Analog Devices Earnings Boost Dividend
Analog Devices earnings beat forecasts; the board raised the quarterly dividend and Q2 revenue guidance topped estimates, likely prompting repositioning.
KEY TAKEAWAYS
- Q1 revenue $3.2B and adjusted EPS $2.46 beat consensus.
- Management guided Q2 revenue to a $3.5B midpoint, above Street forecasts.
- Board raised the quarterly dividend 11% to $1.10, marking 22 consecutive years.
HIGH POTENTIAL TRADES SENT DIRECTLY TO YOUR INBOX
Add your email to receive our free daily newsletter. No spam, unsubscribe anytime.
Analog Devices reported stronger-than-expected first-quarter results on Feb. 18, 2026, supporting a board decision to raise the quarterly dividend while management issued second-quarter revenue guidance above Wall Street estimates.
Quarter Results and Guidance
The company said in a Feb. 18 press release that fiscal first-quarter revenue for the period ended Jan. 31, 2026, reached $3.2 billion, up 30.4% year over year. Adjusted earnings per share (EPS) were $2.46, beating consensus by 1.5% on revenue and 6.6% on EPS. The company described the results as providing momentum heading into the new quarter.
Margins and cash flow improved alongside revenue growth. Adjusted gross margin rose 240 basis points year over year to 71.2%, while adjusted operating margin expanded 500 basis points to 45.5%. Trailing 12-month operating cash flow totaled $5.1 billion, or 43% of revenue, and trailing free cash flow was $4.6 billion, or 39% of revenue.
For the second quarter, management set revenue guidance centered at $3.5 billion and issued adjusted EPS guidance of $2.88, a midpoint well above Street estimates. The outlook reflects broad strength in the Industrial segment, record Data Center orders, and continued bookings growth. The company’s CFO said, “Our revenue outlook for the second quarter reflects a new high watermark for ADI.”
Dividend Increase and Capital Returns
The board approved an 11% quarterly dividend increase to $1.10 per share, marking 22 consecutive years of dividend growth, according to a Feb. 17 SEC filing. The record date is March 3, 2026, with payment scheduled for March 17.
Analog Devices returned $1.0 billion to shareholders in the quarter through dividends and share repurchases. Since launching its capital-return program 22 years ago, the company has returned $32 billion to shareholders. Management reaffirmed a long-term target to return 100% of free cash flow to shareholders after 29 consecutive years of positive free cash flow.
The board also appointed Dr. Yoky Matsuoka, expanding it to 11 members. She brings experience from Panasonic Holdings. Analyst price targets cited include $375 and $400.
