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Call sheet · Q2'26

Analog Devices (ADI)

Q2'26 earnings call · held May 20, 2026 · compared with the Q1'26 call · management-credibility review
5/12
Disclosure score
2 high, 3 medium, 1 low flags
Financial quality
Bottom line
The street sees record earnings, but the Empower panic-buy reveals ADI is behind, not ahead, in AI power despite owning two premier power franchises. Management claims 'record demand' while mysteriously dropping book-to-bill disclosure and guiding Q3 down 14% sequentially, the worst Q3 guide in recent memory. The binding constraint is internal capacity: they're maxed on utilization, can't expand fast enough, and outsourcing will pressure margins. Most revealing quote: 'time is of the essence' on Empower because they lack the IP to catch the AI wave organically. My view changes if they restore book-to-bill disclosure above 1.1x or Empower contributes $500M+ in 2027.

The 30-second version

  • The Empower acquisition reveals ADI is behind in AI power, not ahead
  • Record revenue of $3.62B masks a critical capacity constraint
  • China auto recovery narrative quietly collapsed

What changed this quarter

MetricQ1'26Q2'26Change
Revenue$3.16B (+30% YoY)$3.62B (+37% YoY)+700 bps YoY acceleration
EPS$2.46 (+51% YoY)$3.09 (+67% YoY)+1600 bps YoY acceleration
Industrial Revenue %47% of total50% of total+300 bps mix shift
Data Center Revenue75% of comms75% of comms (+90% YoY)Massive acceleration from prior growth
Gross Margin71.2%73.0%+180 bps sequential
Operating Margin45.5%49.0%+350 bps sequential
Days of Inventory171 days168 days3 day improvement
BMS RevenueFirst YoY growth in 2 yearsUp double digits YoYAccelerating from return to growth
ATE Sequential Growth+40% in FY25+30% sequential in Q3 guideStill strong but decelerating
China AutoNot specifiedDeclined quarter-over-quarterWeakness despite 'material pickup' claim

Accountability tracked

8 new promises made5 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
Read the full ADI Q2'26 report Subscribe
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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