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Analog Devices Reports Third Quarter Fiscal 2023 Financial Results

  • Revenue of $3.08 billion with continued year-over-year growth in Industrial & Automotive
  • Operating cash flow of $4.8 billion and free cash flow of $3.7 billion on a trailing twelve-month basis
  • Returned $1.1 billion to shareholders via $0.7 billion in share repurchases and $0.4 billion in dividends during the third quarter

Analog Devices, Inc. (Nasdaq: ADI), a global semiconductor leader, today announced financial results for its third quarter fiscal year 2023, which ended July 29, 2023.

“In a challenging operating environment, ADI executed well, and delivered third quarter results within our expectations. However, the customer inventory adjustments we mentioned last quarter have accelerated as economic conditions deteriorate and our lead times continue to improve,” said Vincent Roche, CEO and Chair. “Despite the near-term turbulence, we have built a resilient business over many decades defined by our diversified customer and product portfolio and our flexible hybrid manufacturing model. This enables us to endure softer demand periods, while sustaining strategic investments to ensure we capitalize when the business inflects.”

Roche continued, “Our tremendous optimism in ADI’s long-term outlook is undiminished. In this rapidly digitalizing world, our portfolio is aligned to an unprecedented number of secular trends, including Industry 4.0, Electrification, Digital Healthcare, Immersive Consumer, and Advanced Connectivity. These trends, coupled with our cutting-edge solutions, will enable ADI to empower the next waves of innovation at the Intelligent Edge, and unlock value for all stakeholders.”

Performance for the Third Quarter of Fiscal 2023

Results Summary(1)

 

 

 

 

 

(in millions, except per-share amounts and percentages)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Jul. 29, 2023

 

Jul. 30, 2022

 

Change

Revenue

$

3,076

 

 

$

3,110

 

 

 

(1

)%

Gross margin

$

1,962

 

 

$

2,043

 

 

 

(4

)%

Gross margin percentage

 

63.8

%

 

 

65.7

%

 

(190 bps)

Operating income

$

929

 

 

$

893

 

 

 

4

%

Operating margin

 

30.2

%

 

 

28.7

%

 

150 bps

Diluted earnings per share

$

1.74

 

 

$

1.44

 

 

 

21

%

 

 

 

 

 

 

Adjusted Results

 

 

 

 

 

Adjusted gross margin

$

2,222

 

 

$

2,304

 

 

 

(4

)%

Adjusted gross margin percentage

 

72.2

%

 

 

74.1

%

 

(190 bps)

Adjusted operating income

$

1,470

 

 

$

1,557

 

 

 

(6

)%

Adjusted operating margin

 

47.8

%

 

 

50.1

%

 

(230 bps)

Adjusted diluted earnings per share

$

2.49

 

 

$

2.52

 

 

 

(1

)%

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Trailing Twelve Months

Cash Generation

 

 

Jul. 29, 2023

 

Jul. 29, 2023

Net cash provided by operating activities

 

 

$

1,142

 

 

$

4,780

 

% of revenue

 

 

 

37

%

 

 

37

%

Capital expenditures

 

 

$

(325

)

 

$

(1,090

)

Free cash flow

 

 

$

818

 

 

$

3,690

 

% of revenue

 

 

 

27

%

 

 

29

%

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Trailing Twelve Months

Cash Return

 

 

Jul. 29, 2023

 

Jul. 29, 2023

Dividend paid

 

 

$

(430

)

 

$

(1,641

)

Stock repurchases

 

 

 

(687

)

 

 

(3,312

)

Total cash returned

 

 

$

(1,117

)

 

$

(4,954

)

 

 

 

 

 

 

(1) The sum and/or computation of the individual amounts may not equal the total due to rounding.

