Analog Devices (ADI) 22 May 242024 Q2 Earnings call transcript

Good morning, and welcome to the Analog Devices Second Quarter Fiscal Year 2024 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, Vice President of Investor Relations and FP&A. Sir, the floor is yours.

Thank you, Gigi, and good morning, everybody. Thanks for joining our second quarter fiscal 2024 conference call. call ADI's ADI's CFO, the Vincent and on and Roche; Rich me today CEO are Chair, With Puccio.

disclosures. are information to which materially at We nonoperating as will For you required anyone When special rate, in of gross margin, tax cash and basis, and statements, today comparing our release, special these and with it most uncertainties non-GAAP that, to our which and schedules risks statements to today's the turn periods. materials SEC. includes our with from results report the measures comments earnings our and margin, ADI's non-GAAP operating excludes the as measures to operating are could EPS measures Reconciliations a information results this can release, non-GAAP obligation historical periodic we're the investor.analog.com. On expenses, free and expectations find forward-looking additional it performance, are to our our who flow release. And of also and comparable relating GAAP the included forward-looking to missed discuss items The information update directly the I'll filed items. further our on to Chair, in certain prior Vince. differ by over be these law. Reference date CEO excluded from reflect except only undertake about in and Actual about subject the as statements, financial to other as no call. described

all. Mike. a to much, welcome and you morning, Good very Thanks big

with above and revenue [ end on our the of outlook. earnings strong per the in $X.XX execution ] focus finishing So resulted quarter, high of share our in profitability billion, second

improving, Notably, quarter. third behind us, are which manufacturing PMIs, our inventories cycle. our bookings for highly global we the a are consecutive With improved this have core and XQ correlated believe business with customer stabilizing, point are passed of low we've now

optimism persists. growing and remains geopolitical uncertainty Our short-term as economic guarded however,

as all As and drive of the against will for longer-term manage our discipline fund we continue great to with such, execute we priorities of to our stakeholders. increasing levels value near term strategic

framing, that of like what all a to that unique to some high-performance strong growth continuing be we ADI's strengthen markets you examples how would across are be with recovery. franchise and with will So share we I'd creating to cyclical drivers hope additive

is the in our performance surgical health expanding example, the we've wins fast-growing areas we where robotics processing as opportunities For care, precision glucose exciting the of have continuous monitoring multiple in in critical. market And several connectivity solutions space, signal such and rapidly customers. across won

upgrades time. analog to devices deterministic, accelerating and unique, We hundreds digitally-enabled grow XXx front-end hire increase is sensors key position life of revenue power dollars and the days believe deployments as stream the to can durable growth next can across the factory up over industrial efficiency digital extend solutions factory floor. of weeks. In customers to the that Ethernet will industrial accuracy number battery the automation, of Our of a of bandwidth, support edge leadership from that millions several beginning ramp create year with to our

Turning automotive. to

ADI. connectivity full new pervasive signal of by content trend all vehicle is open that per opportunities that The EVs. vehicle combustion increasing is hybrids content more proliferation and types, driven in platforms Our and sensor higher management, power solid increase a of being performance engines, use vehicles number more processing the for across an

sensors expanded our for a to European high-performance, to and also larger at across OEM GMSL share their from than solution system attach electrification, is safety, increased advanced deploy expanded of starting European a OEM battery safe who and content Korean the with engagements X high-bandwidth we've model global leading of We've our our XX and [ share displays deploy to and functionally our in power, intend manufacturers management ADAS launches For car fleets. design BMS we've used top wireless next share XX example, X upcoming share the manufacturer. In XX more wins increased OEMs, seen OEMs at our solutions which and our X doubled strong and ] recently and at systems and higher leading Chinese intend year. connectivity

perspective our cloud. that will play to intelligence role our point, like AI is tipping spans I'd artificial playing technology my ADI today prepared has to the clearly at in from use rest comments Now on a future. reached of and opportunity This share and to the the sensor

