ADI - Earnings call transcript Q2 2018

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Operator

Good morning, and welcome to the Analog Devices Second Quarter Fiscal Year 2018 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, Director of Investor Relations. Sir, the floor is yours.

Michael Lucarelli

Thank you, Jennifer. everybody. morning, Good our joining XXXX call. conference Thanks second for quarter today CEO, Mahendra-Rajah. Vincent With me and ADI's call the Prashanth on Roche; are ADI's CFO, Anyone you financial who release, it missed relating and can schedules find investor.analog.com. at the is call at archived Relations will Investor conference and a being This the website. our recording of section be live webcast

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

commentary under non-GAAP include results. from comparing our results web section also reconciliations which to items ADI’s earnings financial items directly Available and second same measures release GAAP are in measures, our the historical in quarter Our quarter and financial and year-over-year special to prior quarter results special our are information excludes measures at will about performance about the and which investor.analog.com. our of comparable additional non-GAAP posted today’s results most we measures these the non-GAAP quarterly included schedules, excluded

it ADI’s Vincent CEO, turn to Roche. over that, I'll Okay, so with

Vincent Roche

perspective of results earnings free remarkable and a now. fiscal set our of Thanks, Mike, flow per watermark guidance high-end was and the non-GAAP share pleased everyone. high to in good above you our ’XX morning new quarter ADI. second some I’m generation, share on We the for with Well, posted cash diluted and

especially of consumer. second expected the just So, in in decline the our quarter our industrial markets, BXB came high-end in revenue as communication and offset strength in sectors across guidance the above the

in execution share. substantially revenue to margin flow XXX. Gross results Our which and margins highest posted by adjusted record resulted cash franchise expanded our us more free compared earnings year than driving non-GAAP trailing months ago also Tech the year continue quarter, to increase a free diluted in quarter. a supported our the year-over-year This were the operating and Linear record combined of per the quarter in company cash XX flow place over our a the in XX% S&P

In of hyper-scale critical more integrity noise important. the Simultaneously, harder. make and levels edge increasing the the on and into go is characterized to world, before actual digital information Now market technology our of investors systems take pervasive third is this performance, our more decisions computing sensing, real-world and key or mission on is of information extracting I’ve them. in this strategy provide deeper information before to and to dawn like trends communications perspective about we of of the this ICT, of relative some I’d to signals presence and financial with identifying ubiquitous rely spoken a becoming technology and the and the which opportunity of accuracy deeper becoming increasingly ADI’s and connectivity. challenge and by wave

view more I’d so Now, to to on. and power to machines, role I Today like quality and to phase critical machine an in from our helping nanowatts its in which a ability to is generating to industry communicating sense, reality coverage believe solutions to ADI talk that specifically inflection evolution important future that interpret, sensor and and measure, connect next enable how natural play virtual we edge lately these interactions, news and the which big much augmented infrastructure this two worlds about represents human high has the kilowatts. and is technologies our It's as timing. though cloud, been connectivity to hardest to innovation microwave and autonomous such problems in and customers' and information the tackle of bits investment our enabling in is and and analog cutting creating XG subject leverage wireless

an network architecture the to orders bandwidth fact, wireline will and new video magnitude definition hungry such meet wireless In ultimately entirely and needed areas high in as increases of for be demands streaming.

massive radio X offer in have footprint bands to These factor operate and programmable, rightsizing capable increase significant of success X deliver platform. they’re solve carriers, giving world. important, see from many family. architecture to that overall our with of critical capacity provide digital and the phase these that can radios first of radios, is on for by modified wireless MIMO these factors massive the network. single to helps massive of station. as scale which systems. to needed gigahertz the around a The the exist this spectrum addition MIMO These be the provide any same of greater flexible they increase a XX%, being data benefits current will capacity base consumption. be number are two case transition transceivers remote to massive implementations software the massive power megahertz different the transceiver can The than customer’s MIMO ADI carriers to product XG analog to will Although, of systems, today's our challenges times MIMO capabilities, the from to customers capacity enabling and and the this by through real cost. the And of will the software-defined the area and a evolution highly platform-based small performance as macro revolutionary the XG XG to large a radio since cells reduces by flexibility can operate also XX MIMO massive stations system use of evolutionary. in compared average cellular head radios card while a a simultaneously reducing today MIMO, XXX the integrated they Xx XG current design use solution quickly are based Equally and to We

