Business Wire | Aug 18, 2021 07:00AM EDT

Analog Devices Reports Record Revenue and Earnings for the Third Quarter Fiscal 2021

Aug. 18, 2021

WILMINGTON, Mass.--(BUSINESS WIRE)--Aug. 18, 2021--Analog Devices, Inc. (Nasdaq: ADI), a leading global high-performance semiconductor company, today announced financial results for its third quarter of fiscal 2021, which ended July 31, 2021.

"ADI delivered record revenue and earnings for the second consecutive quarter with continued gross and operating margin expansion. All markets increased sequentially with our Industrial and Automotive segments once again achieving records," said Vincent Roche, President and CEO. "Robust bookings across all end markets, combined with lean inventories and ongoing capacity additions will enable us to close this year on a high note and continue to grow into fiscal 2022."

Roche continued, "The economic recovery continues to take shape with demand still far exceeding supply, underscoring the importance of semiconductors across all industries. We continue to execute soundly, and I have never been more confident about the future of ADI's franchise as our solutions become more vital in the modern digital age. Our ethos of innovation, deep customer engagements, and alignment with favorable secular growth drivers position us to deliver strong returns in the years to come."

Performance for the Third Quarter of Fiscal 2021

Results Summary^(1)

(in millions, except per-share amounts and percentages)



Three Months Ended

Jul. 31, Aug. 1, Change 2021 2020

Revenue $ 1,759 $ 1,456 21 %

Gross margin $ 1,221 973 25 %

Gross margin percentage 69.4 % 66.8 % 260 bps

Operating income $ 610 $ 419 46 %

Operating margin 34.7 % 28.8 % 590 bps

Diluted earnings per share $ 1.35 $ 0.97 39 %



Adjusted Results

Adjusted gross margin $ 1,259 $ 1,018 24 %

Adjusted gross margin percentage 71.6 % 69.9 % 170 bps

Adjusted operating income $ 766 $ 616 24 %

Adjusted operating margin 43.6 % 42.3 % 130 bps

Adjusted diluted earnings per share $ 1.72 $ 1.36 26 %



Three Trailing Months Twelve Ended Months

Cash Generation Jul. 31, Jul. 31, 2021 2021

Net cash provided by operating activities $ 630 $ 2,467

% of revenue 36 % 38 %

Capital expenditures $ (86 ) $ (243 )

Free cash flow $ 544 $ 2,224

% of revenue 31 % 34 %



Three Trailing Months Twelve Ended Months

Cash Return Jul. 31, Jul. 31, 2021 2021

Dividend paid $ (255 ) $ (968 )

Stock repurchases (163 ) (516 )

Total cash returned $ (418 ) $ (1,484 )



(1) The sum and/or computation of the individual amounts may not equal thetotal due to rounding.

Outlook for the Fourth Quarter of Fiscal Year 2021

For the fourth quarter of fiscal 2021, we are forecasting revenue of $1.78 billion, +/- $70 million. At the midpoint of this revenue outlook, we expect reported operating margin of approximately 34.2%, +/-140 bps, and adjusted operating margin of approximately 43.7%, +/-100 bps. We are planning for reported EPS to be $1.33, +/-$0.11, and adjusted EPS to be $1.72, +/-$0.11.

Our fourth quarter fiscal 2021 outlook is based on current expectations and actual results may differ materially, as a result of, among other things, the important factors discussed at the end of this release. These statements supersede all prior statements regarding our business outlook set forth in prior ADI news releases, and ADI disclaims any obligation to update these forward-looking statements.

The adjusted results and adjusted anticipated results above are financial measures presented on a non-GAAP basis. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures are provided in the financial tables included in this press release. See also "Non-GAAP Financial Information" section for additional information.

Dividend Payment

The ADI Board of Directors has declared a quarterly cash dividend of $0.69 per outstanding share of common stock. The dividend will be paid on September 8, 2021 to all shareholders of record at the close of business on August 27, 2021.

Conference Call Scheduled for Today, Wednesday, August 18, 2021 at 10:00 am ET

ADI will host a conference call to discuss our third quarter fiscal 2021 results and short-term outlook today, beginning at 10:00 am ET. Investors may join via webcast, accessible at investor.analog.com, or by telephone by calling 833-423-0297, ten minutes before the call begins. International participants may provide the passcode 8334230297.

