ANALOG DEVICES INC

Analog Devices, Inc. operates as a global semiconductor leader, designing, manufacturing, testing, and marketing a broad portfolio of solutions including integrated circuits (ICs), software, and subsystems that leverage high-performance analog, mixed-signal, and digital signal processing technologies. The company is positioned at the intersection of the physical and digital worlds, providing building blocks to sense, measure, interpret, connect, and power. The Intelligent Edge, characterized by ubiquitous sensing, hyper-scale and edge computing, artificial intelligence (AI), and pervasive connectivity, drives new generations of applications that expand demand for Analog Devices' high-performance analog, mixed-signal, power, and radio frequency ICs. The company's focus is largely on the business-to-business end markets of Industrial, Automotive, and Communications and related applications, as well as Consumer applications, with the goal of driving sustainable and profitable growth over the long term.

Analog Devices competes with a number of semiconductor companies in markets that are highly competitive. Many competitors have sufficient financial, manufacturing, technical, sales, and marketing resources to develop and market products that compete with Analog Devices' products. Some competitors may have more advantageous supply or development relationships with current and potential customers or suppliers. Competitors also include both emerging companies selling specialized products in markets served and companies outside of the U.S., including entities associated with well-funded efforts by foreign governments to create indigenous semiconductor industries. The company believes that its technical innovation emphasizing product performance and reliability, supported by its commitment to strong customer service and technical support, enables it to make a fundamental difference to its customers' competitiveness in its chosen markets.

Analog Devices generates revenue primarily through the sale of its ICs to customers worldwide, including original equipment manufacturers (OEMs) and customers who build electronic subsystems for integration into larger systems. The company sells its products globally through a direct sales force, third-party distributors, independent sales representatives, and via its website. Sales to third-party distributors accounted for approximately 56% of revenue in the year ended November 1, 2025. The company typically does not have long-term sales contracts with its customers. In some markets, customers place orders that require Analog Devices to manufacture product and have it available for shipment, even though the customer is unwilling to make a binding commitment to purchase all, or even any, of the product. In other instances, the company manufactures product based on forecasts of customer demand.

Analog Devices' product portfolio includes more than 75,000 stock keeping units (SKUs) that can be aggregated into general categories: Analog and Mixed Signal, Power Management & Reference, Amplifiers/RF and Microwave, Sensors & Actuators, Digital Signal Processing and System Products (DSPs), Interface, and Software, Digital Platforms and Artificial Intelligence. Data converters remain the company's largest and most diverse product family. The company's analog and mixed-signal IC technology has been the foundation of its business for six decades, and it is one of the world's largest suppliers of high-performance analog ICs. In fiscal 2025, the company introduced an upgrade to its open-source embedded development platform, CodeFusion Studio 2.0, and launched Power Studio, a digital simulation and design ecosystem. These platforms are part of a broader Physical Intelligence vision, which seeks to leverage deep expertise in electro-physical systems to develop and fine-tune foundational AI models.

Revenue by end market for fiscal 2025 was: Industrial $4,929,409 thousand (45% of total), Automotive $3,277,865 thousand (30%), Consumer $1,434,568 thousand (13%), and Communications $1,377,865 thousand (13%). Revenue by sales channel for fiscal 2025 was: Distributors $6,144,819 thousand (56% of total), Direct customers $4,718,993 thousand (43%), and Other $155,895 thousand (1%). Revenue by geographic region for fiscal 2025 was: United States $3,238,145 thousand, Rest of North and South America $162,470 thousand, Europe $2,285,598 thousand, Japan $989,916 thousand, China $2,858,286 thousand, and Rest of Asia $1,485,292 thousand.

During fiscal 2025, the company recorded net special charges of $69,980 thousand, primarily due to increased charges related to its Global Repositioning Actions. The company has recorded net special charges of $591.6 million on a cumulative basis through November 1, 2025, as part of the integration of the acquisition of Maxim Integrated Products, Inc. and continued organizational initiatives. In the fourth quarter of fiscal 2025, the company determined its facility located in Penang, Malaysia met the held for sale criteria, with net property, plant and equipment of $54,160 thousand reclassified to prepaid expenses and other current assets. On November 24, 2025, the Board of Directors declared a cash dividend of $0.99 per outstanding share of common stock, expected to total approximately $484.8 million. As of November 1, 2025, the company had repurchased a total of approximately 216.5 million shares of its common stock for approximately $17.0 billion under its share repurchase program, with an additional $9.7 billion remaining available for repurchase.

Total revenue for fiscal 2025 was $11,019,707 thousand, an increase of 17% compared to $9,427,157 thousand in fiscal 2024. Gross margin was $6,773,478 thousand, or 61.5% of revenue, compared to $5,381,343 thousand, or 57.1% of revenue in the prior year. Net income was $2,267,342 thousand, or 20.6% of revenue, compared to $1,635,273 thousand, or 17.3% of revenue in fiscal 2024. Diluted earnings per share were $4.56, compared to $3.28 in the prior year. Net cash provided by operating activities was $4,812,202 thousand, or 44% of revenue.

A major growth vector is the company's positioning to capitalize on critical long-term growth trends to drive advancements in digitized factories, mobility, digital healthcare, combat climate change, and reliably connect humans and the world. The company is well aligned with key B2B markets driving the increase in data at the Intelligent Edge and will continue to be a critical partner in the collection, creation, and communication of customers' edge data. The company incorporates AI capabilities across its technologies, business operations, products, and services to enhance performance and drive smarter, more efficient solutions. The company's Physical Intelligence vision seeks to leverage deep expertise in electro-physical systems to develop and fine-tune foundational AI models that can reason about and interact with the real world, integrating signal, power, sensing, time-series sampling, actuation and more to support autonomous operation and enhanced system responsiveness.