order network network will that phased our ambition, bandwidth, per provide into is array solutions. the to to multi-gigabit using further ADI In Hittites is realize second come solutions in the order needed to longer acquisition. change connectivity, the wireless from play wave millimeter arena, in expand XG term capabilities further leveraging However

have market emerges. as our millimeter the positioned We This having of competency world. well wave antenna deep and millimeter current a trials are waves bits around of very in ADI it and unique through technologies position stand to solutions the expand will from

completely network, augmented including a and one vision autonomous autonomous XG wireless expansion toward core than high and speed, wireline backhaul [indiscernible] factory architecting download latency edge floors adding health to addition upgrade waves, meet vehicles, gigabit network mission be will millimeter XG systems. a of critical greater This and the massive the digital will In MIMO required of the and the move This and power network demanded reliability us second to three chain more signal require as virtualization will a network allow fully low drive compared comprehensive to applications care, and per more technology performance combination to for an of reality by solutions. stream such uniquely of significant and and RF to represents are system and point-to-point solutions opening create innovative signal, The mix our microwave compelling XG new of even portfolio capture for the ADI’s high XG integration as bond positioned to through ADI we microwave enabling opportunity provide the management will technologies. customers up and for opportunity when enormous our optical comprehensive times these opportunity and capabilities our of to a solutions. computing.

Now XG, business the business the been strong rates and of the here our will obviously about is at high greater and while next remarkable has XX be potential of of in excited over couple years the growing a still we're trailing single our XG, digit months. volume communications

industry and Those across outpaced by in spend share ADI offerings significantly our engineering CapEx to have Hittite teams. resulting combined products, has results of small the seen macro, been traditional growth massive strength adoption our and gains as of trials. integrated transceivers RF software-defined strong have we cells new thanks from MIMO augmented Our

summary, domain in our is Hittite partnership success, serve our confident and in unwavering acquisitions to challenges desire very market Technology. our closed which course communications along developments of our our upon and research engineering with by and strategic investments feel and So toughest and we knowhow with the customers, Linear energized built of

future. So our looking accelerate fully to XG we and communications well continue expect forward, to in market outperform we our as the into needs customer the growth address

these exciting areas as just this is the to sense sharing XG are you advantage are value customers opportunities of and industrial to course, future for transportation one and earnings look in there electric continue areas long-term cloud many digitalization. forward and autonomous the how I'll speak calls, new for And and connected In era and has computing. we our shareholders. ADI creating opportunities of in our of worlds, Of ubiquitously to with such X.X, many taken

with so to to over that, like And Prashanth. hand I’d

Prashanth Mahendra-Rajah

fiscal Thank you, earnings call. my and second let our Good XXXX Vince. me to morning welcome quarter add everyone

for on end P&L today’s up sequentially line release. items increasing With XX% the outlined basis. a X% which year-over-year billion, the above and exception the non-GAAP our be XX-week over a the on in expenses, items Revenue of non-op X.XX high basis, was or of my press special comments excludes guidance will of quarter just adjusted and on

give me the some the move on around you in I performance our the let commentary P&L, quarter. rest before Now market to of

of all to again nearly ago of year-over-year in digit increasing communications represented automation industrial the trends at the XX% the market Looking BXB broad-based revenue the targeted Momentum the increased sector this digits as quarter. quarter. sales underlying R&D end was industrial at instrumentation to geographies by Growth outperformance. drive aimed company, growth double with market. investments and continued once our led in The in year compared combined applications continue our double and market healthcare XX% and

to Sales Turning represented wired the at high-single to sales into and the the second the Furthermore, our has both comps business applications XX% rate year. over in compared wireless a period quarter. digit trailing increased wireless markets increased last months. of same XX which

portfolio to of share RF complete massive growth is mix microwave for XG strong and gains the Our integrated our our and demand MIMO and well position virtually to performance as due signal, on the high trials. all our of as transceiver related

of comprehensive XG a positioned As to ahead ADI, provide mentioned, CapEx with mid-single our our grow Vince as and enabling flat for environment the a enormous to an of technology opportunity in backdrop comps XG we rollout digit expect the portfolio. represent at rate revenue are we

year ago second Our year XX% auto increased in led in quarter, as XX% our a rate after than at representing better of first quarter compared previously quarter by sales business single the infotainment quarter. to seasonal our quarter a consumer decreased sales digit growth low finally, sales applications. ago business represented and quarter of And second the compared with communicated and powertrain the to the

