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Analog Devices is a leading provider of analog, mixed-signal, and digital-signal processors. The company’s integrated circuits serve as a bridge between the physical and the electronic worlds by monitoring, amplifying, and converting real-world signals such as temperature, weight, light, and sound. With a vast product catalog featuring more than 75,000 different models, ADI sells its chips directly and through distributors to customers in the automotive, communications, consumer electronics, and industrial sectors. Founded in Cambridge, Mass., by two MIT graduates in 1965, Analog currently produces chips through a combination of ten internal factories and dozens of contract manufacturers.

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Analog Devices (ADI): Company Profile, Stock Price, News, Rankings

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Analog Devices

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Good morning, and welcome to the Analog Devices Third Quarter Fiscal Year twenty twenty five 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. Richard Puccchio, Executive Vice President and Chief Financial Officer. Sir, the floor is yours.

Thank you, Josh, and good morning, everybody. Thanks for joining our third quarter fiscal 'twenty five conference call. Joining me today on the call is ADI's CEO and Chair, Vincent Roche. For anyone who missed the release, you can find it and related financial schedules at investor.analog.com. The information we're about to discuss includes forward looking statements, which are subject to certain risks and uncertainties as further described in our earnings release and our periodic reports and other materials filed with the SEC.

Actual results could differ materially from the forward looking information as these statements reflect our expectations only as of the date of this call. We undertake no obligation to update these statements except as required by law. References to gross margin, operating and non operating expenses, operating margin, tax rate, EPS, and free cash flow in our comments today will be on a non GAAP basis, which excludes special items. When comparing our results to our historical performance, special items are also excluded from prior periods. Reconciliations of these non GAAP measures to their most directly comparable GAAP measures and additional information about our non GAAP measures are included in today's earnings release.

References to EPS are on a fully diluted basis. Okay. With that, I'll turn it over to ADI's CEO and Chair, Vincent Roche.

Thank you, Rich, and a very good morning to you all. While our third quarter revenue and earnings exceeded our expectations, and for the second quarter in a row, we achieved double digit year over year growth across all of our end markets. While geopolitical and macro uncertainty continues to cloud the outlook, we believe ADI's innovation driven, resilient, highly diversified business model positions us to continue to successfully navigate these challenges. The accelerated recovery of our industrial business encompassing instrumentation, automation, healthcare, aerospace and defense and energy management is a case in point. As you've heard us detail on prior calls, our industrial recovery began in the aerospace and defense and instrumentation sectors, driven by our strong product and customer portfolio positions, as well as spending growth in defense and AI infrastructure.

We're now seeing double digit year over year growth across the entire industrial portfolio. For today's call, I'm going to focus on our billion dollar plus industrial automation business, which was the last sector to return to double digit growth. Its market dynamics and trajectory are expected to bring long term expansion. Companies have long invested in automation systems to gain first order productivity, efficiency and quality benefits. Today, a new wave of adoption is being driven by economic and demographic pressures and enabled by the potential to transform and accelerate business through leverage of real time intelligent edge data.

ADI's high performance technology stack and deep domain expertise are crucial to customer success in this highly sensed, securely connected, software driven era, and the new robotic modalities that are emerging. It's predicted that the convergence of compounding macro and AI enabled technology factors will drive robust double digit growth within the robotics market for the foreseeable future. ADI's ability to deliver exceptionally accurate physical representations and enable faster insights at the edge will become even more essential as the market migrates to next generation autonomous robotic systems. Our long history in robotics has given us a deep understanding of the sector's hardest problems and the greatest opportunities. We're investing to maintain our performance edge in analog while capturing increasing levels of system value.

In addition, we're building ecosystem partnerships and deploying experts and an increasingly broad suite of technologies to enrich and deepen our customer collaborations. We expect this multi pronged approach to unlock significant ASP and SAM expansion for our automation business, following the proven path we've successfully executed in other markets such as aerospace and defense and healthcare. Now let me share a few examples of our strategy in action. Earlier this year, we partnered with Teradyne Robotics. Our solutions for precision positioning and dynamic motion control are helping Teradyne increase their value proposition to the logistics industry through higher performance cobots and autonomous mobile robots or AMRs.

In the agricultural sector, where labor shortages are chronic, high precision robotic systems are increasingly filling the gap. In addition, these systems' enhanced data collection capabilities are enabling higher crop yields while reducing water and chemical usage levels. A growing portion of our robotics revenue is coming from this sector as we help customers solve their toughest challenges through our sensing, connectivity and energy management solutions. In the healthcare sector, robot assisted surgery systems minimize invasiveness and improve patient outcomes through enhanced system precision. And we're leveraging our leading precision technology franchise to successfully attach more of our power management, connectivity and sensing content to the more innovative systems being designed and deployed.

