Analog Devices Q3 2026 earnings beat on AI data center demand

Analog Devices Q3 2026 earnings beat on AI data center demand

Wed, August 19, 2026 at 3:28 PM GMT+3 2 min read

• ADI -3.50%

Analog Devices reported fiscal third-quarter revenue of $4.02 billion on Wednesday, a 40% jump from a year earlier, driven by demand for data center and industrial chips. The company also posted a record outlook for its fourth quarter.

The company's net income climbed to $1.34 billion, or $2.74 per share, compared with $518.5 million, or $1.04 per share, in the year-ago quarter. On an adjusted basis, the company earned $3.45 per share, topping the $3.34 analyst consensus, while revenue of $4.02 billion surpassed expectations of $3.92 billion, according to the Wall Street Journal.

"Demand continued to strengthen across our product portfolio and regions throughout the third quarter, which is reflected in our record fourth quarter outlook," Chief Financial Officer Richard Puccio said in a statement.

For the fiscal fourth quarter, the company guided for revenue of $4.3 billion, plus or minus $100 million, and a reported operating margin of around 42.6%. Adjusted earnings per share are projected at $3.86 at the midpoint of guidance, outpacing the $3.54 analyst estimate, according to the Wall Street Journal.

The company generated operating cash flow of $5.5 billion and free cash flow of $4.9 billion on a trailing twelve-month basis. It returned $1.7 billion to shareholders through dividends and share repurchases during the quarter. The board also declared a quarterly cash dividend of $1.10 per share, payable September 15 to shareholders of record as of September 1, the company said.

The results follow Analog Devices' move to deepen its position in the AI infrastructure market. The company agreed to acquire Empower Semiconductor for $1.5 billion in cash, a deal targeting what Empower CEO Tim Phillips described as "the hardest problem in AI power delivery — the power bottleneck that is limiting AI throughput." Analog Devices CEO and Chair Vincent Roche said energy is "the most persistent constraint to scaling next-generation systems." The transaction is expected to close in the second half of 2026.

The acquisition comes amid a broader surge in AI infrastructure spending. The four largest hyperscalers combined for $413 billion in capital expenditures in 2025 and are projected to spend $600 billion to $700 billion in 2026, with rack-level power density in AI data centers growing sharply as a result.