ADI · Q4 2025 Earnings

Bullish

Analog Devices

Reported November 25, 2025

30-second summary

Revenue grew 26% YoY to $3.08B and beat the $3.0B guide midpoint by $76M, with industrial up 34% YoY to $1.43B and auto at $852M — essentially flat sequentially versus the ~15% QoQ decline implied by last quarter's framing. Adj. gross margin 69.8% (+190bps YoY, +60bps QoQ); GAAP gross margin 63.1%. Management held adj. operating margin at the guided 43.5%, and the Q1 FY2026 guide of $3.1B (±$100M) sustains the run-rate rather than giving back gains. The auto unwind story that dominated last quarter's bear case did not materialize.

Headline numbers

EPS

Q4 FY2025

$2.26

Revenue

Q4 FY2025

$3.08B

+26.0% YoY

Gross margin

Q4 FY2025

63.1%

Free cash flow

Q4 FY2025

$1.49B

Operating margin

Q4 FY2025

30.7%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$3.08B	+26.0%	$2.88B	+6.8%
EPS	$2.26	—	$2.05	+10.2%
Gross margin	63.1%	—	62.1%	+100bps
Operating margin	30.7%	—	28.4%	+230bps
Free cash flow	$1.49B	—	$1.09B	+36.8%

Guidance

ADI exceeded Q4 FY2025 guidance across revenue, adjusted EPS, and margins while maintaining strong FY2026 momentum; Q1 FY2026 guided in-line with current run-rate, signaling confidence in cyclical recovery and secular growth.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q4 FY2025	$3.0 billion, +/- $100 million	$3.076 billion	+$76 million above midpoint (+2.5%)	Beat
Adjusted EPS	Q4 FY2025	$2.22, +/- $0.10	$2.26	+$0.04 above midpoint	Beat
Reported EPS	Q4 FY2025	$1.53, +/- $0.10	$1.60	+$0.07 above midpoint	Beat
Adjusted Operating Margin	Q4 FY2025	43.5%, +/- 100 bps	43.5%	in-line with guidance	Met
Reported Operating Margin	Q4 FY2025	30.5%, +/- 150 bps	30.7%	+20 bps above midpoint	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q1 FY2026	$3.1 billion, +/- $100 million	—
Adjusted EPS	Q1 FY2026	$2.29, +/- $0.10	—
Reported EPS	Q1 FY2026	$1.60, +/- $0.10	—
Adjusted Operating Margin	Q1 FY2026	43.5%, +/- 100 bps	—
Reported Operating Margin	Q1 FY2026	31.0%, +/- 130 bps	—
Tax Rate	Q1 FY2026	12% to 14%	—

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Industrial	$1.427B	+34.0%
Automotive	$0.852B	+19.0%
Communications	$0.39B	+37.0%
Consumer	$0.408B	+7.0%
Industrial End Market Growth	34% YoY	—
Communications End Market Growth	37% YoY	—

Profitability

Q4 FY2025

Segment	Q4 FY2025
Adjusted Operating Margin	43.5%
Free Cash Flow Margin	48%
Operating Cash Flow	$1.701 billion

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Cash Returned to Shareholders	$1.167 billion

Management tone

Q4-24 "revenues bottomed" → Q1-25 "cyclical upturn" → Q2-25 "ever more confident" → Q3-25 "tremendous growth opportunities" → Q4-25 "well positioned to drive further profitable growth in 2026"

From cycle-call to secular-call. A year ago management was naming the bottom; six months ago it was confirming the upturn; this quarter the prepared remarks barely mention the cycle at all. Roche: "Our diversified business model has proven agile and consistently capable of generating superior outcomes, reflected in both last year's resilient margins and this year's strong rebound in profitable growth." The sentence structure is telling — "resilient margins" in the down year and "rebound" this year are presented as evidence of one thing: model durability. The cycle is now framed as the test ADI passed, not the variable that drives the model.

From ASP defense to ASP as strategy. For the prior three quarters ASPs were either not mentioned or framed in the context of mix. This quarter Roche made it a standalone pillar: "We're realizing stronger value capture as reflected in the increase in our average selling prices, particularly in new products where ASPs significantly exceed those of legacy offerings." The shift is from talking about volume recovery to talking about pricing power on new products — a different (and harder to fade) source of growth that wasn't part of the equity narrative six months ago.

From AI as a vertical to AI as the cross-portfolio driver. Two quarters ago AI was mentioned alongside ATE strength. One quarter ago humanoid robotics was the showcase. This quarter management quantified data center at $1B (+50%), ATE at $800M (+40%), called out 800G→1.6T optical transitions, and said vertical power technology is "at an inflection point for broad adoption" — AI is now the driver inside industrial and communications, not a standalone story. That fundamentally changes how the comms segment should be modeled (two-thirds is now data center, not wireless).

