Analog Devices reported fiscal third-quarter revenue of $4.02 billion on Wednesday, a 40% increase from the same period a year earlier. The results were driven by rising demand for data center and industrial chips, and the company set a record outlook for its fourth quarter.
Net income reached $1.34 billion, or $2.74 per share, compared with $518.5 million, or $1.04 per share, in the year-ago quarter. On an adjusted basis, the company earned $3.45 per share, topping the $3.34 analyst consensus. Revenue of $4.02 billion also surpassed expectations of $3.92 billion, according to the Wall Street Journal.
"Demand continued to strengthen across our product portfolio and regions throughout the third quarter, which is reflected in our record fourth quarter outlook," Chief Financial Officer Richard Puccio said in a statement.
For the fourth quarter, Analog Devices guided for revenue of $4.3 billion, plus or minus $100 million, and a reported operating margin of around 42.6%. Adjusted earnings per share are projected at $3.86 at the midpoint of guidance, beating the $3.54 analyst estimate.
The company also reported strong cash generation. Operating cash flow totaled $5.5 billion and free cash flow reached $4.9 billion on a trailing twelve-month basis. During the quarter, Analog Devices returned $1.7 billion to shareholders through dividends and share repurchases. The board declared a quarterly cash dividend of $1.10 per share, payable September 15 to shareholders of record as of September 1.
Beyond the quarterly results, the company announced a $1.5 billion cash acquisition of Empower Semiconductor. The deal targets what Empower CEO Tim Phillips described as "the hardest problem in AI power delivery — the power bottleneck that is limiting AI throughput." Analog Devices CEO and Chair Vincent Roche said energy is "the most persistent constraint to scaling next-generation systems." The transaction is expected to close in the second half of 2026.
The acquisition fits into a broader surge in AI infrastructure spending. The four largest hyperscalers combined for $413 billion in capital expenditures in 2025 and are projected to spend between $600 billion and $700 billion in 2026. Rack-level power density in AI data centers is growing sharply as a result, creating demand for the kind of power management chips that the Empower deal is designed to supply.
Analog Devices shares were among the movers in a broader market session that saw the Dow Jones Industrial Average rise 0.2% and the S&P 500 gain 0.4% early Wednesday.
