Q3 FY2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue | $4.02 billion | up 40% year-over-year |
| EPS | $3.45 | up 68% year-over-year |
| Industrial Revenue | 49% of total | up 53% year-over-year |
| Communications Revenue | 16% of total | up 84% year-over-year |
| Operating Margin | 50% | up 780 basis points year-over-year |
Guidance and outlook
- Revenue is expected to be $4.3 billion, plus or minus $100 million.
- Operating margin at the midpoint is expected to be 52%, plus or minus 100 basis points.
- Adjusted EPS is expected to be $3.86, plus or minus $0.15.
How management sounded
Positive (+7 on our -10 to +10 scale). Management delivered record results and raised guidance, citing strong secular growth in AI and defense. Management sounded more upbeat than on 48% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Gross Margin
Asked: JPMorgan asked if the 100 basis point improvement in Q4 gross margin is driven by price increases or volume and mix.
Answer: Management stated the improvement is driven by favorable mix, higher fixed cost absorption, and price adjustments.
FY2027 Outlook
Asked: Bank of America asked about the sustainability of growth into 2027 and if there is more operating leverage.
Answer: Management highlighted strong secular drivers like AI and defense, noting they expect a brisk growth year in 2027.
Data Center Growth
Asked: Bernstein Research asked if the communications segment growth will continue at 100% year-over-year.
Answer: Management expects strong double-digit growth in data center through 2030, driven by increasing analog content.
Supply Chain
Asked: Cantor asked about capacity constraints and supply capabilities.
Answer: Management stated they are executing well, building inventory, and adding capacity to support demand.
What to watch before the next call
- Potential slowing of AI infrastructure capital expenditures.
- Macroeconomic volatility and geopolitical risks.
- Impact of seasonal shutdowns on Q1 gross margins.
