df3fd8bc4f1a19236bc719c897763413f5abc458a14f2b17f58ce99113a0d2d0

Number of countries with direct sales offices, sales representatives, or distributors (countries)

b41c1ab660df08ee1a91da2eb3b0973fe257593564f1c223c70f13b11ab2c48a

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

4585017dcb95fe1574e9643a3c0ec44dbbdd690989fd40642b91b82e6eeacc63

cdb3f399d91f093bab33a22b4e3e4190eb286d6e6db70459c6521553a8d01821

The lower revenue in Q2 2024 was driven by a **broad-based demand decline** and extensive **inventory digestion** by customers, which negatively impacted sales across multiple end markets. In addition, there were significant year-over-year declines in key segments such as **Industrial** and **Communications**, along with challenging **macroeconomic and geopolitical factors** that contributed to weaker demand and a less favorable product mix.  **[0000006281-24-000132_adi-20240504.htm:17]** **[ADI_3390382_4]** **[ADI_3390382_1]** 

Why was Revenue so low in Q2 2024?

The lower **Operating Income** in Q2 2024 was primarily the result of a combination of factors. There was a **34% decline in revenue** that directly impacted profitability, as revenues dropped from **$3,262,930 thousand** in Q2 2023 to **$2,159,039 thousand** in Q2 2024.  **[20240522NE20438:7]** **[0000006281-24-000130_adi2q24exhibit991earnings.htm:0]**  Additionally, the **gross margin fell** from **65.7% to 54.7%**, a reduction of **1,100 basis points**, highlighting a less favorable cost and pricing environment.  **[20240522NE20438:1]** **[0000006281-24-000130_adi2q24exhibit991earnings.htm:0]**  Although **operating expenses decreased**, they still remained a significant burden relative to the lower revenue. Finally, challenging market conditions—including **inventory digestion** and weaker demand in the **industrial, automotive,** and **communications** sectors—further contributed to the decline in operating income.  **[20240522NE20438:7]** **[0000006281-24-000130_adi2q24exhibit991earnings.htm:0]** **[ADI_3390382_4]** 

What contributed to the lower Operating Income in Q2 2024?

The significant decline in EPS in Q2 2024 was driven by several factors. **Revenue declined** sharply, with revenue falling from **$3.26 billion** in Q2 2023 to **$2.16 billion** in Q2 2024, a drop of **34%**, which affected the topline performance. Additionally, there was a **gross margin reduction** from **65.7%** to **54.7%** resulting from an unfavorable product mix and reduced utilization as the company lowered inventory levels. The **operating expense ratio** also had a negative impact, with a notable decrease in the operating margin from **34.6%** to **17.9%**, despite reduced operating expenses. Finally, the **net income** experienced a **69% decline**, falling from **$977.7 million** to **$302.2 million**, which further contributed to the steep drop in EPS.  **[0000006281-24-000130_adi2q24exhibit991earnings.htm:0]** **[0000006281-24-000132_adi-20240504.htm:17]** **[ADI_3390382_4]** **[20240522NE20438:7]** 

Why did EPS drop significantly in Q2 2024?

The sharp decline in net income for **Q1 2024**—a **52% drop** from **Q1 2023**—was mainly driven by a significant reduction in **operating income**. This decrease resulted from a **23% decline in revenue** across most end markets (with the exception of Automotive) and a **31% drop in gross margin**, which was impacted by lower revenue, an unfavorable mix, and reduced utilization. Additionally, there was an **increase in nonoperating expenses** (primarily higher interest expenses) that further contributed to the decline, even though a **decrease in the provision for income taxes** partially offset the impact.  **[0000006281-24-000032_adi1q24exhibit991earnings.htm:0]** **[0000006281-24-000034_adi-20240203.htm:18]** **[0000006281-24-000034_adi-20240203.htm:15]** 

What caused Net Income to fall so sharply in Q1 2024?

a2c9b2dd3f95a9517bde195863c0bccaf3f8ff52ff45e1cd70b43c287b1d0441

The peak in cash reserves during Q3 2024 was mainly driven by **strong operating cash flows**. ADI generated **$855,027 thousand** from operating activities, which more than offset the cash used in investing (**$(172,066) thousand**) and financing (**$(516,624) thousand**) activities. This robust performance resulted in the cash and cash equivalents rising to **$2,106,032 thousand** in Q3 2024.  **[0000006281-24-000159_adi-20240803.htm:2]** **[20240821NE88140:5]** 

Why did cash reserves peak in Q3 2024?

The surge in current debt in Q2 2024 was driven by **Analog Devices, Inc. raising $1.1 billion of debt** during the quarter for **general corporate purposes**, including planning for **upcoming debt maturities**.  **[20240522NE20438:7]** **[ADI_3390382_4]** 

What drove the surge in current debt in Q2 2024?

