Analog Devices (ADI) 19 Feb 202020 Q1 Earnings call transcript

Good morning, and welcome to the Analog Devices First Quarter and Fiscal Year 2020 Earnings Conference Call, which is being audio webcast via telephone and over the web. I'd now like to introduce your host for today's call, Mr. Michael Lucarelli, Senior Director of Investor Relations. Sir, the floor is yours.

Thank you, Cheryl, and good morning everybody. first fiscal our conference joining for quarter XXXX and call. Thanks are on Mahendra-Rajah. Vincent the me ADI call Prashanth With CFO, today CEO, ADI Roche; and

anyone it can at release, missed relating investor.analog.com. financial schedules For find who the and you

including on statements statements to our including undertake future our about of light opinion recent as update forward-looking most reflect earnings Actual a forward-looking of our information materially differ We factors, our includes discuss, results information events. outlook result to may the those and from of Now These The statements. call. these and no date the or we're release of discussed disclosures. new in as in objectives XX-Q. these to forward-looking various forward-looking this statements obligation

financial to historical about special first special short-term financial comments and fiscal include to XXXX exclude these from excluded measures, will our which Our results the also performance, measures quarter outlook comparing today's results information are additional measures also non-GAAP are non-GAAP directly items earnings Reconciliations The ADI's measures about included items. prior today of comparable and in GAAP non-GAAP their release. periods. most

I'll Vincent ADI over it Vince? Roche. that, to with And turn CEO,

capital quarters results in morning to Well, expansion to working Mike, as Thanks, good position and line margin our were first ourselves deliver the with will And effectively everybody. operating importantly, and our costs quarter see. in to you expectations our ahead. we managed

address coronavirus I quarterly Before like outbreak. discuss the I'd the highlights, to

doing situation the businesses. disruption need while. can provide we the their is expand closely. And minimize and employees. and in Prashanth monitoring the it course, safety fluid, we health will of to on while and to We're affected First of with to our the are support top implications financial a those our remains just our customers they priority foremost, everything

was decision lower approximately first year was lower prior line versus time our XX% the guidance. earnings margin last the and Adjusted year, per $X.X at billion, due quarter, with to into our expectations. utilization. now midpoints in share but the Operating a So revenues to of down above versus $X.X, revenue

Over approximately this the to to $X cash cash generated S&P XX% equating flow free continues of flow a the And the top free places months, trailing billion margin. XXX. XX% XX we of in

On our call an our for you progress like give update our so last priority far. on of quarter our and is one we XXXX, shared Priority efficient to use capital. the I'd

with over in is activities. product in million first R&D most our XX% markets. BXB of effective the this targeting spend $XXX capital new funding more development we quarter, In across The than invested call first our opportunities the

focus ADI is For area power for franchise. example, of an increased our

data in Here across increasing position automotive like we've R&D markets new broad to center, strong the enhance areas infrastructure. into opportunities extend to been XG and and our

And we momentum design And quarterly the power in returns. same expect committed strong. to we years just to time, the ahead we wind the $XXX In revenue quarter, Our to shareholders. to strong a million shareholder us. increase over delivering remain rate we double growth remains our OTC the At returned XX% of announced first historical dividend.

deepening is two Priority centricity. customer

challenges. needs order As to expertise, examples engaging just to you domain sets always share their portfolio, And capabilities specific now. our a ADI combination I’ve the like and automotive manufacturing the with anticipating imparity in apart. broad shared few I'd with before, and our of technology We're our to product solve segment of toughest customers

cancellation system. quarter manufacturer noise first And AXB cancellation. cabin announced XXth In By noise the as continues gain we technology. traction to became Our ecosystem. to opening such industry's our our the customers portfolio, to electronics platform Hyundai the leveraging new auto applications HEV we're together, the up in platform all-digital for incorporate road active

noise With customer our our due and per we're the while rise to vehicle. stickier of increasing the software sum cancellation, capabilities, of active hardware relationships integration creating

growing intensity of audience health with at charge the wins to and electric our in improve level and in electric solutions, efficiency miles strength double-digit monitoring leaders of across production. a vehicle vehicles delivering help to industry also our player rate. the and a us market In models moving objective market, were electric urgency customers battery new from deliver more our There's the results, accurately. long-term benefiting future the towards partnering design greater ramp an powertrains, as early per will near-term battery are we BMS as U.S. of revenue BMS we're on And

secular Priority as growth. capitalizing such XG, across We've automation you factory addressable previously key vehicles, center. with discussed diversified expand markets trends our to our data company, electric trends on is three and and drive secular