been we've more to pace and as decades, AI and to are software recent in scope internally we've us expanded our adding increasingly take products algorithmic better enhanced coming development, manufacturing intelligence of distinct X products to fully waves. the majority a leveraging for in our our well we position opportunity around accelerate efficiency and operations, experience. to the extend in help create and While industry are investments needs But our around our of of in years. Today, and as potential. We AI's customers' activities enormous portfolio our our business now meet customer leadership. this deploying that innovations engineering AI advantage centered We're product see

and order infrastructure all new in intensified rapidly. data systems, In is vertical power focused know, to The are the of demands and now we on underway, is investing growing AI as architectures. energy processing center tackle very compute customers first wave,

reduce previously, we XX% technology, gaining can our to is losses compared by power highlighted As with existing architectures, to which up vertical power traction hyperscalers.

solutions AI power connectivity be a high-performance more key and us that in this speeds. expertise more value is factor share capture efficient, integration the to heterogeneous provide modules. At enable driving also digital and nascent though, create our greater integrate to the a efficiently, computing, our is is space. Power-efficient ecosystem analog, one just ability terabit memory more sparking reduced indeed much, challenge, X.X leverage at customers to a vertical smaller wireline differentiator. gigabit securely deliver upgrade This transition continue interface, form Data XXX must and much and to infrastructure, to solutions that We optical electro-optical faces. to in transported

was and driving efficiency module used globally This, and controller high-performance our systems. The for a density speeds, fueling turn, near growth of compute. improved a revenues is amount systems We're channel vector AI test greater AI of content Our the efficiency, digital cost. impact of creating test new the in high-performance by recently right systems the high-performance high-precision in latency, compound test. scan extraordinary for and for security bringing physical record edge, AI the memory and Industrial, midterm. compute improvements application-specific enable particularly sectors memory in wave The next-gen first AI is for demand ADI system compute to models our down and and designed X.X-terabit production SoC greater high-performance compute leader. In players is the the value instrumentation power scale in into opportunity faster ADI these to high-bandwidth the higher with in with to significantly and energy is necessary memory key business, of working to positioning ahead this to in optical added

share second wave. we me examples this are to amplify So how let working of some

audio algorithms adapt acoustic to of For enrich developing learn real nature mixed strong have customers also are with a enable processor hardware area. highly and system a platform with sound networks Excitingly, embedded traction that example, to combining offerings. processing application-specific with this in the our signal ultralow our We're systems, we variable neural in we to energy multiple time. in

first fraction our with enhance growing advanced connectivity network an the give domain next-generation power management rich in to the processing technology, time. In capabilities AI-enabled in for In consumption address platform, energy-efficient, to same ability the of vein, with ] arduous to power their implemented for development tool an linearization [ expertise we're using to in our the Now data volatile centers. real-time challenges patterns our the AI-assisted we're customers XG challenge combining radios, leveraging solve we've trees tuning of our platform. neural example, a AI

power course, always physical weeks lower helping Our the real market. ADI operated the from where to required time and, data to has compress engineers time most complexity for edge important world's born. solutions accelerate at of is hours, and the to costs reduce

becomes expect to types AI ADI's for demand our see power across to sensor portfolios. In we broad As the looks growth accelerate more well and chain signal short, will of AI insights, to of that used diversity bright at multimodal the is pervasive sensor explosion as an of deeper unearth future continuum cloud. edge, as the

the So industry semiconductor has one how downturns in has closing, our of the I'm very seen. executed largest of team proud in

what never I've for ADI. future the importantly, excited and it holds we're positioned been More how about for more

so to that, hand going to And I'm over it Rich. with

quarter me add my let to and call. Vince, you, earnings our Thank second welcome

our comparison quarter quarter quarter, only. first As so are XX-week year-over-year we going limit was XXXX a a to our to reminder, this

revenue outlook, Second this midpoint $X.XX year-over-year. finished was the XX% Industrial above billion XX% down the our result down XX% was quarter of quarter in year-over-year. and of revenue of represented

