Analog Devices Reports Fiscal First Quarter 2024 Financial Results
-- Revenue of more than $2.5 billion with continued growth in Automotive
-- Operating cash flow of $4.6 billion and free cash flow of $3.2 billion
on a trailing twelve-month basis
-- Returned over $600 million to shareholders through dividends and
repurchases in the first quarter
-- Raised quarterly dividend by 7%, marking the twentieth consecutive year
of increase
-- Appointed Richard C. Puccio as EVP and Chief Financial Officer
WILMINGTON, Mass.--(BUSINESS WIRE)--February 21, 2024--
Analog Devices, Inc. (Nasdaq: ADI), a global semiconductor leader, today announced financial results for its 14-week fiscal first quarter 2024, which ended February 3, 2024.
“ADI delivered first quarter revenue and profitability above the midpoint of our outlook, despite the continued difficult macroeconomic environment,” said Vincent Roche, CEO and Chair. “Consistent with our prior view, we expect customer inventory rationalization to largely subside in our second quarter, and thus enter the second half in a more favorable business backdrop. Importantly, we are well positioned to capitalize on the inevitable upswing given our replenished die banks, short lead times, and agile hybrid manufacturing model.”
Roche continued, “Over the past several years, we have invested at record levels in product development, customer engagement, and manufacturing activities, positioning us exceptionally well to pursue the rich opportunities of the Intelligent Edge era. The growing criticality of our technology to our customers’ success, and our ‘customer first’ approach to innovation, gives me unwavering confidence in our ability to drive shareholder value for many years to come.”
Performance
for the 14
Week First
Quarter of
Fiscal 2024
--------------
Results
Summary(1)
(in millions,
except
per-share
amounts and
percentages)
Three Months Ended
----------------------------------------------------------
Feb. 3, 2024 Jan. 28, 2023 Change
---------------- ------------------- -------------------
Revenue $ 2,513 $ 3,250 (23)%
Gross margin $ 1,474 $ 2,124 (31)%
Gross margin
percentage 58.7% 65.4% (670 bps)
Operating
income $ 586 $ 1,131 (48)%
Operating
margin 23.3% 34.8% (1,150 bps)
Diluted
earnings per
share $ 0.93 $ 1.88 (51)%
Adjusted
Results(2)
Adjusted gross
margin $ 1,734 $ 2,392 (28)%
Adjusted gross
margin
percentage 69.0% 73.6% (460 bps)
Adjusted
operating
income $ 1,054 $ 1,659 (36)%
Adjusted
operating
margin 42.0% 51.1% (910 bps)
Adjusted
diluted
earnings per
share $ 1.73 $ 2.75 (37)%
Trailing Twelve
Three Months Ended Months
------------------- -------------------
Cash
Generation Feb. 3, 2024 Feb. 3, 2024
------------------- -------------------
Net cash
provided by
operating
activities $ 1,139 $ 4,550
% of revenue 45% 39%
Capital
expenditures $ (223) $ (1,308)
Free cash
flow(2) $ 916 $ 3,242
% of revenue 36% 28%
Trailing Twelve
Three Months Ended Months
------------------- -------------------
Cash Return Feb. 3, 2024 Feb. 3, 2024
------------------- -------------------
Dividend paid $ (426) $ (1,720)
Stock
repurchases (180) (2,490)
--- -------- --- --- -------- ---
Total cash
returned $ (606) $ (4,209)
(1) The sum and/or computation of the individual amounts may not equal the
total due to rounding.
(2) Reconciliations of 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 the "Non-GAAP Financial
Information" section for additional information.
Outlook for the Second Quarter of Fiscal Year 2024
For the second quarter of fiscal 2024, we are forecasting revenue of $2.10 billion, +/- $100 million. At the midpoint of this revenue outlook, we expect reported operating margin of approximately 15.1%, +/-200 bps, and adjusted operating margin of approximately 37.0%, +/-100 bps. We are planning for reported EPS to be $0.46, +/-$0.10, and adjusted EPS to be $1.26, +/-$0.10.
Our second quarter fiscal 2024 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 release. See also the “Non-GAAP Financial Information” section for additional information.
Dividend Payment
The ADI Board of Directors has declared a quarterly cash dividend of $0.92 per outstanding share of common stock. The dividend will be paid on March 15, 2024 to all shareholders of record at the close of business on March 5, 2024.
Conference Call Scheduled for Today, Wednesday, February 21, 2024 at 10:00 am ET
ADI will host a conference call to discuss our first quarter fiscal 2024 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, U.S. 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 financial measures to their most directly comparable GAAP financial measures 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 primary performance measurements 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 free cash flow, a non-GAAP liquidity measure, 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 expenses(1) , which are described further below. Adjusted gross margin percentage represents adjusted gross margin divided by revenue.