 

Outlook for the Fourth Quarter of Fiscal Year 2023

For the fourth quarter of fiscal 2023, we are forecasting revenue of $2.70 billion, +/- $100 million. At the midpoint of this revenue outlook, we expect reported operating margin of approximately 26.8%, +/-130 bps, and adjusted operating margin of approximately 44.0%, +/-70 bps. We are planning for reported EPS to be $1.19, +/-$0.10, and adjusted EPS to be $2.00, +/-$0.10.

Our fourth quarter fiscal 2023 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 press release. See also “Non-GAAP Financial Information” section for additional information.

Dividend Payment

The ADI Board of Directors has declared a quarterly cash dividend of $0.86 per outstanding share of common stock. The dividend will be paid on September 14, 2023 to all shareholders of record at the close of business on September 5, 2023.

Conference Call Scheduled for Today, Wednesday, August 23, 2023 at 10:00 am ET

ADI will host a conference call to discuss our third quarter fiscal 2023 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, 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 measures to the most directly comparable financial measures calculated and presented in accordance with GAAP 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 the primary performance measurement 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 the non-GAAP liquidity measure free cash flow 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 (benefit from) 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 Integrated Products, Inc. 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, an income tax benefit from a discrete item related to a federal corporate income tax relief claim, certain other income tax benefits associated with prior periods and an income tax benefit from a discrete tax item related to the consolidation of certain subsidiaries. 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

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 FY22 and approximately 25,000 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.

Forward Looking Statements

This press release contains forward-looking statements, which address a variety of subjects including, for example, our statements regarding financial performance; economic uncertainty, business cycles, and demand and supply chains; capital expenditures; expected revenue, operating margin, tax rate, earnings per share, and other financial results; expected market trends and acceleration of those trends, market share gains, and growth opportunities; expected product solutions, offerings, capabilities, and applications and the importance of our product offerings and technologies to our customers; market position; 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: political and economic uncertainty, including any faltering in global economic conditions or the stability of credit and financial markets; erosion of consumer confidence and declines in customer spending or cancellations of orders for our products; unavailability of raw materials, services, supplies or manufacturing capacity; disruptions to our manufacturing operations or our ability to execute our business strategy; changes in geographic, product or customer mix; changes in export classifications, import and export regulations or duties and tariffs; changes in our estimates of our expected tax rates based on current tax law; adverse results in litigation matters, including the potential for litigation related to the Maxim acquisition; the risk that we will be unable to retain and hire key personnel including as a result of labor shortages; changes in demand for semiconductors; attempted or actual security breaches and other cybersecurity incidents that disrupt our operations; unanticipated difficulties or expenditures relating to integrating Maxim; uncertainty as to the long-term value of our common stock; 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; the diversion of management time on integrating Maxim's business and operations; our ability to successfully integrate acquired businesses and technologies, including Maxim; and the risk that expected benefits, synergies and growth prospects of acquisitions, including our acquisition of Maxim, may not be fully achieved in a timely manner, or at all. 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 (“SEC”), 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

 

Nine Months Ended

 

Jul. 29, 2023

 

Jul. 30, 2022

 

Jul. 29, 2023

 

Jul. 30, 2022

Revenue

$

3,076,495

 

 

$

3,109,880

 

 

$

9,589,055

 

 

$

8,766,237

 

Cost of sales

 

1,114,880

 

 

 

1,066,738

 

 

 

3,358,553

 

 

 

3,376,578

 

Gross margin

 

1,961,615

 

 

 

2,043,142

 

 

 

6,230,502

 

 

 

5,389,659

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

423,751

 

 

 

431,829

 

 

 

1,253,600

 

 

 

1,279,510

 

Selling, marketing, general and administrative

 

334,113

 

 

 

326,942

 

 

 

984,648

 

 

 

929,615

 

Amortization of intangibles

 

250,719

 

 

 

252,864

 

 

 

756,882

 

 

 

759,707

 

Special charges, net

 

23,539

 

 

 

138,201

 

 

 

46,675

 

 

 

244,603

 

Total operating expenses

 

1,032,122

 

 

 

1,149,836

 

 

 