As expected, inventory impacted all were digestion. applications by

However, and broader revenue XX% year-over-year. defense down aerospace of revenues industrial. Automotive was outperformed represented and XX%

was lastly, broad-based digestion Continued growth partially wireless balanced weaker and year-over-year. represented XX% other with in portables, revenue growth revenue franchises consumer and and X% XX% functionally of declines our safe represented XX% elsewhere. Communications year-over-year both applications. was connectivity power wireline across down of declines offsetting our demand leading businesses. And and Inventory and down impacted in

the P&L. line rest from Now of top move let's the to the

as the by lower year-over-year, at quarter of the result and $X.XX, Second to continue we revenue variable reduce $XXX Operating and quarter significantly outlook. unfavorable lower The of million, and strong quarter high driven in driven finished on lower control. outlook. Nonoperating organization-wide net gross execution expenses $XX was of margin for the sequentially was exceeded by cost the end margin and of XX.X%, down above million, utilization high tax our XX% down was compensation were year-over-year expenses mix, XX.X%. rate our Operating end EPS the inventory.

with items short-term than is and We call statement. cash sheet position balance from ratio financial X.X. flow to like billion a of ended investments and leverage our and cash of QX few Our solid, $X.X more out net and a I'd

billion million quarter, Inventory XXX purposes, from upcoming debt the to raised including sequentially XXX. days $XX and maturities. $X.X for of debt declined general corporate During we decreased

and months billion, million we quarter and for with the channel reduced the flow at $X.X quarter CapEx XX respectively. for cash respectively. and [ billion $X.X planned, [ weeks approximately quarter and this billion, $X.X trailing ending trailing inventory $XXX months was As ] ] was XX X. Operating

be are reduction cycle hybrid We to investment from these continue both 'XX figures a tapers. CapEx as U.S. XXXX, to of fiscal roughly European Act. which in Not versus and $XXX benefits approximately included million, CHIPS XX% the expect manufacturing our is the

XX months, $X.X billion or generated cash revenue. we During of of the flow last XX% free

our same repurchases. and roughly have the period, share returned free time XXX% Over cash of we via dividends flow

is cash return of policy the over term. to shareholders our reminder, XXX% our a free As to flow long

expected all is sequentially to midpoint, at for BXB exhibit margin we and increase growth or the be Revenue Now outlook. basis is fastest plus million, the up Once than $X.XX XX%, expect midpoint. or billion, $XXX to be XXX X% industrial with the plus higher in the to At I'll sell-through seasonal minus sequentially to turn to we third expected strength. Operating consumer quarter minus markets sell-in. points. to again, be expect

Our to XX%, expected is tax plus on and XX% rate $X.XX. EPS minus based and between these is to or expected be be $X.XX, inputs, adjusted

Before passing thoughts some term. Mike ] near I'll on [ to begin to it share back final Q&A, our

a look time at we business XQ taking first the driving always excelled has outstanding as challenging, provide recovery the we quarters of execution. with balance outsized in come. With I'll bookings that, As value and and doubt, strong in quarter, our areas, above to well fiscal beginning back opportunity in exited risk we the smart cyclical a also forward to can our are for we stakeholders Q&A. a when book-to-bill these throughout they but Vince and for over cyclical pass indicated, transitions ADI it for increased be for believe approached the year. No Mike the to parity acceleration for discipline, of

Thanks, Rich.

