The following is a summary of the Analog Devices, Inc. (ADI) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Analog Devices reported Q2 revenue of $2.16 billion, finishing above the high-end of their outlook.

• The gross margin for Q2 was 66.7%, lower than previous year due to a mix of factors including lower revenue and utilization.

• Operating margin hit 39% surpassing the high-end outlook.

• They closed the quarter with more than $2.3 billion of cash and short-term investments and a net leverage ratio of 1.1.

• Raised $1.1 billion of debt for general corporate purposes within the quarter.

• ADI's EPS for the quarter was $1.40, surpassing the high end of their outlook.

• Heading into Q3, the projected revenue is $2.27 billion ± $100 million, a 5% sequential increase at the midpoint.

• The Q3 gross margin is expected to be slightly above 67% with an expectation of modest expansion for the second half of the year.

Business Progress:

• ADI is expecting recovery from a downturn, with enhanced bookings for the third consecutive quarter.

• Key wins recorded across the healthcare, industrial automation, and automotive sectors.

• Achieved multiple customers and good traction in the high-performance computing services due to AI potential.

• Leveraging AI for engineering development and enhancing manufacturing efficiency.

• Anticipate progression in AI for acoustic systems, 5G radios, and industrial automation.

• Reduced inventory by over $70 million in Q2 and plan further reduction in Q3. Met reduction goal of $100 million in the channel and plan additional reduction in Q3.

• Software investment and development of machine learning, neural networking capabilities have been underway to bolster the second half of 2025.

• An investment of over $2.5 billion made to increase internal capacity across various revenue-generating nodes to meet demand.

More details: Analog Devices IR

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