Ended

August 1, 2026

August 2, 2025

Revenue

% of Revenue1

Y/Y%

Revenue

% of Revenue1

Industrial

$     1,971,926

49 %

53 %

$     1,292,988

45 %

Automotive

998,227

25 %

16 %

857,146

30 %

Communications

654,515

16 %

84 %

354,768

12 %

Consumer

397,231

10 %

6 %

375,446

13 %

Total revenue

$     4,021,899

100 %

40 %

$     2,880,348

100 %

Nine Months Ended

August 1, 2026

August 2, 2025

Revenue

%  of Revenue1

Y/Y%

Revenue

% of Revenue1

Industrial

$     5,269,825

49 %

50 %

$     3,512,896

44 %

Automotive

2,685,246

25 %

9 %

2,454,845

31 %

Communications

1,659,553

15 %

72 %

965,036

12 %

Consumer

1,191,003

11 %

18 %

1,010,813

13 %

Total revenue

$   10,805,627

100 %

36 %

$     7,943,590

100 %

1) The sum of the individual percentages may not equal the total due to rounding.

ANALOG DEVICES, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended

Nine Months Ended

Aug. 1, 2026

Aug. 2, 2025

Aug. 1, 2026

Aug. 2, 2025

Gross margin

$     2,707,544

$     1,789,748

$     7,192,318

$     4,831,661

  Gross margin percentage

67.3 %

62.1 %

66.6 %

60.8 %

      Acquisition related expenses

209,192

204,756

619,404

662,865

Adjusted gross margin

$     2,916,736

$     1,994,504

$     7,811,722

$     5,494,526

  Adjusted gross margin percentage

72.5 %

69.2 %

72.3 %

69.2 %

Operating expenses

$     1,094,575

$        971,720

$     3,202,643

$     2,844,376

  Percent of revenue

27.2 %

33.7 %

29.6 %

35.8 %

      Acquisition related expenses

(188,594)

(188,015)

(565,089)

(564,045)

      Acquisition related transaction costs

(23,391)

—

(23,391)

—

      Special charges, net

24,216

(4,348)

(23,766)

(69,980)

Adjusted operating expenses

$        906,806

$        779,357

$     2,590,397

$     2,210,351

  Adjusted operating expenses percentage

22.5 %

27.1 %

24.0 %

27.8 %

Operating income

$     1,612,969

$        818,028

$     3,989,675

$     1,987,285

  Operating margin

40.1 %

28.4 %

36.9 %

25.0 %

      Acquisition related expenses

397,786

392,771

1,184,493

1,226,910

      Acquisition related transaction costs

23,391

—

23,391

—

      Special charges, net

(24,216)

4,348

23,766

69,980

Adjusted operating income

$     2,009,930

$     1,215,147

$     5,221,325

$     3,284,175

  Adjusted operating margin

50.0 %

42.2 %

48.3 %

41.3 %

Nonoperating expense (income)

$          67,100

$          54,619

$        173,107

$        162,372

      Acquisition related expenses

2,150

2,150

6,450

6,450

Adjusted nonoperating expense (income)

$          69,250

$          56,769

$        179,557

$        168,822

Income before income taxes

$     1,545,869

$        763,409

$     3,816,568

$     1,824,913

     Acquisition related expenses

395,636

390,621

1,178,043

1,220,460

     Acquisition related transaction costs 

23,391

—

23,391

—

     Special charges, net

(24,216)

4,348

23,766

69,980

Adjusted income before income taxes

$     1,940,680

$     1,158,378

$     5,041,768

$     3,115,353

Provision for income taxes

$        205,779

$        244,891

$        469,302

$        345,309

Effective income tax rate

13.3 %

32.1 %

12.3 %

18.9 %

     Tax related items

48,270

(106,855)

162,938

15,780

Adjusted provision for income taxes

$        254,049

$        138,036

$        632,240

$        361,089

Adjusted tax rate

13.1 %

11.9 %

12.5 %

11.6 %

Diluted EPS

$              2.74

$              1.04

$              6.83

$              2.97

      Acquisition related expenses

0.81

0.79

2.40

2.45

      Acquisition related transaction costs

0.05

—

0.05

—

      Special charges, net

(0.05)

0.01

0.05

0.14

      Tax related items

(0.10)

0.22

(0.33)

(0.03)

Adjusted diluted EPS*

$              3.45

$              2.05

$              8.99

$              5.53

* The sum of the individual per share amounts may not equal the total due to rounding.

