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Analog Devices Reports Record Revenue for the Second Quarter Fiscal 2023

  • Revenue of $3.26 billion increased 10% year-over-year, led by another quarter of record results in Industrial and Automotive
  • Operating cash flow of $4.9 billion and free cash flow of $4.0 billion on a trailing twelve-month basis
  • Returned $1.5 billion to shareholders through $1.1 billion of share repurchases and $0.4 billion of dividends during the second quarter

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

“ADI continued to execute well in the second quarter with revenue growth for the thirteenth consecutive quarter and record earnings per share,” said Vincent Roche, CEO and Chair. “Looking to the second half, we expect revenue to moderate given the continued economic uncertainty and normalizing supply chains. However, I am confident in ADI’s ability to navigate short-term business cycles due to the strength and diversity of our franchise, our hybrid manufacturing model, and alignment to secular growth trends.”

Roche continued, “Longer term, the center of gravity for data processing is shifting from the cloud to the edge, thanks to emerging applications that include Industry 4.0, Smart Energy Systems, Electric Vehicles, Advanced Connectivity, and Immersive Consumer. ADI’s alignment with these applications, where semiconductor content per dollar of capex is increasing, presents tremendous growth opportunities. I am excited for what our future holds as we continue to deliver breakthrough solutions at the Intelligent Edge for our customers.”

Performance for the Second Quarter of Fiscal 2023

Results Summary(1)

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Apr. 29, 2023

 

Apr. 30, 2022

 

Change

Revenue

$

3,263

 

 

$

2,972

 

 

 

10

%

Gross margin

$

2,145

 

 

$

1,945

 

 

 

10

%

Gross margin percentage

 

65.7

%

 

 

65.4

%

 

 

30 bps

 

Operating income

$

1,128

 

 

$

918

 

 

 

23

%

Operating margin

 

34.6

%

 

 

30.9

%

 

 

370 bps

 

Diluted earnings per share

$

1.92

 

 

$

1.49

 

 

 

29

%

 

 

 

 

 

 

Adjusted Results

 

 

 

 

 

Adjusted gross margin

$

2,404

 

 

$

2,205

 

 

 

9

%

Adjusted gross margin percentage

 

73.7

%

 

 

74.2

%

 

(50 bps

)

Adjusted operating income

$

1,671

 

 

$

1,495

 

 

 

12

%

Adjusted operating margin

 

51.2

%

 

 

50.3

%

 

 

90 bps

 

Adjusted diluted earnings per share

$

2.83

 

 

$

2.40

 

 

 

18

%

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Trailing Twelve Months

Cash Generation

 

 

Apr. 29, 2023

 

Apr. 29, 2023

Net cash provided by operating activities

 

 

$

1,082

 

 

$

4,885

 

% of revenue

 

 

 

33

%

 

 

38

%

Capital expenditures

 

 

$

(284

)

 

$

(930

)

Free cash flow

 

 

$

797

 

 

$

3,955

 

% of revenue

 

 

 

24

%

 

 

31

%

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Trailing Twelve Months

Cash Return

 

 

Apr. 29, 2023

 

Apr. 29, 2023

Dividend paid

 

 

$

(435

)

 

$

(1,605

)

Stock repurchases

 

 

 

(1,153

)

 

 

(3,532

)

Total cash returned

 

 

$

(1,588

)

 

$

(5,137

)

 

 

 

 

 

 

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

Outlook for the Third Quarter of Fiscal Year 2023

For the third quarter of fiscal 2023, we are forecasting revenue of $3.10 billion, +/- $100 million. At the midpoint of this revenue outlook, we expect reported operating margin of approximately 31.9%, +/-130 bps, and adjusted operating margin of approximately 48.5%, +/-70 bps. We are planning for reported EPS to be $1.64, +/-$0.12, and adjusted EPS to be $2.52, +/-$0.10.

Our third 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 June 14, 2023 to all shareholders of record at the close of business on June 5, 2023.