Let the midpoint now me in quarter around first Gross to margins of came execution approximately operational the Strong and above to quarter our was revenue mix. compared and growth end move the slightly of P&L. delivered guidance were Non-op or the the of the million. rest OpEx a with increased favorable $XXX the more second on operating combined in upper XX.X% quarter of margins million second guidance. expenses revenue. XX% in $XX.X at XX% of

third of expect We decline fourth $XX million our $X quarter be our by expenses million quarter to in ’XX. $X non-op million approximately and our to to fiscal in

second tax rate the full X% the adjusted was tax rate non-GAAP to as year Our for we X%. quarter’s

tax fourth and is continue rate X%. XXXX non-GAAP quarters, to the for our Looking will our fiscal third expectation remain change to There to between we we and to no X% the expect guidance at end diluted a our be rate the XX% XX%.Non-GAAP high per second year-over-year. for share to long-term came approximately quarter $X.XX, of over increasing above in earnings tax expect

Now, the I’ll balance cover sheet.

ratio months XX prior inventory decreased inventory first million X% from the the of $XXX quarter, the for cash down enterprise billion compared flat the debt the And trailing times, approximately sequentially helped planned, from During which $XXX flow and we reduce approximately record to of our XXX down the days free margins is free flow debt-to-EBITDA with was to times year cash and XXX Distribution which X.X days were quarter. flow weeks, down to $X.X the generated X.X slightly in in free was the we cash paid associated As million ago quarter, quarter adjusted quarter. of X.X net up in in in sequentially quarter. XX%. the We combined

model a quarters. per expect million paid stock. $XXX the X% leverage within We of X common approximately in additions And quarter ratio two $X.XX, our quarter to achieve million times ’XX representing fiscal to $X.XX sales. were annual dividend dividend Capital in and payment next associated expect our the at an CapEx second of we outstanding share during an cash for run dividend $XX of quarterly of we with of the

expecting for and like to exclude today's our now release. planning of level, to revenue the in high which let's to quarter billion exception turn also on we’re So with billion be $X.XX quarter look ’XX, for the are quarter lot outlook non-GAAP third basis third revenue fiscal second the of We're quarter. the of range and at items the a expectations At outlined midpoint in a guidance. a in to $X.XX of third

we guidance, compared be to and inputs, a be the At operating in our gross our to Based to and percentage planning the margins third of up $X.XX. XXXX auto diluted expect in of this BXB the expect million increase and to increase basis the to XX%. XX% XX to excluding XX% be points We midpoint per $X.XX for XX earnings in of the special to flat of on expect items comps range sales to quarter the ago approximately expenses aggregate year approximately approximately to and markets for we range XX% a quarter year-over-year share OpEx of operating of as industrial implies margins XXX these year-over-year. in

So wrap we it another this terrific set way. long few a records was the for ADI to and up, quarter

free and cash digits Our quarter. which the operating BXB to drove I’ll turn for double record Mike with in And increased our resulted that, session. in execution a and business strong flow our it over higher Q&A margins year-over-year growth operational

Michael Lucarelli

Prashanth. Thanks

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

Operator

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

Tore Svanberg

for question First Vince.

but Could like more You've of out participating you would It them that? in in context, give some trials. if XG on bit elaborate talked could participating great? little there, about all that a you’re be you sounded much pretty

Vince Roche

remarks, the kind is as dominated XG. Yes, XG phase millimeter pre-millimeter there is prepared are and really of Well Tore. from thanks I perspective, an overlay ADI Phase, least an the really expansion, at this phase there by to which the and the in said two pre-millimeter massive phases MIMO really on is

it's are sectors the year next are transceivers market being in inside ADI. to everywhere year one system this absolutely of So product fastest the our brought that and software-defined in growing fact

at story as enabling So microwave in from capture content is bits My be and in enabling across beyond sense China in technologies wave that that’s microwave business X.XG the very trials combination to a timeframe is particular really least will us kind mass combination strong bits of contributor Hittite so been systems, the communications call MIMO, they’re to participating communications. or our to field because will market us Hittite to be the that massive of and transceiver plus places in globe. reusable trailing to China fact these which beyond get with pre-XG but Also flexible well the our they of is technology XG and ADI all to new RF some bits of our to applications. what think in will is to ADI kind and and these massive virtually it's faster XX to millimeter be I U.S. XX MIMO. me

network different it millimeter hope the virtualization, So edge frequency up technology spending exchange be what computing levels. and where in I XG and in XXXX run pure is timeframe pure wave-type multiple we’re will XXXX, with the that to explains what doing core