A replay will be available two hours after the completion of the call. The replay may be accessed for up to two weeks by dialing 855-859-2056 (replay only) and providing the conference ID: 1767395, or by visiting investor.analog.com.

Non-GAAP Financial Information

This release includes non-GAAP financial measures that are not in accordance with, nor an alternative to, generally accepted accounting principles (GAAP) and may be different from non-GAAP measures presented by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. These non-GAAP measures have material limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP and should not be considered in isolation from, or as a substitute for, the Company's financial results presented in accordance with GAAP. The Company's use of non-GAAP measures, and the underlying methodology when including or excluding certain items, is not necessarily an indication of the results of operations that may be expected in the future, or that the Company will not, in fact, record such items in future periods. You are cautioned not to place undue reliance on these non-GAAP measures. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.

Management uses non-GAAP measures internally to evaluate the Company's operating performance from continuing operations against past periods and to budget and allocate resources in future periods. These non-GAAP measures also assist management in evaluating the Company's core business and trends across different reporting periods on a consistent basis. Management also uses these non-GAAP measures as the primary performance measurement when communicating with analysts and investors regarding the Company's earnings results and outlook and believes that the presentation of these non-GAAP measures is useful to investors because it provides investors with the operating results that management uses to manage the Company and enables investors and analysts to evaluate the Company's core business. Management also believes that the non-GAAP liquidity measure free cash flow is useful both internally and to investors because it provides information about the amount of cash generated after capital expenditures that is then available to repay debt obligations, make investments and fund acquisitions, and for certain other activities.

The non-GAAP financial measures referenced by ADI in this release include: adjusted gross margin, adjusted gross margin percentage, adjusted operating expenses, adjusted operating expenses percentage, adjusted operating income, adjusted operating margin, adjusted income before income taxes, adjusted provision for income taxes, adjusted tax rate, adjusted diluted earnings per share (EPS), free cash flow, and free cash flow margin percentage.

Adjusted gross margin is defined as gross margin, determined in accordance with GAAP, excluding certain acquisition related expenses1 which are described further below. Adjusted gross margin percentage represents adjusted gross margin divided by revenue.

Adjusted operating expenses is defined as operating expenses, determined in accordance with GAAP, excluding: certain acquisition related expenses1; acquisition related transaction costs2; restructuring related expense, net3; and charitable foundation contribution4which are described further below. Adjusted operating expenses percentage represents adjusted operating expenses divided by revenue.

Adjusted operating income is defined as operating income, determined in accordance with GAAP, excluding: acquisition related expenses1; acquisition related transaction costs2; restructuring related expense, net3; and charitable foundation contribution4 which are described further below. Adjusted operating margin represents adjusted operating income divided by revenue.

Adjusted income before income taxes is defined as income before income taxes, determined in accordance with GAAP, excluding: acquisition related expenses1; acquisition related transaction costs2; restructuring related expense, net3; and charitable foundation contribution4 which are described further below.

Adjusted provision for income taxes is defined as provision for income taxes, determined in accordance with GAAP, excluding tax related items5which are described further below. Adjusted tax rate represents adjusted provision for income taxes divided by adjusted income before income taxes.

Adjusted diluted EPS is defined as diluted EPS, determined in accordance with GAAP, excluding: acquisition related expenses1; acquisition related transaction costs2; restructuring related expense, net3; charitable foundation contribution4; and tax related items5 which are described further below.

Free cash flow is defined as net cash provided by operating activities, determined in accordance with GAAP, less additions to property, plant and equipment, net. Free cash flow margin percentage represents free cash flow divided by revenue.

1Acquisition Related Expenses Expenses incurred as a result of current and prior period acquisitions and primarily include expenses associated with the fair value adjustments to inventory, property, plant and equipment and amortization of acquisition related intangibles, which include acquired intangibles such as purchased technology and customer relationships. Expenses also include severance payments, equity award accelerations, and the fair value adjustment associated with the replacement of share-based awards related to the Linear Technology Corporation (Linear) acquisition. We excluded these costs from our non-GAAP measures because they relate to specific transactions and are not reflective of our ongoing financial performance.

2Acquisition Related Transaction Costs Costs directly related to the proposed Maxim Integrated Products, Inc. acquisition, including legal, accounting and other professional fees as well as integration-related costs. We excluded these costs from our non-GAAP measures because they relate to a specific transaction and are not reflective of our ongoing financial performance.