Conference Call Scheduled for Today, Wednesday, May 24, 2023 at 10:00 am ET

ADI will host a conference call to discuss our second 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 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 the Acquisition, 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, 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, earnings per share, and other financial results; expected market trends and acceleration of those trends, market share gains, growth opportunities; expected product solutions, offerings, capabilities, and applications and the importance of our product offerings and technologies to our customers; and market position. 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; the uncertainly as to the extent of the duration, scope, and impacts of the COVID-19 pandemic; 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

 

Six Months Ended

 

Apr. 29, 2023

 

Apr. 30, 2022

 

Apr. 29, 2023

 

Apr. 30, 2022

Revenue

$

3,262,930

 

 

$

2,972,064

 

 

$

6,512,560

 

 

$

5,656,357

 

Cost of sales

 

1,118,384

 

 

 

1,027,544

 

 

 

2,243,673

 

 

 

2,309,840

 

Gross margin

 

2,144,546

 

 

 

1,944,520

 

 

 

4,268,887

 

 

 

3,346,517

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

415,754

 

 

 

420,901

 

 

 

829,849

 

 

 

847,681

 

Selling, marketing, general and administrative

 

324,251

 

 

 

305,308

 

 

 

650,535

 

 

 

602,673

 

Amortization of intangibles

 

253,021

 

 

 

253,476

 

 

 

506,163

 

 

 

506,843

 

Special charges, net

 

23,136

 

 

 

46,674

 

 

 

23,136

 

 

 

106,402

 

Total operating expenses

 

1,016,162

 

 

 

1,026,359

 

 

 

2,009,683

 

 

 

2,063,599

 

Operating income

 

1,128,384

 

 

 

918,161

 

 

 

2,259,204

 

 

 

1,282,918

 

Nonoperating expense (income):

 

 

 

 

 

 

 

Interest expense

 

63,252

 

 

 

49,548

 

 

 

123,705

 

 

$

101,512

 

Interest income

 

(12,575

)

 

 

(563

)

 

 

(23,404

)

 

$

(781

)

Other, net

 

(10,216

)

 

 

(10,069

)

 

 

(2,493

)

 

$

(20,613

)

Total nonoperating expense (income)

 

40,461

 

 

 

38,916

 

 

 

97,808

 

 

 

80,118

 

Income before income taxes

 

1,087,923

 

 

 

879,245

 

 

 

2,161,396

 

 

 

1,202,800

 

Provision for income taxes

 

110,267

 

 

 

95,972

 

 

 

222,266

 

 

 

139,450

 

Net income

$

977,656

 

 

$

783,273

 

 

$

1,939,130

 

 

$

1,063,350

 

 

 

 

 

 

 

 

 

Shares used to compute earnings per common share - basic

 

504,715

 

 

 

522,370

 

 

 

505,918

 

 

 

523,831

 

Shares used to compute earnings per common share - diluted

 

508,725

 

 

 

526,264

 

 

 

509,955

 

 

 

528,203

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

1.94

 

 

$

1.50

 

 

$

3.83

 

 

$

2.03

 

Diluted earnings per common share

$

1.92

 

 

$

1.49

 

 

$

3.80

 

 

$

2.01

 

 

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

 

 

Apr. 29, 2023

 

Oct. 29, 2022

Cash & cash equivalents

$

1,177,609

 

$

1,470,572

Accounts receivable

 

1,616,256

 

 

1,800,462

Inventories

 

1,648,136

 

 

1,399,914

Other current assets

 

302,919

 

 

267,044

Total current assets

 

4,744,920

 

 

4,937,992

Net property, plant and equipment

 

2,742,016

 

 

2,401,304

Goodwill

 

26,913,134

 

 

26,913,134

Intangible assets, net

 

12,261,693

 

 

13,265,406

Deferred tax assets

 

2,248,858

 

 

2,264,888

Other assets

 

634,118

 

 

519,626

Total assets

$

49,544,739

 

$

50,302,350

 

 

 

 

Current liabilities

$

2,646,410

 

$

2,442,655

Long-term debt

 

6,475,646

 

 

6,548,625

Deferred income taxes

 

3,325,350

 

 

3,622,538

Other non-current liabilities

 

1,084,109

 

 

1,223,209

Shareholders' equity

 

36,013,224

 

 

36,465,323

Total liabilities & shareholders' equity

$

49,544,739

 