our the question, Q&A Let's [ Instructions] [Operator please. ] have will go first session. we to With that,

from Stifel. comes Tore of Svanberg Instructions] question the first from [Operator Our line

for outlook specifically Congratulations QX, had on question I here. recovery in a the finding the industrial. about

that inventory that you this strongest could to growth? market if performer indicated demand, you I any driving behind a little was strength quarter. the subsegments about that what's industrial you think there's between that's talk bit expect and outperforming replenishment, I be within industrial hoping end

is take This I'll that Rich, Sure, one. Tore. and

end industrial, weathered unprecedented correction the So profitable an broad-based and market, diversified is over and our year. obviously, inventory it's past most

in and bookings in industrial, as here in year for bottom the now. further reason which This have stabilized undershipping prepared mentioned was in will starting QX consumption, channel expect we reduce PMIs headwinds a And grow Importantly, the half we the believe any the for other impacts QX, will we're we've of planning industrial supporting for X to XQ. Stronger are inventory remarks, the inventory one it more than market. be seen more than quarters consecutive industrial. second broad-based

these we are design tailwinds AI-related our Given the exciting the strongly test we dynamics beginning recovery. and business, in feel of wins alluded industrial Vince which instrumentation at and and to, the

Yes.

one ones business over still of other Tore, is demand -- a segments, terms the of that years. high in defense and obviously, prospects of coming the think and Rich of piece particularly for We've is it's the out. most in think I lot aerospace pointed I color, upward geographically, the that across doing well. But been general, on that the the

than industrial faster grow right industrial you're XQ. just fastest, to comment, we of clarify will markets, the in Consumer said, what that outlook grow BXB the the on Tore, And

of if sequentially, markets probably just and grow XQ. down digits. but want So kind below growing other mid-single bit, it bit about to closer XX% little industrial a And a X markets in that should are back probably probably little level, all you industrial the to consumer's

from next of Bernstein Research. Our Stacy from comes the question line Rasgon

ask about the wanted to I book-to-bill.

X So it is the it Or in segments? is just above industrial? in X, it's above X above all

It's and that's Yes. geographies. [ again, and exit little the And all last started a bookings earnings X they about applications. And relays about It's above markets But good shape above what across end X. and within applications talked about in we are though. bookings the And actually if that all throughout the think all question. of bit the last and not so applications call, parity on we talked you end ], about quarter are parity, markets -- all markets. question below above improved. quarter, Not -- X above

some industrial. can instrumentation, automation, aerospace some within think You defense some and of

market broad-based geographies ] the all really in takeaway. is improvement So [ bookings across main

next Our Sachs. the from question from Goldman of line comes Toshiya Hari

cycles, of ask and we of shape underestimate the of the the to the many thinking Vince, of collectively half think the lived how typically, of I back wanted you've the the the underestimate way about pace about downturn, I the we calendar the upturn. same pace recovery. you're magnitude through year

today to anything So I'm different, you of we past or those curious from in the to of if similar upturn the you upturn? would expect indicate anything terms [ cycles, follow patterns? shape this kind customers ] see be of in and do materially Or marketplace the that something

Yes. Toshiya. Thanks,

as So seen, industrial bottom half we've a seen which strong about our company's there's confidence a yes, first correlation off, the of Mike and revenue. look, that us we believe sector, we've total is indicated, PMIs the in the of industrial the between the business, particularly give cycle. of And lot stronger

sense. I'll that quarter out point think times, also -- will bookings indications expect we several we're said the year. the we the know So but a second strong going we've the growth time, Well, here. be? and shape think few I all the half coverage brisk growth next my as backlog shape really going to beyond asked continued and exact for the is XXXX, have months upward I on this now I That's And we're of a give don't the to during be, what trajectory. us what's would for out,

board. We the have in confidence across that

Toshiya. Thanks,

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

in is we [ all set way end the inventory ] fluctuations. the right to the true aside if What understand change demand

-- example, be does is any for in setting inventory QX. seeing is just trying sell-through at what way ] inform what the What I'm that whatever about did apples-to-apples looking can year-on-year the assumption worthwhile is So see QX right QX? this to demand right of all for do distribution And of -- seasonality? it in end is a aside way doing version [ seasonal, noise? us