ANALOG DEVICES, INC.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

(Unaudited)

(In thousands)

Trailing
Twelve
Months

Three Months Ended

Aug. 1, 2026

Aug. 1, 2026

May 2, 2026

Jan. 31, 2026

Nov. 1, 2025

Revenue

$  13,881,544

$ 4,021,899

$ 3,623,465

$ 3,160,063

$ 3,076,117

Net cash provided by operating activities

$    5,545,325

$ 1,603,959

$    872,041

$ 1,368,515

$ 1,700,810

% of Revenue

40 %

40 %

24 %

43 %

55 %

Capital expenditures

$      (607,830)

$   (145,662)

$   (137,702)

$   (109,313)

$   (215,153)

Free cash flow

$    4,937,495

$ 1,458,297

$    734,339

$ 1,259,202

$ 1,485,657

% of Revenue

36 %

36 %

20 %

40 %

48 %

ANALOG DEVICES, INC.

RECONCILIATION OF PROJECTED GAAP TO NON-GAAP RESULTS

(Unaudited)

Three Months Ending October 31, 2026

Reported

Adjusted

Revenue

$4.3 Billion

$4.3 Billion

(+/- $100 Million)

(+/- $100 Million)

Operating margin

42.6 %

52.0 %(1)

(+/-150 bps)

(+/-100 bps)

Nonoperating expense

~$80 Million

~$80 Million

Tax rate

12% - 14%

12% - 14% (2)

Earnings per share

$3.14

$3.86 (3)

(+/- $0.15)

(+/- $0.15)

(1) Includes $405 million of adjustments related to acquisition related expenses as previously defined in the Non-GAAP Financial Information section of this press release. 

(2) Includes $53 million of tax effects associated with the adjustment for acquisition related expenses noted above.

(3) Includes $0.72 of adjustments related to the net impact of acquisition related expenses and the tax effects on those items.

For more information, please contact: 

Jeff Ambrosi
Senior Director, Investor Relations
Analog Devices, Inc.
781-461-3282
[email protected] 

SOURCE Analog Devices, Inc.

Key Takeaways Analog Devices' Industrial revenues jumped 56% year over year to $1.80 billion in fiscal Q2 2026.ADI's automation, energy, healthcare and other industrial businesses grew more than 40% in the first half.ADI expects mid- to high-single-digit sequential Industrial growth in fiscal Q3 2026. Analog Devices’ (ADI - Free Report) Industrial segment is emerging as a key driver of its growth, supported by both a cyclical recovery and powerful secular trends. Industrial revenues rose 56% year over year to $1.80 billion in second-quarter fiscal 2026, accounting for 50% of total company revenues. For the first six months, Industrial revenues increased 48% to $3.30 billion.

The segment benefits from broad exposure across automated test equipment, aerospace and defense, automation, electronic test and measurement, sustainable energy, healthcare and broad-market industrial applications. Management noted that automation, ETM, sustainable energy, healthcare and broad-market businesses collectively grew more than 40% in the first half of fiscal 2026, while remaining below prior-cycle highs with lean channel inventories.

Automation is benefiting from factory modernization, robotics and reshoring, while energy demand is supported by grid modernization and electrification. Healthcare is also delivering double-digit growth as ADI expands into wearable and outpatient applications. Management expects Industrial to maintain above-seasonal growth, with mid- to high-single-digit sequential growth projected for fiscal third-quarter 2026.

ADI’s portfolio of high-performance sensing, signal chain, power management and connectivity supports the shift toward digital factories and next-generation robots across semiconductor fabs, biopharma and data centers. For the third quarter, management expects Industrial to grow mid- to high-single digits sequentially at the midpoint of guidance, which anchors a continued recovery.

Given Industrial’s 15- to 20-year average product lifecycles and above-corporate profitability, this mix can support durable margins as volumes normalize in the upcoming quarters. However, ADI faces competitive pressure from large semiconductor companies in this sphere.