3Restructuring Related Expense, net Expenses, net, incurred in connection with facility closures, consolidation of manufacturing facilities, severance, other accelerated stock-based compensation expense and other cost reduction efforts or reorganizational initiatives. We excluded these expenses from our non-GAAP measures because apart from ongoing expense savings as a result of such items, these expenses have no direct correlation to the operation of our business in the future.

4Charitable Foundation Contribution Expenses incurred in connection with a one time contribution of registered shares of common stock to the Analog Devices Foundation. We excluded this expense from our non-GAAP measures because this expense has no direct correlation to the operation of our business in the future.

5Tax Related Items Income tax effect of the non-GAAP items discussed above and income tax from certain discrete tax items related to the resolution of the IRS audit of Linear's pre-acquisition federal income tax returns for fiscal year 2015 through fiscal year 2017, other discrete income tax benefits upon filing of our fiscal 2019 federal income tax return and income tax from prior period tax credits. We excluded these tax related items from our non-GAAP measures because they are not associated with the tax expense on our current operating results.

About Analog Devices

Analog Devices (Nasdaq: ADI) is a leading global semiconductor company dedicated to solving the toughest engineering challenges. We enable our customers to interpret the world around us by intelligently bridging the physical and digital with unmatched technologies that sense, measure, power, connect and interpret. Visit http://www.analog.com.

Forward Looking Statements

This press release contains forward-looking statements, which address a variety of subjects including, for example, our statements regarding our proposed acquisition of Maxim Integrated Products, Inc. ("Maxim"); the impact of the COVID-19 pandemic on our business, financial condition and results of operations; expected revenue, operating margin, tax rate, earnings per share, and other financial results; expected market trends, market share gains, operating leverage, production and inventory levels; expected customer demand and order rates for our products and expected product offerings; product development; and marketing position. Statements that are not historical facts, including statements about our beliefs, plans and expectations, are forward-looking statements. Such statements are based on our current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: the uncertainty as to the extent of the duration, scope and impacts of the COVID-19 pandemic; political and economic uncertainty, including any faltering in global economic conditions or the stability of credit and financial markets; erosion of consumer confidence and declines in customer spending; unavailability of raw materials, services, supplies or manufacturing capacity; changes in geographic, product or customer mix; changes in export classifications, import and export regulations or duties and tariffs; changes in our or Maxim's estimates of our respective expected tax rates based on current tax law; our ability to successfully integrate Maxim's businesses and technologies; the risk that the expected benefits and synergies of the proposed transaction and growth prospects of the combined company may not be fully achieved in a timely manner, or at all; adverse results in litigation matters, including the potential for litigation related to the proposed transaction; the risk that we or Maxim will be unable to retain and hire key personnel; the risk associated with the timing of the closing of the proposed transaction, including the risk that the conditions to the transaction are not satisfied on a timely basis or at all or the failure of the transaction to close for any other reason or to close on the anticipated terms, including the anticipated tax treatment; the risk that any regulatory approval, consent or authorization that may be required for the proposed transaction is not obtained or is obtained subject to conditions that are not anticipated; unanticipated difficulties or expenditures relating to the transaction, the response of business partners and retention as a result of the announcement and pendency of the transaction; uncertainty as to the long-term value of our common stock; the diversion of management time on transaction-related matters; our ability to successfully integrate acquired businesses and technologies; and the risk that expected benefits, synergies and growth prospects of acquisitions may not be fully achieved in a timely manner, or at all. For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to our filings with the Securities and Exchange Commission ("SEC"), including the risk factors contained in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Forward-looking statements represent management's current expectations and are inherently uncertain. Except as required by law, we do not undertake any obligation to update forward-looking statements made by us to reflect subsequent events or circumstances.

Analog Devices and the Analog Devices logo are registered trademarks or trademarks of Analog Devices, Inc. All other trademarks mentioned in this document are the property of their respective owners.

