Analog Devices (ADI) 23 Aug 232023 Q3 Earnings call transcript

Good morning, and welcome to the Analog Devices Third Quarter Fiscal Year 2023 Earnings Conference Call, which is being audio webcast via telephone and over the web.

I'd like to now introduce your host for today's call, Mr. Michael Lucarelli, Vice President of Investor Relations and FP&A. Sir, the floor is yours.

Thank you, Michelle, and good morning, everybody. third 'XX our call. joining for quarter conference fiscal Thanks ADI's call Chair, Prashanth With the are Mahendra-Rajah. CEO CFO, me on ADI's today and and Vincent Roche;

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

as about release, includes forward-looking we're filed reports other and to obligation differ these at as could Actual other are these materially expectations statements, this described forward-looking information, statements law. further with reflect from discuss uncertainties materials only and statements periodic risks as results the to the in call. information the our which We to except subject of date The by undertake required certain our no SEC. earnings and update

non-GAAP special include which Our will financial comments items. also exclude measures, today

our to are performance, special comparing from periods. are historical results items prior our excluded also We

their measures are non-GAAP comparable Reconciliations today's to measures these in our included most of about additional measures and directly information release. non-GAAP GAAP earnings

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

Thank to you you, all. good morning very and a Mike,

XX%, above Industrial commands. portfolio's and ADI continued profitability Automotive strong, innovation third it led delivered expectations our by within that $X.X resilience the operating quarter in was remained the premium executed challenging margin $XXX growth reflects as margin million. Gross was nearly our the XX% our operating was results again. EPS This well despite environment. once billion, as and markets Revenue in well nearly and

just a I want the to moment. environment to business for turn current now

steady lead accelerating and weakening relate our conversations, backdrop believe ADI's the a years reconciliation we're three period Through in of macro rapidly we customer of inventory As following these to last improving inventory quarter, customer consecutive times. it's evident adjustments we shared growth.

inventory to coming undiminished. in shipped we our customers' back, in so quarters. again help quickly while expect near-term to return more fourth. do confidence we in turbulence, quickly and the dynamics Importantly, growth and to remains normalize us below This end our will more or position third the consumption quarter the market believe Stepping long-term

decades, business, while defined by enhanced last periods hybrid resiliency on the inflects. model. softer ensure ensure and that demand strategic the and to have to flexible of investments several manufacturing the when us Over sustaining we This our customer upside portfolio the enables we product diversified capitalize our global business

that and characteristics confidence these that to It's our alignment will revenue model concurrent give XX% deliver ADI trends numerous of X% growth secular our long-term to on CAGR. us

revenue. about underpinning outlook to applications our of one total this use X/X growth the are tied currently which sustainable Now represents area cases,

the vital want And unpack a is and automotive evolving industrial today, I of that markets. part driving to in this, electrification growth ecosystem our

accounting X, emitted gases to XX As emissions. more contributor of the by every gigatons all we far marches for are the world of to largest year. XX% net than eliminate global fuels Fossil need greenhouse

both vehicles commercial And global energy Making underway a at A XXXX. consumption sources major as forecasted emissions. and reduce expanded same is support unnecessary is and renewable the gas transportation and by the is in by decarbonization infrastructure greenhouse energy transition through well an time, upgraded energy will and to global shift XX% pathway. to foundational as energy electric residential grid increase

battery. are forming in of generation upgrading and vehicle and ADI of distribution, create supply. the electrification energy all the from challenges also moves grid consumption managing journey solutions phases to the These new smoothing across this embedded infrastructure

excels. applications signal the and The all is in which high-performance they processing, woven ADI management these capabilities thread require, through capabilities control power common precision

future to meet the current demands. story at Now the undergoing I'll grid with starting application bring electrical to grid is life level, infrastructure. today's and today, Overall, modernization

distributed like and oil necessitating wind to a renewable direction and the are bidirectional consumer. in the grid from sources like were sources Today, of more energy. distributed energy centralized coal, dynamic traditional energy Historically, gas and flow one solar