I happened, average Yes. of get it's when to the is question Yes. to simply what's post-pandemic. think very to that Look, written, going answer and because we're history pre-pandemic hard

positioned So from think able to of be then the ringing than to sense But got very I overshoots to if And the here balance things a is and demand our downstream. certainly there's upside demand is grow We've been I faster my undershoot. system, perspective, much we're which well well a ADI, capture so -- kept AI, expect. We've got tailwind on to be lot a with as inventory going the less sheet. the -- we closer think from we've multiyear tailwind. inventory in

interest the So we've us relatively got, same still, got, we've time, still, got that along. We've got high places. But in high at inflation pushing many rates. we've

strong I growth So about. tone each well are and sense of of the many year of of edge an a I And demand, pace think I as our I this as geopolitical in more into value But we'll the that got intelligent for out. think growth and industry the and semis feel drivers and size segments. in and recovery that the We're is 'XX, overall, in that, right we of to overall beyond confident have economic place good the the in our feel very about the becomes each my as good recovery of customers the see selling more builds will cloud many, terms ultimately, we've strong mean, growth remainder it. now

takes. at, -- where I can we But PMIs to are but very, a mean given our give hard is phase. demand of the given we're an near at, where hard very are on answer what you puts decode. So the you the tell and to recovery term, in relatively is, dynamics

belief have monitor customer the tells is much been that, are Vince, signals add into than to over into [ the under consumption that our to certainly, customer they entered [indiscernible], for end visibility a we Vivek... And us perfect year under healthier we in while aided and also we second And half. as now, our both it's shipping inventories would previously by ] impossible that get I that Yes. channel the direct. this were inventory,

sell-through [indiscernible] quantification, what been of has in the the quarters right, year-on-year? reported

can there, Yes, you Vivek. I out help

earnings about question of sell-in think kind sell-through. talked what's last call... is We I your versus

[indiscernible]...

than Yes. We bit our talked in did a about about $XXX reducing actually achieved inventory the ] [ We that better XQ. little We channel by million. that.

to much, channel by but As less much we'll not than reduce look that XQ, million, million. dollars $XXX not $XXX nearly again you

weeks our the we're into are So ] down range. in normal our as channel coming getting more [ target

So of from also is XQ and XQ, which but indication. growth, is in the some how at really that sell-through [ business drive for is look increasing normalization an helping we the ]

As forward And these to continue, to more fast XQ then There's you won't bookings in perspective as don't if ship-out think from a there. no well. be XQ, how see balance in XQ we goes from ] ship-in, we we'll [ reason know.

So the question of about kind I Rich that's and leaning you're inventory, asking about think customer's that's talked Vince there's -- the talked about, ] out. [ is piece

normalizing, a in what us second XXXX. shipping us look you half good If at ] setting channel, we're up the in and [ for that's also

line Christopher next question Danely the Our from Citigroup. from comes of

touch margin previous get Maybe talked back can pricing norms. you the about historical gross your returning If peak? utilization about from still the rates, and gross that of talk margins you drivers on -- to the happens, have Can here? some competitors trends inventory to

QX. both in take I'll gross margin margin talked expect one. we the perspective, call, bit bottoming ] Sure, a a out about utilization and in and this little From [ utilization that gross QX we

gross QX, a above pace specifically in modest. of the for margin bit expect half to second be XX%. anticipate expansion gross do we margin However, we the And

QX, sheet going including gross in sheet significantly, balance continued to peak of mix here, growth, expansion business inventory be utilization. from QX. over is Looking since dictated revenue reduced million we've margin perspective, our $XX balance in and a From by

reduce again executed manufacturing For dynamic we the a the [ our against inventory lesser expect pretty third to mitigating we strongly gross model. on than quarter, hybrid our goals but ] margin, while amount inventory impact leveraging QX. Overall, in reduction

effectively, been of floor capacity is which utilization. us done swing flexibility super why fabs called help that on ] protecting is things into trough to helpful We've to in the our utilization. that's [ in we One the back the this maintain

continues utilization, $XXX to perspective, a margin increase that expect as aid channel our expansion. From start will was I goal achieved. So -- to Mike as our million, mentioned, reduce in demand from which and a increase, we to channel

an target this get degree. will will lesser inventory weeks of We into of amount us channel. reduce in additional QX X our firmly to the to And a we that in back range ultimately, X expect

Yes.