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended Nine Months Ended

Jul. 31, 2021 Aug. 1, 2020 Jul. 31, 2021 Aug. 1, 2020

Revenue $ 1,758,853 $ 1,456,136 $ 4,978,718 $ 4,076,761

Cost of sales 537,669 483,558 1,575,526 1,409,367

Gross margin 1,221,184 972,578 3,403,192 2,667,394

Operating expenses:

Research and 306,617 260,794 897,005 770,280 development

Selling,marketing, 206,076 153,753 597,963 494,808 general and administrative

Amortization of 107,783 107,077 323,217 321,448 intangibles

Special (8,938 ) 31,830 (8,189 ) 44,286 charges, net

Total operating 611,538 553,454 1,809,996 1,630,822 expenses

Operating 609,646 419,124 1,593,196 1,036,572 income

Nonoperatingexpense (income):

Interest 44,659 45,914 130,204 $ 144,712 expense

Interest income (300 ) (504 ) (799 ) $ (3,778 )

Other, net (6,991 ) 685 (21,090 ) $ 1,331

37,368 46,095 108,315 142,265

Income before 572,278 373,029 1,484,881 894,307 income taxes

Provision for 68,967 10,364 170,146 60,072 income taxes

Net income $ 503,311 $ 362,665 $ 1,314,735 $ 834,235



Shares used tocomputeearnings per 368,476 368,791 368,834 368,417 common share -basic

Shares used tocomputeearnings per 371,849 372,003 372,457 371,857 common share -diluted



Basic earningsper common $ 1.37 $ 0.98 $ 3.56 $ 2.26 share

Dilutedearnings per $ 1.35 $ 0.97 $ 3.53 $ 2.24 common share

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

Jul. 31, 2021

Oct. 31, 2020

Cash & cash equivalents

$

1,480,701

$

1,055,860

Accounts receivable

823,163

737,536

Inventories

657,520

608,260

Other current assets

129,071

116,032

Total current assets

3,090,455

2,517,688

Net property, plant and equipment

1,173,674

1,120,561

Other investments

105,562

86,729

Goodwill

12,278,898

12,278,425

Intangible assets, net

3,248,802

3,650,280

Deferred tax assets

1,425,293

1,503,064

Other assets

318,506

311,856

Total assets

$

21,641,190

$

21,468,603

Other current liabilities

$

1,468,665

$

1,364,986

Debt, current

1,324,677

-

Long-term debt

3,824,819

5,145,102

Deferred income taxes

1,776,308

1,919,595

Other non-current liabilities

982,758

1,040,975

Shareholders' equity

12,263,963

11,997,945

Total liabilities & equity

$

21,641,190

$

21,468,603

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

Jul. 31, 2021 Oct. 31, 2020

Cash & cash equivalents $ 1,480,701 $ 1,055,860

Accounts receivable 823,163 737,536

Inventories 657,520 608,260

Other current assets 129,071 116,032

Total current assets 3,090,455 2,517,688

Net property, plant and equipment 1,173,674 1,120,561

Other investments 105,562 86,729

Goodwill 12,278,898 12,278,425

Intangible assets, net 3,248,802 3,650,280

Deferred tax assets 1,425,293 1,503,064

Other assets 318,506 311,856

Total assets $ 21,641,190 $ 21,468,603



Other current liabilities $ 1,468,665 $ 1,364,986

Debt, current 1,324,677 -

Long-term debt 3,824,819 5,145,102

Deferred income taxes 1,776,308 1,919,595

Other non-current liabilities 982,758 1,040,975

Shareholders' equity 12,263,963 11,997,945

Total liabilities & equity $ 21,641,190 $ 21,468,603

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

Three Months Ended

Nine Months Ended

Jul. 31, 2021

Aug. 1, 2020

Jul. 31, 2021

Aug. 1, 2020

Cash flows from operating activities:

Net income

$

503,311

$

362,665

$

1,314,735

$

834,235

Adjustments to reconcile net income to net cash provided by operations:

Depreciation

50,162

57,598

158,937

176,722

Amortization of intangibles

145,989

143,865

436,734

431,985

Stock-based compensation expense

41,687

39,560

118,683

112,961

Gain on sale of property, plant and equipment

(13,557

)

-

(13,557

)

-

Deferred income taxes

(24,286

)

(7,412

)

(72,578

)

(42,802

)

Non-cash contribution to charitable foundation

-

-

-

40,000

Other

(2,843

)

1,874

(14,965

)

5,675

Changes in operating assets and liabilities

(70,422

)

(40,950

)

(133,644

)

(222,887

)

Total adjustments

126,730

194,535

479,610

501,654

Net cash provided by operating activities

630,041

557,200

1,794,345

1,335,889

Percent of revenue

36

%

38

%

36

%

33

%

Cash flows from investing activities:

Proceeds from other investments

3,649

-

22,215

-

Additions to property, plant and equipment

(86,341

)

(20,804

)

(212,899

)

(135,804

)

Proceeds from sale of property, plant and equipment

35,714

-

35,714

-

Payments for acquisitions, net of cash acquired

-

(12,763

)