The significant drop in intangible assets by FY 2024 was primarily caused by a high amortization expense of **$1,741,545 thousand**, which directly reduced the net value of intangible assets from **$11,311,957 thousand** in FY 2023 to **$9,585,464 thousand** in FY 2024. Additionally, a portion of the acquired intangible assets had become fully amortized during FY 2023, and there were no significant new acquisitions to offset the amortization impact.  **[0000006281-24-000204_adi-20241102.htm:75]** **[0000006281-24-000202_adiq424exhibit991.htm:8]** **[0000006281-24-000204_adi-20241102.htm:77]** **[0000006281-24-000202_adiq424exhibit991.htm:9]** **[0000006281-24-000204_adi-20241102.htm:54]** 

What caused the significant drop in intangible assets by FY 2024?

67e1ac0c6c4610df160c9156eb1cac45aefb833e07b9a16ee1fcee94df344096

Net Income (USD, thousands)

Depreciation (USD, thousands)

Amortization of Intangibles (USD, thousands)

Cost of Goods Sold for Inventory Acquired (USD, thousands)

Stock-based Compensation Expense (USD, thousands)

Non-cash Impairment Charge (USD, thousands)

Other Adjustments (USD, thousands)

Total Adjustments to Net Income (USD, thousands)

Net Cash Provided by Operating Activities (USD, thousands)

Purchases of Short-Term Investments (USD, thousands)

Maturities of Short-Term Investments (USD, thousands)

Additions to Property, Plant and Equipment, Net (USD, thousands)

Other Investing Activities (USD, thousands)

Net Cash Used For Investing Activities (USD, thousands)

Proceeds from Debt (USD, thousands)

Early Termination of Debt (USD, thousands)

Debt Repayments (USD, thousands)

Payments on Revolver (USD, thousands)

Proceeds from Revolver (USD, thousands)

Proceeds from Commercial Paper Notes (USD, thousands)

Payments of Commercial Paper Notes (USD, thousands)

Dividend Payments to Shareholders (USD, thousands)

Repurchase of Common Stock (USD, thousands)

Proceeds from Employee Stock Plans (USD, thousands)

Other Financing Activities (USD, thousands)

Net Cash Used For Financing Activities (USD, thousands)

Effect of Exchange Rate Changes on Cash (USD, thousands)

Net Increase (Decrease) in Cash and Cash Equivalents (USD, thousands)

Deferred Income Taxes (USD, thousands)

Cash and Cash Equivalents at Beginning of Year (USD, thousands)

Cash and Cash Equivalents at End of Year (USD, thousands)

88f7f43c80953f199fe4645eb728a46cf5ea2ce13ef21908908a41bfce787c83

Industrial

Automotive

Communications

Consumer

Distributors

Direct customers

Other

Total Revenue

5d4f133a7d974b6254b71c14322a4880808a6a22ecfcf8c6d0c332f74108c9b8

Revenue (USD, thousands)

Cost of Sales (USD, thousands)

Gross Margin (USD, thousands)

Research and Development Expenses (USD, thousands)

Selling, Marketing, General and Administrative Expenses (USD, thousands)

Special Charges, Net (USD, thousands)

Total Operating Expenses (USD, thousands)

Operating Income (USD, thousands)

Interest Expense (USD, thousands)

Interest Income (USD, thousands)

Other, Net (USD, thousands)

Total Nonoperating Expense (Income) (USD, thousands)

Income Before Income Taxes (USD, thousands)

Provision for Income Taxes (USD, thousands)

Basic Earnings per Common Share (USD)

Diluted Earnings per Common Share (USD)

ac4244f3b529174f55575e69c1752f2516a2bd5aebeb68a580db4565cb647ebf

Cash and cash equivalents (USD, thousands)

Short-term investments (USD, thousands)

Accounts receivable (USD, thousands)

Inventories (USD, thousands)

Prepaid expenses and other current assets (USD, thousands)

Total current assets (USD, thousands)

Net property, plant and equipment (USD, thousands)

Goodwill (USD, thousands)

Intangible assets, net (USD, thousands)

Deferred tax assets (USD, thousands)

Other assets (USD, thousands)

Total non-current assets (USD, thousands)

TOTAL ASSETS (USD, thousands)

Accounts payable (USD, thousands)

Income taxes payable (USD, thousands)

Debt, current (USD, thousands)

Commercial paper notes (USD, thousands)

Accrued liabilities (USD, thousands)

Total current liabilities (USD, thousands)

Long-term debt (USD, thousands)

Deferred income taxes (USD, thousands)

Other non-current liabilities (USD, thousands)

Total non-current liabilities (USD, thousands)

Common stock (USD, thousands)

Capital in excess of par value (USD, thousands)

Retained earnings (USD, thousands)

Accumulated other comprehensive loss (USD, thousands)

Total shareholders’ equity (USD, thousands)

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (USD, thousands)

3ab00ba3e4c498d1153f113d1444499c8c0e30e75286454d3bb52d346d235532

United States

Rest of Americas

Europe

Japan

China

Rest of Asia

Subtotal Foreign

65ae1a356ebf07422e6b28a4482b7bcf93132069c5541ba079747fb8bb42c489

Analog Devices Inc (ADI)

Financials