ADI

Technology

Analog Devices

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Market Data

Financials

XBRL · SEC EDGAR

2007–2025(19yr)

Revenue

Net Income

Free CF

Metric	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$2.5B	$2.6B	$2.0B	$2.8B	$3.0B	$2.7B	$2.6B	$2.9B	$3.4B	$3.4B	$5.1B	$6.2B	$6.0B	$5.6B	$7.3B	$12.0B	$12.3B	$9.4B	$11.0B	+16.9%
Gross Profit	$1.5B	$1.6B	$1.1B	$1.8B	$2.0B	$1.7B	$1.7B	$1.8B	$2.3B	$2.2B	$3.1B	$4.2B	$4.0B	$3.7B	$4.5B	$7.5B	$7.9B	$5.4B	$6.8B	+25.9%
Gross Margin	61.2%	61.1%	55.5%	65.2%	66.4%	64.5%	64.3%	63.9%	65.8%	65.1%	59.9%	68.3%	67.0%	65.9%	61.8%	62.7%	64.0%	57.1%	61.5%	+4.4pp
Operating Income	$568.7M	$625.0M	$284.8M	$900.1M	$1.1B	$824.0M	$753.1M	$752.5M	$830.8M	$1.0B	$1.1B	$1.9B	$1.7B	$1.5B	$1.7B	$3.3B	$3.8B	$2.0B	$2.9B	+44.3%
Operating Margin	23.1%	24.2%	14.1%	32.6%	35.8%	30.5%	28.6%	26.3%	24.2%	30.0%	20.7%	30.3%	28.6%	26.7%	23.1%	27.3%	31.1%	21.6%	26.6%	+5.0pp
Net Income	$496.9M	$786.3M	$247.8M	$712.1M	$867.4M	$651.2M	$673.5M	$629.3M	$696.9M	$861.7M	$727.3M	$1.5B	$1.4B	$1.2B	$1.4B	$2.7B	$3.3B	$1.6B	$2.3B	+38.7%
Net Margin	20.2%	30.4%	12.3%	25.8%	29.0%	24.1%	25.6%	22.0%	20.3%	25.2%	14.2%	24.1%	22.8%	21.8%	19.0%	22.9%	26.9%	17.3%	20.6%	+3.2pp
Free Cash Flow	$678.6M	$512.0M	$376.1M	$879.6M	$777.5M	$682.4M	$789.3M	$693.7M	$753.8M	$1.2B	$908.5M	$2.2B	$2.0B	$1.8B	$2.4B	$3.8B	$3.6B	$3.1B	$4.3B	+37.0%
FCF Margin	27.5%	19.8%	18.7%	31.9%	26.0%	25.3%	30.0%	24.2%	21.9%	33.7%	17.8%	35.3%	33.0%	32.9%	32.7%	31.4%	28.9%	33.1%	38.8%	+5.7pp
EPS (Diluted)	$1.50	$2.65	$0.85	$2.33	$2.81	$2.13	$2.14	$2.02	$2.23	$2.80	$1.97	$4.04	$3.70	$3.28	$3.46	$5.25	$6.55	$3.28	$4.56	+39.0%

Total Debt$8.1B

Cash & Equiv.$2.5B

Net Debt$5.6B

4 min read

1. THE BIG PICTURE

Analog Devices is decoupling its performance from the standard semiconductor cycle by embedding its "physical intelligence" into long-life industrial and automotive systems. By maintaining a portfolio of 75,000 products and a massive engineering workforce, Analog Devices has secured the highest gross margins among its primary peers, effectively charging a premium for the complexity of sensing and interpreting real-world data (10-K Item 1).

2. WHERE THE RISKS HIT HARDEST

Analog Devices’s "customer-centric" strategy and reliance on field application engineers are threatened by its distributor dependency. While Analog Devices prides itself on close customer relationships, it funnels 56% of its revenue through third-party distributors, leaving it exposed to accounts receivable defaults and a lack of direct control over over half of its sales channel (10-K Item 1A).

Furthermore, its technical leadership in high-performance analog ICs is structurally vulnerable to supply chain concentration. Analog Devices relies on third-party foundries, specifically TSMC, for more than 50% of its annual wafer requirements. This creates a single point of failure where geopolitical instability in the Taiwan Strait could instantly nullify the competitive advantage of its 13,000-person engineering team (10-K Item 1A).

3. WHAT THE NUMBERS SAY TOGETHER

The financial data reveals a company operating at peak efficiency, converting revenue to cash at a rate far superior to its larger rivals. While Texas Instruments (TXN) leads in operating margins, Analog Devices claims the top spot in Free Cash Flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin at 36.5%—nearly four times the rate of TXN (XBRL). This cash generation is critical because it services a substantial $8.6 billion debt pile that otherwise limits operational flexibility.

The growth trajectory shows a sharp acceleration. While the trailing twelve-month (TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter) revenue growth stands at 16.9%, the most recent quarter saw a 30% jump to $3.16 billion (10-Q). This divergence is not a fluke of one sector; it is broad-based, with Industrial revenue climbing from $1.08 billion to $1.49 billion and Communications rising 63% due to data center expansion (10-Q). Management’s guidance of a $3.5 billion "high watermark" for the next quarter suggests this is a structural shift driven by AI and data center demand rather than a temporary mean-reversion (8-K).

