- Revenue of more than $2.5 billion with continued growth in
Automotive
- Operating cash flow of $4.6 billion and free cash flow of $3.2
billion on a trailing twelve-month basis
- Returned over $600 million to shareholders through dividends
and repurchases in the first quarter
- Raised quarterly dividend by 7%, marking the twentieth
consecutive year of increase
- Appointed Richard C. Puccio as EVP and Chief Financial
Officer
Analog Devices, Inc. (Nasdaq: ADI), a global semiconductor
leader, today announced financial results for its 14-week fiscal
first quarter 2024, which ended February 3, 2024.
“ADI delivered first quarter revenue and profitability above the
midpoint of our outlook, despite the continued difficult
macroeconomic environment,” said Vincent Roche, CEO and Chair.
“Consistent with our prior view, we expect customer inventory
rationalization to largely subside in our second quarter, and thus
enter the second half in a more favorable business backdrop.
Importantly, we are well positioned to capitalize on the inevitable
upswing given our replenished die banks, short lead times, and
agile hybrid manufacturing model.”
Roche continued, “Over the past several years, we have invested
at record levels in product development, customer engagement, and
manufacturing activities, positioning us exceptionally well to
pursue the rich opportunities of the Intelligent Edge era. The
growing criticality of our technology to our customers’ success,
and our ‘customer first’ approach to innovation, gives me
unwavering confidence in our ability to drive shareholder value for
many years to come.”
Performance for
the 14 Week First Quarter of Fiscal 2024
Results Summary(1)
(in millions, except per-share amounts and
percentages)
Three Months Ended
Feb. 3, 2024
Jan. 28, 2023
Change
Revenue
$
2,513
$
3,250
(23
)%
Gross margin
$
1,474
$
2,124
(31
)%
Gross margin percentage
58.7
%
65.4
%
(670 bps)
Operating income
$
586
$
1,131
(48
)%
Operating margin
23.3
%
34.8
%
(1,150 bps)
Diluted earnings per share
$
0.93
$
1.88
(51
)%
Adjusted Results(2)
Adjusted gross margin
$
1,734
$
2,392
(28
)%
Adjusted gross margin percentage
69.0
%
73.6
%
(460 bps)
Adjusted operating income
$
1,054
$
1,659
(36
)%
Adjusted operating margin
42.0
%
51.1
%
(910 bps)
Adjusted diluted earnings per share
$
1.73
$
2.75
(37
)%
Three Months Ended
Trailing Twelve Months
Cash Generation
Feb. 3, 2024
Feb. 3, 2024
Net cash provided by operating
activities
$
1,139
$
4,550
% of revenue
45
%
39
%
Capital expenditures
$
(223
)
$
(1,308
)
Free cash flow(2)
$
916
$
3,242
% of revenue
36
%
28
%
Three Months Ended
Trailing Twelve Months
Cash Return
Feb. 3, 2024
Feb. 3, 2024
Dividend paid
$
(426
)
$
(1,720
)
Stock repurchases
(180
)
(2,490
)
Total cash returned
$
(606
)
$
(4,209
)
(1) The sum and/or computation of the
individual amounts may not equal the total due to rounding.
(2) Reconciliations of non-GAAP financial
measures to their most directly comparable GAAP financial measures
are provided in the financial tables included in this press
release. See also the "Non-GAAP Financial Information" section for
additional information.
Outlook for the Second Quarter of
Fiscal Year 2024
For the second quarter of fiscal 2024, we are forecasting
revenue of $2.10 billion, +/- $100 million. At the midpoint of this
revenue outlook, we expect reported operating margin of
approximately 15.1%, +/-200 bps, and adjusted operating margin of
approximately 37.0%, +/-100 bps. We are planning for reported EPS
to be $0.46, +/-$0.10, and adjusted EPS to be $1.26, +/-$0.10.
Our second quarter fiscal 2024 outlook is based on current
expectations and actual results may differ materially as a result
of, among other things, the important factors discussed at the end
of this release. These statements supersede all prior statements
regarding our business outlook set forth in prior ADI news
releases, and ADI disclaims any obligation to update these
forward-looking statements.
The adjusted results and adjusted anticipated results above are
financial measures presented on a non-GAAP basis. Reconciliations
of these non-GAAP financial measures to their most directly
comparable GAAP financial measures are provided in the financial
tables included in this release. See also the “Non-GAAP Financial
Information” section for additional information.
