Analog Devices Q3 Revenue Jumps 40% to a Record $4.02B

Analog Devices reported its fiscal third quarter on August 19, 2026, and the headline number is the kind that makes you check the year-ago comparison twice. Revenue came in at $4.02 billion, up 40% from $2.88 billion, against a consensus around $3.92 billion. Adjusted earnings landed at $3.45 per share versus roughly $3.33 expected. For a company that sells analog and mixed-signal chips into industrial and automotive markets, this is not a quarter that looks like the usual slow cycle.

• Q3 revenue was $4.02 billion, up 40% year over year and ahead of the roughly $3.92 billion consensus
• Adjusted EPS of $3.45 beat estimates near $3.33 and rose 68% year over year, while GAAP diluted EPS of $2.74 climbed 163%
• Adjusted gross margin expanded 330 basis points to 72.5%, and adjusted operating margin rose 780 basis points to 50.0%
• Q4 guidance calls for $4.3 billion in revenue, plus or minus $100 million, and adjusted EPS of $3.86, plus or minus $0.15

Where Did the Growth Come From?

Analog Devices does not sell the chips people write headlines about. It sells the parts that sit between the physical world and a processor: data converters, amplifiers, power management, precision timing. That business normally moves with industrial capital spending, which is why a 40% year-over-year quarter is worth pausing on.

Management pointed to broad-based demand across the portfolio and across regions, with data center and industrial leading. That combination is the tell. AI infrastructure buildouts do not just consume accelerators; they consume enormous amounts of power conversion and signal-chain content, and that is precisely what Analog Devices supplies. CEO Vincent Roche described the quarter as exceeding the midpoint of the company's revenue, margin, and earnings outlook on strengthening demand.

Why the Margin Numbers Are the Real Story

Revenue growth is nice. Margin expansion at that speed is unusual. GAAP gross margin rose 520 basis points to 67.3%, and GAAP operating margin jumped 1,170 basis points to 40.1%. On an adjusted basis, gross margin reached 72.5% and operating margin hit an even 50.0%.

That pattern says utilization. Semiconductor fabs carry heavy fixed costs, so when volumes rise against a largely unchanged cost base, an unusually large share of incremental revenue drops through to profit. It works dramatically in both directions, which is the standing caution with any cyclical semiconductor business, and it is why a single quarter should be read as a data point rather than a trajectory.

Cash generation backed it up. On a trailing twelve-month basis, operating cash flow was $5.5 billion and free cash flow $4.9 billion, or 40% and 36% of revenue. The company returned $1.7 billion to shareholders in the quarter and declared a quarterly dividend of $1.10 per share payable September 15, 2026.

What Does the Q4 Outlook Imply?

Guidance points to about $4.3 billion in revenue for the fourth quarter, plus or minus $100 million, with adjusted EPS of $3.86 and an adjusted operating margin around 52.0%. That is sequential growth on top of a record quarter, with margins expanding again.

This continues a run of strong results from the equipment and components layer beneath AI infrastructure, alongside Applied Materials posting a record $9.12 billion quarter and Cisco's record $17.3 billion quarter on AI orders. The picks-and-shovels read on this cycle keeps holding up.

Standard disclaimer, and I mean it: this is coverage, not advice, and cyclical businesses cut both ways. More earnings analysis in our stock trading section.

Sources: Analog Devices Investor Relations — August 19, 2026; StockTitan — August 19, 2026; Benzinga — August 19, 2026.