From macro as gating risk to macro as background noise. Last quarter macro caveats followed growth assertions; this quarter they're almost ornamental. CFO Gilbert's closing: "I'm confident in our ability to continue navigating macro and geopolitical challenges and believe we are well positioned to drive further profitable growth in 2026." The construction puts confidence first, navigation second — the inverse of FY24's order. The hedging language is still there ("mindful of the macro environment and the continued impacts of tariffs"), but it no longer gates the outlook sentence.

From design pipeline as recovery proof-point to design pipeline as leading indicator. "Diverse design pipeline that grew more than 20% in fiscal 25... we anticipate further growth in FY26 due to our expanding design pipeline." The pipeline used to be cited as evidence the bottom was real; now it's cited as a forward predictor of growth. Different argumentative work, same data point — management has earned the right to use it as a leading indicator after three quarters of beats.

Recurring themes management leaned on this quarter:

AI infrastructure as multi-vertical growth engineDesign pipeline expansion signaling sustained demandMargin expansion through utilization and mix optimizationCapital allocation to support long-term secular trendsTechnology leadership at intelligent edge as competitive moatSoftware and AI capabilities as customer success enablers

Risks management surfaced:

Macro environment uncertainty and volatilityTariffs and trade uncertainty impactsWireless communications sector softness (though management believes bottomed)Inventory digestion cycles in wirelessGeopolitical headwinds

Q&A highlights

Vivek Arya · Bank of America Securities

Asked for segment-by-segment color on Q1 guidance strength given industrial was below expectations in Q4, and sought management perspective on whether annualized Q1 guidance (12-13% growth) is achievable for fiscal 26 given macro uncertainty.

Management provided detailed end-market guidance: industrial up mid-single digits, auto down mid-single digits, comms up 10%, consumer down low double digits. For fiscal 26, highlighted industrial and comms as growth leaders, with tailwinds from cyclical factors, data center strength (two-thirds of comms), aerospace/defense, ATE, and content gains in auto despite flat SAR. Stated all end markets expected up year-over-year despite uncertain macro.

Q1 industrial expected up mid-single digits above seasonalQ1 auto down mid-single digits below seasonalQ1 comms up 10% above seasonalData center represents two-thirds of comms business

CJ Muse · Cantor Fitzgerald

Requested framework for understanding AI and data center-driven growth across industrial and comms, including percentage of mix that should grow significantly faster than rest of business, with specific numbers.

Management quantified data center and ATE as primary AI beneficiaries. Data center grew 50% in 2025 at $1 billion run rate; ATE grew 40% and expected to continue growing. Detailed two primary data center sectors: electro-optical interfaces (800 gig moving to 1.6 terabit) and power management/protection/conversion. Stated both areas should see double-digit growth over next few years, with vertical power adoption at inflection point.

Data center grew 50% in fiscal 2025ATE business grew 40% in fiscal 2025Data center at $1 billion run rateATE at $800 million run rate

Joe Moore · Morgan Stanley

Asked why auto outperformed expectations (ended slightly up despite guidance for slightly down) and requested clarity on pull-forward effects and demand normalization.

Management attributed outperformance to market resilience, strong volumes, and double-digit CAGR driven by secular content gains and share gains in connectivity/power for ADAS. Acknowledged some upside was tariff/policy-related pull-ins but noted Q4 results were fairly seasonal with normal bookings (book-to-bill just below 1). Cautious on Q1 outlook (down mid-single digits sequentially, up year-over-year) due to tariff uncertainty and low visibility from short lead times.

Auto has driven double-digit CAGR through cycleSignificant share gains in China for light vehicle applicationsQ4 book-to-bill just below 1.0 (typical)Some tariff/policy-related pull-in activity acknowledged

Timothy Arcuri · UBS

Requested update on Maxim revenue synergies and clarification on normal Q2 seasonality and drivers.

Synergies conversion began in 2024 contributing tens of millions, accelerated in 2025 to hundreds of millions against $1 billion fiscal 27 target, expecting stronger contribution in fiscal 26. Complementarity evident across auto, consumer, healthcare, and data center. Confirmed Q2 is seasonally strongest quarter, typically up mid-single digits.

$1 billion Maxim synergy target by fiscal 2027Synergies at hundreds of millions in fiscal 2025Synergies accelerating with momentum in new products and cross-sellQ2 seasonally strongest quarter, typically up mid-single digits

Harlan Sur · JP Morgan

Asked about continued double-digit growth in aerospace and defense (>$1 billion annualized run rate, >10% of revenues) for fiscal 26 and ADI-specific product cycle drivers.

