ADI - Earnings call transcript Q1 2019

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Operator

Good morning. And welcome to the Analog Devices First Quarter Fiscal Year 2019 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

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

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

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

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

quarter first a reminder a quarter. XX week XXXX As the of was

In accounting. of first addition this quarter sell-in is adoption ASC XXX the of our

basis All this two selling on site. this Q&A will have Investors during end quarterly year and market growth extra unless a during this data, otherwise on and week be look on posted our revenue We historical for commentary and financial to statements today's conform exclude stated. a standard our back revenue call to comments

and the revenue we does not move approximately million have channel mapping LTC's revenue. annual impact consumer. we product refined as mapping further addition of automotive new or industrial to to adjusted $XX sound communications The from accounting In in

over CEO, Vince? to With turn Vincent Okay. ADI’s Roche. I’ll it that,

Vincent Roche

Thank to morning everybody. you Mike and a very good

continued what billion the in high This our and another macroeconomic by ongoing year-over-year EPS markets. as we're very strategic our we is XG in operating market margins deployments. strong X.XX the predominantly communications XXXX guidance over our $X.XX related came discretionary also executing above guidance environment guidance. ADI of told of driven at to in adjusted with quarter successful delivering first soundly XG strength the the quarter our by investments a in growth for spend. All of high was initial was first fiscal of BXB prudent in of led growth of XX% and or strong upgrades midpoint our a balanced was quarter end The Adjusted end at challenging Revenue results.

S&P have of XX% months in Over cash period and the same the the revenue shareholders free time generated top XX XXX in X% past cash $X.X flow of which than that to we over repayments. billion returned we've flow free more ADI of after places debt over or XXX% our

for opportunities breadth levels Now and franchise franchise. attractive to while strong growth. to depth enable areas extending exist we're execution our continue push results and expand that of to investing of the us innovation to To end of strategic where future we our uncertainties invest our R&D the and record in macro boundaries continue in see

been life business The cycles conditions. increased innovate business career momentum of to of our to today. growth. our with my uncertain customer our we've plan innovation In the am plus in never and our while and to long or XX led a I more back excited decade our go In than pulled or product invest we average where further indeed reach addition about continuously have resiliency our of activities ability model is deepen virtuous confident prospects strengthen investments broaden imperative more. us lifespan and competitors in some allows markets upon our to year engagements. is market lose build in And given cycle to ADI This times I our regardless and

communications the a and product information analog I to creating is of we've wave at trends inflection built believe provide and in tailwinds technology industry an portfolio macro favorable third come. for will years The that aimed

Now to Today are uncertainty. our seeing examples with provide markets some tariff we're CAPEX you of specifically. with BXB balancing customers in deployments what industrial

that management, are will focused factory requires The additional to However, securing future where the digitizing growth. These efficiency high and robust on remain more and our and more areas sensors, performance processing move all connectivity. and the fuel customers excels. power the digital factory their productivity signal ADI

an front times the today and to more the up with of require very is we when And to future ADI networks and expansions algorithms compared microwave signal we're account once additional We ADI well. X comprehensive the software as to the automotive optical content as vehicle. positioned will mixed backhaul space, again to in to followed XG connectivity, over just well to the solutions radar and of drivers and data network the radio these of well opportunity and compared and combustion is by MIMO the vehicles necessary see to efficiently content three wave it's is create are growth power with ADI effectively global times the looking car their Electric massive per that of in wellness report in the stalled and manage begin upgrade the by to opportunity vehicles radio the sensing XG electric in necessary up that's both expect the vehicle upgrades four enjoy continued future. increase cycle upgrades lighters processing, precision for all optical the cost and the a the our Microwave of level the impact the but the data. transceivers represent and spectral, us of aging recently optical as backbone worldwide driving tailwinds modalities a core. but growth our systems climb deluge are compelling address introduction stages. XX% the well autonomous increasing as just transmitted. XG systems. building created provide RF, we data our management the & X% portfolio XG to network need and provide healthcare technologies deal will upgrade carriers as bandwidth an vision to efficiency of as analog has dual communications the of And is wireless and upgrade investments the intensifies between only our This power but address of our as and reality. train require of in software population more of about suggests the additional of safety autonomous to In and thermal will towards economically network. increase Today mixed just higher luxuries multi-year sensors sales for need well networks than cameras the and opens the IMUs defined both and XG XG bridge content power four defined in creating our signal unit the This traditional customers by phase for provide level the pressing higher the to ever customers. nascent being and a opportunity frequencies vehicle make will so. On virtualization introduction management move decade the massive to to An or The industry into autonomous important to are technology uniquely cars across are vehicles future fully systems the for These to next or the RF as beginning more expected and in systems. will to at electric these cars to MIMO business this real engines. blocks [ph] times products and the next This for the radio to beginning be as autonomous lastly expands not more they to up