Another growth vector is the expansion of the company's software and digital platform capabilities. In fiscal 2025, the company introduced an upgrade to its open-source embedded development platform, CodeFusion Studio 2.0, designed to support embedded system design through integrated workflows for signal processing, edge computing, and connectivity. The company also launched Power Studio, a digital simulation and design ecosystem integrating new system-level and IC-level design capabilities into a single product family, designed to enable faster time to market by streamlining power management design and optimization. These platforms are part of the company's evolution from a component supplier to a full-system and solutions provider.

Gross margin percentage in fiscal 2025 increased by 440 basis points compared to fiscal 2024, primarily due to higher utilization of factories due to increased customer demand as well as a decrease in amortization expense related to acquired intangible assets. Research and development expenses were $1,766,001 thousand, or 16% of revenue, in fiscal 2025, compared to $1,487,863 thousand, or 16% of revenue, in fiscal 2024. The company expects to continue the development of innovative technologies and processes for new products and believes that a continued commitment to R&D is essential to maintain product leadership and provide innovative new product offerings.

The company expects capital expenditures for fiscal 2026 to be between approximately 4% and 6% of fiscal 2026 revenue. These capital expenditures will be funded with a combination of cash on hand and cash expected to be generated from future operations, together with existing and anticipated available short- and long-term financing. The company currently sources more than half of its wafer requirements annually from third-party wafer fabrication foundries, such as Taiwan Semiconductor Manufacturing Company (TSMC) and others, and the remainder is sourced internally. The company also operates an assembly, wafer sort and testing facility in Penang, Malaysia and wafer sort and test facilities in the Philippines and Thailand, and makes extensive use of third-party subcontractors for assembly and testing.

Research and development spending was $1,766,001 thousand in fiscal 2025. Net additions to property, plant and equipment were $533,552 thousand in fiscal 2025. As of November 1, 2025, the company had repurchased a total of approximately 216.5 million shares of its common stock for approximately $17.0 billion under its share repurchase program, with an additional $9.7 billion remaining available for repurchase. On November 24, 2025, the Board of Directors declared a cash dividend of $0.99 per outstanding share of common stock, expected to total approximately $484.8 million. The company currently expects quarterly dividends to continue in future periods, although they remain subject to determination and declaration by the Board of Directors.

The company faces structural headwinds from global political and economic uncertainty and adverse conditions related to its international operations. A significant portion of revenue is derived from customers in international markets, and the company has significant operations and manufacturing facilities outside the United States, including in Ireland, the Philippines, Thailand, and Malaysia. Factors that could negatively impact the business include political, legal, and economic changes; trade policy disputes and restrictions, particularly with respect to China; currency conversion risks; instability of global credit and financial markets; sanctions; complex and changing government regulations; and economic disruption from terrorism. The company also faces headwinds from recently announced and future tariffs and other trade restrictions, which could increase costs, reduce availability of raw materials, cause customers to delay or cancel orders, and contribute to volatility and economic slowdown.

The company faces constraints from the cyclical nature of the semiconductor market, which has resulted in periods when demand for products has increased or decreased rapidly. If the company overbuilds inventory in a period of decreased demand, or expands operations too rapidly in anticipation of increased demand that does not materialize, operating results may be adversely affected. Conversely, during periods of rapid increases in demand, available capacity may not be sufficient to satisfy demand. The company also relies on third-party suppliers and service providers, including raw material and components suppliers, semiconductor wafer foundries, assembly and test contractors, and freight carriers. The company currently sources more than half of its wafer requirements annually from third-party wafer foundries, including TSMC and others, and tensions across the Taiwan Strait or other geopolitical events could disrupt TSMC's operations.

The company faces material risks from global political and economic uncertainty, particularly related to its significant international operations and the impact of trade restrictions. Export restrictions limit the company's ability to sell to certain Chinese companies and to third parties that do business with those companies, and these restrictions have impacted revenues and results of operations in China and elsewhere ¹. The company also faces risks from the cyclical nature of the semiconductor market, which can lead to periods of rapid demand changes, overcapacity, and inventory write-downs. Sales to third-party distributors accounted for approximately 56% of revenue in fiscal 2025 ², and the company is exposed to risks related to the performance of these distributors, including accounts receivable default and the need to estimate variable consideration such as price protection credits, for which the liability balance was $785.1 million ³ as of November 1, 2025. The company relies on third-party suppliers for more than half of its wafer requirements annually, including Taiwan Semiconductor Manufacturing Company (TSMC) ⁴, and tensions across the Taiwan Strait or other geopolitical events could disrupt these operations. Additionally, the company has substantial existing indebtedness of approximately $8.6 billion ⁵ as of November 1, 2025, which could limit its operations and increase vulnerability to adverse economic conditions.

Management's message emphasizes the company's position as a global semiconductor leader dedicated to solving customers' most complex engineering challenges, delivering innovations that connect technology to human breakthroughs. The strategic priorities emphasized for the period ahead include efficient use of capital, deepening customer-centricity, and capitalizing on secular trends. Management highlights that research and development is critical to continuing the cycle of innovation, and the company is committed to realizing targeted shareholder value creation from acquisitions. The company believes its engineering talent, with a team of approximately 13,000 engineers, continues to be an important competitive differentiator. Management states the company is positioned to capitalize on critical long-term growth trends to drive advancements in digitized factories, mobility, digital healthcare, combat climate change, and reliably connect humans and the world. The company incorporates AI capabilities across its technologies, business operations, products, and services to enhance performance and drive smarter, more efficient solutions.