Now today, of I'd the spend to markets, time industrial sub-segment a some on obscure sector. like perhaps space our more

are over cosmic radiation the just customers’ also space these challenges are on and under perform solve of built extreme and many comprehensive not We temperatures. of conditions knowledge challenges product decades these Our of and serving processing passive space high solutions must our power RF through base combination signal management, portfolio markets.

five represents While it of revenue percent couple ADI's of commands total stellar to see the margins, over the we today business a the double years. potential next and space

The sector you market exciting rapidly evolving. this me with space let is a share Now to us. about little why more is

with over they satellites XXXX connected thereby forecasts satellites satellites. stay today. unprecedented higher space continuously context, and are technologies LEO given hundreds and differ GEO levels that real a provide this towards to includes low revolver communication. XX,XXX new today's for Operationally, which the be are capabilities satellites. frontier they decade, with approximately position from the XX just terminal To the relative change ADI. minutes. becoming by some This will bandwidth, or advent increasing opportunities earth LEO Therefore, new provide in of that private and by up latency capital suggesting space orbit companies geostationary Over vertical new to from leading These have lower are or emerging time their of enable always gravitated communication of number times. for last the Technologically, XX refunded Earth the

with number the terminals terrestrial the To this these whether will the the communicate satellites creating LEO are that on of being of or be result, succeed proliferation they with in millions air, of both network, a As the and steered. grow satellites. in capable into ground must satellites, terminals

can phased XG increasing requires used channel channels form as this an So more thermal today. architecture into hurdles. smaller that exponential imagine, And networks factors increase count through enabled is in antennas, is array you power packed in and an already

increasingly our engineering a only ubiquitous us the this to of architect. To all always-connected customers those looking to not turning a ADI, supplier system key creating are help but in and be to solve LEO challenges network, indeed

end-to-end So their capabilities solutions antenna we're combined robustness. engaging with process power to and, from design in deliver with develop to bits, course, the required to customers early of performance

spectrum solutions a competitors, signal unique. entire Our any portfolio supplier completely of replicated go RF cannot analog from of space-grade as to comprehensive across chain OEMs, making for power ADI is to disruptors. of our the next by the wave as through provide ability to and And this be well traditional

to of at space in revenue satellites, And communications ahead. we of the told, over GEO compared to today's our five LEO the deliver with the we years refresh times years. cycle size All satellite next least plan expect steadier becoming four stream business shorter the LEO’s see a

potential and has autonomous value fully these growth the reliable space In as well. other across high-speed unlock LEO will be verticals operational, to a to an provide telesurgery. driver connections globally driving from meaningful networks ushering Once real-time, summary, opportunities

by ADI, believe ubiquitous growth, I edge broadly unprecedented speaking about in connectivity well solutions to as to believe sustainable, and and grow indeed, hyper-scale So I sensing, rapidly. And positioned closing, very and deliver be will for innovation our ahead, we're technological shareholder computing, look the returns. underpinned pervasive strong profitable and demand I continues as

So to with it I'll over Prashanth. that, hand

you, Thank Vince.

with first our revenue which today's my quarter an exception of add me will expenses the today be outlined Let release. items welcome special My adjusted press in on comments call. nonop basis, and earnings excludes to

through we margin disciplined came above EPS channel a ADI of solid our first with as operating spending, line delivered Revenue the our reduced and quarter. inventory. meaningfully outlook guidance. And midpoint in were