thereby component are new we of our end value. highly with integrated our addressable capture levels extending to high market subsystems Here complementing franchise

we're fidelity images allowing point highly use. high example to integrated digital monitoring at dosages. at deliver to and electronics creating to us portable performance monitoring photons X-ray battery For of bits our any power ADI's lower under deliver customers in deep ultra power high radiation enable Separately vital subsystems grade enable virtually signs that clinical accuracy, low and expertise

value Now ships. tide. company's The the saying performance strategy, during all low rising a tide in closing test a of true a and goes is its as execution, lifts

leadership analogue, relationships shareholders. trends of confident focuses speak and expand value, diversity that for improvement and positions strategy [ph] alignment the performance. addressable high our and continuous on results And ethos that every and us of our a innovation, across of we've favorable deliver Now technologies, customers strong to We're and capture themselves. markets chosen macro heritage aspect with and more performance to to results our our across continue outperform, create, deep applications, innovation, for market, our

so that you bring it will with more Prashanth who And through hand I'll detail. to over

Prashanth Mahendra-Rajah

non-op with basis to Good today's expenses revenue call. in morning the be which excludes special outlined Vince. quarter press you welcome an today first adjusted add my comments and of our me let earnings Thank and on everyone will My exception release. items

As XX was sell-in quarter ASC have week XXX and accounting. of a we a first the or reminder adopted XXXX quarter now

will conform posted a and week quarterly year We two our for otherwise look To be exclude also financial have on and extra my revenue we sell-in basis a unless give you like Q&A normalize commentary restated for comparison mentioned prepared a basis. remarks growth rates like statements historical end sell-in to and stated. will as our this have market Mike a and on our back

coming first of to on political guidance. are margin, uncertainty in and the of report midpoint to geo face the our above strong pleased all we with quarter quarter, operating results EPS revenue, the in Now

increase target also XX%, our This and X% ADI's optimism to are have our to financial reflects dividend we future. we delighted since to Additionally XX% strong as our regarding increased the growth raised as our by XXXX annually. well dividend almost results largest

me the let end statement cover into first diving the income Before markets.

ongoing was XG our experiencing expectations exceptional momentum very market the highly to sales market and the demand and measurement, This in led quarter diversified in of XG by XX% growth communication illustrates quarter memory business wireless. years. exceeded continued Our expected MIMO. during increased a the The in growth over traditional systems strong ago this sales year quarter and the and year-over-year by growth XX% represented weaker test. quarter. in year-over-year comps initial of that were the deployment roughly the in in by XG and and XG BXB represented to of industrial deployments. The by double-digit early factory driven first test market experienced in multi-year revenue in defense growth automation led XG the revenue the XX% healthcare, upgrade deliver coming electronic growth and strength and as balanced Within is see compared revenue flat ADI is massive We momentum cycle strong aerospace

from and auto is in unit in quarter growth as business XX% bring direct and offset compared on moved customers double-digit lastly reach, to reported quarter. and management business during breakout And sales the accounting new products power the from due AXB. Our market in quarter. BMS, vehicle sell-in to we end ago sales our The essentially as represented of ramping customer weakness represented quarter. the extend Overall flat was we through the growth our in sell year-over-year primarily some to market revenue first XX% consumer growth sales year of was by based distribution of to our X%