$

50,302,350

 

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

Three Months Ended

 

Six Months Ended

 

Apr. 29, 2023

 

Apr. 30, 2022

 

Apr. 29, 2023

 

 

Apr. 30, 2022

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

$

977,656

 

 

$

783,273

 

 

$

1,939,130

 

 

 

$

1,063,350

 

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

 

 

 

 

 

 

 

 

Depreciation

 

80,260

 

 

 

71,851

 

 

 

165,581

 

 

 

 

137,016

 

Amortization of intangibles

 

501,536

 

 

 

504,255

 

 

 

1,003,713

 

 

 

 

1,008,900

 

Stock-based compensation expense

 

69,102

 

 

 

70,996

 

 

 

144,143

 

 

 

 

157,935

 

Cost of goods sold for inventory acquired

 

 

 

 

 

 

 

 

 

 

 

271,396

 

Deferred income taxes

 

(133,756

)

 

 

(88,341

)

 

 

(280,110

)

 

 

 

(122,992

)

Non-cash operating lease costs

 

(4,256

)

 

 

(35,520

)

 

 

(6,902

)

 

 

 

(27,697

)

Other

 

(2,708

)

 

 

(654

)

 

 

9,670

 

 

 

 

(10,225

)

Changes in operating assets and liabilities

 

(406,253

)

 

 

(84,054

)

 

 

(487,339

)

 

 

 

(399,463

)

Total adjustments

 

103,925

 

 

 

438,533

 

 

 

548,756

 

 

 

 

1,014,870

 

Net cash provided by operating activities

 

1,081,581

 

 

 

1,221,806

 

 

 

2,487,886

 

 

 

 

2,078,220

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

(284,338

)

 

 

(118,779

)

 

 

(460,496

)

 

 

 

(229,912

)

Other

 

(183

)

 

 

5,186

 

 

 

(81

)

 

 

 

13,010

 

Net cash used for investing activities

 

(284,521

)

 

 

(113,593

)

 

 

(460,577

)

 

 

 

(216,902

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Early termination of debt

 

(65,688

)

 

 

 

 

 

(65,688

)

 

 

 

(519,116

)

Dividend payments to shareholders

 

(435,213

)

 

 

(397,544

)

 

 

(820,665

)

 

 

 

(760,189

)

Repurchase of common stock

 

(1,152,951

)

 

 

(776,840

)

 

 

(1,807,508

)

 

 

 

(852,860

)

Proceeds from employee stock plans

 

25,774

 

 

 

11,582

 

 

 

67,012

 

 

 

 

20,054

 

Proceeds from commercial paper notes

 

253,635

 

 

 

 

 

 

253,635

 

 

 

 

 

Other

 

84,530

 

 

 

14,617

 

 

 

52,942

 

 

 

 

26,657

 

Net cash used for financing activities

 

(1,289,913

)

 

 

(1,148,185

)

 

 

(2,320,272

)

 

 

 

(2,085,454

)

Effect of exchange rate changes on cash

 

 

 

 

(12,694

)

 

 

 

 

 

 

(16,095

)

Net decrease in cash and cash equivalents

 

(492,853

)

 

 

(52,666

)

 

 

(292,963

)

 

 

 

(240,231

)

Cash and cash equivalents at beginning of period

 

1,670,462

 

 

 

1,790,399

 

 

 

1,470,572

 

 

 

 

1,977,964

 

Cash and cash equivalents at end of period

$

1,177,609

 

 

$

1,737,733

 

 

$

1,177,609

 

 

 

$

1,737,733

 

 

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

 

April 29, 2023

 

April 30, 2022

 

Revenue

 

% of Revenue1

 

Y/Y%

 

Revenue

 

% of Revenue1

Industrial

$

1,744,567

 

53

%

 

16

%

 

$

1,502,731

 

51

%

Automotive

 

784,775

 

24

%

 

24

%

 

 

633,255

 

21

%

Communications

 

453,530

 

14

%

 

(4

)%

 

 

474,722

 

16

%

Consumer

 

280,058

 

9

%

 

(22

)%

 

 

361,356

 

12

%

Total revenue

$

3,262,930

 