$X.XX, last to range our allocation high-end We capital of an this and is consistent XXth years. cornerstone the optimism the as also increase of our well prospects as the our increases policy, of returns increase X% shareholder strong dividend represents for over These our long-term target XX to reflect quarterly the dividend The to raised business. of XX%. XX%, our about commitment the our

line first represented while the year-over-year during cover income getting In quarter market. first XX% wireless our declined wired industrial quarter, this end we revenue declined by into quarter, Industrial, softer forecasted represents revenue the XX% BXB Before once during Communications, communications year-over-year. X% expectations, balanced aerospace with grew demand defense, of activity. was within and declined. revenue business as as our double-digits again, most let better-than-expected which XX% decreased statement, highly-diversified and which applications year-over-year, of me as the XX% the year-over-year both declined

or While communications the ecosystem. been balanced lumpy our stronger has more is position never inherently across an market,

global rollout, which we We are at XG be to will expect stages early tailwind. a the of the continue multiyear

across declined business, to XX% which the during weakness Auto represented of due all Our revenues year-over-year quarter, XX% applications.

to represents to our Vince especially wins, first applications. portable in XX% declined position. And we market-leading pipeline our and XX% highlighted, As revenue the our infotainment BMS auto strong which due due platform Consumer, remain quarter, confident customer in of of during lastly,

said in last XXXX our to for the be we our As expect we Consumer call, earnings segment. bottom

slightly P&L. the by year-over-year, as XXX at came basis was Gross favorable up in sequentially, mix margin XX.X%, offset points onto lower utilization. down Now and

in quarter trough quarters. year-over-year. of past X% OpEx and down we balance spending As and levels and curtailed $XXX inventories. near sequentially, have software this sequential down million, our delivered fab channel order the declines each was our five of the in quarter OpEx a light in reminder, In the to utilization X% reduce environment, was revenue sheet

annualized As fiscal goods plan with $XX of savings million across of sold XXXX a OpEx. cost reminder, to and we exit

above lower XX% driven sequentially, interest expense. approximately at midpoint. Nonop the million finished $XX by margins $X million, Operating were $X year-over-year, million expenses and down guided

came $X.X. quarter the quarter above rate for guide tax told, adjusted XX%. All in of Our midpoint at the was approximately first EPS

on moving the sheet. to balance Now

LTC legacy XXX. of As by days that of carry bridge due million two an of X% to facilities, to to during additional process revenue. about sequentially. We level to for to our or we XXX is lower call days closing planned, reduction, XX days we increased support X was the to XXX inventory inventory expect target do inventory $XX the reduced our this customers. our But inventory Despite

long-term X% degree. plan also million, of second end to We quarter, a the below about quarter revenue, but $XX reduce to target. to inventory again, $XX reduce in X% by and lesser fiscal fourth or channel channel expect million slightly and in quarter our approximately XXXX the CapEx in inventory the was we

cash buybacks and cash trailing free a million $X down shareholders flow billion, between our of of of about repayments. free returned $XXX XXXX. paid we've debt margins first in $XXX than of after our XX flow XX%. debt On to or to month through period, basis, dividends free quarter. finished flow and plan We pay cash in We million XXX% repurchased still the stock more this at in $XXX approximately fiscal dividends million million $XXX to Over

our expected. quarter into provide I'll as relatively second throughout remain Orders on of context view the quarter, we we overall our the recent quarter. business the current Now In coronavirus. have better trends resilient saw on and signs first the trended and some stabilization

New related China Chinese However, business see in we demand begun unsurprisingly, to the and disruption. extended had to Year weaker ongoing

Consumer outlook last minimal two assuming in a months all the to our are that such, returning the rollout. of we level business more before high Automotive of an of And likelihood due and normal impact delay demand is China's our As for in XG Industrial, on Communications February, our for assumes quarter. the second a to

very our forecasting China dynamics is business So in difficult today.