As less portables than year-over-year expected. revenues declined however expected declined

sequentially high market a quarter rates. Non-op with translated debt ago reduction year. balanced the the quarter XX.X midpoint on utilization but in and operating to This prudent billion XX of approximately unchanged expenses mix XXX at guidance down and $X.X was billion X.XX our spend. XQ we than million the end the in lower lower XX.X% for margin from past in up due of P&L, guidance X% investments was below the came to an at and of the Now discretionary the range. lower revenue was million slightly Gross was end the our margin at end OPEX year-over-year. year-over-year quarter of strategic which high of first to due over guided our as year to our at

told of first end in the Our of XX% quarter the guidance XX%. quarter rate adjusted just from a XX% tax at the All the to lower for diluted $X.XX. earnings above outlook share midpoint and above came was of at per

sequentially the to inventory Now were increased dollars sheet, balance quarter. moving on slightly compared days flat to XXX fourth at while

coming to and As our of back-end begin we ahead a of cost facilities will front-end closure synergies. inventory expect quarters $XXX in million we the another that the reminder build of to bridge deliver

So inventory range. these year-over-year quarter are were we the our days closures plan CAPEX sales. target increase X% of in sequentially Distribution complete. days and down our first million in both remain temporarily modestly to until inventory was or $XX and

trailing flow For anticipate due temporary billion month the and our full a future model. $X.X to support of CAPEX modestly XX additional product This co-location our capacity be deviation a year business to would model and our from Free higher on development cash linear we run may long-term was the X% basis. than teams growth.

have XX buybacks of repayments. our after or X.X the quarter million months we XXX% dividends through $XXX first flow free in million dividends Over In and million debt XXX we cash million our roughly and stock debt, of shareholders paid returned XXX shares. of past repurchased repaid the to

the revenue in outlined non-op adjusted of also today's release. and excluding exception expenses Now on which again items guidance an onto is basis with

POA a accounting. our is As or based guidance reminder sell-in on

could revenue while first impacts For channel average in three X% have context during as in and channel minimal variances increased was inventory about quarterly XXXX the of On half inventory for the the the channel was the been be larger. the half year. change second over reduced inventory in past years annual and by year

sequentially was minus mindful to year-over-year our led Second expect kick XX.X%. of inputs to slightly revenue be in we expected items range and is aggregate we market. XX the is EPS billion million. expect minus to guidance fiscal we a the At for $X.XX All guided industrial, operating XX XXXX are sequentially the second be and our plus it of At the increase lower expected expected previously a of $X.XX. by to Based we of be are it at or with end Q&A. growth be around quarter that opportunities quarter economic are towards Mike and flat margin I echo our say tax automotive, and expenses for plus to these while markets be that midpoint midpoint us excluding to the are we strong in or Non-op the to X.X extremely to planning confident communications will of And to turn our BXB on up of over off basically slightly the communications uncertainty Vince's diluted special start long-term XX. optimism ADI. to quarter I'll rate

Michael Lucarelli

Thanks Prashanth.

basis it. on one before last commentary unless Q&A from week our reminder Okay, move be sell-in IR, will to growth otherwise normalized XX state we and we on

can After for question. our have Operator, we Now question let's an get follow-up to limit you we will give to opportunity one the question. first yourself please. initial a Q&A. Please response our

Operator

Please ahead. And comes our question from BMO. first from go Instructions]. Srivastava Ambrish [Operator

is line open. Your

Michael Lucarelli

Ambrish. morning Good

Ambrish Srivastava

to Good have assume put to the changes different morning. your Maxon your guided like what reported guide it's the peers respect Dixon bigger really being Q-over-Q in than guide fair wanted and I with Is one factors [ph]? your accounting to. that sell-in just to and of peers it the

Prashanth Mahendra-Rajah

not I conclude Ambrish am why would that. sure you No

a are be excuse of the at the we not mid-point. but at XX.XX anymore. should mentioned, I on year-over-year sale basis. sell-in on the growth, We're basis as not, are XXXX The we of is -- me, guide Our guiding guide midpoint point guide

strong channel a to were still inventory assumption pretty number would you year-over-year there. on or sequential you growth see take an If flat

Michael Lucarelli

prepared XXXX said inventory of in year built first his the half some year much. we're remarks we context as this just there in in and planning build Prashanth Yeah, the as not to

said. would actually be a that So counter you what to

Ambrish Srivastava

for thanks Okay, that.