To exponential Enel system the achieve with and requires digitalization solutions in network across operators. for real in meters smart storage able monitoring adjust distribution time, Group an the provides grid which collaboration grid example, this, increase the our and must to capabilities. performance be And for

enabling at ADI's we're Here, and precision our and digital high-performance, and the heart digital edge. to mixed-signal at control enable grid's technologies the monitoring creation substation. sensing greater technologies are of And data leveraging algorithm intelligence the

issues to energy mitigate are the intermittency systems, moving Now across to which critical network. storage

across capacity XX% of management ADI value. and battery a commercial Leveraging technologies the our storage BMS. scale We're in with technology utilization systems, energy is systems increasing maximizes improving residential, grid which energy and energy leader in lifetime our system used storage networks. or battery's

These energy metrology, monitoring EV AC applications ADI's broader help to technologies, storage stations, DC the range challenges extend edge isolation including charging grid's of charging in a well, and sensing and enable equipment. and as

market. important our signal electrify In high-performance are segment, and our processing expertise addition diverse to industrial these automotive helping to applications in highly domain the platforms

combustion technology the start to cleaner vehicles from is and I'll our range And key engines increasing cost. enabler in BMS. lowering a transition Here, by with electric

area leader solution we've are EV in shared we before, designed with top into manufacturers. BMS As XX XX our this the of the

These charging our solution, which change the utilizes how prediction. all advances in in the range health is eighth better generation software capabilities and measurement sampling battery and way faster the the supporting enable into physical currently game edge managed, battery algorithms We're to internal cell. processing

of this industry. quicker more scalable cost-effective with our solution and of the has a architecture, cycles. wireless benefits the An enables production It BMS solution, a and battery extension our in all wired is first

another adopt large Currently, our the in at BMS four quarters. coming wireless designed to we in is it and OEMs, OEM expect

a cutting-edge solutions. capabilities decade. portion our revenue the end represent believe momentum the by will we value the to And of and this of proposition, storage large power we're platform ahead, management the BMS beyond conversion broadening our wireless battery and looking Given EV

Notably, the network, transfer EV creating driving back more powertrain. intelligent switch Specifically, and we're to charging solution onboard this And cost. into a this opportunity than size switch more XX%, by for reliable the reduces our doubles down enables carbide-based that a silicon over per developing energy charger bidirectional significantly grid. smart content innovation integrated weight thus EV

by a summary, humanity ADI proud a deep in our improve our impact well-being innovations immensely indeed the the play We're in remain of for is to So the purpose positively role of and to desire and confident of very our all sense stakeholders. and driven technologies planet, I future.

of base to the where shape This of portfolio growth talent increasing trends, technologies, profitable Our presents is the per world-class attractive tremendously. ADI CapEx future of cutting-edge secular with unprecedented number semiconductor an ability well aligned of are dollar as the content continued as opportunities with industries.

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

Vince. Thank you,

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

Automotive. continued for continued demand $X.X and quarter, both the delivered Industrial driven year-over-year to line with While was nearly revenue, billion throughout This growth ADI our by soften in guidance.

expectations. XX% Automotive, was grew sustainable modestly Looking at XX our by defense, with in sequential represented quarters increased digits. down up, which as each double growth. energy led XX% Industrial, after as On with a aerospace broad-based. XX% revenue, sequentially Year-over-year of most down revenue of was performance our tremendous represented basis, finished line well which stretch year-over-year end of which and of revenue, sequentially straight of growth market. by a X% applications X%

year-over-year. connectivity double which solutions, for year-over-year which continued outsized of collectively leading growth correction inventory XX% represented in-cabin management revenue, the both we sequentially due battery and saw Communications, flagged nearly and ADI's to digits, increased We XX% decreased broad-based previously.

marked XX% finishing represented revenue P&L. optimistic in correction. ongoing up which sequentially, but bottom expected, the business stronger than inventory came consumer, second of this on lastly, year-over-year. to rest quarter We despite And remain our now for of XX% the down XX% And the the that

declined of mix. of Operating and were utilization remains but industry-leading, sequentially. expenses roughly due flat sequentially to lower and XX.X% up Gross $XXX year-over-year million margin product

merit impact increases. our points OpEx XXX rate gross quarter's XX.X% line margin and margin XX.X%. expenses roughly Operating million, Non-op contracted reflects year-over-year, were was the basis $XX This the tax of full with annual in decline. of

$X.XX All guidance came at told, our EPS in within range.

net of cash ratio X.X. and ended a over the to the with quarter balance sheet. of $X.X Moving We leverage billion

