Analog Devices Q3 2026: AI demand drives record revenue outlook

Analog Devices posted fiscal third-quarter revenue of $4.02 billion, up 39.6% year over year and ahead of expectations. Adjusted earnings per share of $3.45 topped expectations, a fourth straight quarter of consensus EPS beats.

The Communications segment grew 84% year over year, the fastest growth of any segment and tied directly to data center and AI-related demand. The Industrial segment, the company's largest, grew 53% year over year and accounted for roughly half of total revenue.

Adjusted operating margin reached 50.0%, widening 780 basis points from the same quarter a year ago, a sign that the volume surge is flowing efficiently to the bottom line. Operating income grew 97% year over year.

Management guided fourth-quarter revenue to $4.3 billion, which it characterized as a record quarter outlook. The company also completed the acquisition of Empower Semiconductor during the quarter and declared a quarterly cash dividend of $1.10 per share.

CEO Vincent Roche credited broad-based demand across the portfolio and said investments in innovation and manufacturing agility position the company to capture value in what he called the AI era. With the fourth-quarter bar set at record levels, the question for investors is whether data center and industrial demand can sustain the pace.