Vincent Roche

Ambrish, our the channel for know take are basically XQ outlook if in next you you our days quarter flat. the

run so I run sell issue. internet. through basis the company want that an a build So it's inventory an on or We on the make certainly to thing the clear. not so We

Michael Lucarelli

Do follow-up Ambrish. have a you

Ambrish Srivastava

that different make content just you I what think help A XG the roll-out can roll-out, I also to for bit understand on I the expect, versus your that wise cut just sure you dynamics clarification. term versus are longer positioning I XG, Vince should that did, thank it's wanted the architecture and the in about know right. multi-flavor you gains how it was you? we multi-year thank what XG, us

Vincent Roche

XG continuing. the are so Yes, build outs

the the example for spectral upgraded, being massive story next ADI. years be course direct will in to the that is adding XG terms improve of think energy But MIMO for we're of couple contribution efficiency. revenue of I and to

think high as in are at left share phase of the and I stage in the very now the right continues, said is And we the where XG. I what a present platform. I have seeing XG initial there years So, will XG XG primary time we're the be think multiple

are we initial really materialize. yet of XG to in XG So but has deployments stages the

it new in MIMO when to way content content the the systems frequency higher get would four to microwave ADI. that's there. ump and by the these more portfolio these of of And as we XG content well. you expect for in times at know value there looking is the we comes And course the when of systems create know densification that car before massive another say we management You add systems, move the I with to XG generations

management of well. content, power as and story the a content XG to portfolio to I've pleased stages that are every said we mixed of of and signal power attaching as I'm say early at dollar So our least analog dollar for XG before at LT of our there's

Michael Lucarelli

you Thank Ambrish.

Our next caller.

Operator

Thank you.

Tore Please comes question Stifel, go ahead. from from Svanberg next Nicolaus. Our

open. Your line is

Michael Lucarelli

morning Good Tore.

Tore Svanberg

results. the on congratulations and you thank Yes,

the that that First going it consumer when assume in I comes until to question, seems the to BXB of consumer things participate intrigued and investments be healthcare. expect in but to up doing you're should BXB ADI side linear so lot healthcare? by both in on business the a annual of I'm sort now there we

Vincent Roche

much question. signal of focusing is what there. grid example is monitoring. higher point a end Well, sensing most good view vital It the the clinical of we're and doing very activity -- signs We're the processing for the of in on

problems true help on not, we're the toughest ADI from technologies you enabling health recovery and to wear and focused sensing to really predict situations. know, So indeed form we monitor wellness and consumers solving new to with healthcare are

So the that we're story about I would type on largely more activities. to say that think is BXB focused to way be the going

Michael Lucarelli

Your follow-up Tore.

Tore Svanberg

That's really this through for helpful. to Could and give maybe could thanks here you give you range Yes, going sense as are Prashanth. Prashanth us transition much said go days? talking question a we're your Mike, you up. go inventory us on about inventories for you a how

Prashanth Mahendra-Rajah

Yeah Tore. sure, thanks

remarks prepared So, had I cost as in to the part that as we the shutdown two of to of acquisition. the LTC committed additional mentioned synergies sites some acquired relating we

this this the burn kind we'll early which million goods. of two $XXX closure once generate little days the up to inventory an to help bridging, around more To we're our transition sheets pinpoint cost this in is shutdown and through of too is all at those to kind at that should and under cost facilities hard off. bit would that needing be of facilities of and incremental necessary a us then of internally those stage us running synergies to estimating so through carry And five balance be of what put we're much but going are

Michael Lucarelli

Tore. you Thank

please. question next Our

Operator

you. Thank

comes Research. from next from Bernstein Our Stacy question Rasgon

open. line is Your

Stacy Rasgon

ordinarily and of first lot amount change. taking it XXXX the of half the I built said you if that with magnitude thanks given first in what from just drawdown particularly to this like second accounting, the profile as to would drawdown considerable in half other stronger new the the half? so the one you of half, was a industrial ordinary demand I in of moved patterns the so environment the the it bigger to the maybe it have in be revenue was first second the Back the just channel my than would what we than maybe second as in you sell-in up I we in guess of put that compare half bigger guys, is channel in words, from the revenue, than magnitude see your would second what leaner right the noted now, in shows the But old Hi for typically question. normal the see saw a we revenue in