best estimates. our reflects guidance Our

again, And risks $XX first looking the of or with be in to we expected QX, quarter. coronavirus. $X.XX much said to revenue billion, revenue but the ahead This to minus includes expect I as to degree than the inventory is associated an channel lesser a $XX near-term million. plus reduce earlier, million So approximately due reduction

all At aggregate we increase to and mid across the markets billion, our midpoint growth Communications. in of expect BXB BXB to of $X.XX high-single Industrial, revenue digits the with of sequentially Automotive

expected to up op Based midpoint XX.X%. margin approximately guidance, be of is to on sequentially the

outlook to between We rate the we XX%. XX% are fiscal tax be for XXXX improving for planning and XX% XX% and quarter, our are between and our to

Based is $X.XX, adjusted expected be to on EPS $X.XX. these or plus inputs, minus

end point of to While for this, extremely markets, we by I improvement and Vince's confident ADI. we uncertainty are trend mindful the a that and the are we near-term in across growth stabilization encouraged optimism, echo around opportunities long-term are

now to to Let it Q&A. back give start our me Mike

Prashanth. Thanks,

Okay.

one our Operator, have Please initial Q&A you yourself Let's give question response. question to get to We'll can follow-up. opportunity limit session. first we our please? for the after our

[Operator from from Arya comes And question America. first Bank Instructions] Vivek our of

Your open. line is

This on question. a Vivek. ask us to Jamie letting is for Thanks for

So has and end stabilizing the markets. similar actually to improving peers, all growth guys trends some But end the you January markets noticed in like it across seems quarter. decelerated in

or guess, I end improving February So to specific lot even broad-based? headwinds? in of it market the in these more is more And are it or with virus trends geography a any is

Yeah.

expected. So, what Jamie, with I first quarter think we was the in line

into quarter. So was the deceleration going there first

under shipped the I Now, channel. $XX And said under my as we prepared million. in remember that we comment, by in have this shipped quarter

ship million basis, $XX in on PO was revenue So [indiscernible] sell-through. a below reg

second into quarter orders quarters. made expect continue into where to were go quarter, in on to to first demand improving is course of future disruption quarter. we over this note believe going we the get the second some we out this the pushed And China, the that As that of with we

of our do view we've quarters. subsequent get that from here better and think that we I out through is bottomed So here sort

little Yeah. Maybe bit well that. on color add market a perspective I can from a as of

as a like wire growth what we're more communications We're and say, well sector. strength in in we're business And expecting well, China, which of XG growth our strength becoming standpoint, that in particular process part in side our this what is second seeing, sector is, an automation good time. a in factory actually deployment we're quite broad-based. is of in XG the I a little spite in in at And Europe business, from Industrial control America things So, as shoots growth also the looks of would as seeing significant automotive as seeing as line. in ADI's gathering ATE green the point quarter, well delayed and

Cheryl. of Given long to the the that we're push please, caller of kind answer, next

next question Svanberg comes our Tore And from from Stifel.

line Your open. is

hoping Vince, elaborate more you a XG. there I little was on could bit

becoming said more a broad-based You it's business.

to understand not the from, is because coming coming it's obviously from where Just geographically growth trying near-term. China

could you be elaborate, would great. So if that Thanks.

Well, taken think, a pause. I China Tore, has

is XG. by in today, Asia far still, in point this is at the time, strongest in terms deployments of Asia

had quarter. roll-off I probably, what a the but seeing out well. of of during set in is XG in taken anticipated. a second think is I it's and for wireline Metro in in haul has also demand for whether what networks XG it's ramp doing – center, long China, pause whether bit we're is faster pointed a based terms or than that the is we quite data a ADI And set we see general,

into the we quarter. come yes, So second

Our gives of is growing confidence book-to-bill that quarter -- has here. above strength one. in the been well that And through the second us business the

Do you follow-up? a Thanks Tore. have

Yeah.

sounds quarter. good job you trying did dollar or you Prashanth, lower to either Could one. to than this lowering some like by? give a more channel a going targets bit weeks us what that by quick amount again you a you're lower Just maybe inventory. It

little I we bit the the in impact Well, or the get that take goal target It our in to didn't may quarter second think, coronavirus longer range mentioned us the first the a top our that call of fourth given by line. was include had Tore, quarter. to now quarter end we back of our

channel bit quarter we're softer But So the might I with up think, it back target we're end of be had a towards still top that range. we’ve in before inventory heading third same actually line, before.