100

%

 

10

%

 

$

2,972,064

 

100

%

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

April 29, 2023

 

April 30, 2022

 

Revenue

 

% of Revenue1

 

Y/Y %

 

Revenue

 

% of Revenue1

Industrial

$

3,438,006

 

53

%

 

21

%

 

$

2,849,577

 

50

%

Automotive

 

1,498,178

 

23

%

 

27

%

 

 

1,183,985

 

21

%

Communications

 

941,735

 

14

%

 

6

%

 

 

887,663

 

16

%

Consumer

 

634,641

 

10

%

 

(14

)%

 

 

735,132

 

13

%

Total revenue

$

6,512,560

 

100

%

 

15

%

 

$

5,656,357

 

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

 

Six Months Ended

 

Apr. 29, 2023

 

Apr. 30, 2022

 

Apr. 29, 2023

 

Apr. 30, 2022

Gross margin

$

2,144,546

 

 

$

1,944,520

 

 

$

4,268,887

 

 

$

3,346,517

 

Gross margin percentage

 

65.7

%

 

 

65.4

%

 

 

65.5

%

 

 

59.2

%

Acquisition related expenses

 

259,312

 

 

 

260,748

 

 

 

526,826

 

 

 

789,363

 

Adjusted gross margin

$

2,403,858

 

 

$

2,205,268

 

 

$

4,795,713

 

 

$

4,135,880

 

Adjusted gross margin percentage

 

73.7

%

 

 

74.2

%

 

 

73.6

%

 

 

73.1

%

 

 

 

 

 

 

 

 

Operating expenses

$

1,016,162

 

 

$

1,026,359

 

 

$

2,009,683

 

 

$

2,063,599

 

Percent of revenue

 

31.1

%

 

 

34.5

%

 

 

30.9

%

 

 

36.5

%

Acquisition related expenses

 

(257,293

)

 

 

(260,904

)

 

 

(515,352

)

 

 

(523,104

)

Acquisition related transaction costs

 

(2,668

)

 

 

(8,537

)

 

 

(5,232

)

 

 

(21,429

)

Special charges, net

 

(23,136

)

 

 

(46,674

)

 

 

(23,136

)

 

 

(106,402

)

Adjusted operating expenses

$

733,065

 

 

$

710,244

 

 

$

1,465,963

 

 

$

1,412,664

 

Adjusted operating expenses percentage

 

22.5

%

 

 

23.9

%

 

 

22.5

%

 

 

25.0

%

 

 

 

 

 

 

 

 

Operating income

$

1,128,384

 

 

$

918,161

 

 

$

2,259,204

 

 

$

1,282,918

 

Operating margin

 

34.6

%

 

 

30.9

%

 

 

34.7

%

 

 

22.7

%

Acquisition related expenses

 

516,605

 

 

 

521,652

 

 

 

1,042,178

 

 

 

1,312,467

 

Acquisition related transaction costs

 

2,668

 

 

 

8,537

 

 

 

5,232

 

 

 

21,429

 

Special charges, net

 

23,136

 

 

 

46,674

 

 

 

23,136

 

 

 

106,402

 

Adjusted operating income

$

1,670,793

 

 

$

1,495,024

 

 

$

3,329,750

 

 

$

2,723,216

 

Adjusted operating margin

 

51.2

%

 

 

50.3

%

 

 

51.1

%

 

 

48.1

%

 

 

 

 

 

 

 

 

Nonoperating expense (income)

$

40,461

 

 

$

38,916

 

 

 

97,808

 

 

 

80,118

 

Acquisition related expenses

 

7,155

 

 

 

2,288

 

 

 

9,443

 

 

 

4,587

 

Adjusted nonoperating expense (income)

$

47,616

 

 

$

41,204

 

 

$

107,251

 

 

$

84,705

 

 

 

 

 

 

 

 

 

Income before income taxes

$

1,087,923

 

 

$

879,245

 

 

$

2,161,396

 

 

$

1,202,800

 

Acquisition related expenses

 

509,450

 

 

 

519,364

 

 

 

1,032,735

 

 

 

1,307,880

 

Acquisition related transaction costs

 

2,668

 

 