Prashanth Mahendra-Rajah

that two let pieces. me break Thanks, into

if factory see were to it one of indicate around China. you was that the with the back some beginning think was on particularly year space we summer first in given companies last we to to challenge were So that first what going automation

proactive constrain on going we uncertain inventory in channel being times of amount So that into the ahead. preparation the of the to began

see environment. significant kind So yes, last macro half more of did year second the channel a given the we in correction the in inventory to

accounting As we first on and that channel comps business tough some the in the we year the half sell-in now correction. the show lapping for inventory now move second well softer as are again we as also environment that half this be into now we'll as creates setting for up that

gets seven here of the forward. feel we're right and on kind pretty what's that the that to. kind and guide from half that's growth the of about at better of we in And in So good weeks industrial we channel for do today terms in range

It POS important is is on the drives and is in the serve basis channel the and on what decisions put striking our about what it's running customers inventory Vince is in in we've what focused a that kind balance necessary we As this so less of POS channel. to mentioned our particular revenue us a the is managing business number. for

Michael Lucarelli

a have you do Stacy, Thanks follow-up.

Stacy Rasgon

to you. thank wanted I ask I OPEX. about do,

guess somewhat about QX, continually in of opportunities you're kind relative uncertain year? how growth of flattish which kind in thinking I the but QX, growth flattish year-over-year in the should at go we rest so time the were does OPEX investing of you're seem revenue about you new So, as in particular to talking current maybe through guiding given same the situation we

Prashanth Mahendra-Rajah

I if We be of a quarter that were revenue you move told the to be you case to would in flattish. year, And the timers that quarter we driver sort change line think last the that call be behind and been some about with through one frankly we we there last to the the the meaningful biggest say relatively continue on in but not as call our a earnings which we to balance little on spend higher move from that there's talked of second this the OPEX are that. that is historically OPEX year quarter. first will that variable when would and we're be would a first adjust profit growth. expecting in compensation The the designed bit

today about R&D that fully XX% at and So, runs of we funded. revenue really consider

that needs envelope So required. development product will the deliver to work within that are we

Stacy Rasgon

much. it, very thank you Got

Michael Lucarelli

our please. you, question Thank next

Operator

Our question Harsh Jaffray. Kumar, next comes Piper from

open. is line Your

Harsh Kumar

quarters? on great assume coming hurting a few guys. or manage utilization guidance. the and the great in you bit just stronger, but of that hey are and and mix coming of gross sort I the down, BXB Yes, little expecting the consumer Gross sort to Congratulations how fab results, factory was in margin therefore margin came

Vincent Roche

the through the lower in quarter in rest year utilization of expect had the we utilization our but fiscal the that quarter well here. we and will Yeah, first second increase

XX.X% pretty that of will the gross we the we posted we in also improve. quarter, also as level to margins the I towards utilization. And keep margin mix So the high industrial expect improves first would think

I gross margin lower seeing across are So the improve we right will and that industrial activity shape the think well would think the I certainly be of the what is improves. as utilization probably in And company business point now. as good

Harsh Kumar

Thanks.

Vincent Roche

comments but your one consumer in growth also just correct there, was growth in are it it clarification the was Harsh, communications.

holiday so for are current are mix the the we we shutdown point lowest end that -- short-term the have market utilization where quarter this are season. and typical the at is responsible typically left we remember over do So holiday the

go Do you follow-up So, to Harsh. a with we'll caller. that next our have

Harsh Kumar

Yeah, thanks. Thanks Vince.

the question on quick So automotive.

before about, of on. you looking stuff maybe to So out see held you digit timeframe? in you feel it on your sell-in automotive laid about out up unwilling at there's you than or slightly do targets start sell-in kind lot automotive the How I us some give that got some if are high growth a some to to a and that how number number, mid excited do single going of sort you color talk if real you realizing of that back out. when numbers Could year that that even more

Prashanth Mahendra-Rajah

Great, great first the Harsh. take to second Vince and Thank you I'm let part then going do the part.

