tapebrief
ADI · Q2 2026

ADI · Q3 2026 Earnings

Bullish

Analog Devices

Reported August 19, 2026

30-second summary

Revenue grew 40% YoY to $4.02B in Q3, beating the prior $3.9B guide midpoint by $122M and clearing the high end of the range by $22M, with communications up 84% YoY to $655M, industrial up 53% YoY to $1.97B, and adj. operating margin expanding to 50.0% (top of the guided range). The Q4 guide of $4.3B (±$100M) implies +36–43% YoY against the $3.08B FY25 base and 52.0% ±100bps adj. operating margin — a fresh record ceiling that puts every prior "structural vs. cyclical" question on the bull side of the ledger. No transcript was available on the print, so Q&A resolution and tone reads are drawn from the press release only.

Headline numbers

EPS

Q3 FY2026

$3.45

Revenue

Q3 FY2026

$4.02B

+40.0% YoY

Gross margin

Q3 FY2026

67.3%

Free cash flow

Q3 FY2026

$1.46B

Operating margin

Q3 FY2026

40.1%

Key financials

Q3 FY2026
MetricQ3 FY2026Q3 FY2025YoYQ2 FY2026QoQ
Revenue$4.02B$2.88B+39.7%$3.62B+11.1%
EPS$3.45$2.05+68.3%$3.09+11.7%
Gross margin67.3%62.1%+520bps67.3%+0bps
Operating margin40.1%28.4%+1170bps38.1%+200bps
Free cash flow$1.46B$1.09B+34.3%$0.73B+99.7%

Guidance

Company delivered strong Q3 beats across revenue and all profitability metrics, with adjusted operating margin expanding 100 bps above guidance; forward Q4 guidance implies acceleration to 42.6%-44.6% reported and 51.0%-53.0% adjusted operating margins, signaling robust year-end seasonality and sustained growth momentum.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueQ3 FY2026$3.8B - $4.0B$4.022B+$0.022B above high end of guideBeat
Adjusted EPSQ3 FY2026$3.15 - $3.45$3.45at high end of guideBeat
Reported EPSQ3 FY2026$2.45 - $2.75$2.74at high end of guideBeat
Reported Operating MarginQ3 FY202639.0% +/- 150 bps40.1%+110 bps above midpointBeat
Adjusted Operating MarginQ3 FY202649.0% +/- 100 bps50.0%+100 bps above midpointBeat

New guidance

MetricPeriodGuideYoY
RevenueQ4 FY2026$4.2B - $4.4B+36-43% YoY
Adjusted EPSQ4 FY2026$3.71 - $4.01—
Reported EPSQ4 FY2026$2.99 - $3.29—
Reported Operating MarginQ4 FY202642.6% +/- 150 bps—
Adjusted Operating MarginQ4 FY202652.0% +/- 100 bps—

Segment performance

Q3 FY2026
SegmentQ3 FY2026Q3 FY2025YoY
Industrial$1.972B$1.285B+53.5%
Automotive$0.998B$0.851B+17.3%
Communications$0.655B$0.372B+76.1%
Consumer$0.397B$0.372B+6.7%
Data Center growthStrong growth——

Profitability

Q3 FY2026
SegmentQ3 FY2026Q3 FY2025YoY
Adjusted gross margin72.5%——
Adjusted operating margin50.0%——
Free cash flow margin36.0%——
Operating cash flow$1,604M——
TTM operating cash flow$5,545M——
TTM free cash flow$4,937M——

Other KPIs

Q3 FY2026
SegmentQ3 FY2026Q3 FY2025YoY
Cash returned to shareholders (Q3)$1,692M——

Management tone

Customer optimization hangover → AI experiments → Industrial breadth → AI as operating model → Confidence at historic highs → Momentum into FY27

Note: no transcript was available for Q3, so tone reads below are anchored in the press-release commentary from Roche and Gilbert only. Multi-quarter arcs draw on prior-brief tone summaries.

From "banner year potential" to "finish the year strongly and carry momentum into fiscal 2027." Two quarters ago Roche called FY26 "a banner year" with a macro caveat; last quarter he said "confidence has never been greater"; this quarter Gilbert's press-release close is "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." The escalation is that FY27 is now named in the current-quarter press release — a forward reference management has been carefully avoiding for six quarters. Combined with the seventh consecutive absence of an FY26 range, the framework is now clearly being held back to seed FY27 as the number that matters.

From cyclical framing to explicit "demand strengthened throughout the quarter." Roche's press-release lead is "demand continued to strengthen across our product portfolio and regions throughout the third quarter." The intra-quarter escalation ("throughout the third quarter") is what's new — prior quarters framed strengthening as YoY or QoQ deltas measured at the print date. Saying demand strengthened inside the quarter is a leading-indicator statement about the exit rate, and it is consistent with the Q4 guide implying +6.9% QoQ against a Q3 that itself cleared the high end of its guide.

From auto as the fragile line to auto as an active reacceleration. Two quarters ago auto was +2% YoY and the segment with the weakest trajectory in the deck. This quarter it grew 16% YoY and 15% QoQ. Roche did not single out auto in the press-release quote, but the numbers alone reframe the segment from "content gains offsetting weak SAR" to "content gains compounding on stabilizing volumes" — the exact resolution the Q2 Q&A implied but that the print hadn't yet delivered.