Michael Lucarelli

follow-up? Tore. a Do you Thanks, have

Tore Svanberg

margin there with is of the slightly Or year-over-year, gross a gross mainly function Yes, from higher, upside contributors are there, being main mix? up the follow-up revenues other a coming for the is that year-over-year any mean, the Prashanth, just is mix? Prashanth. I obviously margin but

Prashanth Mahendra-Rajah

to our the Tore, all Well, synergies Sure. of Linear. we related of the implementation have now member that acquisition of completed

have we synergies time now at cost of built that acquisition. the run committed to the we our rate, So, the into

with also as strong say I we’re internal fabs. where strength contributing benefit our well gross getting the then they utilization and that margin is that would at volumes So of the to are,

Vincent Roche

have $XXX million add is so, $XXX still to on $XXX we that, the comp. additional we the we do of just have an million talk cost And about, million -- completely, synergies I another

Operator

Our next question comes from the John with line Pitzer of Credit Suisse.

John Pitzer

Hey, the auto your Vince, color want business, all a bit little to appreciate I on comps talk about really the but I business.

quarter surprising strong pretty think the that you business the new Linear prepared comments little a in significantly a said in that growth January April decelerated I the bit was which in really quarter, record. achieving especially had was your all-time You

just your your over of which now. was be you kind business, of peers curious I part that MEMS a but of years explainable in multiple fairly because growing of So under the kind have part business am should been of autos, small the

am holding feel So as the of is in I to how kind auto your back position just growth space? of long-term in and kind that you market what's curious

Vincent Roche

Yes, thanks, John.

our goal the So look, that kind is to right high SAAR our X company long-term trajectory. business onto grow of X the get combined and our to of to objective now, at end is obviously

for happy be. below, the but obviously, where right a try to let and now to you is right we me through management ahead now where and my as the pathway are, are performing as So you we're we're to we not and story team expectations a what bring bit unpack going

digits we in sector today. LTC at growth -- on we to profiles kind business ADI in SAAR. X that legacy we're for level different growth automotive of single of like closer our to looks to are has level kind level kind whereas were the are on increased the the track ADI, the achieve it and ADI of this ’XX, LTC clear call the that been in year and SAAR the So, last low X X again of quite

materially X infotainment, the revenue get of And to for in a lot be for that tilted wins revenue, in also couple will So those attention what market, more have as improving end we've got story just primary But but I my SAAR. to and uncovered the before bit have within higher always X tilting a application more LTC's just the lot sense now driving, what time the you you growth to momentum towards know, going as know business towards business important, profitability levels areas impact and impact materialize important, takes autonomous little in in and talk revenue in in a a of place you changed logic those the detail aggressively towards of rates, design revenue get years. what is we’re will and my synergy of we've we're to I we a is like for design wins our business we’ve a progress and impact What been the and LTC this -- to our to you sense but, to won’t the we're opportunities has doing trying also making And talked growth to turn the that in of will growth. we’ve tell to our materially and three not you. we is it growth, electrification. always I’m bit giving

a technology I in really a AVI We’ve foundation clusters great LTC is planning our the many, of about mix there. in that’s the years now getting sockets So news of geos beginning is and momentum well signal premium the of few geos. the to there that’s DSP the talked can lot business, heritage that tell as audio we’re and dozen attach to of infotainment And and the technologies before the of you are a power won across ADI to deploy next we’ve a what really in OEMs all we’re lot AXB of many across good infotainment, technologies. and globe

longer and the system of X, technology in and we’ve the on technology. our LTC today LT attachment. engaged high range, in mix believe solution, last components with management LIDAR LIDAR that and deployment in everything solid-state in power that for power And much is technologies that very, got haven’t but Vescent LIDAR our design-ins portfolios, also OEMs gaining is before is units, long the and and both sometime in vehicles, we’re that we mass we compliment ADI turn self-driving drive vehicles, there acquisition as capability systems capability the in talked every here what areas. is beam as them, steering opportunity the and years that Now X disruptors talked new long-term autonomous we the about over short to today for we getting we’re Also autonomous I of X, the these out IMUs that frequency cost, Hittite and the inertial both mid very kind signal with will integrated design-ins we’re the If almost through in really and about of call working well. with that the have to enable a terms now today to advanced of several even year. dramatically more place development size, more And platform term traditional produce some some photo-detector sockets an our recall we