Thank you.

Sachs. comes Toshiya Our from Hari Goldman from question next

open. is line Your

business? was line your business about was Is to Automotive guess business your XX% in over share? decline in guys double-digit are rate in quarter, thinking are with Prashanth, guidance, you your Your on in I in growth the activities through-cycle around peers a Automotive couple reduction? your the mostly kind kind how inventory from of little the infotainment. of BMS about you more of worse relative and losing importantly, near-term, Vince the channel which for a but basis. down you the optimism years? design-win But driving Automotive what's the talked and Or year-over-year that next guys

double-digit I the sector of we a clear. driver last drivers years, ADI. processing Yeah. noise very look, automotive course, very, two And in been, growth are for the been have -- area, growth signal Well, the AXB over for has active The audio ADI in general. infotainment BMS couple cancellation, of

And root virus. we the expect think and better I second quarter as when second in of quarter we which look but, has suffered in trends a China, our just has has the quarter, the America Europe. – strong BMS, a past result into in North

expecting probably had for the So sector been technology years the ago. a really modest or MEMS, The where safety at also our of passive more And investments has I little the rate ADI expected. the of XX-gigahertz we safety three headwind in quarter. we're growth radar in the than faster second four area where kind declining, MEMS is a withdrew

we'll is, So, bottom-out, think, to very, we customers. XX those begin all our I very exciting I have safety accounts, modality for headwinds. think, new to a on Specific which by gigahertz, in safety,

gigahertz of bottoming, I MEMS the XX the think, the and see radar will We decline.

infotainment, the next years. is we're sense sectors in two, very, my the those So we've to four areas three, grow very powertrain, picked well-positioned over

Thank next Srivastava comes And question our Ambrish from BMO. you. from

open. Your line is

much. number? but weeks might were give you Prashanth, the of quarter. X.X in inventory, actual a you it, I have very weeks an the actual and think had you I I did on Thank question missed prior

down above numerator the revenue mentioned, because still target if also I math, if you you we're range the the to $XX What give -- but be our We a has has channel Ambrish. took moved, inventory but the denominator do going shrunk. did million, not to number, the

high, we're more a to chunk on and weeks out take the is a did So in ratio going we we as standpoint, big but mentioned. still out, take QX

a follow-up, Ambrish? there Is

I given to Industrials, in -- what's way year, going You did. outperformed should as How on Vince, for And right on growth but guys years It’s China we should the year-over-year what's different maybe you. question. about growth Industrials the about how you business? the design to you about you and excited gets are look real quick Thank you. about two areas in at last think return less. if what to positioned slightly think wireline. think back about How we in In ask in comps, what in that then, out you ago? And then guys -- a wins wireline returning? always versus the be ramping broader. why

Thanks, Ambrish.

try me the first. and address Let Industrial question

seeing business continue annually. we our rates So, double-digit and aerospace defense at grow are to

a little as solid factory improvement on its I I'd -- the are on Asia We said seeing, I automation of a in pattern. say demand side earlier is things, said a

I out equation industrial think been taken the of inventory has hangover the in largely sector.

in quarter. think, of month industrial the shipments when So, there really expecting of not anything the February. the And we look impact we're a that said, in China, decent But, second for book-to-bill think top-line in terms virus sector the I industrial at of our in all sector. we've during a the get, the industrial I solid and in will we increase very

wireline of is side On pieces. gain things, really two our the there

data position centers. systems We optical have control strong for a in very leadership

And the data infrastructure also will of in market, technology things, there for optical signal use cable in chain. example, have centers our systems. a we good for all of control So their the position the

in business wireline any that. years. I several digits for been And don't see growing decline So now has high-single

time. the runs be that'll of annually the think ADI. a of terms $XXX in growth at sales for driver It million I present decent into region

company. I a the view as that Ambrish, very tailwind for So much,

Yes.