This year, we're achieving robust growth and expect continued momentum as the proliferation of automated surgical procedures further expands our opportunities in this space. Overall, the near and medium term outlook for robotics is compelling, supported by increasing revenue and a burgeoning opportunity pipeline. From this strong foundation, we're extending into the next promising era of robotics, namely humanoid and other highly dexterous robot form factors, and creating a potentially exponential growth opportunity for ADI. Our content in a humanoid robot is likely to be several thousands of dollars, that's basically a 10x increase over the content in today's cutting edge AMRs. The primary reason for this content multiplier is the explosion in sensor and actuator counts.

Every joint and point of contact requires accurate sensing and precision motor control, and every sensor and actuator drives a signal chain and power management opportunity for ADI. To further capture this flourishing opportunity, we're investing in higher level application specific solutions that integrate multiple sensing modalities such as pressure, vibration, depth, acoustics, vision and positioning. With high accuracy, ultra low power signal chains, functionally safe power management and AI algorithms powered by robotics foundation models. Simultaneously, we're collaborating with NVIDIA on a range of digital twin simulation programs and reference designs for humanoid and other robotic systems to accelerate development and AI training for our customers. This work is particularly relevant for high value applications such as dextrous manipulation of cable assemblies in data centers, and of course in automotive manufacturing, to name just one.

We are combining ADI's unique sensor expertise and our latest advances in robotics policy training and techniques to enhance realism in NVIDIA's Isaac Sim and substantially shorten our customers' innovation timelines. So in summary, we're capitalizing on growth in advanced robotics today and investing to capture even more value in the future. Ultimately, the strategy, investments and customer impact of our robotics business is a microcosm of our approach across ADI, namely uncovering and tackling the hardest innovation challenges at the intelligent physical edge and leveraging our industry leading technology portfolio and expertise to solve them. As we turn our attention to the end of fiscal 'twenty five and the beginning of the new fiscal year, we're focused on executing our strategy and capitalizing on cyclical and idiosyncratic momentum. Despite the geopolitical and macro turbulence, we remain undeterred and excited by the tremendous growth opportunities that we see over both the near and long terms.

And with that, I'm going to pass it back to Rich.

Thank you, Vince. Now on to our third quarter results. Revenue of $2,880,000,000 came in above the high end of our outlook, up 9% sequentially and 25% year over year. Industrial represented 45% of our third quarter revenue, finishing up 12% sequentially and 23% year over year. Our industrial recovery has continued with sequential growth across all subsectors and regions.

Year over year growth accelerated across all major applications led by our automatic test equipment business fueled by increasing AI investment. Additionally, our aerospace and defense business had a record quarter. Automotive represented 30% of quarterly revenue, finishing down 1% sequentially and up 22% year over year. Double digit year over year growth continues to be driven by our leading connectivity and functionally safe power solutions. Communications represented 13% of quarterly revenue, finishing up 18% sequentially and 40% year over year.

Our wireline and data center business, which is roughly two thirds of total communications, grew double digits sequentially and year over year as increasing AI demand continues. Wireless also grew double digits both sequentially and year over year. And lastly, consumer represented 13% of quarterly revenue, finishing up 16% sequentially and 21% year over year, marking the fourth straight quarter of double digit year over year growth. We continue to see strength across handsets, gaming, hearables and wearables. Now on to the rest of the P and L.

Third quarter gross margin was 69.2% and operating margin was 42.2%, up 100 basis points sequentially and year over year. Non operating expenses finished at $57,000,000 and the tax rate for the quarter was 11.9%. All told, EPS was $2.5 above the high end of our guided range and up 30% year over year. Now I'd like to highlight a few items from our balance sheet and our cash flow statements. Cash and short term investments finished the quarter at $3,500,000,000 and our net leverage ratio remained virtually flat at 1.1.

Inventory increased $72,000,000 sequentially in support of the cycle recovery. Days of inventory declined to 160 and channel weeks ticked lower. We are continuing to execute our strategy of keeping leaner channel inventories while maintaining higher levels on our balance sheet. Over the trailing twelve months, operating cash flow and CapEx were 4,200,000,000 and $500,000,000 respectively. We continue to expect fiscal twenty twenty five CapEx to be within our long term model of 4% to 6% of revenue.

Free cash flow over the trailing twelve months was $3,700,000,000 or 35% of revenue, and we have returned $3,500,000,000 in cash to shareholders over the last four quarters. As a reminder, we target 100% free cash flow return over the long term using 40% to 60% for our dividend and the remainder for share count reduction. Now on to our fourth quarter guidance. Revenue is expected to be $3,000,000,000 plus or minus 100,000,000 On a sequential basis at the midpoint, we expect industrial, communications and consumer to increase with the fastest growth in industrial. Automotive is expected to decline.

