Analog Devices 2025 Q4 Earnings 67% EPS Surge and 64.8% Net Income Growth

Analog Devices (ADI) reported fiscal 2025 Q4 earnings on Nov 25, 2025, exceeding expectations with a 25.9% revenue increase to $3.08 billion and a 67% rise in EPS to $1.61. The company raised its Q1 2026 revenue guidance to $3.1 billion ±$100 million, with adjusted EPS of $2.29 ±$0.10, outpacing analyst forecasts.

Revenue

Revenue surged 25.9% year-over-year to $3.08 billion, driven by robust demand across industrial, automotive, and communications sectors. The industrial segment, representing half of ADI’s business, grew 34% to $1.43 billion, fueled by factory automation and defense spending. Communications revenue reached $389.8 million, surpassing forecasts, while automotive and industrial markets also posted double-digit gains.

Earnings/Net Income

Net income jumped 64.8% to $787.74 million, with EPS rising 67% to $1.61. The company’s profitability reflects strong operational resilience and strategic investments in R&D and capacity expansion post-Maxim acquisition. This marks over two decades of consistent profitability, underscoring ADI’s market leadership.

Post-Earnings Price Action Review

The strategy of buying ADI shares after a revenue drop quarter-over-quarter on the report date and holding for 30 days delivered moderate returns but underperformed the market, with a CAGR of 11.19% versus the benchmark’s 40.07%.

The approach had minimal risk (0.00% max drawdown) and a Sharpe ratio of 0.36, making it suitable for conservative investors. However, the stock’s post-earnings decline in pre-market trading, despite beating estimates, highlights market skepticism about future guidance and macroeconomic risks.

CEO Commentary

CEO Vincent Roche emphasized Q4 results exceeded expectations, driven by cyclical recovery, Maxim synergy execution, and innovation in analog and power technologies. He highlighted strong ASP growth in new products and momentum in industrial, automotive, and data center markets. The company remains confident in FY26 growth, citing robust design pipelines and leadership in high-margin sectors.

Guidance

ADI guided Q1 2026 revenue to $3.1 billion ±$100 million, with operating margin of 43.5% ±100 bps, tax rate of 12–14%, and adjusted EPS of $2.29 ±$0.10. CFO Richard Puccio noted industrial growth will offset automotive declines, while communications and industrial sectors are expected to expand mid-single digits.

Additional News

1. Dividend Consistency: ADI declared a $0.99/share dividend, maintaining its payout for four consecutive quarters. The forward yield of 1.65% reflects its commitment to shareholder returns.

2. Price Target Adjustments: Evercore ISI lowered ADI’s price target to $282 from $303 while maintaining an Outperform rating. JPMorgan raised its target to $310, citing ADI’s secular exposure and design pipeline growth.

3. Insider Selling: Insiders sold 59,750 shares (~$14.7M) in the last three months, reducing ownership to 0.33%. Analysts attributed this to portfolio rebalancing rather than performance concerns.

Article Polishing

The stock’s post-earnings dip in pre-market trading, despite strong results, underscores investor caution over macroeconomic risks. ADI’s strategic focus on AI, software, and digital capabilities positions it to capitalize on industrial automation and energy infrastructure trends. With a record $4.3 billion in free cash flow for FY2025, the company remains well-positioned to sustain shareholder returns and reinvest in growth.