How Competitors Fare Against ADIAnalog Devices competes with Texas Instruments (TXN - Free Report) and STMicroelectronics (STM - Free Report) in the Industrial segment. Texas Instruments competes with ADI in industrial signal chains, precision sensing and power management, especially in PLCs, factory automation and motor control. STMicroelectronics competes in industrial MCUs, motor drivers, sensors and automation systems.

In the robotics space, STMicroelectronics provides sensors, motor control ICs and power management for cobots, AMRs and humanoid robots. In automation, Texas Instruments provides low-power precision analog and sensing for medical imaging, patient monitoring and diagnostics.

Both STMicroelectronics and Texas Instruments compete with ADI in the aerospace and defense business through their radiation-hardened analog and mixed-signal ICs, secure communications and avionics systems.

ADI’s Price Performance, Valuation and EstimatesShares of ADI have gained 43.9% year to date compared with the Semiconductor - Analog and Mixed industry’s growth of 42.7%.

ADI YTD Performance Chart
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From a valuation standpoint, ADI trades at a forward price-to-sales ratio of 11.64X, higher than the industry’s average of 8.68X.

ADI Forward 12-Month (P/S) Valuation Chart
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The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings implies year-over-year growth of 59%. The consensus estimate for fiscal 2026 has been revised downward by a penny in the past 30 days.

Image Source: Zacks Investment Research

ADI currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ADI Global Distribution Inc. Common Stock NYSE: ADIG reported record second-quarter revenue as commercial demand remained resilient, helping offset continued weakness in residential audiovisual markets. The company also initiated its full-year 2026 outlook following its August spin-off from Resideo.

Chief Executive Officer Rob Aarnes said the quarter marked ADI's first earnings call as a standalone public company. The distributor, which serves professional installers and integrators across security, fire and life safety, residential AV, Pro AV and Datacom, began trading on the New York Stock Exchange on Aug. 4.

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ADI generated second-quarter revenue of $1.29 billion, up 1% year over year, while average daily sales rose 2% despite one fewer selling day. Results were presented on a carve-out basis because ADI operated within Resideo during the quarter before the Aug. 3 spin-off.

Commercial Categories Offset Residential AV Weakness
Aarnes said approximately 70% of ADI's 2025 revenue came from commercial end markets, where demand is supported by retrofit, replacement and technology upgrade activity in addition to new construction. He said commercial demand remained resilient during the quarter.

Datacom revenue rose in the low teens.
Commercial security increased in the mid-single digits.
Pro AV grew in the low single digits.
Residential audiovisual remained weak amid a soft U.S. housing environment.

“We have yet to see signs of meaningful recovery” in residential AV, Aarnes said. However, he said ADI is continuing to invest in its portfolio and new products to position the business for an eventual housing-market recovery.

During the question-and-answer session, Aarnes said commercial security had returned to mid-single-digit growth and that the company had recovered most of the share it believes it lost during last year's enterprise resource planning, or ERP, system disruption. He cited demand trends in video surveillance, access control, fire and life safety, as well as the company's backlog and daily sales trends, as supporting confidence in the second half.

Margins Affected by Costs, Mix and Tariff Items
Gross profit increased $9 million from the prior-year period to $292 million, while gross margin expanded 50 basis points to 22.7%. Chief Financial Officer Mike Carlet said the quarter included about $20 million in tariff-related refunds from the U.S. government recorded in cost of goods, benefiting gross margin by approximately 160 basis points.

Excluding the refund effect, Carlet said gross margin faced pressure from a difficult comparison with prior-year tariff-related pricing actions, higher freight, fuel and tariff-related product costs, and business mix. Exclusive brands revenue, which is concentrated in the challenged residential market, declined nearly 3% year over year.

Adjusted EBITDA was $86 million, or 6.7% of revenue, compared with $95 million, or 7.4% of revenue, a year earlier. Selling, general and administrative expense rose $16 million to $206 million, largely reflecting merit and inflation-related employee costs, temporary rent costs from overlapping facilities, and higher allocated Resideo corporate expenses.

ADI reported net income of $6 million, compared with a net loss of $283 million in the second quarter of 2025. The prior-year period included $331 million of expense associated with the Honeywell indemnification agreement that was allocated to ADI.