Dividend Payment
The ADI Board of Directors has declared a quarterly cash
dividend of $0.92 per outstanding share of common stock. The
dividend will be paid on March 15, 2024 to all shareholders of
record at the close of business on March 5, 2024.
Conference Call Scheduled for Today,
Wednesday, February 21, 2024 at 10:00 am ET
ADI will host a conference call to discuss our first quarter
fiscal 2024 results and short-term outlook today, beginning at
10:00 am ET. Investors may join via webcast, accessible at
investor.analog.com.
Non-GAAP Financial
Information
This release includes non-GAAP financial measures that are not
in accordance with, nor an alternative to, U.S. generally accepted
accounting principles (GAAP) and may be different from non-GAAP
measures presented by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting rules
or principles. These non-GAAP measures have material limitations in
that they do not reflect all of the amounts associated with the
Company’s results of operations as determined in accordance with
GAAP and should not be considered in isolation from, or as a
substitute for, the Company’s financial results presented in
accordance with GAAP. The Company’s use of non-GAAP measures, and
the underlying methodology when including or excluding certain
items, is not necessarily an indication of the results of
operations that may be expected in the future, or that the Company
will not, in fact, record such items in future periods. You are
cautioned not to place undue reliance on these non-GAAP measures.
Reconciliations of these non-GAAP financial measures to their most
directly comparable GAAP financial measures are provided in the
financial tables included in this release.
Management uses non-GAAP measures internally to evaluate the
Company’s operating performance from continuing operations against
past periods and to budget and allocate resources in future
periods. These non-GAAP measures also assist management in
evaluating the Company’s core business and trends across different
reporting periods on a consistent basis. Management also uses these
non-GAAP measures as primary performance measurements when
communicating with analysts and investors regarding the Company’s
earnings results and outlook and believes that the presentation of
these non-GAAP measures is useful to investors because it provides
investors with the operating results that management uses to manage
the Company and enables investors and analysts to evaluate the
Company’s core business. Management also believes that free cash
flow, a non-GAAP liquidity measure, is useful both internally and
to investors because it provides information about the amount of
cash generated after capital expenditures that is then available to
repay debt obligations, make investments and fund acquisitions, and
for certain other activities.
The non-GAAP financial measures referenced by ADI in this
release include: adjusted gross margin, adjusted gross margin
percentage, adjusted operating expenses, adjusted operating
expenses percentage, adjusted operating income, adjusted operating
margin, adjusted nonoperating expense (income), adjusted income
before income taxes, adjusted provision for income taxes, adjusted
tax rate, adjusted diluted earnings per share (EPS), free cash
flow, and free cash flow revenue percentage.
Adjusted gross margin is defined as gross margin, determined in
accordance with GAAP, excluding certain acquisition related
expenses1, which are described further below. Adjusted gross margin
percentage represents adjusted gross margin divided by revenue.
Adjusted operating expenses is defined as operating expenses,
determined in accordance with GAAP, excluding: certain acquisition
related expenses1, acquisition related transaction costs2, and
special charges, net3, which are described further below. Adjusted
operating expenses percentage represents adjusted operating
expenses divided by revenue.
Adjusted operating income is defined as operating income,
determined in accordance with GAAP, excluding: acquisition related
expenses1, acquisition related transaction costs2, and special
charges, net3, which are described further below. Adjusted
operating margin represents adjusted operating income divided by
revenue.
Adjusted nonoperating expense (income) is defined as
nonoperating expense (income), determined in accordance with GAAP,
excluding: certain acquisition related expenses1, which is
described further below.
Adjusted income before income taxes is defined as income before
income taxes, determined in accordance with GAAP, excluding:
acquisition related expenses1, acquisition related transaction
costs2, and special charges, net3, which are described further
below.
Adjusted provision for income taxes is defined as provision for
income taxes, determined in accordance with GAAP, excluding tax
related items4, which are described further below. Adjusted tax
rate represents adjusted provision for income taxes divided by
adjusted income before income taxes.
Adjusted diluted EPS is defined as diluted EPS, determined in
accordance with GAAP, excluding: acquisition related expenses1,
acquisition related transaction costs2, special charges, net3, and
tax related items4, which are described further below.
Free cash flow is defined as net cash provided by operating
activities, determined in accordance with GAAP, less additions to
property, plant and equipment, net. Free cash flow revenue
percentage represents free cash flow divided by revenue.
