Analog Devices Reports $2.42 Billion Revenue, 4% Decrease Year-Over-Year

Analog Devices, Inc. reported a revenue of $2.42 billion for the three months ended February 1, 2025, reflecting a 4% decrease from $2.51 billion in the same period of the previous fiscal year. The decline in revenue was attributed to the absence of an additional week of operations that was present in the first quarter of fiscal 2024, as well as a 10% drop in the industrial end market due to reduced customer inventory levels. Net income for the quarter was $391.3 million, down 15% from $462.7 million year-over-year, resulting in diluted earnings per share of $0.78, compared to $0.93 in the prior year.

The company's gross margin improved slightly to 59.0%, up from 58.7% in the previous year, primarily due to a decrease in amortization expenses related to acquired intangible assets. Research and development expenses increased by 3% to $402.9 million, driven by higher discretionary spending and benefit expenses. Selling, general, and administrative expenses decreased by 2% to $284.8 million, reflecting lower employee-related variable compensation expenses. Special charges related to the company's Global Repositioning Actions rose significantly to $63.9 million, compared to $16.1 million in the prior year, indicating a strategic shift in organizational design and operations.

In terms of operational metrics, Analog Devices reported a decrease in accounts receivable, which fell by 11% to $1.19 billion, attributed to variations in billing and collection timing. Inventory levels increased by 2% to $1.47 billion, as the company aimed to balance production with demand forecasts. The company’s cash and cash equivalents at the end of the quarter stood at $2.35 billion, up from $1.30 billion a year earlier, bolstered by strong cash flow from operations.

Looking ahead, Analog Devices remains focused on its strategic initiatives, including ongoing investments in research and development to maintain product leadership and drive innovation. The company has also authorized an additional $10 billion for its share repurchase program, bringing the total remaining authorization to approximately $11.5 billion. The Board of Directors declared a cash dividend of $0.99 per share, expected to be paid on March 17, 2025, indicating a continued commitment to returning value to shareholders despite the recent decline in net income. The company anticipates that its existing liquidity and cash generation will be sufficient to support operations and capital expenditures in the near term.