A add business. performance backdrop, of goes down that Industrial down meaningfully. Industrial. to a next was digit. a that we’ll did that and tough in you me macro zoom Cheryl, on With out, lot we also only pretty we go Industrial, on it we basis, side, general Let take trailing diversity good XX-month question. to a relates It of kind to the at that of at if look And the inventory look low-single

Thank you.

Our from RBC next Steves Capital comes Mitch question from Markets.

I things. to just clarify wanted couple

XX% having guys you XX% of margin, space kind understanding think and satellites but now very is hard a I of realized I'm mix kind I capital I'm good to time gross allocation, probably about the that higher did job margin. margin here. guessing what talking your at

down actually as half? the maybe second the in you guys a line. half gross then margin gross coming You bit the in what through well? how and talk operating the the margin should flow profile would Can us that margin like And are through line look first

guess a bit background little I So right. of

were XX% cycle we we're XXs, in is in it’s XX%, And like times, now, gross model so at in margin for through long-term Our the operating times, a more challenging model. the XX%. good down high

going see As we things be utilization impacting are from two move mix. margins, forward both here, we that and to

expectations year. So QX level utilization the the represented trough of for our

fair a be of and mentioned manufacturing margins. Vince businesses. amount to be Industrials forward. questions asked, here the in on So continue will gets in from under our highest of we also that strength better expect absorption Industrial, as move of Industrial, as general, facilities. some internal And And growing tailwind our margin one is at That were to that we to the

provide tailwind. will that So also

second maybe sequential of in to our towards the would improvement end balance can see model of the the the this So that of the gross margins getting year. through year, end margins in expect you back I likely half,

the business. then terms I follow-up the in And just for of seasonality have one just

was April quarter, on? July macro the from from above probably going X. at sounds you a April up March looked guess, items a maybe But seasonal should is like think April I thinking little I be, are given going the just China when July, view the it to depressed all bit going should of to conservative be I in that more that because open

the zeroed the top included guide that for million quarter $XX use the February out math essentially there. that for made of then and arrive of and is are adjustment second an made Industrial at coronavirus. pushed And department pushed on at out the because And for impact of the challenges to China we Consumer. the labor that the going Communications for in also a being adjustment of we just So our -- it XG we of being we that Auto

back. as Could above begin to that quarter. That's and the expect a be third a that in as depends months It's our say. locked how it's in it is not the shift demand. to view that on We back purely going current -- order $XX is the that that timing that falls that of unwinding normal? not when to be But certainly certainly to comes certainly But that suggests back subsequent possibility the in, activity it's million normal timing away. hard

Stacy question next Our from Bernstein from Rasgon comes Research.

open. line Your is

wanted my taking it sounds out. in on like Thanks pushing view for questions. so comp, it first I you're to

trajectory comp that given had still guess, year quarter mind lower similar ago just be of versus you're growth a of comp guidance? strong when and for profile backing to away to in half, sequential you QX for last – was very the was a I forward. off gave guidance expect you was maybe second in Do guidance feels year-over-year but we the old like kind the you on prior trajectory that see should thinking every from grow going the the Your ramp that, the about it pump in three How in months base? the half second

Yeah.

So, just things, a few Stacy.

expected half the than the 'XX. started lower XG we pause due For to of a second little quarter, mainly bit that the in first

expected, begun to back much is quarter, and in come have second the above orders into as our one. Moving book-to-bill very we

for supporting as increase been reported was is So related XG strength in of a sequential that's strong because had good lot our that number seeing below expectations as a in the some timing by in a second The but peers both to XG, Vince China. increase of quarter sequential initial mentioned, also well. wireline of we're --

So here. is moving everything I the bit little a to think right

versus think we have or and recovers installations for in the at demand but really as of hard So that year-on-year, we'll not? this to still us that destruction. this of year the say going it feel to recovery point caught up good demand see to how whether I put happen But us is is dislocation up it's timing loss or whether this very a the actual quickly

comment tell in I'll one Stacy. you other that,

happening over optimism in the America to has what's related quarter well. past as Our about XG strengthened

disruption. we back China. So yes, in that to we delay my probably own than have of activity It's But end really see the is the year more XG. the a the of U.S. sense rather in disruption relating demand in

there Stacy? a Is follow-up,

Thank do. I you.

