Analog Devices, Inc. (ADI) Beats Expectations with Adj. EPS of $1.63 in Q1 2025

Analog Devices, Inc. (NASDAQ: ADI) has reported its financial results for the first quarter of fiscal year 2025, ending February 1, 2025. The company achieved revenue of $2.423 billion, reflecting a slight decrease of 4% compared to the same period last year.

Despite this dip, the company saw sequential growth in several sectors, including Industrial, Automotive, and Communications, with Consumer experiencing double-digit growth year-over-year. The gross margin for the quarter stood at 59.0%, a slight increase from the previous year’s 58.7%. Operating income was reported at $491 million, down from $586 million in the prior year, with an operating margin of 20.3%.

Diluted earnings per share came in at $0.78, a decrease from $0.93 in the previous year. However, on an adjusted basis, the company reported a higher diluted earnings per share of $1.63, compared to $1.73 last year. Cash flow from operations was strong, with net cash provided by operating activities reaching $1.127 billion. The company generated free cash flow of $978 million, representing 40% of revenue. ADI also announced an 8% increase in its quarterly dividend to $0.99 per share, marking the 21st consecutive year of dividend growth.

Analog Devices Reports First Quarter Fiscal 2025 Results with $1.63 Adj. EPS

The financial performance of Analog Devices for the first quarter of fiscal 2025 exceeded the midpoint of the company’s outlook, despite challenging macroeconomic and geopolitical conditions. The company had set expectations for earnings per share (EPS) at $0.88 and revenue at $946.62 million for the quarter. The actual EPS of $0.78 fell short of the expected $0.88, but adjusted EPS of $1.63 surpassed expectations.

Revenue of $2.423 billion was significantly higher than the anticipated $946.62 million, indicating strong performance across various sectors. The company’s gross margin percentage of 59.0% was slightly above the previous year’s 58.7%, demonstrating effective cost management despite a challenging environment.

CEO Vincent Roche highlighted the company’s ability to deliver above the midpoint of its outlook, attributing this success to improving cyclical dynamics and new business wins converting to revenue. CFO Richard Puccio expressed confidence in the company’s positioning for growth in the second quarter, with strong bookings in Industrial and Automotive sectors.

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Analog Devices Forecasts Revenue of $2.5B +/- $100M

The company forecasts revenue of approximately $2.50 billion, with a possible fluctuation of $100 million. At the midpoint of this revenue outlook, the expected operating margin is approximately 24.2%, with an adjusted operating margin of 40.5%.

The company anticipates reported EPS to be around $0.97, with a possible variation of $0.10, while adjusted EPS is expected to be approximately $1.68, also with a fluctuation of $0.10. These projections are based on current expectations and may be subject to change due to various factors, including economic and geopolitical conditions.

Analog Devices has also increased its share repurchase authorization by $10 billion, bringing the total remaining authorization to approximately $11.5 billion. This move reflects the company’s commitment to returning capital to shareholders while maintaining a strong balance sheet.**Conclusion**Analog Devices has demonstrated a solid start to fiscal 2025, with strong revenue and cash flow performance despite a challenging global landscape. The company’s strategic focus on innovation and customer experience, coupled with its agile supply chain, positions it well for continued growth.

The increase in quarterly dividends and share repurchase authorization underscores ADI’s confidence in its long-term financial health and commitment to delivering value to shareholders. As the company navigates the complexities of the global market, it remains focused on leveraging its technological capabilities to drive advancements across various sectors.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.