Given the XXX. days to moved dollars higher inventory and finished our the of channel, hold versus inventory decision revenue more to restocking pressures and increased goods the

channel and slightly target declined. result, level remains our a As below inventory

due Specifically, trends. should in represent demand offer customers for and strategically products was quarter the undershipped on our expect XXXX. as for sourced. and especially million to decline weaker it global we their $XXX resiliency where CapEx XXXX we Asia, enhance ADI's the to China, watermark options CapEx, we to invest high are

include anticipate both from our U.S. the Act. that funds and European Chips do credit we not investments benefits grant and tax the Importantly, the of

to $X.X And or shareholders over we've cash more Over $X.X generated the flow dividends. buybacks cash billion of nearly in $X over and returned more trailing billion period, billion than of months, XX% XXX% same in we've billion via the revenue. free flow of or XX than $X.X free

guidance. turning Now QX to the

We to below or expect the outlook $XXX to be fourth quarter $X.X billion, be revenue million. sell-through. This sell-in assumes minus plus

the plus This bit Auto expected and the planned OpEx. markets Consumer reductions margin be margin XX% given Operating in broad-based outlook relative inventory or we a be a points. sequentially utilization decline of XX At and correction. midpoint and a basis outlook, Industrial expect down perform Comms. is our to to minus all basis, On embeds better should than

XX%. is Our expected XX% tax between rate and to be

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

me let some context we As what our will lower outlook expected, experiencing on how provide and than is we're navigate.

Our markets, all geographies small. softness both and all revenue customers broad-based end reflects the outlook and across macro large

times XX% weeks, of demand from is better are shipping year lead we're also strategically customer up enhance We into XX% within view to Today, our satisfaction. ago. a over and improving this products get a and XX

environment As statement. we're and accelerate flow both and are balance adjustments integrity measures as such, Vince to taking sheet, due preserve to customers time cash inventory income lead we the the seeing mentioned, our of improvements. And our softer

importantly, This and on resiliency capability. XX% with trailing decrease of unique inventory manufacturing expect our a includes maintain XX-month coming meaningfully capacity as a a margins wafer margin further to reducing hybrid the the in to And basis. purchases outlined goal gross will lowering flexibility testament we swing quarters. and level model before, our This a is external we've utilization gross

OpEx comp, to sequentially. reduce In addition by roughly to also the million $XX naturally taking lower variable we're total steps

we highs. that back, quickly. do, when resilient very we're up bottom to a call business, but shows yet opportunities. built we ready achieve stepping rich our with And ADI will So higher cycle the has history we not

to solid trends to free us cash enabling durable and our exposure earnings drives and capital return flow, to consistently diversification stream secular Our numerous shareholders.

And billion shareholders end, the or of market returned to more XX trailing cap. months, over than our that X% $X we've to

and chair, audit like earnings to their As the a to seeing look reminding to of including counsel his including mentorship on to young the for owners. Vince last Karen staff, to over support the world-class for give is most you six for forward Golz, Mike importantly, you, ADI many this coming ADI our call, Board, thank my road. you the to our in here years and past commitments I'd finance of I quick always as the the weeks we get us unwavering company's

let's Mike, Q&A. go to

don't called some but I appreciate in Prashanth. young been time, think Thanks, that. I've I

first Now [Operator Q&A session. that, to Instructions] question, please. get our let's our With can be

you. Thank question Stifel. from Our with comes Instructions] [Operator Tore first Svanberg

Your open. is line

Thank Yes. Vince. question have I for you. a

back to that maybe I guidance based of to October XXXX this call for build industry the know level. quarter, bottom. would early a ready of your some say started XXXX, inventory that not So observers But on you're you're late sort sort

being you've cycles, these inventory that seen getting you different. wanted of a just we're They're just But sense said you've for close, about you then get many complete? given now I think what adjustment what all seen to them. of So sort especially

look are of this kind I always Yes. correction. Thanks, to now, I current this inputs cycles, there causes right but are in same different at have think the particular components. to Tore. the the When symptoms these tend cycle, And two

for I in digestion is inventory has think XX that been one exists the there out XX, that building months now.