direct in So we moved were channel. the as the I some who said remarks customers into prepared

the to would As been flat a the a us, to sell-in due result there what revenue want a you think that number. Normally that auto that. build was and growth if little remember for bit growth of not be in would've inventory is associated about with

that we natural the to the about first from inventory So to Vince quarter we we as so was be for the minimal would -- With but expect have auto going in build it inventory and is let auto quarter longer-term the half that of a quarter-over-quarter kind from down. kind we that what quarter. growth first offset the kind demand growth. were corresponding was because had markets other auto the think overall the up of Channel in second was flattish of say flattish we that the talk

Vincent Roche

of lower our been -- portion in business. XXXX expecting couple but things through me the business we're the single-digits. grew the in specific, of hard LTC was a single-digits so driving legacy portion ADI let Yeah, you our tell ADI to The in that the we've high

of equipment we in in area so. increasing looking put a the BMS, faster his legacy double-digits the of automotive LTC remarks new year to audio well portfolio sector in fact in CAPEX winning again this automotive sockets is Prashanth we're in in year-over-year over And solutions particular that that as our power on need products basis. incremental that at business Legacy indicated just to glad in the to many that as us that our this area. last three coverage in get the test particular quarter, the past that we to we're CAPEX that year, remainder and infotainment quarters the do the reasons power LT well XXXX been customers that place and growing in management we've or sector. the put everything our And growth bringing premium seen one in Our grew as market we've to we're think power were to back-end. the I enable ADI full where the sockets I'm battery our winning continues power to area. flourish double-digit and We're fact automotive we're a attaching in to and in in say to also

some as traction so we're But launched high just to there. we've at yet gigahertz starting to XX that So, that's exciting are get very indications radar resolution level well the technology the come. early of

portfolio opportunities. we to many critical technologies that we areas electrification automotive themes in in and around the and aligned product have are attack the these think well now industry best I So the and have with autonomy

Michael Lucarelli

Thank you Harsh.

caller We next will please. go to our

Operator

is from question next Morgan Hettenbach Stanley. from Craig Our

line is open. Your

Craig Hettenbach

can slightly how expect year-over-year? comp, thanks. between of up markets just commentary rough a those it and if you to Yes, on kind you BXB that sense of The frame you trend automotive look industrial,

Prashanth Mahendra-Rajah

that believe I a Industrial was quarter. strong I be Remember Craig. say. down last kind XQ growth of would very very, will hey year-over-year. Sure,

the we the of double-digits was our industrial to grew the in going sequentially down about Automotive year-over-year. about also is year-over-year through accounting. as we tough be change a think revenue talked That's sell peak we for ago. a I year kind comp inventory in selling It channel plus XQ. talk

think I and first would XXXX So auto basically XXXX sales versus unit with vehicle for flattish unit down. look with first at -- auto is half half flattish that

So, vehicle is the accomplishment that we that good production. do decline recognize in given a

auto sequentially that that's it I Put growth So of together call then offset strong and account. be even of it would comps double-digit slightly will year-over-year. another the what the sell-in because with increases

probably year-on-year. up If X% you X% that to away took BXB is

Craig Hettenbach

then just on design on industrial how you Vince understanding the that kind track? with And of just of ease a could there. talk market, back and engagements see there's customers the cyclical some business can Got that near-term question once you it, appreciate the some things through cyclical get pressure color pressure

Vincent Roche

it's a question good know Craig. You

though pipeline and the an opportunity products all legacy both an on high. record That power in ADI LT legacy particular. have We is at time

and So broader position a we're Board converting the that in we've the sector. basically deeper across automation pipeline and

doing more for our extended measurements the tests growing. And test oriented quite into year-over-year have vertically sector which is well. as company area on complements been a reach and and has energy We the basis well well our memory electronic

more sector So in measuring, all we things the defense are do the places and more in around powering, in those and aerospace technologies industrial connecting as well. interpreting, used sensing, getting and the and

a sales have portfolio, out got and we day. with bigger So, more engaging we've every application deeply our there resource customers

the to over is mid were target seven if to put on growth the to my five the high to we grow in sense I area a consistently think So opportunity years. coming I have single-digit number it

Michael Lucarelli

you please. we our will caller next Thank go Craig, to

Operator

from comes next Barclays. Our Curtis Blayne question from

open. is Your line

Thomas O'Malley

Blayne is for Hey question. Thanks on Tom guys for O'Malley ask Curtis. letting the this me

that over profile of moved chunk that the cover Just you think revenue? something I describe mentioned to of growth kind call, the early could you in comp to from consumer, what you you're want $XX and said million you guys of moving