(24,950

)

(12,763

)

Changes in other assets

(534

)

70

(3,360

)

(1,214

)

Net cash used for investing activities

(47,512

)

(33,497

)

(183,280

)

(149,781

)

Cash flows from financing activities:

Proceeds from debt

-

-

-

395,646

Payments on revolver

-

-

-

(350,000

)

Proceeds from revolver

-

-

-

350,000

Debt repayments

-

-

-

(300,000

)

Dividend payments to shareholders

(254,506

)

(228,798

)

(738,114

)

(656,558

)

Repurchase of common stock

(163,281

)

(17,651

)

(509,152

)

(237,265

)

Proceeds from employee stock plans

11,676

26,853

55,348

57,750

Changes in other financing activities

(447

)

436

1,952

(4,015

)

Net cash used for financing activities

(406,558

)

(219,160

)

(1,189,966

)

(744,442

)

Effect of exchange rate changes on cash

(486

)

784

3,742

276

Net increase in cash and cash equivalents

175,485

305,327

424,841

441,942

Cash and cash equivalents at beginning of period

1,305,216

784,937

1,055,860

648,322

Cash and cash equivalents at end of period

$

1,480,701

$

1,090,264

$

1,480,701

$

1,090,264

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

Three Months Ended Nine Months Ended

Jul. 31, 2021 Aug. 1, 2020 Jul. 31, 2021 Aug. 1, 2020

Cash flows fromoperating activities:

Net income $ 503,311 $ 362,665 $ 1,314,735 $ 834,235

Adjustments toreconcile netincome to net cash providedby operations:

Depreciation 50,162 57,598 158,937 176,722

Amortization of 145,989 143,865 436,734 431,985 intangibles

Stock-basedcompensation 41,687 39,560 118,683 112,961 expense

Gain on sale ofproperty, plant (13,557 ) - (13,557 ) - and equipment

Deferred income (24,286 ) (7,412 ) (72,578 ) (42,802 )taxes

Non-cashcontribution to - - - 40,000 charitable foundation

Other (2,843 ) 1,874 (14,965 ) 5,675

Changes inoperating (70,422 ) (40,950 ) (133,644 ) (222,887 )assets and liabilities

Total 126,730 194,535 479,610 501,654 adjustments

Net cashprovided by 630,041 557,200 1,794,345 1,335,889 operating activities

Percent of 36 % 38 % 36 % 33 %revenue

Cash flows frominvesting activities:

Proceeds fromother 3,649 - 22,215 - investments

Additions toproperty, plant (86,341 ) (20,804 ) (212,899 ) (135,804 )and equipment

Proceeds fromsale of 35,714 - 35,714 - property, plant and equipment

Payments foracquisitions, - (12,763 ) (24,950 ) (12,763 )net of cash acquired

Changes in (534 ) 70 (3,360 ) (1,214 )other assets

Net cash usedfor investing (47,512 ) (33,497 ) (183,280 ) (149,781 )activities



Cash flows fromfinancing activities:

Proceeds from - - - 395,646 debt

Payments on - - - (350,000 )revolver

Proceeds from - - - 350,000 revolver

Debt repayments - - - (300,000 )

Dividendpayments to (254,506 ) (228,798 ) (738,114 ) (656,558 )shareholders

Repurchase of (163,281 ) (17,651 ) (509,152 ) (237,265 )common stock

Proceeds fromemployee stock 11,676 26,853 55,348 57,750 plans

Changes inother financing (447 ) 436 1,952 (4,015 )activities

Net cash usedfor financing (406,558 ) (219,160 ) (1,189,966 ) (744,442 )activities

Effect ofexchange rate (486 ) 784 3,742 276 changes on cash



Net increase incash and cash 175,485 305,327 424,841 441,942 equivalents

Cash and cashequivalents at 1,305,216 784,937 1,055,860 648,322 beginning of period

Cash and cashequivalents at $ 1,480,701 $ 1,090,264 $ 1,480,701 $ 1,090,264 end of period

ANALOG DEVICES, INC.

REVENUE TRENDS BY END MARKET

(Unaudited)

(In thousands)

The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the "sold to" customer information, the "ship to" customer information and the end customer product or application into which our product will be incorporated. As data systems for capturing and tracking this data and our methodology evolves and improves, the categorization of products by end market can vary over time. When this occurs, we reclassify revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market.

ANALOG DEVICES, INC.