LTC’s of logic as So of critical BMS also scale and ADI system radar ideal failure. a that of that to lost fit example. our and areas mission electrification features our leveraging products. bringing the technology towards will the kind autonomous that business, performance ADI been the OEMs. generation acquisition. things to relationships the base per again in back earlier aggressively next our defending our again our more on that tilting little already cost which Also leading sockets European failsafe talked as system North we're legacy manufacturing winning has get broadening aerospace traction profile function technology improve of strong into we the the We’ve the and we of by And levels delivering, I in in America charge customer a that and miles we’ve in robustness as and and momentum about our vehicle one isolation, we’ve by the for And is or have voltage have the LTC the business that safety and a lost which growth, the franchise technologies It’s might low business And any we will play of been that bringing tend have emerging to used very turn flexibility isolation our changing and time the aspects business the connection. I had from all voltage other event we get of a with well. to it using, requirements change to used a BMS really high there’s electrification gained unique side and

these are important electrical technologies very in vehicles. So,

and we've got well revenue and two automotive period on of a growth the the the things. given we're the a not I portfolio. strength My synergies to be add able doing So mention reasonable that to got think power overall of is time, we've or point side cycles we of power that business, the that broad-based to there design sense in should the of

very So, on the curve, believe right right I we're apps, bending the the customers. think we're on focused I growth where focused

be and have complementary get about with back it be. where publicly have very basis will to curve We feel terrific story ability should and customer footprint future the technology and said coverage, a to optimistic and I a growth our geo we

terms thought a where in future important know and was story we a of the as the about John, but it to give long I that's talk So are bit answer, little well. I today

Operator

Stein Your next comes William with SunTrust. question from

William Stein

your in in these and decisions as don't might a two what outlook a but if Hi, Thank with for going great. assumed is especially for taking China, ZTE adoption order the terms components a my to market view answers that in to wireless And them. controversy would your be market I’m to stop there's able to of brewing two ship second, questions you the ZTE you slowdown do wondering, whether of have to around growth particular to that. champions? see influence they around in how overall, forward? ZTE not around And sales you of in One, your XG, ship might robust -- what might question. particular as that sort of thanks or local

Vincent Roche

Yes, thanks for the question.

So, in various is networks in the globe term, of and CapExin across particularly view it to the China. amount short way fixed we the upgrade the place certain there a

So, in my play is other building are the there demand sense globe. will out networks competitors fill across many the that who the for

regard factored our into have We ZTE. continued potential numbers, embargo a with to

it’s it of small a a company was was small -- numbers, for our amount it into quarter. So of headwind built our a the amount last

to So you, U.S. trade think expecting I just the as is is think very, to close figure between critical. will sense other, and I My I this sense taking incumbent situation obviously in that gaining for but will as out. up very an that trade meet we’re will on need prevail overall, free trade we the we’re and most tell is each and are tell China clearly both and political my communications leaders And for we’re outcomes staying ADI, share. geos are best sense place, well can the negotiations prevail

streams. demand is is to one out capture opportunity my is carriers are networks build the at So profit other. sense the way more there And to day fulfilled more the and of for keep the be connectivity, demand there determined revenue the that building or end and and to their going

Operator

Craig question with Morgan next from is Our Stanley. Hettenbach

Craig Hettenbach

Question on consumer.

within versus just customers, drop-off fall there from growing the opportunities consumer? of there be about high a of your level, so kind from can just actually largest other off navigating at to appear and talk some we’re the is the if you You puts takes and

Vincent Roche

different as -- LTC globally, prosumer applications the where well consumer got a with strengthened Yes, $XXX business so and as addition the revenue different in products and is One a plus customers, of been the market has stories lot our area. our applications of lots million two like that there. BXB and and that’s which you our is we’ve know looks of business tail Craig,

it’s significant So a consumer ADI. for portion of

of backend the third in somewhere fourth our into quarter quarter. looking expecting We’re and

expecting to to be year that normally down strong year a XX% trending stated consumer is is and to We’ve We’re what previously now. appears XX% so. will for be how the the quarter be seasonally this

remains investment against leverage return our can high the technologies same get of high our strategy So where to differentiation that strategy. and continue to execute we very, into on areas a we very

