AI Takeaway
ADI delivered a standout Q1 FY2026 with revenue surging 30.4% YoY to $3.16B, operating income more than doubling to $997M, and net income jumping 112.3% to $831M, reflecting a powerful cyclical recovery and strong operating leverage.
Revenue
$3.16B
++30.42% YoY
EPS (Basic)
$1.70
++115.19% YoY
Gross Margin
64.7%
++5.68% YoY
Operating Income
$997.03M
++102.93% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Revenue grew 30.4% YoY to $3.16B in Q1 FY2026, up from $2.42B in Q1 FY2025, signaling a robust demand recovery across ADI's end markets after a prolonged inventory correction cycle.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Gross margin improved significantly to 64.7% from 59.0% in the prior-year period, reflecting better factory utilization, favorable product mix, and operating leverage on higher revenue volumes.
Source: Source: 10-Q Income Statement & Key Ratios (XBRL Financial Data)
Operating income more than doubled to $997M (operating margin of 31.5%) from $491M (20.3% margin) a year ago, demonstrating that revenue growth is flowing through efficiently despite R&D and SG&A increases of 16.0% and 21.2% respectively.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
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Upgrade to unlockADI's business is highly sensitive to semiconductor industry cycles. The current recovery could reverse if customers re-enter inventory digestion phases, particularly in industrial and automotive end markets. A demand slowdown could compress margins rapidly given ADI's fixed-cost manufacturing base.
Source: Source: 10-Q Financial Data (XBRL), industry context
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Upgrade to unlockReported EPS of $2.46 versus the $2.33 analyst consensus — a +5.4% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $3.16B | $2.42B | +30.42% |
Cost of Revenue | $1.12B | $992.87M | +12.33% |
Gross Profit | $2.04B | $1.43B | +42.98% |
Operating Income | $997.03M | $491.31M | +102.93% |
Net Income | $830.83M | $391.32M | +112.32% |
EPS (Basic) | $1.70 | $0.79 | +115.19% |
EPS (Diluted) | $1.69 | $0.78 | +116.67% |
R&D Expense | $467.4M | $402.89M | +16.01% |
SG&A Expense | $345.25M | $284.8M | +21.23% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $47.99B | $47.97B | +0.05% |
Current Assets | $7.6B | $5.73B | +32.61% |
Current Liabilities | $4.33B | $2.97B | +45.76% |
Stockholders' Equity | $33.79B | $35.07B | -3.66% |
Cash & Equivalents | $2.91B | $2.35B | +23.65% |
Long-Term Debt | $7.24B | $6.62B | +9.39% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $1.37B | $1.13B | +21.45% |
Investing Cash Flow | $-107.03M | $-194.3M | +44.92% |
Financing Cash Flow | $-855.03M | $-573.86M | -49.00% |
Share Buybacks | $516.5M | $160.37M | +222.07% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 64.7% | 59.0% | +5.68% |
Operating Margin | 31.5% | 20.3% | +11.27% |
Net Margin | 26.3% | — | — |
ROE | 2.5% | — | — |
ROA | 1.7% | — | — |
Current Ratio | $1.756 | — | — |
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ADI delivered an exceptionally strong Q1 FY2026, with revenue rising 30.4% YoY to $3.16B and net income more than doubling to $831M. Diluted EPS came in at $1.69, up 116.7% from $0.78 in Q1 FY2025, driven by a cyclical demand recovery and significant operating leverage.
ADI's 30.4% YoY revenue growth to $3.16B in Q1 FY2026 reflects a broad-based recovery in demand after a prolonged semiconductor inventory correction cycle. The strong top-line growth also flowed through to gross profit, which surged 43.0% YoY, suggesting favorable product mix and improved factory utilization.
ADI's gross margin expanded to 64.7% in Q1 FY2026, up approximately 570 basis points from 59.0% in Q1 FY2025. The improvement reflects higher factory utilization on increased revenue volumes, a favorable product mix toward higher-margin analog and mixed-signal chips, and disciplined cost management.
Yes, ADI generated $1.37B in operating cash flow in Q1 FY2026, up 21.5% YoY, confirming that its strong reported earnings are backed by robust cash generation. The company also accelerated share buybacks to $516M, more than triple the $160M repurchased in Q1 FY2025, signaling management confidence in the business outlook.
Key risks for ADI include cyclical demand volatility — the current recovery could reverse if customers re-enter inventory digestion — and geopolitical/export control risks given ADI's global semiconductor operations. Additionally, current liabilities grew 45.8% YoY, faster than current assets, and long-term debt rose to $7.24B, warranting monitoring if earnings growth moderates.