REVENUE TRENDS BY END MARKET

(Unaudited)

(In thousands)



The categorization of revenue by end market is determined using a variety ofdata points including the technical characteristics of the product, the "soldto" customer information, the "ship to" customer information and the endcustomer product or application into which our product will be incorporated. Asdata systems for capturing and tracking this data and our methodology evolvesand improves, the categorization of products by end market can vary over time.When this occurs, we reclassify revenue by end market for prior periods. Suchreclassifications typically do not materially change the sizing of, or theunderlying trends of results within, each end market.

Three Months Ended

July 31, 2021

August 1, 2020

Revenue

% of Revenue1

Y/Y%

Revenue

% of Revenue1

Industrial

$

1,001,867

57%

29%

$

778,361

53%

Communications

288,743

16%

(21)%

363,304

25%

Automotive2

290,077

16%

80%

161,489

11%

Consumer

178,166

10%

16%

152,982

11%

Total revenue

$

1,758,853

100%

21%

$

1,456,136

100%

Nine Months Ended

July 31, 2021

August 1, 2020

Revenue

% of revenue1

Y/Y %

Revenue

% of revenue1

Industrial

$

2,829,648

57%

30%

$

2,184,413

54%

Communications

847,632

17%

(4)%

880,633

22%

Automotive2

793,443

16%

45%

548,002

13%

Consumer

507,995

10%

10%

463,713

11%

Total revenue

$

4,978,718

100%

22%

$

4,076,761

100%

1) The sum of the individual percentages may not equal the total due to rounding.

2) Includes $24.1 million of revenue immediately recognized in the third quarter of fiscal 2021 from an intellectual property licensing agreement.

Three Months Ended

July 31, 2021 August 1, 2020

Revenue % of Y/Y% Revenue % of Revenue^1 Revenue^1

Industrial $ 1,001,867 57% 29% $ 778,361 53%

Communications 288,743 16% (21) 363,304 25% %

Automotive^2 290,077 16% 80% 161,489 11%

Consumer 178,166 10% 16% 152,982 11%

Total revenue $ 1,758,853 100% 21% $ 1,456,136 100%



Nine Months Ended

July 31, 2021 August 1, 2020

Revenue % of Y/Y Revenue % of revenue^1 % revenue^1

Industrial $ 2,829,648 57% 30% $ 2,184,413 54%

Communications 847,632 17% (4)% 880,633 22%

Automotive^2 793,443 16% 45% 548,002 13%

Consumer 507,995 10% 10% 463,713 11%

Total revenue $ 4,978,718 100% 22% $ 4,076,761 100%



1) The sum of the individual percentages may not equal the total due torounding.

2) Includes $24.1 million of revenue immediately recognized in the thirdquarter of fiscal 2021 from an intellectual property licensing agreement.

ANALOG DEVICES, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended

Nine Months Ended

Jul. 31, 2021

Aug. 1, 2020

Jul. 31, 2021

Aug. 1, 2020

Gross margin

$

1,221,184

$

972,578

$

3,403,192

$

2,667,394

Gross margin percentage

69.4

%

66.8

%

68.4

65.4

%

Acquisition related expenses

37,945

45,222

123,653

134,633

Adjusted gross margin

$

1,259,129

$

1,017,800

$

3,526,845

$

2,802,027

Adjusted gross margin percentage

71.6

%

69.9

%

70.8

%

68.7

%

Operating expenses

$

611,538

$

553,454

$

1,809,996

$

1,630,822

Percent of revenue

34.8

%

38.0

%

36.4

%

40.0

%

Acquisition related expenses

(109,434

)

(110,460

)

(329,637

)

(333,298

)

Acquisition related transaction costs

(18,326

)

(9,121

)

(56,570

)

(9,121

)

Charitable foundation contribution

-

-

-

(40,000

)

Restructuring related expense, net

8,938

(31,830

)

8,189

(44,287

)

Adjusted operating expenses

$

492,716

$

402,043

$

1,431,978

$

1,204,116

Adjusted operating expenses percentage

28.0

%

27.6

%

28.8

%

29.5

%

Operating income

$

609,646

$

419,124

$

1,593,196

$

1,036,572

Operating margin

34.7

%

28.8

%

32.0

%

25.4

%

Acquisition related expenses

147,379

155,682

453,290

467,931

Acquisition related transaction costs

18,326

9,121

56,570

9,121

Charitable foundation contribution

-

-

-

40,000

Restructuring related expense, net

(8,938

)

