Analog Devices Stock Earnings Reports

Analog Devices reported a strong Q3 FY2025 beat with revenue of $2.88B (up 25% YoY, +9% sequentially) and EPS of $2.05 (+30% YoY). For the second consecutive quarter the company delivered double‑digit YoY growth across all end markets. Industrial—now 45% of revenue—was the standout, up 12% sequentially and 23% YoY, with broad strength across instrumentation, automation, aerospace & defense, health care and energy management. Aerospace & defense and ATE (test infrastructure tied to AI chip builds) were particularly strong; aerospace/defense hit a record quarter and some supply constraints exist there as demand outpaces current production. Communications and consumer also posted robust growth (communications +40% YoY) while automotive finished the quarter up 22% YoY but is expected to decline sequentially in Q4 as some prior pull‑ins unwind. Margins: Q3 non‑GAAP gross margin was 69.2% and operating margin 42.2% (a one‑time utilization hit in a European fab held back gross margin); management expects gross margin to resume improvement and targets ~70% in Q4. Balance sheet and cash flow remain strong—$3.5B cash & short‑term investments, net leverage ~1.1x, trailing‑12‑month free cash flow ~$3.7B (35% of revenue), and $3.5B returned to shareholders in the last four quarters. Q4 guidance: revenue $3.0B ± $0.1B, operating margin ~43.5% ± 100 bps, adjusted EPS $2.22 ± $0.10; industrial is expected to be the fastest growing segment in Q4 while automotive is expected to decline. Strategy/longer term: ADI is emphasizing high‑performance sensing, signal chain, power and system solutions for robotics and automation (including collaborations with NVIDIA), sees a long runway for automation and robotics (including humanoid/dexterous robots), and expects opportunities to expand ASPs and attach more system content. Key risks flagged: geopolitical/tariff uncertainty and macro volatility.