consumption customers forecast their third our low-end direct well. situation, and side second, of the we the quarter. which that same look our for growth the these as at our in we've in a believe understand what if revenue of to fourth largest business, from macroeconomic is when we the will But growth major the think example, been you very customers, and governor the I at at course, we And look is compared shipping

sense both our is quite think we're as think I a our channel. at been I correction get the on the as because carefully, be this well our to inventories, managing managing two before we've look way as we beyond cycle, is own So long inventory distribution our positioned factories get sheet inventory company it very will fast My will how through digestion three quarters one take? to it and to balance

taken view our customers. to So I a of patterns also, think, the we've long-term demand

into, agreements, take We forcing that need. will long-term We've been for any point haven't, managing that really in cycle, this supply aggressively. forced example, the them products way, essentially, them in they be at to our channel don't

said, I we're on more sheet. own as So balance inventory our keeping

think where gets here. again, So we distribute recovery underway to the it's get we the when supply will ultimately needed

sense, So that's my sorry.

I the of look mean, back quarters. three the you four the last com financial crisis cycle, in to you if look dot to to industry, at the downturns most cycle, tended XXXX

macro-economy my And see least here, next a then recovery to the the of does really we question the So begin over two, it's a sense is quarters, side. inventory three perform? at on how

you. Thank perspective. Great

Thanks Tori.

Next question, please.

you. Thank

of with America question comes Securities. Bank next Arya from Our Vivek

open. is line Your

his Dan. Thanks adventure. to next on wishes Prashanth Best again

of you're mentioned that think it that worse time. Vince, is How tends yet inventory period ADI mid-single seasonality? something about ready some digit, You QX than think kind can last mid-single kind be said different the call you for digestion be for do that prepared and down you still should margins should to It digit. And the could maintain you than not Right? bottom more XX%. gross we think we that? above if of Do to

So kind would of to and help be useful. very takes align our just models puts us

I Why Vivek. take don't that,

correct. sure quick the make first, has comments So QX to just everyone guide,

the said are forecast in have I on channel we So shipping as the our from below the remarks, we partners. prepared channel, in

So less given in the we down but -- uncertainty. for us some included inventories level better bringing the set strength. than is up higher intentionally channel help backlog coverage are guide The some to of the normal turns, has

an quarter-over-quarter. a And we mentioned positive be out. turns then market more all or end to two got So is from standpoint, Vince book-to-bill, would need down end we've which likely and some quarter just markets

to further know, quarter, be think holidays view mid-single than seasonal I reduce don't on we reason color it you out that quarter quarter-over-quarter. There's a, by to but first think guide it, which that call into -- customer you we right. go the down and not going as be is So the essentially as driven inventory the But is to would have some no digit would the year-end. our they current decisions

impute what in know a to just at and can will down point, we to be today. have messaged we've of a XX-week not, And more quite start this QX that quarter, step actually we're of here margin years, a trough in margin QX decline story on So XX%. would every we seeing basis to from to XX% to of on XX-month you down give gross you math that we'll about didn't you, And while that trailing XX% a OpEx gross the number, times with margin that north and peak. from that have we the see it a plant remember in I meaningful that our everyone 'XX. gross QX on you hold that couple a a based we we've as of model that. are out and QX a gross you'll margins, we're I think work of of continue a we peak gave QX maintain to once ability the number will then proud -- -- been And I XX%, able is if

but doing have now our hadn't we levels best been very we about to we capacity. activated swing We're are utilizations my QX, successful inventory level than because on a little in it. For we more on activating if that bring face swing gross actually better likely we XX% as have utilization sense the margins, would challenge be down,

see for of wouldn't to So very are all it's where I kind us. out lever that And from math we for works need been a powerful to the expect QX. but notably different we be how on of for QX QX,

Prashanth has comment, other to to Vivek, Yes. one add I'd what like said.

the life very got that the or is It's expect products stable. sticky. share. I is pricing very, than business, very And So rather unit pricing, and of stable, margin a correction tremendous cycles don't really resilient. that side of change. our very, We've in price are part very this to and is other our business

that. for Thanks Helpful.

you. Thank

next Our Ambrish from with BMO. Srivastava question comes

open. line Your is

This Ambrish, quarters. 'XX was into you to to decline I and Hi. competitor. a in. chime in closest much. Mike, XQ Young going are looking can your Thank very TI the you is started said free old Vince, two comms, year-over-year three and at look they you and year-over-year rival feel at just starting, I as peer

around basis, past You and quarters right? that the about right of quarters year-over-year in said the we your a Is way means suggest three to usually to assuming that that decline. roughly see of in I'm think history decline on two four five reps, year-over-year digestion year to So does business?

