10-KPeriod: FY2024

ANALOG DEVICES INC Annual Report, Year Ended Nov 2, 2024

Filed November 26, 2024For Securities:ADI

Summary

Analog Devices, Inc. (ADI) reported a decrease in revenue for fiscal year 2024, down 23% to $9.43 billion compared to $12.31 billion in fiscal year 2023. This decline was primarily attributed to weaker macroeconomic trends, impacting the Industrial and Communications segments significantly, with Automotive and Consumer segments also experiencing declines. The company's gross margin also saw a substantial decrease from 64.0% to 57.1%, driven by lower factory utilization and an unfavorable product mix. Despite the revenue and margin challenges, ADI continues to invest in research and development, which increased as a percentage of revenue to 16%. The company also maintained a strong liquidity position, ending the fiscal year with $2.4 billion in cash, cash equivalents, and short-term investments. ADI also continued to return capital to shareholders through dividends and share repurchases, demonstrating a commitment to shareholder value even amidst a challenging market environment.

Financial Highlights

57 data points
Beta

Revenue

$9.43B

57.1% Gross Margin

Net Income

$1.64B

17.3% Net Margin

EPS (Diluted)

$3.28

Total Assets

$48.23B

Cash & Equivalents

$1.99B

Free Cash Flow

$3.12B

Financial Statements
Beta
Revenue$9.43B
Cost of Revenue$4.05B
Gross Profit$5.38B
R&D Expenses$1.49B
SG&A Expenses$1.07B
Operating Expenses$3.35B
Operating Income$2.03B
Net Income$1.64B
EPS (Basic)$3.30
EPS (Diluted)$3.28
Shares Outstanding (Basic)496.17M
Shares Outstanding (Diluted)498.70M

Key Highlights

  • 1Revenue decreased by 23% year-over-year to $9.43 billion in fiscal year 2024, impacted by weaker macroeconomic conditions across key end markets.
  • 2Gross margin declined from 64.0% to 57.1% due to lower factory utilization and an unfavorable product mix.
  • 3The Industrial segment, representing 46% of revenue in fiscal 2024, experienced a significant 35% revenue decline.
  • 4Research and Development (R&D) expenses increased as a percentage of revenue to 16%, indicating continued investment in innovation.
  • 5The company maintained a strong liquidity position with $2.4 billion in cash, cash equivalents, and short-term investments as of November 2, 2024.
  • 6ADI returned approximately $1.7 billion to shareholders through dividends and stock repurchases during fiscal year 2024.
  • 7The company declared a quarterly dividend of $0.92 per share, demonstrating ongoing commitment to shareholder returns.

Frequently Asked Questions

The primary driver for the 23% revenue decrease in fiscal year 2024 was weaker macroeconomic trends, which led to reduced customer demand. This was particularly pronounced in the Industrial segment due to customer inventory adjustments and in the Communications segment due to the timing of infrastructure deployment cycles. The Automotive and Consumer segments also saw weaker demand due to reduced consumer spending.

Analog Devices experienced a significant decrease in profitability. Gross margin dropped from 64.0% in fiscal year 2023 to 57.1% in fiscal year 2024. This decline was attributed to lower factory utilization due to decreased customer demand and an unfavorable product mix. Consequently, net income decreased by 51% to $1.64 billion, and diluted earnings per share fell by 50% to $3.28.

Analog Devices continues to view research and development as critical for its long-term success and future growth. R&D expenses increased as a percentage of revenue from 13% in fiscal year 2023 to 16% in fiscal year 2024. The company emphasizes its commitment to developing innovative technologies and processes for new products, believing this is essential to maintain product leadership and offer new offerings.

Analog Devices maintained a strong liquidity position, ending fiscal year 2024 with $2.4 billion in cash, cash equivalents, and short-term investments. The company demonstrated its commitment to shareholder returns by paying dividends and repurchasing its own stock. In fiscal year 2024, ADI returned approximately $1.7 billion to shareholders through these activities. The board declared a quarterly dividend of $0.92 per share, indicating an ongoing commitment to dividend payments.