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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