Analog Devices, Inc. (אנלוג דבייסס)

Analog Devices designs and makes chips that translate physical signals — temperature, pressure, sound, motion, radio waves and electrical current — into digital information, as well as power-management chips. Its customers make industrial equipment, vehicles, communications and data-center systems, and consumer products. The company is headquartered in Wilmington, Massachusetts, and employs about 24,500 people, roughly 13,000 of them in engineering roles.

Manufacturing is hybrid. The company runs wafer fabs in the United States and Ireland, and more than half of its wafers are made by outside foundries, including TSMC. In 2021 it acquired Maxim Integrated; that deal accounts for most of the goodwill and intangible assets on the balance sheet. Revenue for the 12 months ended August 2026 totaled $13.88 billion.

About 58% of the quarter's revenue came through distributors. One distributor accounted for 24% of fiscal 2025 revenue. There is no controlling shareholder. Vincent Roche is CEO and Chair.

The quarter: broad growth, record margins

In the May–July 2026 quarter, revenue rose 40% to $4.02 billion. It was the third quarter in a row above the midpoint of management's outlook, and in two of them revenue also exceeded the top of the range. Gross margin was 67.3%. According to the filing, the improvement came mainly from higher utilization of fixed manufacturing costs, driven by demand, and from product mix.

Three layers of earnings per share. Reported EPS rose from $1.04 to $2.74 (+163%). The prior-year quarter, however, included a one-time tax charge of $153.8 million tied to the U.S. tax law enacted in July 2025. Without it, prior-year EPS was about $1.35, and the increase about 102%. The company's adjusted EPS rose from $2.05 to $3.45 (+68%). The main adjustment is amortization of acquired intangibles, about $398 million in the quarter, which is not a cash expense. The company does not exclude stock-based compensation from adjusted earnings.

The multi-year context: a cycle

The company's revenue moves in cycles. In fiscal 2023 it reached $12.31 billion; in 2024 it fell 23% to $9.43 billion, and gross margin dropped 6.9 points that year. Revenue over the last 12 months is already 12.8% above the 2023 peak. Based on management's fourth-quarter outlook ($4.3 billion, plus or minus $100 million), fiscal 2026 revenue would total about $15.1 billion. The jump in 2022 reflects mainly the full consolidation of Maxim, not organic growth.

Company-adjusted operating margin: 40.9% in fiscal 2024 and 41.9% in fiscal 2025 (Q4 fiscal 2025 earnings release).

On August 1, 2026, financial debt stood at $9.22 billion: bonds in 13 series and $1.0 billion of commercial paper. Cash and short-term investments totaled $2.33 billion, and net debt $6.9 billion — about one year of adjusted operating income. Current debt includes a $900 million series at 3.5% maturing in December 2026 and a $440 million series maturing in June 2027.

After the balance-sheet date:

• On September 9, 2026, the company signed an agreement to acquire Alif Semiconductor for $1.35 billion in cash. The deal has not yet closed.
• On September 17, 2026, the company issued $3.0 billion of bonds in four series at 5.10% to 5.75%. Annual interest on the issue is about $166 million. The use of proceeds is not stated in the filing.
• If the acquisition is funded with cash, net debt would rise to about $8.25 billion, before fourth-quarter cash flow.

Goodwill and intangible assets total $35.5 billion, more than total shareholders' equity ($33.6 billion). Tangible equity is therefore negative, and a debt-to-equity ratio of 0.27 gives only a partial picture. The company has $6.0 billion of undrawn credit facilities; half of that is a 364-day facility signed in July 2026.

Capital return: over the last 12 months the company paid $2.04 billion in dividends and bought back $3.13 billion of stock: together 105% of free cash flow. In February 2026 the quarterly dividend was raised 11% to $1.10, the 22nd consecutive year of increases. The diluted share count fell 1.6% over the past year.

Working capital: since the start of the fiscal year, accounts receivable rose 66%, from $1.44 billion to $2.39 billion. Over the same period quarterly revenue rose 31%. Days sales outstanding increased from 44 to 50, and working-capital changes consumed $941 million in nine months. Management attributes this to higher sales and the timing of collections and billings. Inventory rose 17%, while inventory days fell from 140 in Q1 to 131.

The company reports a single operating segment and discloses revenue by four end markets. Profitability by market is not disclosed.

Industrial: according to the filing, all sub-markets grew, with test equipment and aerospace and defense growing fastest. Communications: according to the filing, the strongest growth came from data centers, driven by AI infrastructure investment. Data-center revenue is not disclosed as a dollar figure. Automotive: growth of 2% in Q2 and 16% in Q3. Consumer: about $397 million in each of the last three quarters.

Geography (fiscal 2025, by buyer location): United States 29%, China 26% (up 34%), Europe 21%, rest of Asia 13%, Japan 9%. The quarterly reports do not include a geographic breakdown.

The company operates in analog and mixed-signal chips: components that sit at the point of contact between the physical world and the digital system. In this market, a part chosen into a customer's design tends to stay in production for years, particularly in industrial, automotive and defense. Customers are dispersed: no end customer reaches 10% of revenue. The concentration is in the distribution channel, not among end customers.

The strategic direction the company presents: more content per system, from sensor to power management. In July 2026 the company completed the acquisition of Empower Semiconductor for $1.5 billion. Empower develops integrated voltage regulators and silicon capacitors that deliver power close to the processor in AI servers. About $1.0 billion of the price was recorded as goodwill, and according to the filing its revenue since the acquisition is immaterial. The Alif acquisition adds microcontrollers with on-device AI processing. Alif's revenue has not been disclosed.

In its filings the company cites increasing competition, including from companies outside the United States, and variables such as tariffs, export classifications and distributor performance. This review does not include competitor data from primary sources.

Risks that emerge from the filings

• Cyclicality: in fiscal 2024 revenue fell 23% and reported operating margin dropped to 21.6%. Current margins rest, according to management, on high utilization.
• Distribution channel: 58% of revenue through distributors, one of them 24%. No disclosure of distributor inventory.
• China and trade: China was 26% of fiscal 2025 revenue. The filing cites tariffs, trade restrictions and changes in export classifications.
• Acquisitions and debt: two acquisitions totaling $2.85 billion with no disclosed revenue, and debt issued at rates above existing debt.
• Tax: a transfer-pricing assessment of about $267 million with no provision, and later years not yet quantified.
• Cybersecurity: unauthorized access with file exfiltration in June 2026, and a separate matter under review since July 2026.

Items to monitor in the Q4 report and annual report (late November 2026)