Analog Devices Inc.

Solid Financial Performance: Analog Devices (ADI) reported Q1 revenue of $2.42 billion, which was better than expected, marking a 1% sequential decrease but a 4% year-over-year decline. Adjusted EPS was $1.63, at the high end of the guidance range. Notably, excluding an extra week in fiscal Q1 2024, this represents a 4% increase, indicating a potential return to growth.

Positive Outlook for Q2: ADI anticipates Q2 revenue to be approximately $2.5 billion, plus or minus $100 million, with expectations for double-digit year-over-year growth. Key drivers for growth are anticipated to come from the industrial and automotive segments, while communications and consumer markets are expected to decline.

Market Recovery and Inventory Normalization: ADI believes it has passed the cyclical trough, as inventory levels across distribution and direct channels have largely normalized. Management indicated a recovery in sectors including industrial automation, surgical robotics, and automotive, underlining the importance of a lean inventory approach to align supply with demand.