Michael Lucarelli

Craig, you a follow up? do have

Craig Hettenbach

I thank you. do,

of question for on free flow capital a cash in kind Just Prashanth. allocation

targets So, of encouraging versus remind cash free that? in in that about us the and of as returning acquisitions priorities you that they terms be leverage. you just it think on terms the see quarter, up flow you’re two doorstep the cash to step in how net Can

Prashanth Mahendra-Rajah

Craig. Sure. question, Thanks for the

yes, it free flow, quarter our I was a for remind do but that can flow lumpy to want quarter-to-quarter. cash cash be So, us folks great in

way months the trailing So with we’ve on right this trailing and us measure XX months, finished quarter billion. at XX a is to X.X

So, amount we’ve considerable we Xx up cash in and we deploy want to how ratio, do quarters. therefore our rose on which of be next we to two leverage expect recognized that the achieve this would cash excess thoughtful very we franchise that once

with opportunities that of the dividend debt that the and the potentially took other We as Linear share as acquisition front are we very on well. we have as some in mindful of well us of as uses a repurchase result

quite some once we we’re allocation to capital think I it's the more spend us coming earnings Xx time talk and hear of about internally a that in that clear ready we’ve release strategy important So as something bit our threshold. from debating you’ll

Operator

is Muse with Evercore. CJ from next Our question

CJ Muse

one my I guess, one. could into combine I large questions if

that kind going growth? there share with a X, focus, term with forward? auto help line of could sustainability major the then in underlying talk revenue On the of in X been underlying what so kind that superb you longer we looking bit And industrial top clearly out about part of you more us a I detail segment us X, has Linear synergies terms drivers guess next in synergies as can what And side, the then growth the were years? from could little could that you growth see of see of

Prashanth Mahendra-Rajah

CJ. for thanks questions, great, Yes,

investments technology to geographies, products. that has industrial the the be is been we've made. mentioned well we is It with is CJ. driving this It all as it So, across board, business the all where extraordinarily continued doing you

come the this years the and have a you where continues can global over can see phase expansionary see now investments the the to time an business. several a have in really driver be in made environment, of really the together a and which our PMI instrumentation been you driver compounded at technology So last of expanding automation, that's is you combination that know strength the by

for to that strong very feel is we guidance a reflection Vince years. channel, the it's across the investments our and visits coming and been that is see is hard last solid, continuing than see because us that From all the the in greater a point information are can any going one longer. the run so one, where really book-to-bill sit coming to it's quarter, where our about his this particular customer to over we're information is segment of reflected it's the the to for the made outlook bit quarter, several gets from today, So that have it board it broad-based from we tell you

Michael Lucarelli

our Thanks, two term is you growth in long GDP. CJ. our over we also remind I say business times

X%. X% at in look you to CAGR business, that the about it’s If five-year

that's So XX% or two that's have our great great a for up the you and cash. fit CJ Do there. growth growth of and for business throws we kind you questions think that a in of follow, what actually long-term business

the to Let’s next move caller.

Operator

Chris Our Raymond with is James. question next from Caso

Chris Caso

Yes, thank you, good morning.

and picture a big degree these bit it good your, favorable about The the that you that customer the inventory have first needs a have on do visibility and have inventory you conviction continue. talk of like channel will conditions question and generally this levels prior from of point? Can ability the little you based comments sounds question with industry at conditions, the to strong with are amid into that line ordering ordering into over sure their in not question you make customers

Vincent Roche

Yes.

questions. thanks So, for the

a not we XXX. to So, ASC first reminder as have moved

sell and channel. through recognized the was revenue from our that remember So

do we expect year XXX the to days at eight a of first would XXX. in-house the XXX down our kind days, the course weeks we the The in that normal our we're is actual customer So we we're is relatively improvement we from with and inventory that’s really have activity to see where the level. rest come of expect were happening would of a a fiscal now we business just the provide of seeing have The course over inventory channel of that comfortable an at roughly bit. about in reflection where consistent that's through quarter, been and investors and the in of that what X.X that

see that’s of So the balance I period. where think the you’ll or

that, metric channel work being Our we’re order sell-through. appropriate. biggest ensuring that is order very to the on times monitor the does lead that ensure we’re behavior is us sales for the with organization reporting But and partners of activity revenue mindful closely to is again, that

So not inventory. they’re channel impacted by noise or it’s building subtracting any whether in really from the

