01—Abstract
Summary
Summary of the 10-K filed November 26, 2024. Cited figures are marked; the original filing is the authoritative source.
Analog Devices, Inc. (ADI) reported a decrease in revenue for fiscal year 2024, down 23% to $9.43 billion compared to $12.31 billiona 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%b 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 billionc 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.
02—Key points
Key Highlights
- Revenue decreased by 23% year-over-year to $9.43 billion in fiscal year 2024, impacted by weaker macroeconomic conditions across key end markets.
- Gross margin declined from 64.0% to 57.1% due to lower factory utilization and an unfavorable product mix.
- The Industrial segment, representing 46% of revenue in fiscal 2024, experienced a significant 35% revenue decline.
- Research and Development (R&D) expenses increased as a percentage of revenue to 16%, indicating continued investment in innovation.
- The company maintained a strong liquidity position with $2.4 billion in cash, cash equivalents, and short-term investments as of November 2, 2024.
- ADI returned approximately $1.7 billion to shareholders through dividends and stock repurchases during fiscal year 2024.
- The company declared a quarterly dividend of $0.92 per share, demonstrating ongoing commitment to shareholder returns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Analog Devices kept $0.17.
- Revenue$9.43B100.0%
- Cost of revenue−$4.05B42.9%
- Gross profit$5.38B57.1%
- Operating costs−$3.35B35.5%
- Operating income$2.03B21.6%
- Interest, other & tax−$397.5M4.2%
- Net income$1.64B17.3%
Where FY2024 revenue went
$9.43B- Cost of revenue: $4.05B, 43% of revenue
- Net income: $1.64B, 17% of revenue
- R&D: $1.49B, 16% of revenue
- SG&A: $1.07B, 11% of revenue
- Other operating costs: $792.0M, 8.4% of revenue
- Interest, other & tax: $397.5M, 4.2% of revenue
Kept 17% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed November 26, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $9.43B$12.31B | −23.4% |
| Cost of Revenue | $4.05B$4.43B | −8.6% |
| Gross Profit | $5.38B$7.88B | −31.7% |
| R&D Expenses | $1.49B$1.66B | −10.4% |
| SG&A Expenses | $1.07B$1.27B | −16.1% |
| Operating Expenses | $3.35B$4.05B | −17.4% |
| Operating Income | $2.03B$3.82B | −46.8% |
| Net Income | $1.64B$3.31B | −50.7% |
| EPS (Basic) | $3.30$6.60 | −50.0% |
| EPS (Diluted) | $3.28$6.55 | −49.9% |
| Shares Outstanding (Basic) | 496.17M502.23M | −1.2% |
| Shares Outstanding (Diluted) | 498.70M505.96M | −1.4% |
05—Questions
Frequently Asked Questions
What were the main drivers for the revenue decline in fiscal year 2024?
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.
How did the company's profitability metrics change in fiscal year 2024?
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.
What is the company's outlook on R&D investment?
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.
How is the company managing its liquidity and returning capital to shareholders?
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.
06—Continue