Let me the a on make comment pricing of things. side

has expect pricing our stable, been portfolio, continue. to the that and across very very, So I

Our sticky. decade. more tend long to The it's our And hang very products we of than it. lots franchise, products average, in on are for, got on life sockets to a diversified, think, an I very

the new clearly, innovation. where competition mixed system for the So that has But space. been pushing And is premier [ signal the analog ] we've the sockets, ADI right? in innovation

While focused value. we're on others focused on volume, are

So commodity very, supplier at I a not think a different We're approach very it's things. to all.

And more average. our I So think that we're are not we well price capture and protected, we the pressure, And we as premium innovation as better know immune margins than enables a have that to of our generate. are Xx value but innovation gross produce value more well, I we moat more to of that kinds the the do. because ASPs to us it's

the from comes Deutsche Seymore of Ross Bank. from question next Our line

on ] a to [ picture bigger I corner. turning question. the mark the Congrats trough [ ] Vince, wanted and the ask in

I prior Maxim, Linear. believe you bought think X that years I been it's to and since with guys X years it was

M&A had? at that there the of you looking the And you puzzle environment? are how pieces kind are any you to So wish

Thanks, Ross. Yes.

selective. very where So will in we need and be. of acquired that franchise, We say customers' a fair analog, of of terms get always to we've Ross, long-term to of I needs. ADI ahead Obviously, scale customers' needs. it's take to been we we've high-performance tend assets our yes, are view, get say, ahead that scope very,

X -- got And capabilities. have content, digital in software my we've that been I signal about also So content. been [ a analog, or franchise putting prepared we've neural we we've more in remarks been, power, more now, adding wonderful for machine alluded remarks mixed ] learning, developing networking power stated years But my now.

sure defined, areas right that So and tuck-in But as think, becomes help done We've that we're focused I when by I that looking. really -- the think capture looking those revenue has on organically -- we're looking, we fully other type acquisitions been But always of that -- clearly now, making area from assets. Maxim. areas software more more all synergies the from is an where are and way, some more clearly, but it's now we where the we're as for have And ADI world synergies area. always us the analog is in investing. complete, well we're

Our from comes Mark question Evercore ISI. the line of next Lipacis from

look your you, since unit you trend line. that for below think, It if increase adjust shipped pricing. below for your basis, you're shipping the And you had if your line far think the world XX% like the looks don't long-term for you step Vincent, I I revenues that you a at financial on -- crisis. function trend

get seems setting as enter happening, up same kind risk the kind you supply that up it your orders it or I'm like time year the -- about like industry a you there's you maybe and of inventories. -- talked industry scenario? And is And about a lowering the the inventories, supply at of for customers next that as is lowering -- we of for And never learn that's is time. tight they're their wondering inventories the a chain do real you think customers even early year. how really your And a to that like setting on there this end the and environment, you're right seems risk early lowering

your is inventories adjust then your which to on there last in to [ are operations happened, in on ] at downside tight. like that's when enable So you come that, the and things something over the really what historically second will is their you has that changed customers to

-- Well, virtually high [ days at of as XXX level. surging Yes. in I our stage primarily is a socket quality. sheet, yes, problem [ And ] the inventory think have balance of a die we demand ]

gives and that It's amount could packaging well. as carrying test of finished to the to that first bring output weeks tremendous we we're a question within market. So Obviously, us goods approximation. of a a

produce we have X that plus meet revenue the sure critical able of most of got like TSMC, also our internal across fabs to on hybrid be $X.X are the partners, capacity billion for We have manufacturing that example, We've demands ADI. making in internal great the spent partners our who a to for part nodes model.