 

8,537

 

 

 

5,232

 

 

 

21,429

 

Special charges, net

 

23,136

 

 

 

46,674

 

 

 

23,136

 

 

 

106,402

 

Adjusted income before income taxes

$

1,623,177

 

 

$

1,453,820

 

 

$

3,222,499

 

 

$

2,638,511

 

 

 

 

 

 

 

 

 

Provision for income taxes

$

110,267

 

 

$

95,972

 

 

$

222,266

 

 

$

139,450

 

Effective tax rate

 

10.1

%

 

 

10.9

%

 

 

10.3

%

 

 

11.6

%

Tax related items

 

75,248

 

 

 

95,828

 

 

 

157,091

 

 

 

210,217

 

Adjusted provision for income taxes

$

185,515

 

 

$

191,800

 

 

$

379,357

 

 

$

349,667

 

Adjusted tax rate

 

11.4

%

 

 

13.2

%

 

 

11.8

%

 

 

13.3

%

 

 

 

 

 

 

 

 

Diluted EPS

$

1.92

 

 

$

1.49

 

 

$

3.80

 

 

$

2.01

 

Acquisition related expenses

 

1.00

 

 

 

0.99

 

 

 

2.03

 

 

 

2.48

 

Acquisition related transaction costs

 

0.01

 

 

 

0.02

 

 

 

0.01

 

 

 

0.04

 

Special charges, net

 

0.05

 

 

 

0.09

 

 

 

0.05

 

 

 

0.20

 

Tax related items

 

(0.15

)

 

 

(0.18

)

 

 

(0.31

)

 

 

(0.40

)

Adjusted diluted EPS*

$

2.83

 

 

$

2.40

 

 

$

5.58

 

 

$

4.33

 

* 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

 

Apr. 29, 2023

 

Apr. 29, 2023

 

Jan. 28, 2023

 

Oct. 29, 2022

 

Jul. 30, 2022

Revenue

$

12,870,156

 

 

$

3,262,930

 

 

$

3,249,630

 

 

$

3,247,716

 

 

$

3,109,880

 

Net cash provided by operating activities

$

4,885,068

 

 

$

1,081,581

 

 

$

1,406,305

 

 

$

1,149,336

 

 

$

1,247,846

 

% of Revenue

 

38

%

 

 

33

%

 

 

43

%

 

 

35

%

 

 

40

%

Capital expenditures

$

(929,892

)

 

$

(284,338

)

 

$

(176,158

)

 

$

(304,512

)

 

$

(164,884

)

Free cash flow

$

3,955,176

 

 

$

797,243

 

 

$

1,230,147

 

 

$

844,824

 

 

$

1,082,962

 

% of Revenue

 

31

%

 

 

24

%

 

 

38

%

 

 

26

%

 

 

35

%

 

 

 

 

 

 

 

 

 

 

 

ANALOG DEVICES, INC.

RECONCILIATION OF PROJECTED GAAP TO NON-GAAP RESULTS

(Unaudited)

 

 

Three Months Ending July 29, 2023

 

Reported

 

Adjusted

Revenue

$3.1 Billion

 

$3.1 Billion

 

(+/- $100 Million)

 

(+/- $100 Million)

Operating margin

31.9%

 

48.5% (1)

 

(+/-130 bps)

 

(+/-70 bps)

Nonoperating expense

~ $55 Million

 

~ $55 Million

Tax rate

11% - 13%

 

11% - 13% (2)

Earnings per share

$1.64

 

$2.52 (3)

 

(+/- $0.12)

 

(+/- $0.10)

 

(1) Includes $513 million of adjustments related to acquisition related expenses and $3 million of adjustments related to acquisition related transaction costs as previously defined in the Non-GAAP Financial Information section of this press release.

(2) Includes $69 million of tax effects associated with the adjustments for acquisition related expenses and acquisition related transaction costs noted above.

(3) Includes $0.88 of adjustments related to the net impact of acquisition related expenses and acquisition related transaction costs, as well as the tax effects on those items.

(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 Contacts:

Analog Devices, Inc.

Ms. Ferda Millan

Global PR & External Communications

Ferda.Millan@analog.com

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