4. IS IT WORTH IT AT THIS PRICE?

At a Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 24.7x, Analog Devices is trading almost exactly in line with the peer median of 25.0x (Yahoo Finance). This valuation implies the market expects 6.1% long-term growth (CAPM analysis). Given that Analog Devices just delivered 30% quarterly growth and maintains a 61.9% gross margin—the highest in its peer group—this valuation appears grounded in reality rather than speculation.

However, the $4.9 billion in net debt and the 1.2x net leverage ratio mean Analog Devices has less room for error than a cash-rich peer like Monolithic Power Systems (MPWR). If long-term growth were to slow to 5%, the justified multiple would drop to 19.5x, representing a 21% downside (CAPM analysis). Investors are essentially paying a fair price for a high-quality cash machine, but they are also inheriting significant geopolitical risk that is not currently reflected in the earnings multiple.

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if the second-quarter revenue falls below the $3.4 billion lower bound of guidance, suggesting the "high watermark" was a cyclical peak rather than a new baseline.
Cautious if distributor sales concentration rises above the current 56%, signaling a further loss of direct customer connectivity.
Constructive if Analog Devices uses its 36.5% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin to aggressively pay down its $8.6 billion debt, reducing interest rate sensitivity.

6. BOTTOM LINE

Structural Advantage: A massive, proprietary library of 75,000 SKUs with long lifecycles, integrated into customer workflows by a 13,000-strong engineering team.

Bottom Line: Analog Devices is an exceptionally efficient cash generator trading at a reasonable price, though its heavy reliance on external foundries and distributors remains a persistent structural shadow.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Geopolitical and Trade Instability: Analog Devices maintains significant manufacturing facilities in Ireland, the Philippines, Thailand, and Malaysia, and derives a large portion of its revenue from international markets. Trade policies, export restrictions (particularly regarding China), and regional conflicts—such as tensions across the Taiwan Strait—threaten Analog Devices’s ability to recognize revenue and maintain its supply chain.
Cyclical Industry Demand: The semiconductor industry is inherently cyclical. If Analog Devices overbuilds inventory or expands capacity in anticipation of demand that fails to materialize, it faces risks of underutilization charges, inventory write-downs, and asset impairments.
Distributor Dependency: Sales to third-party distributors accounted for approximately 56% of revenue in the year ended November 1, 2025. Analog Devices lacks protection against accounts receivable default from these distributors and faces risks if they reduce sales efforts or terminate representation.
Supply Chain Concentration: Analog Devices relies on third-party foundries, including Taiwan Semiconductor Manufacturing Company (TSMC), for more than half of its annual wafer requirements. Geopolitical events or capacity constraints at these foundries could disrupt Analog Devices’s ability to manufacture products.
Indebtedness: As of November 1, 2025, Analog Devices had approximately $8.6 billion in outstanding indebtedness. This leverage limits Analog Devices’s ability to obtain additional financing, acquire new technologies, or invest in business growth, and exposes it to interest rate fluctuations.

2. Company-Specific Risks

Gray Market Diversion: Products are occasionally diverted from authorized channels to the "gray market," which can result in the sale of counterfeit or substandard goods, damaging Analog Devices's reputation and requiring costly compliance audits.
Manufacturing Complexity: The fabrication of integrated circuits is highly precise; impurities or equipment failures can cause a substantial percentage of wafers to be rejected, leading to manufacturing delays and product shortages.
Corporate Culture Integration: As Analog Devices grows through acquisitions, it faces the risk of failing to maintain the corporate culture that fosters innovation and employee retention.
Sustainability-Linked Debt: Analog Devices issued $750 million in Sustainability-Linked Senior Notes that are subject to a 30-basis-point interest rate increase if specific environmental sustainability targets are not met by April 1, 2026.

3. Regulatory/Legal Risks

Taxation and Audits: Analog Devices is currently under various tax examinations, including an IRS income tax audit for fiscal years 2018, 2019, and 2021, and an Irish corporate tax audit for fiscal 2021. Changes in global tax laws, such as the OECD’s 15% minimum global effective tax rate, may increase Analog Devices's effective tax rate and cash tax payments.
Data Privacy Compliance: Analog Devices is subject to evolving global privacy regulations, including the GDPR, China’s PIPL, and the CCPA. Failure to comply with these requirements could result in significant penalties and litigation.
Government Contracting: As a U.S. government contractor, Analog Devices is subject to strict procurement regulations. Non-compliance can lead to contract price adjustments, refund obligations, or debarment from future government contracts.
Environmental Hazards: Analog Devices is subject to EHS requirements regarding the use of hazardous materials, such as per- and polyfluoroalkyl substances (PFAS). Restrictions on these materials could force changes to manufacturing processes or increase compliance costs.

4. Financial Impact Map

International Trade/Export Restrictions → Revenue → Impacted by limitations on sales to certain Chinese companies and potential loss of business to foreign competitors.

Cyclical Demand/Overcapacity → Gross Profit / Operating Expenses → Risk of inventory write-downs, underutilization charges, and asset impairments.

Distributor Default → Accounts Receivable → Analog Devices does not require letters of credit from distributors, leaving it unprotected against default or bankruptcy.

Indebtedness → Net Interest Expense → Exposure to changes in market interest rates and potential for increased borrowing costs if credit ratings are downgraded.

Tax Audits/Legislative Changes → Effective Tax Rate / Net Income → Potential for material adjustments to tax provisions and cash tax payments based on the outcome of ongoing audits and new global tax frameworks.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
8-K	Feb 2026	—
10-Q	Feb 2026	Jan 2026
14A	Jan 2026	—
10-K	Nov 2025	Nov 2025