1Acquisition Related Expenses: Expenses
incurred as a result of current and prior period acquisitions and
primarily include expenses associated with the fair value
adjustments to debt, inventory, property, plant and equipment and
amortization of acquisition related intangibles, which include
acquired intangibles such as purchased technology and customer
relationships. Expenses also include fair value adjustments
associated with the replacement of share-based awards related to
the Maxim Integrated Products, Inc. (Maxim) acquisition. We
excluded these costs from our non-GAAP measures because they relate
to specific transactions and are not reflective of our ongoing
financial performance.
2Acquisition Related Transaction Costs: Costs
directly related to the Maxim acquisition, including legal,
accounting and other professional fees as well as
integration-related costs. We excluded these costs from our
non-GAAP measures because they relate to a specific transaction and
are not reflective of our ongoing financial performance.
3Special Charges, net: Expenses, net,
incurred as part of the integration of Maxim, in connection with
facility closures, consolidation of manufacturing facilities,
severance, other accelerated stock-based compensation expense and
other cost reduction efforts or reorganizational initiatives. We
excluded these expenses from our non-GAAP measures because apart
from ongoing expense savings as a result of such items, these
expenses have no direct correlation to the operation of our
business in the future.
4Tax Related Items: Income tax effect of the
non-GAAP items discussed above and certain other income tax
benefits associated with prior periods. We excluded the income tax
effect of these tax related items from our non-GAAP measures
because they are not associated with the tax expense on our current
operating results.
About Analog Devices,
Inc.
Analog Devices, Inc. (NASDAQ: ADI) is a global semiconductor
leader that bridges the physical and digital worlds to enable
breakthroughs at the Intelligent Edge. ADI combines analog,
digital, and software technologies into solutions that help drive
advancements in digitized factories, mobility, and digital
healthcare, combat climate change, and reliably connect humans and
the world. With revenue of more than $12 billion in FY23 and
approximately 26,000 people globally working alongside 125,000
global customers, ADI ensures today’s innovators stay Ahead of
What’s Possible. Learn more at www.analog.com and on LinkedIn and
Twitter (X).
Forward Looking
Statements
This press release contains forward-looking statements, which
address a variety of subjects including, for example, our
statements regarding financial performance; customer inventory
rationalization; economic uncertainty, demand, business cycles, and
supply chains; capital expenditures; expected revenue, operating
margin, nonoperating expenses, tax rate, earnings per share, and
other financial results; investments; expected market and
technology trends and acceleration of those trends; market size,
market share gains, market position, and growth opportunities;
expected product solutions, offerings, technologies, capabilities,
and applications; the value and importance of, and other benefits
related to, our product solutions, offerings, and technologies to
our customers; our manufacturing resilience plan and related
benefits; future dividends and share repurchases; and other future
events. Statements that are not historical facts, including
statements about our beliefs, plans and expectations, are
forward-looking statements. Such statements are based on our
current expectations and are subject to a number of factors and
uncertainties, which could cause actual results to differ
materially from those described in the forward-looking statements.
The following important factors and uncertainties, among others,
could cause actual results to differ materially from those
described in these forward-looking statements: economic, political,
legal and regulatory uncertainty or conflicts; changes in demand
for semiconductor products; manufacturing delays, product and raw
materials availability and supply chain disruptions; products that
may be diverted from our authorized distribution channels; changes
in export classifications, import and export regulations or duties
and tariffs; our development of technologies and research and
development investments; our future liquidity, capital needs and
capital expenditures; our ability to compete successfully in the
markets in which we operate; our ability to recruit and retain key
personnel; risks related to acquisitions or other strategic
transactions; security breaches or other cyber incidents; adverse
results in litigation matters; reputational damage; changes in our
estimates of our expected tax rates based on current tax law; risks
related to our indebtedness; unanticipated difficulties or
expenditures related to integrating Maxim Integrated Products,
Inc.; the discretion of our Board of Directors to declare dividends
and our ability to pay dividends in the future; factors impacting
our ability to repurchase shares; and uncertainty as to the
long-term value of our common stock. For additional information
about factors that could cause actual results to differ materially
from those described in the forward-looking statements, please
refer to our filings with the Securities and Exchange Commission,
including the risk factors contained in our most recent Annual
Report on Form 10-K. Forward-looking statements represent
management’s current expectations and are inherently uncertain.
Except as required by law, we do not undertake any obligation to
update forward-looking statements made by us to reflect subsequent
events or circumstances.
Analog Devices and the Analog Devices logo are registered
trademarks or trademarks of Analog Devices, Inc. All other
trademarks mentioned in this document are the property of their
respective owners.
ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended
Feb. 3, 2024
Jan. 28, 2023
Revenue
$
2,512,704
$
3,249,630
Cost of sales
1,038,763
1,125,289
Gross margin
1,473,941
2,124,341
Operating expenses:
Research and development
391,427
414,095
Selling, marketing, general and
administrative
290,078
326,284
Amortization of intangibles
190,332
253,142
Special charges, net
16,140
—
Total operating expenses
887,977
993,521
Operating income
585,964
1,130,820
Nonoperating expense (income):
Interest expense
77,141
60,453
Interest income
(9,169
)
(10,829
)
Other, net
4,574
7,723
Total nonoperating expense (income)
72,546
57,347
Income before income taxes
513,418
1,073,473
Provision for income taxes
50,691
111,999
Net income
$
462,727
$
961,474
Shares used to compute earnings per common
share - basic
495,765
507,121
Shares used to compute earnings per common
share - diluted
498,741
511,184
Basic earnings per common share
$
0.93
$
1.90
Diluted earnings per common share
$
0.93
$
1.88
ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In thousands)
Feb. 3, 2024
Oct. 28, 2023
Cash & cash equivalents
$
1,303,560
$
958,061
Accounts receivable
1,196,721
1,469,734
Inventories
1,553,221
1,642,214
Other current assets
362,375
314,013
Total current assets
4,415,877
4,384,022
Net property, plant and equipment
3,281,937
3,219,157
Goodwill
26,913,134
26,913,134
Intangible assets, net
10,871,054
11,311,957
Deferred tax assets
2,172,174
2,223,272
Other assets
734,288
742,936
Total assets
$
48,388,464
$
48,794,478
Other current liabilities
$
1,879,600
$
2,154,695
Debt, current
499,322
499,052
Commercial paper notes
544,444
547,224
Long-term debt
5,946,673
5,902,457
Deferred income taxes
2,975,815
3,127,852
Other non-current liabilities
994,537
998,076
Shareholders' equity
35,548,073
35,565,122
Total liabilities & shareholders'
equity
$
48,388,464
$
48,794,478
ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended
Feb. 3, 2024
Jan. 28, 2023
Cash flows from operating activities:
Net income
$
462,727
$
961,474
Adjustments to reconcile net income to net
cash provided by operations:
Depreciation
84,348
85,321
Amortization of intangibles
440,903
502,177
Stock-based compensation expense
69,815
75,041
Deferred income taxes
(102,149
)
(146,354
)
Other
4,684
9,732
Changes in operating assets and
liabilities
178,504
(81,086
)
Total adjustments
676,105
444,831
Net cash provided by operating
activities
1,138,832
1,406,305
Cash flows from investing activities:
Additions to property, plant and
equipment, net
(222,978
)
(176,158
)
Other
3,877
102
Net cash used for investing activities
(219,101
)
(176,056
)
Cash flows from financing activities:
Proceeds from commercial paper notes
2,779,494
—
Payments of commercial paper notes
(2,782,274
)
—
Repurchase of common stock
(180,351
)
(654,557
)
Dividend payments to shareholders
(426,076
)
(385,452
)
Proceeds from employee stock plans
49,819
41,238
Other
(14,844
)
(31,588
)
Net cash used for financing activities
(574,232
)
(1,030,359
)
Net increase in cash and cash
equivalents
345,499
199,890
Cash and cash equivalents at beginning of
period
958,061
1,470,572
Cash and cash equivalents at end of
period
$
1,303,560
$
1,670,462
ANALOG DEVICES, INC. REVENUE TRENDS
BY END MARKET (Unaudited) (In thousands)
The categorization of revenue by end market is determined using
a variety of data points including the technical characteristics of
the product, the “sold to” customer information, the "ship to"
customer information and the end customer product or application
into which our product will be incorporated. As data systems for
capturing and tracking this data and our methodology evolves and
improves, the categorization of products by end market can vary
over time. When this occurs, we reclassify revenue by end market
for prior periods. Such reclassifications typically do not
materially change the sizing of, or the underlying trends of
results within, each end market.
Three Months Ended
February 3, 2024
January 28, 2023
Revenue
% of Revenue1
Y/Y%
Revenue
% of Revenue1
Industrial
$
1,196,832
48
%
(31
)%
$
1,740,780
54
%
Automotive
739,158
29
%
9
%
680,637
21
%
Communications
302,573
12
%
(37
)%
477,266
15
%
Consumer
274,141
11
%
(22
)%
350,947
11
%
Total revenue
$
2,512,704
100
%
(23
)%
$
3,249,630
100
%
1) The sum of the individual percentages
may not equal the total due to rounding.