3,041,805

 

 

 

3,213,435

 

Operating income

 

929,493

 

 

 

893,306

 

 

 

3,188,697

 

 

 

2,176,224

 

Nonoperating expense (income):

 

 

 

 

 

 

 

Interest expense

 

69,346

 

 

 

51,189

 

 

 

193,051

 

 

$

152,701

 

Interest income

 

(8,794

)

 

 

(1,797

)

 

 

(32,198

)

 

$

(2,578

)

Other, net

 

(5,880

)

 

 

(4,023

)

 

 

(8,373

)

 

$

(24,636

)

Total nonoperating expense (income)

 

54,672

 

 

 

45,369

 

 

 

152,480

 

 

 

125,487

 

Income before income taxes

 

874,821

 

 

 

847,937

 

 

 

3,036,217

 

 

 

2,050,737

 

(Benefit from) provision for income taxes

 

(2,198

)

 

 

98,952

 

 

 

220,068

 

 

 

238,402

 

Net income

$

877,019

 

 

$

748,985

 

 

$

2,816,149

 

 

$

1,812,335

 

 

 

 

 

 

 

 

 

Shares used to compute earnings per common share - basic

 

500,018

 

 

 

517,011

 

 

 

503,951

 

 

 

521,557

 

Shares used to compute earnings per common share - diluted

 

503,503

 

 

 

520,550

 

 

 

507,804

 

 

 

525,652

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

1.75

 

 

$

1.45

 

 

$

5.59

 

 

$

3.47

 

Diluted earnings per common share

$

1.74

 

 

$

1.44

 

 

$

5.55

 

 

$

3.45

 

 

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

 

 

Jul. 29, 2023

 

Oct. 29, 2022

Cash & cash equivalents

$

1,149,246

 

$

1,470,572

Accounts receivable

 

1,616,243

 

 

1,800,462

Inventories

 

1,709,313

 

 

1,399,914

Other current assets

 

360,383

 

 

267,044

Total current assets

 

4,835,185

 

 

4,937,992

Net property, plant and equipment

 

2,922,781

 

 

2,401,304

Goodwill

 

26,913,134

 

 

26,913,134

Intangible assets, net

 

11,762,655

 

 

13,265,406

Deferred tax assets

 

2,224,880

 

 

2,264,888

Other assets

 

688,104

 

 

519,626

Total assets

$

49,346,739

 

$

50,302,350

 

 

 

 

Current liabilities

$

2,831,018

 

$

2,442,655

Long-term debt

 

6,437,650

 

 

6,548,625

Deferred income taxes

 

3,150,748

 

 

3,622,538

Other non-current liabilities

 

1,023,577

 

 

1,223,209

Shareholders' equity

 

35,903,746

 

 

36,465,323

Total liabilities & shareholders' equity

$

49,346,739

 

$

50,302,350

 

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

Three Months Ended

 

Nine Months Ended

 

Jul. 29, 2023

 

Jul. 30, 2022

 

Jul. 29, 2023

 

 

Jul. 30, 2022

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

$

877,019

 

 

$

748,985

 

 

$

2,816,149

 

 

 

$

1,812,335

 

Adjustments to reconcile net income to net cash provided by operations:

 

 

 

 

 

 

 

 

Depreciation

 

86,204

 

 

 

75,619

 

 

 

251,785

 

 

 

 

212,635

 

Amortization of intangibles

 

501,488

 

 

 

503,350

 

 

 

1,505,201

 

 

 

 

1,512,250

 

Stock-based compensation expense

 

82,970

 

 

 

84,874

 

 

 

227,113

 

 

 

 

242,809

 

Gain on sale of property, plant, and equipment

 

 

 

 

(4,352

)

 

 

 

 

 

 

(4,352

)

Non-cash impairment charge

 

 

 

 

91,953

 

 

 

 

 

 

 

91,953

 

Cost of goods sold for inventory acquired

 

 

 

 

 