Yes. Good question, Ambrish.

mean, So yes, the going line, actually I the into wireless. have things, we on have part -- seen ADI's back of got I well. two malaise wire piece mean, wire overall of I we early would 'XX, Comms of components We've look, story. is as late 'XX. seen side the of a We've part just we've line say

carrier control really well. and got networks, a there power. as like center for that's power So data business optical We've things and

be we'll somewhat we to we the power in required computing think explosion in example. the AI space recover driven with catch expect for by for see example, see that's here, able up inflection So handle to the that, CapEx to to that needs,

in its wire first line of quarter -- -- my part sense is the So second year. start the the probably will recovery

really North particularly They're America, going rather weaker a that. harder focused very XG developed We be very, deployments, dynamic. call. thought. we to to is It's coverage capacity. little have than which on countries, The been Wireless than know all

don't very how we lay during probably be headwinds 'XX. course. our us FY to see but expecting we're has that's to know, could I capacity in this been for quarters I And India think during several going in strong year, and 'XX. our FY of think give it both to long, coverage India commitments more So

a leadership totality of -- look, these in timing systems, optical at mind. uncertainty wireless It's we've in in market many got a in So communications of of really areas, in like there's particularly solutions. my But question and control software-defined the XG, point. this lot

answer hopefully, that So you question. to the gives your

about the overall just about I the sorry. asking Well, business, Vince, not was Comms,

Okay. the will trends, inventory that areas transcend the We defense, business. I theme example, overall Ambrish, problem. healthcare, digestion to yes. see the digital a macro-economy even energy aerospace little while sustainable we spoke some like for Look, and think, And the ago. like that

reiterate get sense will So a there on. back from two, volume we'll problem quarters, the unit my just digestion and inventory again, is increase then last probably I will three into

you. Thank

Thanks Ambrish.

you. Thank

comes question next with Bernstein. Stacy Our from Rasgon

Your line is open.

pedantic Hi, week. is so also plus but seasonal, don't you I down Prashanth, question. just QX, thanks on now, like taking a guys, be an want linearize as That I my it if but week, for much extra to know X. said I right extra

So QX, it's like it that do the those New think into and week Year, balance of just not how assuming revenue? is the a I Christmas between QX things do a was... out? Or those two about Or cancel of lot it's so

of model you it. I you just on as down seasonal was that reminder a XX-week basis, my a the comments XX-week when So was gave

math, to do right. essentially the about you're thinking So you think but want do I Mike, it

Yes.

happens business. quarter. first our down, a total call XX-week So or said, X%, business XX-week it, normally minus, let's in and as a Prashanth XQ What plus take is quarter

both side. the the Now adds extra OpEx with on that X.X%, revenue about and side week, an

think pieces, best quarter, and total So XX-week revenue to X.X% the OpEx. the it. add X% in you about normal, can way That's there's two down company, of

that, you my wasn't thank Stacy, I answer. for clear And clarifying in

would you then QX. And off other Okay. into drop go though, QX, the that in way

extra like under off? normal week that QX seasonal than worse would be So circumstances you because have drop

Yes.

XQ. and call an extra headwind. times, it, have is XX-week in away you can got again, have parse X% you you to take to They So a week, a X% it normal XX-week if up, quarter, yes, XQ X.X%

it. Got

to I That's one, get so have Okay. band don't I another guess I.... but want that time, next helpful. I

another question, I'll clarifying allow good that's question because a Stacy.

wanted just next into OpEx I Okay. ask to about year.

the So fiscal it do 'XX? to next think to down think just How about year about year-over-year I million be into OpEx likely should $XXX for materially. about sounds versus guiding like potentially year revenue reasonably in we Like you're a that's 'XX QX. it how it

Yes.

said, think, we Stacy, this long I we've always business the term. run as for

make comp the we're to this variable from of its side, So discretionary innovation. can, going value but adjustments to company adjusting make on comes where prudent that are we and the the the

expect into to spending designed wouldn't I attack meaningfully be on is accordion. XXXX. But variable more that our So the remember highly comp

will if 'XX a year, plays So for meaningfully down Anything as you out us. see unwind that else...

like is right Mike, $XXX run about? that Is think that rate million runway the to

think That's not the about to level for a year. crazy

trying I a step within look you margin gross and take our manage control. to think a at trailing kind XX-month of at if maintaining basis. back about we're talked what XX% We

for to So target goal the full the XX% and long-term gross XX% think is XX%. can our margins within that to end operating low of our and year, account our I margins, maintain do we

year that's So as we guardrails you're what a of modeling for next think revenue. and year down out kind be would about some

guys. you, Thank it. Got

Thanks Stacy.