Cost Program and Exclusive Brands Strategy
Management said its One ADI initiative is intended to simplify operations and improve the customer experience through the company's fully implemented ERP platform and enterprise data capabilities. The initiative includes consolidating systems and websites, standardizing processes, optimizing pricing, and modernizing distribution and store operations.

ADI expects approximately $30 million of gross savings in 2026 from organizational alignment, Snap One integration synergies, and optimization of its store, distribution and technology footprint. Most of the benefit is expected in the second half, according to Carlet. Actions taken to date are expected to generate about $60 million of annualized gross savings, and the company continues to target at least $80 million in annualized gross savings by the end of 2027.

Aarnes said exclusive brands represented roughly 18% of 2025 revenue and carry a meaningfully higher margin profile. While a majority of the approximately $800 million exclusive-brands business is tied to residential AV, ADI plans to increase attachment of those products across its legacy customer base and expand selected offerings into commercial applications.

Management also discussed a transition away from a significant supplier that it said no longer meets market needs. Carlet said the change is expected to create about $6 million of second-half gross-margin headwinds, split roughly evenly between one-time inventory-transition costs and lower margins on alternative products. He said ADI has already completed most of the transition and does not expect a material revenue impact.

Outlook, Cash Flow and Leverage
ADI expects second-half revenue growth in the mid-single digits, with average daily sales growth about two percentage points higher because of four fewer selling days. The outlook assumes continued commercial-category strength and does not assume a recovery in residential AV.

The company said it expects second-half gross-margin rates to be consistent with first-half levels excluding the second-quarter tariff rebates. At the midpoint of guidance, standalone adjusted EBITDA is expected to rise modestly year over year in the second half, supported by stronger revenue growth and slightly lower operating expenses, partially offset by gross-margin pressure.

For full-year 2026, ADI projected:

Revenue of $4.95 billion to $5.0 billion.
Pro forma standalone adjusted EBITDA of $275 million to $295 million.

Net cash used in operating activities was $76 million during the first half, compared with $32 million of cash provided a year earlier. Carlet attributed the change primarily to working-capital use, including supplier-payment timing and higher inventory levels, along with annual cash payments concentrated in the first half. He said operating cash flow is expected to improve in the second half.

Following the spin-off, ADI had approximately $1 billion of long-term debt and about $150 million of cash, resulting in net debt of roughly $850 million and net leverage of approximately 3.0 times adjusted EBITDA. Including its undrawn $500 million revolving credit facility, the company said it began as an independent company with $650 million of liquidity.

ADI's near-term capital allocation priority is reducing leverage toward its long-term target of about 2.0 times total net leverage, while retaining flexibility for organic investments and potential tuck-in acquisitions.

About ADI Global Distribution Inc. Common Stock (NYSE:ADIG)ADI Global Distribution, Inc is a wholesale distributor serving the security, low-voltage, and smart-building technology markets. The company supplies products from multiple manufacturers to professional installers, systems integrators, contractors, and other channel partners rather than selling primarily to consumers.

Its product categories include video surveillance equipment, access-control systems, intrusion and fire-alarm products, networking and data-communications equipment, audio-visual solutions, smart-home technologies, and related wire, cable, and installation accessories.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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In the latest trading session, Analog Devices (ADI - Free Report) closed at $382.81, marking a +2.78% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.89%. At the same time, the Dow added 0.74%, and the tech-heavy Nasdaq gained 1.29%.

Prior to today's trading, shares of the semiconductor maker had lost 16.39% lagged the Computer and Technology sector's loss of 6.6% and the S&P 500's loss of 0.63%.

The upcoming earnings release of Analog Devices will be of great interest to investors. The company is expected to report EPS of $3.33, up 62.44% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $3.92 billion, indicating a 36.25% increase compared to the same quarter of the previous year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $12.42 per share and revenue of $14.55 billion, indicating changes of +59.44% and +32.03%, respectively, compared to the previous year.

Investors should also note any recent changes to analyst estimates for Analog Devices. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.85% upward. At present, Analog Devices boasts a Zacks Rank of #1 (Strong Buy).

From a valuation perspective, Analog Devices is currently exchanging hands at a Forward P/E ratio of 29.98. This indicates a discount in contrast to its industry's Forward P/E of 47.35.

