Analog Devices, Inc. Q4 FY2025 earnings call

• Vincent Roche noted the fourth quarter results reflect business recovery with revenue and earnings per share above outlook. Fiscal '25 revenue accelerated, all end markets grew double digits, margin expanded, EPS grew over 20%. Strong operating results and reduced CapEx led to record free cash flow. • R&D received capital prioritization with record investments in FY '25 for analog, mixed signal, power, software, digital, AI. Expanded development support environment. • Maxim acquisition delivered revenue synergy targets. End markets saw double-digit growth, including AI infrastructure driving ATE and data center growth. • Automotive had record year with growth outpacing light vehicle production, new Ethernet bus expanding market. • Consumer expanded pipeline with integrated solutions in hearables, wearables, etc.

Fourth quarter revenue was $3.08 billion, growing 7% sequentially and 26% year-over-year. Industrial represented 46% of Q4 revenue, up 12% sequentially and 34% year-over-year; full year Industrial increased 15%. Automotive was 28% of Q4 revenue, up 1% sequentially and 19% year-over-year; full year Automotive increased 16%. Communications was 13% of Q4 revenue, up 4% sequentially and 37% year-over-year; full year Communications increased 26% (data center) and was flat (wireless). Consumer was 13% of Q4 revenue, up 7% sequentially and year-over-year; full year Consumer increased 19%.

• Q1 2026 revenue expected $3.1 billion ±$100 million. • Operating margin midpoint 43.5% ±100 basis points. • Tax rate expected 12%-14%. • Adjusted EPS expected $2.29 ±$0.10. • Fiscal '25 had strong growth, confident in FY '26 profitable growth leveraging key differentiators.

• Macro and geopolitical headwinds. • Tariffs and trade uncertainty impacting auto and other markets. • Short lead time orders and low visibility affecting outlook.

Q: Vivek Arya asked about Q1 segment strength and fiscal '26 growth.

A: Richard Puccio said Q1 is seasonally weakest but outlook is up slightly. Industrial mid-single digits above seasonal, auto down mid-single digits below seasonal, comms up 10% above seasonal, consumer seasonally down low double digits. Vincent Roche added belief in broad-based growth in '26 with industrial and comms leading.

Q: Joseph Moore inquired about autos, relative strength and pull forwards.

A: Richard Puccio said auto market more resilient than predicted, some upside due to tariff and policy, approached Q4 with caution, still cautious on market due to tariff and volatility uncertainty.

Q: Stacy Rasgon asked about gross margins.

A: Richard Puccio said Q1 gross margin typically lower due to seasonality, but outlook has higher industrial mix offsetting, pricing in good shape, need higher revenue for further gross margin expansion.

Q: Timothy Arcuri asked about Maxim revenue synergies and fiscal Q2.

A: Vincent Roche said Maxim synergies contributed tens of millions in '24, hundreds of millions in '25, on track to $1B by '27. Richard Puccio said Q2 is seasonally strongest, up mid-single digits.

Q: Christopher Muse asked about framework for industrial and comms growth.

A: Vincent Roche said AI drives data center (50% growth in '25) and ATE (40% growth in '25) with continued growth in '26. Data center has $1B run rate, ATE $800M run rate.

Q: Harlan Sur asked about aerospace and defense growth.

A: Vincent Roche said aerospace and defense growth took off with Hittite acquisition, strong demand globally, products attract high ASPs, business can more than double by end of decade.

Q: Joshua Buchalter asked about Q2 visibility and mix change.

A: Richard Puccio said no significant improvement in visibility, most products have sub-13 week lead times, reducing visibility.

Q: Tore Svanberg asked about R&D prioritization.

A: Vincent Roche said doubling down on power management, continuing to push analog signal processing, enhancing digital portfolio with low power, low latency, and machine learning capabilities.