31,830

(8,189

)

44,287

Adjusted operating income

$

766,413

$

615,757

$

2,094,867

$

1,597,911

Adjusted operating margin

43.6

%

42.3

%

42.1

%

39.2

%

Provision for income taxes

$

68,967

$

10,364

$

170,146

$

60,072

Tax related items

20,686

55,217

66,466

105,364

Adjusted provision for income taxes

$

89,653

$

65,581

$

236,612

$

165,436

Income before income taxes

$

572,278

$

373,029

$

1,484,881

$

894,307

Effective tax rate

12.1

%

2.8

%

11.5

%

6.7

%

Acquisition related expenses

147,379

155,682

453,290

467,931

Acquisition related transaction costs

18,326

9,121

56,570

9,121

Charitable foundation contribution

-

-

-

40,000

Restructuring related expense, net

(8,938

)

31,830

(8,189

)

44,287

Adjusted income before income taxes

$

729,045

$

569,662

$

1,986,552

$

1,455,646

Adjusted tax rate

12.3

%

11.5

%

11.9

%

11.4

%

Diluted EPS

$

1.35

$

0.97

$

3.53

$

2.24

Acquisition related expenses

0.40

0.42

1.22

1.26

Acquisition related transaction costs

0.05

0.02

0.15

0.02

Charitable foundation contribution

-

-

-

0.11

Restructuring related expense, net

(0.02

)

0.09

(0.02

)

0.12

Tax related items

(0.06

)

(0.15

)

(0.18

)

(0.28

)

Adjusted diluted EPS*

$

1.72

$

1.36

$

4.70

$

3.47

* The sum of the individual per share amounts may not equal the total due to rounding.

ANALOG DEVICES, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended Nine Months Ended

