Analog Devices Q2 Earnings Beat Estimates, Revenues Rise Y/Y

Core Viewpoint - Analog Devices (ADI) reported strong financial results for the second quarter of fiscal 2025, with earnings and revenues exceeding market expectations, driven by robust performance across various end markets. Financial Performance - Non-GAAP earnings for Q2 fiscal 2025 were $1.85 per share, surpassing the Zacks Consensus Estimate by 9.5%, and up from$ 1.40 per share in the same quarter last year [1] - Revenues reached $2.64 billion, exceeding the Zacks Consensus Estimate by 5.51%, and increased from$ 2.16 billion year-over-year [2] Segment Performance - Industrial segment revenues were $1.16 billion, accounting for 44% of total revenues, reflecting a 17% year-over-year increase and beating the Zacks Consensus Estimate of$ 1.15 billion [3] - Automotive segment revenues were $849.5 million, representing 32% of total revenue, with a 24% year-over-year growth, surpassing the Zacks Consensus Estimate of$ 758.6 million [3] - Consumer segment generated $317.8 million (12% of revenue), marking a 30% increase year-over-year, beating the Zacks Consensus Estimate of$ 315.4 million [4] - Communications segment revenues were $315.1 million, also 12% of total revenues, with a 32% increase from the prior year, exceeding the Zacks Consensus Estimate of$ 279.9 million [4] Margins and Cash Flow - Adjusted gross margin expanded by 270 basis points to 69.4%, while adjusted operating margin increased by 220 basis points to 41.2% year-over-year [5] - As of May 3, 2025, cash and cash equivalents were $2.38 billion, down from$ 2.72 billion as of February 1, 2025; long-term debt rose slightly to $6.65 billion [6] - Operating cash flow was$ 819 million, and free cash flow was $729 million during the second quarter [6] Shareholder Returns - ADI returned$ 740 million to shareholders, which included $491 million in dividends and$ 249 million in share repurchases [7] Guidance - For Q3 fiscal 2025, management expects net sales of $2.75 billion (+/-$ 100 million), indicating a year-over-year growth of 12.8%, with a non-GAAP operating margin forecast of 41.5% (+/- 100 bps) [8] - Non-GAAP earnings are projected to be $1.92 (+/- 10 cents) per share, with the consensus estimate at$ 1.80 per share, reflecting a year-over-year rise of 13.9% [9]