ability given the we've in I snapback inventories. of order to really just coverage with good, So think be a to able address got short is that terms internal the

capacity Our distributors X got we've internal the we are doubled all in. critical as we than then ] that on inventory. that capacity. every well more And carrying virtually that the weeks as new nodes [ this participate We've address single market

inventories, we're in manufacturing in think good I agility, shape. terms So of

the question line from from JPMorgan. Harlan comes next of Sur Our

quarterly distribution about your on the business, Great overall XX% job revenues. Within it's execution. your of

this control to You channel. [ the allows tightly can ] sell-through in which the team into monitor real-time near inventories

on On levels the direct business, here. of inventory consumption less visibility

best of of to their inventory where terms indicator think are the probably targets. I in are they you customer direct orders

disti return growth quarter-on-quarter being any on differences second by the in the driven So [ [ residual as well? growth ] half then inventory is and optimism to at just direct? order qualitative excess And versus July customers on ] growth direct

of channel it's Mike. but directly direct well out order as a our Harlan, Yes, direct basis the well as orders customers. to -- is [ sales, imaged growth direct the ] as what's about on Yes, sell-through driving channel orders, talked we end the our

channel markets. the out across demand there all growing not not because is -- our So growing on real refilling. because about yes, market it's the We're there's level we're end of

reduce further to and in while balance expect both channel QX We growing. sheet inventory

[indiscernible] Harlan? that your to Did question,

does. it Yes,

question, to We'll go our please. last

Moore Morgan of Our next Joseph Stanley. from question line the from comes

profile. your Great. margin I also touch wanted to on

You full low to XX%. with for kind in XXs. in a you troughing trough, said year, the the probably peak you're operating you're difficult of above used now margins very And as would, you --

about profile up talk your what's you much? you sort that's improvement. decade, going through-cycle is why So a Can margin pretty that, look so of over going good on if structural

Yes.

because a to couple capacity talked resiliency margins look a that our at executing allows all to higher for of I given of think down to some we us on process able improvements swing swing are of level we're So continue our -- the manufacturing across in of right? offset productivity keep about As capacity. productivity utilization we pressure out things, cycle Obviously, internal which on and the fabs. allows us to and

an if operating and at returns you expansion model. and a expenses. into margin I been control demonstrating to growth strong the helps. And perspective, think our we we So demonstrate margin we'll to that margin see phase, revenue expect get as we continue comfortably back we'll grow we've overall will long-term over operational in as then to think Look, pretty continue

Yes.

products more and think, putting well, I has seeing We're industrial, automotive, the to that big as to bands that, said, you look value and into communications, capturing ] if value. We're first vintage it's and consumer in address, Joe, each ASP we the increases more point foremost, the in out addition important Rich innovation-centered, we're of what of products. at [ segments, we're our segments year-on-year. our

I for is that when like, that's -- the root of the ADI. That's you -- happening what's I mean think the of look kind margin I if forward. So that's of things origin, story to

a us helps diversity lot. Our

tremendously life the as is in price-sensitive we pricing said Our the our as [ earlier, cycles many. products ], matter. as When franchise stable. get designed And I isn't

give new dynamic over Moore's in thing generated value last that prior that's the asymptote happening from price now. could Law kind lot been in is stopped a really year. of several everybody ] roughly to The the that that of give innovation, away. for a was origin years is We other We has ADI's of computed years, We back whereas X taught [ price ]. the we don't That [ but compete story. sockets, the margin that

ADI's as for transcript Thank available thank morning. website, right. be copy Have call. and all this are All the Memorial A joining and on you there Joe, and us for thanks, Day everyone, weekend, you, will reconciliations our a great well. listening on of

concludes conference today's Devices Analog This call.

disconnect. now may You