Thank you.

you. Thank

from next with Chris Citi. Our Danely comes question

is line open. Your

on Congrats Prashanth the Auto joining I just I I wish you. was end on guys. Hi. a Thanks retirement. question market. had

it that guess, I saying you expect better do, relatively Industrial. than you're So to

there, materially Given baking then worse? of And any been you that how talking potential Are possible get upcoming it's forecast? supply into the strike about could strike, guess, Auto chain think has a UAW impact I and that Auto their much customers on and inventory the built you do inventory. you are kind

right. Yes. All

going a to York. in of weeks you New we're So couple I thank question. see you the Chris, for think in

I XX on first, year-over-year. context for some we've guess So grown quarters Auto, consecutive

that Auto same to in and acceleration the up there, quarter across our quarter the in going that's lead inventory prepared and BMS, in AXB. They fourth times and the look said some rates the at of that third specifically growers, sequential growth again. GMSL, comments quarter, both our the strong adjustments including in We a When happening and the be supply the And grew driving confidence we're basis on all markets. year-over-year. we and is

kind expect quarter. strength them fourth similar the from We of the into

units in have is, a based now. that said, from really nor end So negotiations received chain outlook be any from I Vince not are driven we as come we think making we number and is that disruption have could our on right on going indicators put our partners yet that should adjustments market that the supply

Yes.

think one early I got other year, and much in every the switch thing, electrification, Chris, cars in more stages true in is, ADI. to and to of general, note that's that, adoption. again, there's of is the pretty silicon value more We've which the

some future. as are great got expect, foreseeable be areas malaise. better Prashanth ADI drivers that overall, that the But to of transcend still there drivers said, the growth will growth Automotive the malaise, for economic will somewhat continue So for we we've one growth many the the

Great. Thanks, guys.

Chris. Thanks,

Thank you.

with comes question Sur JPMorgan. from Harlan next Our

open. Your line is

Hi. Good morning.

that. about Sorry

of So sales. was in about XX% X.X% QX, disti down was was It down, about sequentially.

that's business. than our total around So down came X%. Shipments to direct the customers less

little guys the excess inventory more inventory for direct in shipments excess QX. how monitor you do around and to at you inventories place disti maybe in monitor Like customers have levels your and So of customers? discuss And bit similar situation sell-through sell-through? to than and you your QX the customers? Is direct systems where just the maybe both pronounced here can dynamics a

Yes. Great.

Okay.

let's that. So of pieces on a couple do

ADI, reminder, data have for a your weekly do with company distribution on data First, business arrears you to to give sell-through electronic in feed. basis a via a as us

POS know sorry, China. second said, the to quarter China run we always to done third it that company, distribution the in Vince exactly We the quarter, we that are use we we in gotten intended said we the ahead where So said run our doing we third have of guys and In a had ourselves as on business, call, that. and we earnings undership that a in little basis.

fourth generally quarter to channel continue all down. to the now We to the markets inventories bring are undership intending level in

you We we direct see do where have is our into we we for consignment. the customers of revenue customers customers set can to visibility what inventory limited except which our of levels, But external our and growth. into is data broad have publicly access data have have products end sales the those corresponding their don't

to because referring growth their And is. data that was we why we are builds them our course, have of we're to to get safe team doing how correlation have which undershipping us within what And levels down, growth confidence pull we that that market to is Vince is versus growth we demand, products weeks. them it accelerating how tell their do to is end allowing that which, inventory their XX them, so based that's now seen on can our versus our to

to get be. indicator that's to of inventory inventory. less little Yes. need they customer can the product if hold Prashanth a best what the a a our customers' great point made levels you less lead need is quick, times

our us to So helping hold customers need and what improving give holding. lead is the better us time visibility is they're into what

Yes.

big said total change XX is year. Prashanth since last time portfolio Big, earlier, than now less in think weeks. available I of this XX% our

