01—Abstract
Summary
Summary of the 10-K filed December 3, 2021. Cited figures are marked; the original filing is the authoritative source.
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 billiona 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.
02—Key points
Key Highlights
- Revenue 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.
- The 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.
- Net 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.
- Gross 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.
- Operating income saw a 13% increase to $1.69 billion, demonstrating the company's ability to grow profitably even with increased operating expenses.
- Cash provided by operating activities increased to $2.74 billion, indicating strong cash generation capabilities.
- ADI continued to return capital to shareholders, with substantial share repurchases totaling $2.5 billion through Accelerated Share Repurchase agreements and ongoing dividend payments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Analog Devices kept $0.19.
- Revenue$7.32B100.0%
- Cost of revenue−$2.79B38.2%
- Gross profit$4.53B61.8%
- Operating costs−$2.83B38.7%
- Operating income$1.69B23.1%
- Interest, other & tax−$301.8M4.1%
- Net income$1.39B19.0%
Where FY2021 revenue went
$7.32B- Cost of revenue: $2.79B, 38% of revenue
- Net income: $1.39B, 19% of revenue
- R&D: $1.30B, 18% of revenue
- SG&A: $915.4M, 13% of revenue
- Other operating costs: $621.3M, 8.5% of revenue
- Interest, other & tax: $301.8M, 4.1% of revenue
Kept 19% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed December 3, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $7.32B$5.60B | +30.6% |
| Cost of Revenue | $2.79B$1.91B | +46.0% |
| Gross Profit | $4.53B$3.69B | +22.6% |
| R&D Expenses | $1.30B$1.05B | +23.4% |
| SG&A Expenses | $915.42M$659.92M | +38.7% |
| Operating Expenses | $2.83B$2.19B | +29.2% |
| Operating Income | $1.69B$1.50B | +12.9% |
| Interest Expense | $184.82M$193.31M | −4.4% |
| Net Income | $1.39B$1.22B | +13.9% |
| EPS (Basic) | $3.50$3.31 | +5.7% |
| EPS (Diluted) | $3.46$3.28 | +5.5% |
| Shares Outstanding (Basic) | 397.46M368.63M | +7.8% |
| Shares Outstanding (Diluted) | 401.29M371.97M | +7.9% |
05—Questions
Frequently Asked Questions
What was the primary driver of Analog Devices' revenue growth in fiscal year 2021?
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.
How did the acquisition of Maxim Integrated Products, Inc. impact ADI's financial performance?
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.
How did ADI manage its capital and return value to shareholders in fiscal year 2021?
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.
What are the main end markets for Analog Devices' products?
Analog Devices' products primarily serve the Industrial (55% of fiscal 2021 revenue), Automotive (17%), Communications (16%), and Consumer (12%) end markets.
06—Continue