It is also worth noting that ADI currently has a PEG ratio of 1.04. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor - Analog and Mixed industry had an average PEG ratio of 0.96 as trading concluded yesterday.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 17, finds itself in the top 7% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

, /PRNewswire/ -- Analog Devices, Inc. (NASDAQ: ADI) today announced the completion of its acquisition of Empower Semiconductor. The combination further strengthens ADI's position as a leading strategic, system-level grid-to-core power partner across the entire AI ecosystem, expanding ADI's total addressable market and capabilities in AI compute power delivery.

Commentary

Analog Devices completes acquisition of Empower Semiconductor "Today marks an exciting milestone as we welcome the Empower team to ADI and take an important step forward in solving one of the most complex challenges in modern electronics – power delivery for the AI era," said Vincent Roche, CEO and Chair at ADI. "AI infrastructure is fundamentally reshaping how power must be delivered, with energy now one of the most persistent constraints to scaling next-generation systems. Empower's breakthrough technology is designed to directly address this bottleneck, unlocking new levels of efficiency and performance for AI processors. Leveraging ADI's technology and scale, we will help customers rearchitect their power systems and achieve the compute densities next-generation AI demands. The impact will extend well beyond AI data centers to any domain where energy constrains what is possible." About Analog Devices, Inc.
Analog Devices, Inc. (NASDAQ: ADI) is a global semiconductor leader that bridges the physical and digital worlds to enable breakthroughs at the Intelligent Edge. ADI combines analog, digital, AI, and software technologies into solutions that combat climate change, reliably connect humans and the world, and help drive advancements in automation and robotics, mobility, healthcare, energy and data centers. With revenue of more than $11 billion in FY25, ADI ensures today's innovators stay Ahead of What's Possible. Learn more at www.analog.com and on LinkedIn and X.

Forward-Looking Statements
This press release contains forward-looking statements, which address a variety of subjects including, for example, the expected benefits of the transaction; ADI's expected product offerings and benefits of those offerings, product development, and technical advances resulting from the transaction; and other future events. Statements that are not historical facts, including statements about our beliefs, plans, and expectations, are forward-looking statements. Such statements are based on our current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: unforeseen or unknown liabilities; costs or expenses related to the transaction; the inability to retain key personnel; difficulties in integrating the acquired business; the risk that expected benefits of the transaction may not be realized or may take longer to realize than expected; and uncertainty as to the long-term value of our common stock. For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to our filings with the Securities and Exchange Commission, including the risk factors contained in our most recent Annual Report on Form 10-K. Forward-looking statements represent management's current expectations and are inherently uncertain. Except as required by law, we do not undertake any obligation to update forward-looking statements made by us to reflect subsequent events or circumstances.

CONTACT:
Jeff Ambrosi
Senior Director, Investor Relations  
Analog Devices
[email protected]  
(781) 461-3282

Ferda Millan
Global PR and External Communications 
Analog Devices 
[email protected] 
(408) 373-1854

SOURCE Analog Devices, Inc.

In the latest close session, Analog Devices (ADI - Free Report) was up +1.15% at $417.93. This change outpaced the S&P 500's 0.01% loss on the day. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq lost 0.46%.

Heading into today, shares of the semiconductor maker had lost 0.89% over the past month, outpacing the Computer and Technology sector's loss of 2.57% and the S&P 500's loss of 1.4%.

Investors will be eagerly watching for the performance of Analog Devices in its upcoming earnings disclosure. In that report, analysts expect Analog Devices to post earnings of $3.33 per share. This would mark year-over-year growth of 62.44%. Alongside, our most recent consensus estimate is anticipating revenue of $3.93 billion, indicating a 36.28% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $12.41 per share and revenue of $14.58 billion, which would represent changes of +59.31% and +32.29%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Analog Devices. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.8% higher. Analog Devices presently features a Zacks Rank of #2 (Buy).

With respect to valuation, Analog Devices is currently being traded at a Forward P/E ratio of 33.29. This denotes a discount relative to the industry average Forward P/E of 59.62.

One should further note that ADI currently holds a PEG ratio of 1.16. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor - Analog and Mixed was holding an average PEG ratio of 1.1 at yesterday's closing price.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 5, positioning it in the top 3% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.