Analog Devices Q3 Earnings Beat Estimates, Revenues Rise Y/Y

Analog Devices ADI reported third-quarter fiscal 2026 non-GAAP earnings of $3.45 per share, which beat the Zacks Consensus Estimate by 3.6%. The company reported earnings of $2.05 per share in the year-ago period.

Analog Devices’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 9.6%.

Analog Devices’ third-quarter fiscal 2026 revenues of $4.02 billion surpassed the Zacks Consensus Estimate by 2.5%. The top line increased 40% from the year-ago quarter’s revenues of $2.88 billion.

Analog Devices’ Q3 Details

Industrial: Revenues from this segment were $1.97 billion, representing 49% of total revenues and reflecting 53% year-over-year growth.

Automotive: Revenues reached $998.2 million (or 25% of total revenue), up 16% year over year.

Communications: Revenues came in at $654.5 million, accounting for 16% of total revenues and rising 84% year over year.

Consumer: The segment generated $397.2 million (or 10% of revenues), marking a 6% increase compared with the same quarter last year.

The adjusted gross margin expanded 330 basis points to 72.5%, while the adjusted operating margin was 50%, up 780 basis points year over year.

ADI’s Balance Sheet and Cash Flows

As of Aug. 1, 2026, cash and cash equivalents were approximately $2.17 billion, down from $2.44 billion as of May 2, 2026. The company also held $159.1 million in short-term investments during the third quarter.

Long-term debt was $6.77 billion compared with $7.24 billion at the end of the previous quarter.

Analog Devices generated $1.6 billion in operating cash flow and $1.46 billion in free cash flow during the third quarter of fiscal 2026.

In the fiscal third quarter, the company returned $1.7 billion to shareholders, comprising $535 million in dividends and $1.16 billion in share repurchases.

ADI Initiates Q4 FY26 Guidance

For the fourth quarter of fiscal 2026, management expects revenues to be $4.3 billion (+/- $100 million). The Zacks Consensus Estimate for the same is pegged at $4.02 billion, indicating year-over-year growth of 30.8%.

The company projects a reported operating margin of approximately 42.6% (+/-150 bps) and an adjusted operating margin of about 52% (+/-100 bps).

Reported earnings are anticipated to be $3.14 (+/-$0.15) per share, while adjusted earnings are expected to be $3.86 (+/-$0.15) per share. The consensus mark for the same is pinned at $3.46 per share, indicating year-over-year growth of 53.1%.

Zacks Rank & Other Stocks to Consider

Currently, ADI carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks worth considering in the broader Zacks Computer and Technology sector are Lumentum LITE, Lam Research LRCX and NVIDIA NVDA, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for LITE’s fiscal 2027 earnings is pegged at $18.71 per share, up by 1.2% over the past seven days, indicating an increase of 115.8% year over year. Lumentum shares have surged 229.2% year to date (YTD).

The Zacks Consensus Estimate for Lam Research’s fiscal 2027 earnings has moved northward by 17.8% to $9.32 per share over the past 30 days and calls for a year-over-year jump of 60.4%. Lam Research shares have soared 80.3% YTD.

The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 earnings has moved upward by 1.6% to $8.90 per share in the past 60 days, implying a year-over-year improvement of approximately 86.6%. NVIDIA shares have risen 24.8% YTD.

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This article originally published on Zacks Investment Research (zacks.com).

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