see front So to regulatory? be there's How the though to order in about have behavior it the about? sounds China of seem in customer Chinese relation the sanctions? do like feel of Chinese very in like those orders potential What any we been strength out in in still we also, scramble the relation to you sort you hearing we have in on terms of delay do that of coronavirus that patterns Do of strong. because think part the increases get of those customers to sanctions even

Yeah.

the on. very geopolitical first what's hard off, think machinations, at I when you to going figure out it's look actually

in business And have in we situations. a now right of skews. we rest that product there think obviously thousands kind general, But is in So, restricted, are China, many of regulatory markets customers see think our our but, of are thousands demand ongoing areas business particularly with the where and I many of in I XG. we normalized

across board is So the China strong actually the in of demand the disruption the quite the because seeing virus, otherwise. demand despite we're here is

we the strengthened of dropped view they will foreign rephrase the have that gets direct can’t? you and put guys how through you reevaluate If, year? a gets all the go China the me more products and Would sudden, question. from diminimus like Let and on threshold you the stuff XX%, impact controllers, does ship XX% to trajectory in you what can as what to the

we have have yes, remember But adjusted to low-single traditional revenue. percentage a we Well, communications to of as that would large reevaluate. digit one down mid-single from customer

particular our that's customer. the kind is limit to on what that of depending that of So exposure happens --

Yeah, it on scope of think happens. the I much very what depends

seen we've relating of area everything specific far to one So communication. is

will we'll So, tell. Stacy, but unkown, Time see.

And comes from Craig our Hettenbach next question from Morgan Stanley.

kind to terms the consolidate about the some if kind growth about, just there on profiles double to levers next of just for I years. the that in wanted of growth Prashanth manufacturing coming in the gross And follow-on margins as of how I is linear years? you margin Linear's versus opportunity comments know, of can couple you you dealing the talk in and

Sure.

I’ll comment. it, Vince of So and I'll side the take the margin in doubling let then growth, terms of

margin end this to $XXX that that in all cost side it, about on those. – to taken the goods benefit factory seeing earnings let made -- We've of in of sale got stated as million, savings is And to to we've that closure, shutting On the able of for been announcements in of focus talked line. of of we our some accelerate let through see so But down we've We've some we're the the the come of actually we intention the going we've one for over feathering at be balance XXXX. – of start year. the facilities. kind the QX have the two bottom on call,

of redeploy we not cost So that good things. are looking to

basis So in as ongoing our see an margins on some exit XXXX XXXX. through should you gross we lift and

up of hand kind of linear to rate, that growth we're making double that let Vince. terms me In to the progress

equalize progress we're of in power. Craig, application value the of value mixed with think I in signals the technology of so Yes, legacy given a kind making kind ADI good

dollar market we're I signal to for pipeline of that looking up about XX% can is. power. get you So equivalent, automotive sector, opportunity our what dollar specifically every power And the mixed the production that's we're a we available tell actually for for communication as wireless wired, portfolio early we're year-over-year, moving production into the and, is down sector, and the well. LTC in volume expect

working industrial we the run during areas in impact So to terms are there lines And that in top many, on expect stockists area see new XXXX. many, we're of on. those meaningful the

this very through just we design-ins Hittite. think that turning of we slower company -- revenue. with that franchise given doubled And uptake to lot at XXX, years. that basis take growth over like line points the we're Hittite, that seeing. the process top on now right of I the track terms think -- customer the So XXX portfolio, based of five the LTE the will went longer feel we're with of level and to the little on last size a in I We've a good activity But strength a achieving

go caller. next the to Thanks, We Craig.

next Our from Harlan from question comes JPMorgan. Sur

Your line open. is

up commercial the double-digit most the X% than SATCOM – see last budget here A&D fundamentals guys And Or so in as beginning is grew Good expect improve was morning. you year. segment? here. also there year. defense this approved to It's sector greater continued are Good strength year-over-year last versus to this of well? year, strong starting XX% are growth And fire to from aerospace year. of programs coming defense the starting the that the

