10-KPeriod: FY2021

ANALOG DEVICES INC Annual Report, Year Ended Oct 30, 2021

Filed December 3, 2021For Securities:ADI

Summary

Analog Devices, Inc. (ADI) reported strong performance in fiscal year 2021, with a significant increase in revenue driven by broad-based demand across its key end markets: Industrial, Automotive, Communications, and Consumer. The company's acquisition of Maxim Integrated Products, Inc. in August 2021 for approximately $28 billion was a major event, contributing to the revenue growth and expanding ADI's product portfolio and market reach. Despite a slight decrease in gross margin percentage due to acquisition-related costs, ADI maintained healthy profitability. The company also continued its commitment to returning capital to shareholders through dividends and share repurchases, underscoring its robust financial position and confidence in future growth.

Financial Highlights

33 data points
Beta

Revenue

$7.32B

61.8% Gross Margin

Net Income

$1.39B

19.0% Net Margin

EPS (Diluted)

$3.46

Free Cash Flow

$2.39B

Financial Statements
Beta
Revenue$7.32B
Cost of Revenue$2.79B
Gross Profit$4.53B
R&D Expenses$1.30B
SG&A Expenses$915.42M
Operating Expenses$2.83B
Operating Income$1.69B
Interest Expense$184.82M
Net Income$1.39B
EPS (Basic)$3.50
EPS (Diluted)$3.46
Shares Outstanding (Basic)397.46M
Shares Outstanding (Diluted)401.29M

Key Highlights

  • 1Revenue increased by 31% year-over-year to $7.32 billion in fiscal year 2021, primarily driven by strong demand in Industrial and Automotive sectors, and bolstered by the Maxim acquisition.
  • 2The company successfully completed the transformative acquisition of Maxim Integrated Products, Inc. for approximately $28 billion in August 2021, significantly expanding its analog and mixed-signal semiconductor capabilities.
  • 3Net income increased by 14% to $1.39 billion, while diluted EPS grew to $3.46, reflecting the company's operational efficiency and the positive impact of the Maxim acquisition.
  • 4Gross margin percentage decreased from 65.9% to 61.8%, largely due to acquisition-related costs including inventory fair value adjustments and amortization of intangible assets.
  • 5Operating income saw a 13% increase to $1.69 billion, demonstrating the company's ability to grow profitably even with increased operating expenses.
  • 6Cash provided by operating activities increased to $2.74 billion, indicating strong cash generation capabilities.
  • 7ADI continued to return capital to shareholders, with substantial share repurchases totaling $2.5 billion through Accelerated Share Repurchase agreements and ongoing dividend payments.

Frequently Asked Questions

The primary driver of Analog Devices' revenue growth in fiscal year 2021 was a combination of strong, broad-based demand across its key end markets, particularly Industrial and Automotive. The significant acquisition of Maxim Integrated Products, Inc. in August 2021 also contributed substantially to the year-over-year revenue increase.

The acquisition of Maxim, completed in August 2021, significantly boosted ADI's revenue and expanded its product portfolio. While it contributed to revenue growth, it also led to increased acquisition-related costs, including amortization of intangible assets and fair value adjustments to inventory, which slightly decreased the gross margin percentage. However, the overall impact on net income and operating income was positive, reflecting the strategic benefits of the combination.

Analog Devices demonstrated strong cash generation, with cash provided by operating activities increasing significantly. The company actively managed its capital by executing substantial share repurchases, including $2.5 billion through Accelerated Share Repurchase agreements. ADI also continued to pay dividends to shareholders, signaling confidence in its financial health and commitment to shareholder returns.

Analog Devices' products primarily serve the Industrial (55% of fiscal 2021 revenue), Automotive (17%), Communications (16%), and Consumer (12%) end markets.