From data center as a quantified slice to communications as an AI infrastructure segment. A year ago data center was called out as a $1B run rate inside comms; last quarter it was 75% of comms with 90% YoY growth. This quarter comms alone printed $655M (implying data center at $2B annualized if the 75% mix held, higher if it grew as management guided). The absence of a fresh data center quantification in the press release is notable — either management is de-emphasizing the sub-segment disclosure now that the top-line growth speaks for itself, or the next update is being reserved for the Q4 call. Either read is consistent with a management team that no longer needs to prove the AI infrastructure thesis quarter-by-quarter.

Answers to last quarter's watch list

Q3 auto prints inside $910M–$935M with YoY above +5%. Auto printed $998M, well above the $935M positive threshold, and YoY re-accelerated from +2% to +16% — nearly 3x the +5% bull-case bar. The sequential rebound was not mechanical; it was accompanied by a YoY re-acceleration that validates the Q2 Q&A "content gains, no restocking" framing.
Resolved positively
Industrial Q3 acceleration vs. deceleration ($1.93B+ threshold). Industrial printed $1.972B, above the $1.93B acceleration threshold by $42M, at +53% YoY. This is a modest deceleration from the +56% YoY posted in Q2 — three prints in a row above +50% — but importantly the "well below prior cycle highs" durability claim survived its first tough comparison. The trajectory is holding, not inflecting.
Resolved positively
Data center sequential growth and comms exceeds $600M. Communications printed $655M, clearing the $600M ceiling by $55M (+9% above the watch-list threshold). The press release did not restate data center as % of comms, but the aggregate +84% YoY comms print with QoQ growth of +19% (against a Q2 that already grew +22% QoQ) is inconsistent with any read other than data center continuing at or above the +85% YoY annualized pace.
Resolved positively
Adj. gross margin holding above 72%. Adj. gross margin printed 72.5%, above the 72% watch-list floor by 50bps and below Q2's 73.0% by exactly the ~50bps Q&A had flagged. The 72–73% band is now the confirmed operating range, and further downside would require foundry mix to bite — which did not happen this quarter.
Resolved positively
Whether the FY26 framework finally arrives on the Q3 print. No. This is now the seventh consecutive quarter without an FY range, and Gilbert's press-release language ("finish the year strongly and carry that momentum into fiscal 2027") explicitly points forward past FY26 rather than committing to a number for it. The pattern is now clearly deliberate: management is preserving optionality on Q4 and using the qualitative escalation to seed FY27 as the anchor.
Resolved negatively
Empower close timing and any pre-revenue design-in disclosure. The press release did not disclose an Empower close status or design-in commentary. With no transcript available for this print, no incremental information exists on the integration timeline.
Continue monitoring

What to watch into next quarter

Q4 revenue clearing $4.4B (above the guided high end). The prior guide's high end was cleared by $22M in Q3, the first quarter of the year that happened. A Q4 print above $4.4B would confirm the pattern is now that ADI beats the high end, not the midpoint — meaningful for how the sell-side models FY27 setup. A print at $4.3B midpoint would be a mild deceleration in the beat cadence.

Whether Q4 auto sustains at or above $990M. Auto at $998M in Q3 was +15% QoQ and +16% YoY. Q4 is normally a seasonally softer auto quarter. A Q4 auto print below $950M would signal the Q3 print included some non-recurring benefit; a print at or above $990M would validate that content gains are compounding through seasonality.

Industrial Q4 growth against the toughest comparison base yet ($1.43B FY25). Industrial at +53% YoY in Q3 was on a $1.29B FY25 base. Q4 industrial faces a $1.43B FY25 base, which is the highest comp of the year. A Q4 industrial print above $2.05B (+43% YoY) would extend the "structural not cyclical" thesis against the hardest test; a print below $1.95B would mark the YoY inflection management has been pre-empting with the "well below prior cycle highs" framing.

Whether adj. operating margin actually reaches 52% at the guide midpoint. The Q4 guide of 52.0% ±100bps implies +200bps QoQ operating margin expansion despite gross margin holding flat-to-down. That leverage has to come from OpEx efficiency or mix — a Q4 print at or above 52% would be the third consecutive quarter of a new margin ceiling; a print at 51% or below would suggest the operating leverage story is running into diminishing returns.

First FY27 framework commentary. With FY27 now named in the press release and FY26 still without a range, the next natural step is a qualitative FY27 framework on the Q4 print. Anything less on the Q4 call would mean the deliberate optionality preservation is being extended into a second fiscal year — increasingly hard to justify given the pattern of beats.

Consumer stabilization vs. continued deceleration. Consumer decelerated from +23% YoY in Q2 to +6% YoY in Q3 and printed flat sequentially. A Q4 consumer print below $380M would suggest the segment is rolling over into a new down cycle; a print at or above $410M would suggest Q3 was a one-quarter air pocket.

Sources

  1. ADI Q3 FY2026 press release / earnings exhibit, filed with the SEC: https://www.sec.gov/Archives/edgar/data/6281/000000628126000072/adi3q26exhibit991earnings.htm
  2. Tapebrief ADI Q2-2026, Q1-2026, Q4-2025, and Q3-2025 briefs (for cross-quarter tone and watch-list comparison).

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