Yeah.

there. there. we're you As strong And, I favor space these of content really defense the the remarks, And the launch we're good the of are in our dollars technology prepared GEO thousands in deploying we're of like thing. in increasing well. is at kind -- But we've if that's explosion per satellites as double-digit of had looking satellite yeah, obviously, relatively company. LEO applications satellites in for shape the in many a in of it, good budgets demand and area a so And growth position and terms seeing buying said in

well. very growing that combination So we're about of Both parts business optimistic both. a But really that. of it's are

when about start say, were and decisions this as it, primes design is to ago. a remember, deploying gives the that money into defense would I prime DoD made years many going Harlan, the think the

budget So decisions and us funded. we be have to still some then made design that the We larger has are time ago. primes quite activity for flow that that to were of of into the yet bit enjoying a great

So to that come. starts

front expected us. aerospace holding of well as the really environment the That given growth growing is can And side, On in in mentioned, that's us. there. of it Vince space, as as space its be then on is front in the

continued even for what's business. front optimistic us to, that So activity space the more future both at defense design-win happened ADEF we nice has clip about while been a from growing and and in coming feel of

our caller to last go We’ll please. Harlan. Thanks,

William SunTrust. comes last Stein question from And our from

is open. line Your

you situation provide legal Thanks to for question. and or really, traction maybe design taking competitive win vendor? Two as as can some in high hoping the them I'm converters, performance maybe competitive with my trends that an situation supplier the commentary first, to of update FPGA to competitive relative

broadly three Well, closest competitors for speaking the we've years. in terms of our competition, last outgrown

in and clearly share Industrials, And gaining in across particular. so, board Communications we're the

we're think good So in shape. I competitively

as very, is pricing stable I think well. very

this our the coming information can very we're litigation fruition as strong, overall case, And new within But so court In where to going a this company. be aggressively, is but It's So, well design resolved. you. give is court, IP FPGA and pipeline we're strong and as are you I emerges, new about we'll we very that matter and excited optimistic legacy confident the company, the very, programs the it at we'll we're and how you, things very large as we are be is transparent said, successfully with R&D point, a say believe through the that to will defending have you -- is. with think going. relation with that for communicate all strong, are I is we with, that's our we

You have Will? said you follow-up, a

that. appreciate Yeah,

noticing actually Is weakness assume you. in Thank all? for certain the for saying that's Just supply disruption that where at what on the later I order you're February in seeing sounds zero impact. book. like given Covid you're you're any there any 'XX. quarter? It are orders you're that And is February also the assuming anticipation what

sigh what's mentioned of is the activity orders, remarks, in as to of So I hard the the in on on China. going very kind it prepared

So when community and we these our dynamic. the wanted what we investor analysts’ give knowing that to we using at arrived are are very XX, assumptions

assumptions, bit So XG. activity zero pushed China out to of and taken in our little a February for we've our

supply on. also back-end early settled our had into suppliers disruption We some at of the -- But labor resolved as that's seeing activity. some we’re their run has to this time getting been chain here. out On standpoint. not we're much side, We're struggling – just

and feel good about. you chain from this with just supply we we our standpoint, guys revalidated this chain our supply So our morning

That’s you. Thank great.

given a Thanks each We little confusion we given mid- our out because helpful, market there of Will. to to how sequentially. might BXB be it we high-single said, is think We think outlook do, grow question, going total market is to BXB in think the markets up digits. will do. of it be are what going add, I'll of also seems I think your kind

those three. rank order Our

think the than little with and is that. outlook, bit I worse. does comps little Industry better auto in line overall a does

our will the of on our again is that, to website. that's So with be the And copy found help information of for business. us. our A thank website. joining for going Analog you us, available in joining the you transcript impacting And how think continued and results our Thanks all everyone also of be corona reconciliations can of and on section Devices. quarterly interest the

And Analog Devices this concludes call. today's conference

may disconnect. now You