Jul. 31, 2021 Aug. 1, 2020 Jul. 31, 2021 Aug. 1, 2020

Gross margin $ 1,221,184 $ 972,578 $ 3,403,192 $ 2,667,394

Gross margin 69.4 % 66.8 % 68.4 65.4 %percentage

Acquisitionrelated 37,945 45,222 123,653 134,633 expenses

Adjusted gross $ 1,259,129 $ 1,017,800 $ 3,526,845 $ 2,802,027 margin

Adjusted grossmargin 71.6 % 69.9 % 70.8 % 68.7 %percentage



Operating $ 611,538 $ 553,454 $ 1,809,996 $ 1,630,822 expenses

Percent of 34.8 % 38.0 % 36.4 % 40.0 %revenue

Acquisitionrelated (109,434 ) (110,460 ) (329,637 ) (333,298 )expenses

Acquisitionrelated (18,326 ) (9,121 ) (56,570 ) (9,121 )transaction costs

Charitablefoundation - - - (40,000 )contribution

Restructuringrelated 8,938 (31,830 ) 8,189 (44,287 )expense, net

Adjustedoperating $ 492,716 $ 402,043 $ 1,431,978 $ 1,204,116 expenses

Adjustedoperating 28.0 % 27.6 % 28.8 % 29.5 %expenses percentage



Operating $ 609,646 $ 419,124 $ 1,593,196 $ 1,036,572 income

Operating 34.7 % 28.8 % 32.0 % 25.4 %margin

Acquisitionrelated 147,379 155,682 453,290 467,931 expenses

Acquisitionrelated 18,326 9,121 56,570 9,121 transaction costs

Charitablefoundation - - - 40,000 contribution

Restructuringrelated (8,938 ) 31,830 (8,189 ) 44,287 expense, net

Adjustedoperating $ 766,413 $ 615,757 $ 2,094,867 $ 1,597,911 income

Adjustedoperating 43.6 % 42.3 % 42.1 % 39.2 %margin



Provision for $ 68,967 $ 10,364 $ 170,146 $ 60,072 income taxes

Tax related 20,686 55,217 66,466 105,364 items

Adjustedprovision for $ 89,653 $ 65,581 $ 236,612 $ 165,436 income taxes



Income before $ 572,278 $ 373,029 $ 1,484,881 $ 894,307 income taxes

Effective tax 12.1 % 2.8 % 11.5 % 6.7 %rate

Acquisitionrelated 147,379 155,682 453,290 467,931 expenses

Acquisitionrelated 18,326 9,121 56,570 9,121 transaction costs

Charitablefoundation - - - 40,000 contribution

Restructuringrelated (8,938 ) 31,830 (8,189 ) 44,287 expense, net

Adjusted incomebefore income $ 729,045 $ 569,662 $ 1,986,552 $ 1,455,646 taxes

Adjusted tax 12.3 % 11.5 % 11.9 % 11.4 %rate



Diluted EPS $ 1.35 $ 0.97 $ 3.53 $ 2.24

Acquisitionrelated 0.40 0.42 1.22 1.26 expenses

Acquisitionrelated 0.05 0.02 0.15 0.02 transaction costs

Charitablefoundation - - - 0.11 contribution

Restructuringrelated (0.02 ) 0.09 (0.02 ) 0.12 expense, net

Tax related (0.06 ) (0.15 ) (0.18 ) (0.28 )items

Adjusted $ 1.72 $ 1.36 $ 4.70 $ 3.47 diluted EPS*

* The sum of the individual per share amounts may not equal the total due torounding.

ANALOG DEVICES, INC.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

(Unaudited)

(In thousands)

Trailing Twelve Months

Three Months Ended

Jul. 31, 2021

Jul. 31, 2021

May 1, 2021

Jan. 30, 2021

Oct 31, 2020

Revenue

$

6,505,013

$

1,758,853

$

1,661,407

$

1,558,458

$

1,526,295

Net cash provided by operating activities

$

2,466,941

$

630,041

$

736,361

$

427,941

$

672,598

% of Revenue

38

%

36

%

44

%

27

%

44

%

Capital expenditures

$

(242,787

)

$

(86,341

)

$

(59,170

)

$

(67,388

)

$

(29,888

)

Free cash flow

$

2,224,154

$

543,700

$

677,191

$

360,553

$

642,710

% of Revenue

34

%

31

%

41

%

23

%

42

%

ANALOG DEVICES, INC.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

(Unaudited)

(In thousands)

Trailing Twelve Three Months Ended Months

Jul. 31, 2021 Jul. 31, 2021 May 1, 2021 Jan. 30, 2021 Oct 31, 2020

Revenue $ 6,505,013 $ 1,758,853 $ 1,661,407 $ 1,558,458 $ 1,526,295

Net cashprovided by $ 2,466,941 $ 630,041 $ 736,361 $ 427,941 $ 672,598 operating activities

% of Revenue 38 % 36 % 44 % 27 % 44 %

Capital $ (242,787 ) $ (86,341 ) $ (59,170 ) $ (67,388 ) $ (29,888 )expenditures

Free cash $ 2,224,154 $ 543,700 $ 677,191 $ 360,553 $ 642,710 flow

% of Revenue 34 % 31 % 41 % 23 % 42 %

ANALOG DEVICES, INC.

RECONCILIATION OF PROJECTED GAAP TO NON-GAAP RESULTS

(Unaudited)

Three Months Ending October 30, 2021

Reported

Adjusted

Revenue

$1.78 Billion

$1.78 Billion

(+/- $70 Million)

(+/- $70 Million)

Operating margin

34.2%

43.7% (1)

(+/-140 bps)

(+/-100 bps)

Nonoperating expense

~ $43 Million

~ $43 Million

Tax rate

11% to 13%

11% to 13% (2)

Earnings per share

$1.33

$1.72 (3)

(+/- $0.11)

(+/- $0.11)

(1) Includes $169 million of adjustments related to acquisition related expenses and acquisition related transaction costs as previously defined in the Non-GAAP Financial Information section of this press release. This excludes acquisition related transaction costs that are contingent upon closing of the proposed Maxim Integrated Products, Inc. acquisition as we cannot reasonably predict the timing of this transaction. (2) Includes $23 million of tax effects associated with the adjustments for acquisition related expenses and acquisition related transaction costs noted above. (3) Includes $0.39 of adjustments related to the net impact of acquisition related expenses and acquisition related transaction costs, as well as the tax effects on those items.

(ADI-WEB)

View source version on businesswire.com: https://www.businesswire.com/news/home/20210818005154/en/

CONTACT: For more information, please contact:

CONTACT: Investor Contact: Analog Devices, Inc. Mr. Michael Lucarelli Sr. Director of Investor Relations 781-461-3282 investor.relations@analog.com

CONTACT: Media Contacts: Teneo Ms. Andrea Calise 917-826-3804 andrea.calise@teneo.com

CONTACT: Teneo Ms. Megan Fenton 917-860-0356 megan.fenton@teneo.com