Operating margin is expected to increase to 43.5% plus or minus 100 basis points. Our tax rate is expected to be between 1113%. And based on these inputs, adjusted EPS is expected to be $2.22 plus or minus $0.10 In closing, our strong results and outlook for continued growth, especially in the industrial market, reinforce our view that 2025 will close as a strong recovery year for ADI. However, we are mindful of the continued uncertainty facing customers with respect to tariffs and are monitoring the impacts closely. We believe we are well positioned to successfully navigate an evolving global operating environment thanks to the optionality enabled by the diversity of our markets, applications, and products and the resilience of our hybrid manufacturing strategy.

With that, let's go to our Q and A session. We ask that you limit yourself to one question in order to allow us for additional participants on the call this morning. If you have follow-up questions, please re queue and we will take your question if time allows. Operator, can we have our first question, please?

11 on your phone to enter the queue. If your question has been answered and you wish to be removed from the queue, please press 11 again. If you are listening on a speakerphone, please pick up the handset when you're asking your question. And our first question comes from Timothy Arcuri with UBS. You may proceed.

Thanks a lot. So Industrial last quarter was up 7%, it was up 11% this quarter, and it sounds like it's going to be very strong again in fiscal Q4. Can you just talk do you think you're now shipping above consumption in these markets? How do you view sort of where we are? Are we now in inventory build mode in those markets?

And how do you sort of assess how long the goodness can last?

So since we called the bottom back in Q2, so industrial has been our most profitable business and has grown sequentially every quarter. More recently, as we talked about, growth has accelerated. And our outlook for Q4, which is normally a seasonally down quarter for industrial, we expect it to grow in the low to mid teens quarter over quarter. So very strong outlook there. And what's important is growth is happening across all of our industrial sectors, including instrumentation, automation, aerospace, defense, health care, and energy infrastructure, as well as across all the geographies.

Again, an indication that we are in the cyclical upturn. At the same time for us, we've talked about this in multiple quarters, our channel inventories continue to be very lean, and we believe end demand is still double digits below consumption. Now we are going to start seeing some catch up to the end demand in the fourth quarter. As I mentioned in my prepared remarks, we did see the channel inventory weeks tick down a little bit as the end demand was a bit higher than we had planned. So on top of that, as we look forward, we are continuing to see green shoots across aerospace and defense and ATE.

And so we feel pretty good about where we are both near and long term from an industrial perspective.

Thank you. Our next question comes from Harlan Sur with JPMorgan. You may proceed.

Good morning. Thanks for taking my question and great job on the quarterly execution. Looks like you guys had anticipated last earnings call gross margins for Q3 to be closer to 70%, but actually know, outflows were actually closer to 69%. I assume it's because of the upside in the lower margin communications business, which was up 17% sequentially. So potentially mix related.

Is that a fair assumption? And then on Q4 at the midpoint of your guidance range, are you guys assuming that gross margins are improving sequentially?

I'll take that one. So yes, we did have an implied increase in the margin. However, we did have an unexpected lower utilization during the quarter which kept us from growing our gross margin on a sequential basis. However, the utilization is back on track and we expect it to resume its increase. And in Q4 at the midpoint, we do expect to get back to a 70% margin.

Had we not had the disruption in the utilization in the third quarter, we actually would have grown sequentially. But the mix piece, as you mentioned, because we still are only at 45% industrial mix in the third quarter, would have kept us from fully getting to 70.

Thank you. Our next question comes from Tore Svanberg with Stifel. You may proceed.

Yes. Congrats on the continuous recovery here. Vince, I had a question on the automation revenue. I think in the past, you've talked about this sort of being a 15% grower, and that's certainly above the corporate average. I'm just curious, given everything that you're seeing now in humanoids and robotics, reference designs with some key GPU players and so on and so forth.

Are you starting to see perhaps an acceleration to that 15% growth target going forward?

Yeah, thanks for the question, Tore. So yeah, you know, the automation business for ADI is multiple hundreds of millions of dollars on an annual basis, And it's our sense that by 02/1930, we can double the size of that business, given the strength of the R and D pipeline, the opportunity pipeline that we have, as well as some of these new modalities that are coming into play, you know, as demographics and macro pressures kind of lean on putting more and more manufacturing capability closer to points of consumption. There's obviously a security issue as well, supply chain security issue. So all those factors, I think exogenous and endogenous factors point to a strong growth in that business. Also, as I pointed out in the prepared remarks, we're seeing a lot of new sensing modalities come to bear, and every one of those sensors or actuators that our customers are putting in place require very precision, very, very precise sensing control and data processing.

