Analog Devices Q3 Earnings Beat Estimates, Revenues Rise Y/Y

Core Insights - Analog Devices (ADI) reported third-quarter fiscal 2025 non-GAAP earnings of $2.05 per share, exceeding the Zacks Consensus Estimate by 6.2% and up from $1.58 per share in the same quarter last year [1][9] - The company has consistently beaten earnings estimates over the past four quarters, with an average surprise of 5.6% [1] Revenue Performance - For the second quarter of fiscal 2025, Analog Devices generated revenues of $2.88 billion, surpassing the Zacks Consensus Estimate by 4.45% and increasing from $2.31 billion in the year-ago quarter [2][9] - In the third quarter, revenue breakdown by segment included: - Industrial: $1.29 billion (45% of total revenue), a 23% year-over-year increase [3] - Automotive: $850.6 million (30% of total revenue), up 22% year-over-year [3] - Consumer: $372.2 million (13% of total revenue), marking a 21% increase year-over-year [3] - Communications: $372.5 million (13% of total revenue), rising 40% year-over-year [3] Profitability Metrics - The adjusted gross margin improved by 130 basis points to 69.2%, while the adjusted operating margin increased by 100 basis points to 42.2% year-over-year [4] Financial Position - As of August 2, 2025, cash and cash equivalents stood at $2.32 billion, down from $2.38 billion as of May 3, 2025 [5] - The company held $1.15 billion in short-term investments and reported long-term debt of $8.14 billion, up from $6.65 billion in the previous quarter [5] - Operating cash flow for the third quarter was $1.17 billion, with free cash flow at $1.09 billion [5] Shareholder Returns - Analog Devices returned $1.57 billion to shareholders, which included $490 million in dividends and $1.08 billion in share repurchases [6] Future Guidance - For the fourth quarter of fiscal 2025, management anticipates revenues of $3.0 billion (+/- $100 million), compared to the Zacks Consensus Estimate of $2.79 billion, indicating a year-over-year growth of 14% [7] - Projected reported operating margin is approximately 30.5% (+/-150 bps), with an adjusted operating margin of about 43.5% (+/-100 bps) [7] - Expected reported earnings are $1.53 (+/-$0.10) per share, while adjusted earnings are projected at $2.22 (+/-$0.10) per share, above the consensus estimate of $1.98 per share [7]