Prashanth Mahendra-Rajah

is to So prosumer Tom, related business. this mainly

we're call, the So customer integration comps put typically those finish lies, linear at plus process of we type business ADI from think those with prosumer polycomps Its for into them. LTC. growth a with in we of continue and puts to as where things like GDP consumer stuff removed mapping of type that for communications, conference related

Vincent Roche

and of the stuff like basically feels non-portable and area. and it looks portable Lots longer the and a life business. BXB customers cycles it's when compared to So products product

change the that's taking So that's place.

Michael Lucarelli

a have you follow Do up?

Thomas O'Malley

that the really are of you much before to increase quarters? about in side, happen that lays XG, guess XG the I kind transition towards talk timing of just of XX can guys next for on moving more is think in of were Yeah, people still and excited what massive content couple are are comp XG about about MIMO of you guys ahead you left and that you the seeing talking really how that how the strong

Vincent Roche

it constitutes say connected of XG to would what Well, is a different different with and definitions massive I have X.XG. XG MIMO people is XG. that anything

them call people Some XG.

drivers I be play that So growth that's the least And portfolio. in that's already strongest will think and another for at of XX one in our the story months. XX to

to see to XXXX-XXXX XG massive which technologies it's that XG technology a MIMO. being are going the I XG be introduction is bridge advanced through utilize point. think beginning very I that to

meantime that's course I see XG So of of classical you'll out. I years trials microwave think couple the think of but a the still driven in

Michael Lucarelli

Thanks Tom.

please. next Our question

Operator

is from from Our SunTrust. next question William Stein

open. Your line is

William Stein

Great, thanks questions. taking for my

suspect the successful. And success might I the on First us the I'd on taking style you or has two for maybe would context the that's a appetite of for which should of given to did a but Also in step out company. now allocation net and behind know the was us you increase. was a but think the you've you comment about ADI's allocation a below now there around turns still There very I going proving strategy two of in the your leverage like M&A you're bit broader so dividend are last acquisitions I Linear had? capital hoping clearly concern year a top back be the last little am mind time remind capital you of for been leverage, Hittite strategy,

Vincent Roche

products we to capital our Well fullest extent the getting building the and on sure to invest first market. is greatest make to call in these that products the

level in year. investing is fact we're a call our at record first the this that's OPEX So

all repayments on. Our with as ADI our our a and returning combination -- We're call capital. and we're fixed legacy that's committed to of debt company that's are flow OPEX LT. free now shareholders. Hittite we right the first happy to track cash so in the where We've after We with the very

still franchise. create that can with we that we're the know integrating So we creating and leverage LT

are the to we've last continue that's about it right and we where last the over do now. now I XX right months. that's So think way that been think doing the to some but We'll tuck-in acquisitions

Michael Lucarelli

A follow Will. up

William Stein

can on to conflict degree hurting your has comment been believe if the business. which the Yeah, trade I'm you you wondering

comp clear trend others as as business, of and backlog see that it's degree think think some of in orders much regards already in the is and in there's you effect strength if I thank trade sort what there you? future but, not embedded what a agreement to been the you holds particular you to maybe your your what because think --

Prashanth Mahendra-Rajah

Vince start know orders more want then stronger let me were let add some to minds. get color. orders December. on on I Great, just and than your that's I probably question to so, many January people's

BXB Now all that's was it our not that for us is but sign strengthening across and a of good orders unusual markets.

metric our at Chinese that's Now the orders four But it noise our February metric it lot of emphasize than that. higher that do New Chinese but to strong. very want for our do And XX noisy week is remain going we a there's noisy whatever and it Year both New is Year book-to-bill is X week. worth. in week so I while has look into But but a a