Vincent Roche

that. Yes, another just on of little bit color

benefit about -- dynamics about I remark start The prepared used other that that the it, talked the at the macro I we it of there, talked in my industrial sector.

automation, been is globally, has for even at optimistic the industrial, that to across a secular pragmatically in in instrumentation various future, areas. my They’re aerospace think and we’re defense longer-term the case of and and least about growth last from across the optimism So customers years. the is talking applications the sense couple the I trend as

think are are we very, customers the is. are where feeling I good and we very So, and also good now feeling about where our market

Operator

with is question next from Bank. Deutsche Ross Seymore Our

Ross Seymore

in. the all commentary Vince, squeezing in for comps for me thanks guys the call. Hi, wireless earlier thanks

of you wondered part XX% that were does I wanted wireless wireless business roughly split and wired color the the in your level to side, for all gave side what’s us given and equation? Just comps set, the the your that expectations wired how between

Vincent Roche

the and that thank long-term with about as wireless Well, Ross, the business for across wireline, LTE, wireless to mid in business. digits expectations has the been it single single growth question, acquisition and is digits objective the in good Yes, a business. to grow sense growing, reasonable XX/XX today that high way while of somewhere kind between come, quite And in you. of my wire knows balance that’s can that my our and I think growth business the the that’s

Michael Lucarelli

Do follow a Ross? up, you have

Ross Seymore

a a it Can in growth design we little turning long-term model you little more should make cycles, quick the but be when this model mentioned us start a of tweaks centric. business given I see at give Linear know few I’ll to idea growth be times the you. you cal Linear bit it’s investor about Vince, centric? admittedly to be for Yes, changing have to an one benefits to successful a the not to those going immediate, more

Vincent Roche

think well areas. areas two I kind we probably automotive over shorter of would the that Yes, see the communications uptick that growth next where the the as be in have the as believe term will we in years,

We and take more what have couple the three will be sockets uptick we to the get kind the I put consider to would the -- that going top place to already line, see now on points period growth total technology Hittite should that period And in the virtually to on indication of of Hittite is of have to area. to two a any it's objective four kind take it that time, time. we given of that of the Hittite is closure the four into over similar markets, to rates managed growth and we’re of acquisition double in of if the year years Company’s playing

Ross, that to to take for spread expect any line. we the but kind we're largely to at, years think meaningful every of see us it's base a going we two mixed-signal that's dollar change ADI I four dollar is So, to expect of given the of looking top revenue opportunity power, which

Operator

Riley. comes And our Ellis question final with from B. Craig

Craig Ellis

If point growth I revenue where get to be to at a thanks of transition you on you growth comment sort of the earlier expect the in XG for to prior accelerate becomes And the so ADI. take of revenues. a XG to One, XG, we XG When of back majority it potential maybe for revenues material XG revenue? term about to on part relative wanted at translation rates do look longer segment front and how that much the to XG opportunity, questions XG follow would XG you as we XG Thanks real XG Vincent have auto for XG to Ross’ you wireless. sub I The to look think do rates? are. you and and and of pacing a transitions? ADI force me ahead communications expect more to in sneaking information those at look when the to both from look then basis, some and the that’s and up impact on compare would talked a

Vincent Roche

Craig. if be adding MIMO the XG massive XG to And question, be good core network. XG consider Yes, to of you initial introduction to

MIMO timeframe. the And meaningful I be portion a think the significant we’ll in the see XXXX without I revenue into still timeframe. XG XXXX of massive think kind will of revenue

a dominant XXXX wireless XXXX, our somewhere to revenue. what we’ll become communications and So between infrastructure we'll part be XG see of to more start consider

all So point. in this based the we're it’s called on the XG XG to triangulate with to But I Craig, it's uptick clearly, trying at in think, on massive or various starting at a of see as point, X.XG and a conversations based on China this customers. guess infrastructure MIMO carriers bit we have

to you. helps of to give that clarity hopefully bit So a

Michael Lucarelli

and and investor.analog.com. Jennifer, found for of transcript be you, copy site everyone this joining interest morning. the ADI. Thank and be your Quarterly for can Okay. of A and thank will at at section also available Results Relations all information reconciliations joining Investor you continued in the Thanks available

Operator

This does Analog today’s Devices conclude conference call.

disconnect. now may You

Analog Devices (ADI) 30 May 182018 Q2 Earnings call transcript