 

 

 

 

 

 

271,396

 

Deferred income taxes

 

(151,283

)

 

 

(82,136

)

 

 

(431,393

)

 

 

 

(205,128

)

Operating lease assets and liabilities

 

11,847

 

 

 

9,739

 

 

 

4,945

 

 

 

 

(17,958

)

Other

 

4,515

 

 

 

3,164

 

 

 

14,185

 

 

 

 

(7,061

)

Changes in operating assets and liabilities

 

(270,306

)

 

 

(183,350

)

 

 

(757,645

)

 

 

 

(582,813

)

Total adjustments

 

265,435

 

 

 

498,861

 

 

 

814,191

 

 

 

 

1,513,731

 

Net cash provided by operating activities

 

1,142,454

 

 

 

1,247,846

 

 

 

3,630,340

 

 

 

 

3,326,066

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

(324,574

)

 

 

(164,884

)

 

 

(785,070

)

 

 

 

(394,796

)

Other

 

(2,173

)

 

 

30,751

 

 

 

(2,254

)

 

 

 

43,761

 

Net cash used for investing activities

 

(326,747

)

 

 

(134,133

)

 

 

(787,324

)

 

 

 

(351,035

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from revolver

 

 

 

 

400,000

 

 

 

 

 

 

 

400,000

 

Payments on revolver

 

 

 

 

(400,000

)

 

 

 

 

 

 

(400,000

)

Early termination of debt

 

 

 

 

 

 

 

(65,688

)

 

 

 

(519,116

)

Proceeds from commercial paper notes

 

2,392,874

 

 

 

 

 

 

2,646,509

 

 

 

 

 

Payments of commercial paper notes

 

(2,101,799

)

 

 

 

 

 

(2,101,799

)

 

 

 

 

Repurchase of common stock

 

(686,510

)

 

 

(905,973

)

 

 

(2,494,018

)

 

 

 

(1,758,832

)

Dividend payments to shareholders

 

(430,467

)

 

 

(394,018

)

 

 

(1,251,121

)

 

 

 

(1,154,207

)

Proceeds from employee stock plans

 

45,990

 

 

 

9,960

 

 

 

113,002

 

 

 

 

30,013

 

Other

 

(64,158

)

 

 

(28,376

)

 

 

(11,227

)

 

 

 

(1,718

)

Net cash used for financing activities

 

(844,070

)

 

 

(1,318,407

)

 

 

(3,164,342

)

 

 

 

(3,403,860

)

Effect of exchange rate changes on cash

 

 

 

 

(8,080

)

 

 

 

 

 

 

(24,175

)

Net decrease in cash and cash equivalents

 

(28,363

)

 

 

(212,774

)

 

 

(321,326

)

 

 

 

(453,004

)

Cash and cash equivalents at beginning of period

 

1,177,609

 

 

 

1,737,734

 

 

 

1,470,572

 

 

 

 

1,977,964

 

Cash and cash equivalents at end of period

$

1,149,246

 

 

$

1,524,960

 

 

$

1,149,246

 

 

 

$

1,524,960

 

 

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 revenue within, each end market.

 

Three Months Ended

 

July 29, 2023

 

July 30, 2022

 

Revenue

 

% of Revenue1

 

Y/Y%

 

Revenue

 

% of Revenue1

Industrial

$

1,629,201

 

53%

 

4%

 

$

1,566,885

 

50%

Automotive

 

747,554

 

24%

 

15%

 

 

648,153

 

21%

Communications

 

380,504

 

12%

 

(23)%

 

 

491,515

 

16%

Consumer

 

319,236

 

10%

 

(21)%

 

 

403,327

 

13%

Total revenue

$

3,076,495

 

100%

 

(1)%

 

$

3,109,880

 

100%

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

July 29, 2023

 

July 30, 2022

 

Revenue

 

% of Revenue1

 

Y/Y %

 

Revenue

 

% of Revenue1

Industrial

$

5,092,879

 