Vincent Roche

that's Prashanth. think I fine

Michael Lucarelli

Let's go caller to please. next our

Operator

from comes Pitzer, question John Credit next Suisse. our And

is open. line Your

John Pitzer

But is relative up XX% north thanks start and growth for if the business for kind you a perhaps you've Yeah, to quarter, from basis over any Vince could rate help wondering I week guess the results. business January some the the good last I guess mine was I longer numbers of I'm sort your of pull-in out on the get you're guys, of change almost there ask numbers extra the in lap you a comps me Chinese are concern sustainable to comp hard accounting about should that million, both business their sort excellent as seeing in XXX think in if or in customers relative what ability just law the in XG, pull revenue follow the adjust down by of to letting to not? know to seeing of on morning these tariffs, you quarters there question. or comps you a and between that of of the growth time? grown you compares you break parts look do to concerns Hittite the But maybe several question MIMO, large Will's of period massive some be when at us year-over-year quarterly buckets of and the

Vincent Roche

releases the unnatural there current the of particularly remember tension XG obviously anything anxiety are trialing some. systems planned around but China There's think pull-in. incidentally there systems. there also And XG in of there I Well, numbers probably is don't I see in but advanced the is situation are some trade and

So that's taking place.

these I Q&A here fact LTC from John, terms I ADI, in we're top Linear, we in dominated being certainly and mentioned pieces of ever the is Hittite. remarks a power is the think to breakdown the increasing and prepared are of content of than early adopted. of much But beginning individual what complexity. head legacy you ever primarily stages more see in the as give contribution story the historically by our It's that the of the it have had my in we've systems off hard to

LT early of We're mixed the adoption today by dominated largely and connect portfolio the higher of tremendous the of And the Hittite is a strength our said that legacy So stages several expectations is know is with with years. source that all for in at of signal. frequency that ADI you will my that the content antenna. expectation grow next and business double-digits -- products customers the connect to the the

Michael Lucarelli

time… and Go John. Thanks in just ahead John

John Pitzer

maybe store kind trying your offline. does really percentage content run I years started, that's could Okay that guiding comps the was in of three or point quarterly cover or XX a was what revenue revenue two and of you is what future we that to can of some it content at at What rate back it look say kind ago? take are you story go XX we

Prashanth Mahendra-Rajah

opportunity for to on content up traditional a adding by and at up radios to really The was doesn't is about to XX we're us relates John XG, level to comment really So go that. radios massive content. MIMO, share high as power XX That more and include XX. XXXX content that on XX Linear you gains move

really that's future. So in the

about is XX the in moving massive XXXX share beyond level high XG be will XXXX a about and at So gains, to content. MIMO

John Pitzer

guys. Very helpful, thanks

Michael Lucarelli

question last we Can please. our have

Operator

comes our Evercore. last you, question C.J. from Muse, Thank

is line Your open.

C.J. Muse

curious moving Yeah, the handful on up of industrial proved a good much your think of more to that of coming morning. of most definitely so resilient do questions, result Thank squeezing how you portfolio? to than were in, your me a was I business just think previous you thinking follow versus guess and for us in. I particular sell-in

Prashanth Mahendra-Rajah

none was the largely channel. them. some business say through that would to real industrial of goes due I that Remember

very a in in primarily the tough inventory half built we that industrial because XXXX the compare channel so first is have the in We business.

gotten have reflected think above in bit comment our so little normal I from here I but remarks which to in we As think my headwind than Vince and I is prepared test measurement which we've automation we defense, continue outlook. already so parity offset that's in mentioned made and mentioned had signaled than book-to-bill more test memory some saw the growth we in helped grow more the orders to time The we electronic better ago. aerospace,

C.J. Muse

you guess a know more so follow-up, limited can quick I consumer like through would what wise calendar side business what are and given today as there, That's commentary figured win on how thinking kind look you helpful, design about and I the XXXX? start I guess seasonality of

Prashanth Mahendra-Rajah

given is to and we of for XXXX it XX% you think demand kind think fiscal that we're on down the just that what the XX% last for business sticking I of will be year consumer low Vince in And the point Yeah, [indiscernible] outlook. that's call there. think highly to about

Michael Lucarelli

Okay, Investor our joining investor.analog.com. our this continued available core joining of transcript us be site Thanks at in can all copy A and and additional on the interest for our And C.J. thank at also Relations of and you reconciliations be Devices. information website for results thank section your found again us will of morning. everyone the Analog you

Operator

This Devices Analog concludes call. today's conference

You now disconnect. may

Analog Devices (ADI) 20 Feb 192019 Q1 Earnings call transcript