ANALOG DEVICES, INC.
RECONCILIATION OF GAAP TO
NON-GAAP RESULTS
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended
Feb. 3, 2024
Jan. 28, 2023
Gross margin
$
1,473,941
$
2,124,341
Gross margin percentage
58.7
%
65.4
%
Acquisition related expenses
259,884
267,514
Adjusted gross margin
$
1,733,825
$
2,391,855
Adjusted gross margin percentage
69.0
%
73.6
%
Operating expenses
$
887,977
$
993,521
Percent of revenue
35.3
%
30.6
%
Acquisition related expenses
(192,422
)
(258,059
)
Acquisition related transaction costs
—
(2,563
)
Special charges, net
(16,140
)
—
Adjusted operating expenses
$
679,415
$
732,899
Adjusted operating expenses percentage
27.0
%
22.6
%
Operating income
$
585,964
$
1,130,820
Operating margin
23.3
%
34.8
%
Acquisition related expenses
452,306
525,573
Acquisition related transaction costs
—
2,563
Special charges, net
16,140
—
Adjusted operating income
$
1,054,410
$
1,658,956
Adjusted operating margin
42.0
%
51.1
%
Nonoperating expense (income)
$
72,546
$
57,347
Acquisition related expenses
2,150
2,288
Adjusted nonoperating expense (income)
$
74,696
$
59,635
Income before income taxes
$
513,418
$
1,073,473
Acquisition related expenses
450,156
523,285
Acquisition related transaction costs
—
2,563
Special charges, net
16,140
—
Adjusted income before income taxes
$
979,714
$
1,599,321
Provision for income taxes
$
50,691
$
111,999
Effective income tax rate
9.9
%
10.4
%
Tax related items
65,030
81,843
Adjusted provision for income taxes
$
115,721
$
193,842
Adjusted tax rate
11.8
%
12.1
%
Diluted EPS
$
0.93
$
1.88
Acquisition related expenses
0.90
1.02
Acquisition related transaction costs
—
0.01
Special charges, net
0.03
—
Tax related items
(0.13
)
(0.16
)
Adjusted diluted EPS*
$
1.73
$
2.75
* The sum of the individual per share amounts may not equal the
total due to rounding.
ANALOG DEVICES, INC.
RECONCILIATION OF NET CASH
PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(Unaudited)
(In thousands)
Trailing Twelve Months
Three Months Ended
Feb. 3, 2024
Feb. 3, 2024
Oct. 28, 2023
Jul. 29, 2023
Apr. 29, 2023
Revenue
$
11,568,613
$
2,512,704
$
2,716,484
$
3,076,495
$
3,262,930
Net cash provided by operating
activities
$
4,550,161
$
1,138,832
$
1,187,294
$
1,142,454
$
1,081,581
% of Revenue
39
%
45
%
44
%
37
%
33
%
Capital expenditures
$
(1,308,283
)
$
(222,978
)
$
(476,393
)
$
(324,574
)
$
(284,338
)
Free cash flow
$
3,241,878
$
915,854
$
710,901
$
817,880
$
797,243
% of Revenue
28
%
36
%
26
%
27
%
24
%
ANALOG DEVICES, INC.
RECONCILIATION OF PROJECTED
GAAP TO NON-GAAP RESULTS
(Unaudited)
Three Months Ending May 4,
2024
Reported
Adjusted
Revenue
$2.10 Billion
$2.10 Billion
(+/- $100 Million)
(+/- $100 Million)
Operating margin
15.1%
37.0% (1)
(+/-200 bps)
(+/-100 bps)
Nonoperating expenses
~ $65 Million
~ $65 Million
Tax rate
11% - 13%
11% - 13% (2)
Earnings per share
$0.46
$1.26 (3)
(+/- $0.10)
(+/- $0.10)
(1) Includes $460 million of adjustments related to acquisition
related expenses and special charges, net as previously defined in
the Non-GAAP Financial Information section of this press release.
(2) Includes $61 million of tax effects associated with the
adjustments for acquisition related expenses and special charges,
net noted above. (3) Includes $0.80 of adjustments related to the
net impact of acquisition related expenses, special charges, net
and the tax effects on those items.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240221340894/en/
Investor Contact: Analog Devices, Inc. Mr. Michael Lucarelli
Vice President, Investor Relations and FP&A 781-461-3282
investor.relations@analog.com
Media Contact: Analog Devices, Inc. Ms. Ferda Millan Global PR
& External Communications Ferda.Millan@analog.com
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