Management confirmed strong A&D exposure from Hittite acquisition providing RF/microwave portfolio, supplemented by sensor, precision/high-speed conversion, and power management technologies from LTC and Maxim acquisitions. Drivers include increasing global defense capital deployment, strong European demand, multi-thousand dollar ASPs per system, and positioned for potential doubling by end of decade.

Aerospace and defense >$1 billion annualized run rateA&D represents >10% of total revenuesStrong double-digit growth in fiscal 2025Multiple high-value product portfolios: RF/microwave, sensors, precision conversion, power management

Answers to last quarter's watch list

Q4 auto decline magnitude vs. the implied ~15% QoQ. Auto came in at $852M, essentially flat versus Q3's $850M — well above the ~$0.72B floor that would have signaled an outsized pull-in and above the ~$0.78B that would have validated the "record auto year" claim. The pull-in unwind management staged for in Q3 either didn't happen, was smaller than disclosed, or was offset by genuinely stronger underlying auto demand. Joe Moore directly probed this and management confirmed book-to-bill was just below 1.0 (typical), not depressed.

Resolved positively

Q4 gross margin trajectory. Adj. gross margin landed at 69.8% (+60bps QoQ, +190bps YoY), with management citing higher utilization and favorable mix. On the call Puccio noted they didn't quite reach the 70% threshold because the stronger-than-expected auto mix kept industrial mix slightly lower than planned — a "good problem" outcome. Adj. operating margin landed exactly on the 43.5% guide, confirming the European fab disruption was contained.

Resolved positively

Industrial Q4 sequential growth in the low-to-mid teens despite seasonal headwind. Industrial revenue of $1.427B was +12% QoQ (company-stated), squarely inside the "low-to-mid teens" framing. YoY industrial accelerated from +23% to +34%, which is the more telling number: the breadth and depth of the industrial recovery is widening, not stalling.

Resolved positively

Whether ADI introduces an FY2026 framework on the Q4 print. No. Management again guided Q1 only and offered qualitative FY26 commentary ("all end markets up YoY," "well positioned to drive further profitable growth") but declined to issue an FY revenue or EPS range. Three consecutive quarters of beats without an FY framework signals management is still preserving optionality — but the qualitative tone is now firmly bullish, which is most of the way there.

Resolved negatively

A&D capacity coming online in Q1 FY2026. Management confirmed A&D is >$1B annualized and >10% of revenue, grew strong double digits in FY25, and Roche framed potential to "more than double by end of decade." But the call didn't quantify specifically how much constrained A&D revenue inflects in Q1 from the new tools deployed in Q3/Q4 — the framing is multi-year, not next-quarter.

Continue monitoring

What to watch into next quarter

Q1 auto print versus the "down mid-single digits sequentially" framing. Q4 auto was $852M; a Q1 print below $800M would validate the seasonal pullback management guided; a print above $830M would suggest the auto strength is structural and the "pull-in" framing of prior quarters was overstated.

Industrial Q1 growth at "mid-single digits above seasonal." Q1 is normally a sequentially down quarter for industrial. Management guided +mid-single digits above seasonal, which implies industrial roughly flat-to-up sequentially on $1.43B. A print below $1.40B would signal the +34% YoY Q4 had borrowed-demand inside it; a print at or above $1.45B confirms broad-based industrial demand is still strengthening.

Comms growth concentration vs. diversification. Comms +37% YoY with data center two-thirds of mix means the segment is effectively a data center proxy now. Watch whether wireless inflects positive in Q1 (management implied it has bottomed) or whether the +10% above-seasonal Q1 comms guide is entirely data center. If data center alone is carrying it, the segment risk profile is concentrated, not diversified.

Whether the FY26 framework arrives on the Q1 print. Four consecutive beats without an FY range is now a pattern. If management still won't commit to FY26 numbers after Q1, the most natural read is that the implied FY26 growth rate (~12% from Q1 annualized) is the upper bound of their conviction, not the midpoint.

Data center run-rate trajectory toward what management implied is double-digit multi-year growth. Data center at $1B run rate +50% in FY25. A Q1 print suggesting data center is annualizing above $1.1B would validate the AI infrastructure narrative; a print suggesting deceleration below +30% YoY would force a rethink of how much of the comms growth is durable.

Tax rate guide drift. The 100bps upward shift in Q1 tax rate (12–14% vs. prior 11–13%) is small but worth watching for further drift, which would signal jurisdictional mix changes or policy headwinds management isn't yet calling out explicitly.

Sources

ADI Q4 FY2025 press release / earnings exhibit, filed with the SEC: https://www.sec.gov/Archives/edgar/data/6281/000000628125000151/adiq425exhibit991.htm
ADI Q4 FY2025 earnings call commentary (quoted from extraction inputs).
Tapebrief ADI Q3-2025 and Q2-2025 briefs (for cross-quarter tone and watch-list comparison).

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