53%

 

15%

 

$

4,439,232

 

51%

Automotive

 

2,226,277

 

23%

 

23%

 

 

1,810,803

 

21%

Communications

 

1,319,931

 

14%

 

(4)%

 

 

1,378,352

 

16%

Consumer

 

949,968

 

10%

 

(17)%

 

 

1,137,850

 

13%

Total revenue

$

9,589,055

 

100%

 

9%

 

$

8,766,237

 

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

 

Nine Months Ended

 

Jul. 29, 2023

 

Jul. 30, 2022

 

Jul. 29, 2023

 

Jul. 30, 2022

Gross margin

$

1,961,615

 

 

$

2,043,142

 

 

$

6,230,502

 

 

$

5,389,659

 

Gross margin percentage

 

63.8

%

 

 

65.7

%

 

 

65.0

%

 

 

61.5

%

Acquisition related expenses

 

260,557

 

 

 

260,628

 

 

 

787,383

 

 

 

1,049,991

 

Adjusted gross margin

$

2,222,172

 

 

$

2,303,770

 

 

$

7,017,885

 

 

$

6,439,650

 

Adjusted gross margin percentage

 

72.2

%

 

 

74.1

%

 

 

73.2

%

 

 

73.5

%

 

 

 

 

 

 

 

 

Operating expenses

$

1,032,122

 

 

$

1,149,836

 

 

$

3,041,805

 

 

$

3,213,435

 

Percent of revenue

 

33.5

%

 

 

37.0

%

 

 

31.7

%

 

 

36.7

%

Acquisition related expenses

 

(254,719

)

 

 

(259,648

)

 

 

(770,071

)

 

 

(782,752

)

Acquisition related transaction costs

 

(1,837

)

 

 

(5,417

)

 

 

(7,069

)

 

 

(26,846

)

Special charges, net

 

(23,539

)

 

 

(138,201

)

 

 

(46,675

)

 

 

(244,603

)

Adjusted operating expenses

$

752,027

 

 

$

746,570

 

 

$

2,217,990

 

 

$

2,159,234

 

Adjusted operating expenses percentage

 

24.4

%

 

 

24.0

%

 

 

23.1

%

 

 

24.6

%

 

 

 

 

 

 

 

 

Operating income

$

929,493

 

 

$

893,306

 

 

$

3,188,697

 

 

$

2,176,224

 

Operating margin

 

30.2

%

 

 

28.7

%

 

 

33.3

%

 

 

24.8

%

Acquisition related expenses

 

515,276

 

 

 

520,276

 

 

 

1,557,454

 

 

 

1,832,743

 

Acquisition related transaction costs

 

1,837

 

 

 

5,417

 

 

 

7,069

 

 

 

26,846

 

Special charges, net

 

23,539

 

 

 

138,201

 

 

 

46,675

 

 

 

244,603

 

Adjusted operating income

$

1,470,145

 

 

$

1,557,200

 

 

$

4,799,895

 

 

$

4,280,416

 

Adjusted operating margin

 

47.8

%

 

 

50.1

%

 

 

50.1

%

 

 

48.8

%

 

 

 

 

 

 

 

 

Nonoperating expense (income)

$

54,672

 

 

$

45,369

 

 

 

152,480

 

 

 

125,487

 

Acquisition related expenses

 

2,150

 

 

 

2,288

 

 

 

11,593

 

 

 

6,875

 

Adjusted nonoperating expense (income)

$

56,822

 

 

$

47,657

 

 

$

164,073

 

 

$

132,362

 

 

 

 

 

 

 

 

 

Income before income taxes

$

874,821

 

 

$

847,937

 

 

$

3,036,217

 

 

$

2,050,737

 

Acquisition related expenses

 

513,126

 

 

 

517,988

 

 

 

1,545,861

 

 

 

1,825,868

 

Acquisition related transaction costs

 

1,837

 

 

 

5,417

 