Harlan. you, Thank

you. Thank

Thank you.

question Goldman Hari next from with Sachs. comes Our Toshiya

is Your line open.

up, a share had correction in Hi, the a a One I the opposed second you sort the good as that then one about morning. sort for think if two should Thank I pricing, a XX you unit to can extent with be on into get if How improves quick for new customers higher there? past the would days that pricing it's way call think quickly you normal down, correction of mentioned quick the And of to forward? XXXX, Prashanth. on going more that's cost term, years? pre-pandemic. you've in of will, I you passed how sense. To And foundry which question. ones, same near may. in position pricing. costs it, makes you we DOI taking Vince, XX, XXX, couple vis-a-vis over of the

Sure.

that franchise SKUs it. two answer are the very first, There bedrock Toshiya. the we piece product of the is me They're are parts Let established the ADI. really One XX,XXX sticky. of and are to pricing have

of be life also, very, to portfolio cycles each is pricing. management. tend just -- year. to And in of looking a managing we're We're The actually very they're value fairly designed the they We're we're product strong. our insensitive. normal and And price once by tend elasticity, the be terms part which products for increasing the of way, portfolio

-- also more the But products the value products. to that customers, adding we're new we're to introducing

phase by from lower third-party will which, I design-in the think, if benefit at unlikely. our very the come think cost, do which very, way, costs is lower of the I we get

think I So very stable durable. message pricing and very is is very, is franchise the

And the I'll very Toshi. DOI quickly one here, do

balance a days, dollar it, single XXX call inventory So digits basis. low on grew sheet sequentially

exit We of we million least confidence production value. being plans out at have to allow QX, inventory that the $XXX and taking oriented are to do us high will that.

model, we go to need we've that they're appropriate a kind that through it that CFO is to model they map. next The bless and target, of have that for agreed really the but days to because own going

XXX it's So days, I to that back going tell think XXX get can don't I but days. not you at to be we

point some So you come that what to at looks we'll like. on back

helpful. very you, Thank That's both.

question, last Take Toshi. Thanks please.

you. Thank

with Cowen. Our Buchalter last question TD comes from Josh

is line open. Your

Hi, And run. for Prashanth, me great the on squeezing guys, thanks congratulations in.

like it expect shipping exiting hoping sort Does mean under guidance sounds you're under of was times extent the fiscal quantify the kind shipping to could we print given maybe or few to could off I demand amount you quarter the shipping? seasonal And the a Thank mentioned be you. the of the October provide and quarter? any You isn't that end first in that maybe guidance. then table. you

not question channel sure earnings in the that so take the that because have I forecast them for that part the our our going the business are goes the of through second we the have guys, shipping levels that that in I'm direct. business were help second China. that we said and to inventory through it. we fully channel Mike But to demand We the do into down. pull we quarter from call distribution let under on goes first the comprehended one, I'll channel, and the Business channel

we're the going to do it distis. quarter, for globe This across all

to not Vince on shipment back of our Your second that a we into that end good refer data growth under growth really All know quarter sense can I real growth they them down, our I our have how individual sort going There's shipments customers didn't... when the guys say our we versus levels correlation those about to them that, basis analysis improved. end which end is pull to helping lead we how to we're that shipments to be again quarter to. we in think forecasting they're question have And you do Mike, look the except their referenced them, that to inventory how or versus third to forecasting between an demand revenue times because consensus or to at fourth and do. way grew makes and relatively on a aggregate customers and tremendous to

Sure.

On the -- it's question. first good

lot first the always undership working we look quarter, a consumption typically you year-end. of into going their in the of at customers the first our reduce capital If end You why? see quarter,

the first So consumption. -- below is seeing in the our quarter seasonal down X%

after that, in second kind question was and Thank coming imbalance. demand of comes saying to in think you, it macro, a consumption, happening back what you get of And quarter. I all then back kind Josh. of to macro get what's to Vince our you

you. helpful. Thank Definitely Okay.

this this the Thanks, joining morning. Any again once time. for on will be everyone, quarter. road a us We lot

thanks to York, ADI. with You'll the London team and IR code. Florida, in out in to notified and us Reach when your interest find New are be ZIP that, for us in Chicago, And joining Fran. San we

concludes Analog Devices call. This conference today's

now disconnect. may You