 

 

7,069

 

 

 

26,846

 

Special charges, net

 

23,539

 

 

 

138,201

 

 

 

46,675

 

 

 

244,603

 

Adjusted income before income taxes

$

1,413,323

 

 

$

1,509,543

 

 

$

4,635,822

 

 

$

4,148,054

 

 

 

 

 

 

 

 

 

(Benefit from) provision for income taxes

$

(2,198

)

 

$

98,952

 

 

$

220,068

 

 

$

238,402

 

Effective tax rate

 

(0.3

)%

 

 

11.7

%

 

 

7.2

%

 

 

11.6

%

Tax related items

 

160,500

 

 

 

100,685

 

 

 

317,591

 

 

 

310,902

 

Adjusted provision for income taxes

$

158,302

 

 

$

199,637

 

 

$

537,659

 

 

$

549,304

 

Adjusted tax rate

 

11.2

%

 

 

13.2

%

 

 

11.6

%

 

 

13.2

%

 

 

 

 

 

 

 

 

Diluted EPS

$

1.74

 

 

$

1.44

 

 

$

5.55

 

 

$

3.45

 

Acquisition related expenses

 

1.02

 

 

 

1.00

 

 

 

3.04

 

 

 

3.49

 

Acquisition related transaction costs

 

 

 

 

0.01

 

 

 

0.01

 

 

 

0.05

 

Special charges, net

 

0.05

 

 

 

0.26

 

 

 

0.09

 

 

 

0.46

 

Tax related items

 

(0.32

)

 

 

(0.19

)

 

 

(0.63

)

 

 

(0.59

)

Adjusted diluted EPS*

$

2.49

 

 

$

2.52

 

 

$

8.07

 

 

$

6.85

 

* 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

 

Jul. 29, 2023

 

Jul. 29, 2023

 

Apr. 29, 2023

 

Jan. 28, 2023

 

Oct. 29, 2022

Revenue

$

12,836,771

 

 

$

3,076,495

 

 

$

3,262,930

 

 

$

3,249,630

 

 

$

3,247,716

 

Net cash provided by operating activities

$

4,779,676

 

 

$

1,142,454

 

 

$

1,081,581

 

 

$

1,406,305

 

 

$

1,149,336

 

% of Revenue

 

37

%

 

 

37

%

 

 

33

%

 

 

43

%

 

 

35

%

Capital expenditures

$

(1,089,582

)

 

$

(324,574

)

 

$

(284,338

)

 

$

(176,158

)

 

$

(304,512

)

Free cash flow

$

3,690,094

 

 

$

817,880

 

 

$

797,243

 

 

$

1,230,147

 

 

$

844,824

 

% of Revenue

 

29

%

 

 

27

%

 

 

24

%

 

 

38

%

 

 

26

%

 

 

 

 

 

 

 

 

 

 

ANALOG DEVICES, INC.

RECONCILIATION OF PROJECTED GAAP TO NON-GAAP RESULTS

(Unaudited)

 

 

Three Months Ending October 28, 2023

 

Reported

 

Adjusted

Revenue

$2.7 Billion

 

$2.7 Billion

 

(+/- $100 Million)

 

(+/- $100 Million)

Operating margin

26.8%

 

44.0% (1)

 

(+/-130 bps)

 

(+/-70 bps)

Nonoperating expense

~ $55 Million

 

~ $55 Million

Tax rate

11% - 13%

 

11% - 13% (2)

Earnings per share

$1.19

 

$2.00 (3)

 

(+/- $0.10)

 

(+/- $0.10)

(1) Includes $464 million of adjustments related to acquisition related expenses as previously defined in the Non-GAAP Financial Information section of this press release.

(2) Includes $80 million of tax effects associated with the adjustments for acquisition related expenses noted above.

(3) Includes $0.81 of adjustments related to the net impact of acquisition related expenses and the tax effects on those expenses.

(ADI-WEB)

Contacts

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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