So for all those reasons, we feel very optimistic about the state of this business and its potential to grow and double its size over the next five or six years.

Thank you. Our next question comes from Vivek Arya with Bank of America. You may proceed.

Thanks for taking my question. I think in response to a prior question, you mentioned that you're seeing green shoots in different parts of industrial, right, and despite the strength that you saw in Q2 and Q3. So, does it mean that as we kind of potentially look out to Q1, is ADI still capable of growing at least seasonal or above seasonal? And if yes, what is kind of normal range of seasonality so we can calibrate our models?

I'll start. A Q1 perspective, as we've said before, we don't guide to Q1, but we do expect that we'll be able to grow at seasonal. And obviously for us on an overall perspective, first quarter tends to seasonally be down in the low single digits.

Yeah. So I think as we look into the new year, I believe industrial will be a very, very strong part of our momentum in the coming year. And as Rich narrated in part of the Q and A here, you know, from just the supply demand side of things, we're seeing still customers are in digestion phase of their excess inventories, and particularly in the broad market, is a piece of a significant piece of has been a significant piece of the industrial business in the past, where we're still seeing the demand there quite light. So there's still a kind of a normalization to take place, which should boost the industrial sales in the coming quarters, as well as our position with new products and our position with customers and new applications, so in the automation space. So we've got aerospace and defense, which has been incredibly strong.

In fact, in some ways, we're supply limited in that business. So I think that will be the bedrock of the next several quarters of the company's performance.

Thank you. Our next question comes from Jim Schneider with Goldman Sachs. You may proceed.

Good morning. Thanks for taking my question. I was wondering if you could provide a little bit more color on what you're seeing in the automotive market. I believe last quarter you referenced some pull inactivity. Did you actually in fact see that occur in the quarter?

And from if so from what regions? And then going forward maybe talk a little bit about what's driving the sequential decline you expect in the next quarter? And any color you can provide on regions or customer OEM types would be helpful.

Jim. So obviously, continue to perform very well in automotive, particularly in our connectivity and power management, fueling auto revenue. As we've said, we expect to record record levels of auto revenue for '25. In addition to our content growth and share gains in the next gen ADAS and infotainment systems, we do believe our auto revenue has been aided by some order acceleration, which we talked about in Q2. We do think there was some additional acceleration in Q3.

However, we do see that unwinding in Q4, which is why we expect to see Q4 come down. We think that that will be the close out of that early buying. And this is what we actually talked about when we released our last quarter results was we expected that the pull ins were likely going to come from our Q4 or Q1 period. Based on the way it's settling out, it looks like it's unwinding in the fourth quarter. And if you think about that a sizing perspective in the current quarter, we were obviously above our high end of our guide.

And I think largely that part of the that we were above the high end of our guide was likely related to auto pull ins. And what's different this time actually is the auto pull ins we saw this time in Q3 were in China. Whereas when we talked about them in Q2, that was for North America and Europe. It's impossible for us to know how this will shake out. But we do think that given the behavior we've seen from our auto customers, EV credits expiring and the risk that tariffs could curtail production, We are taking a bit of a more conservative view to automotive in the near term.

But stepping back again, we'll have our third record year in Ottawa in the last four years, which is reflecting our content and share gains. And we've talked about this before. We tend to outpace the volumes with content gains where we're getting about a double digit benefit from share and content. So we feel really well positioned there as we go into the medium and long term.

Thank you. Our next question comes from Stacy Rasgon with Bernstein Research. You may proceed.

Hi, guys. Thanks for taking my question. So around the auto pull ins and I guess relative to industrial, you're auto implicitly down 15% sequentially as those pull ins kind of ease. But industrial, you're guiding up, I don't know, you said low to mid teens, which would put it up in the mid 30% year over year. What are you seeing differently on the trends in industrial versus what you saw in auto that gives you confidence that the strength you're seeing in industrial is not also pull forward?

So what we talked about last time is the indicators, Stacy, for what we thought were pull ins, where we saw unplanned growth in areas around and we saw the anomalous bookings behavior that happened around the tariff announcements and then the ensuing reversals, things normalized. We have not seen that kind of behavior in industrial. In fact, the bookings trends have followed the trends we were expecting. It's impossible to say there isn't some minor amount maybe in any of the businesses, but we haven't seen anything outside of auto that would give us an indication there's any meaningful pull in in our business. Ahead.

The GEICO industrial is well above seasonal, though. So I mean, is that just that's just increased demand? It's channel fill or or or what? No. It's nothing

to do with channel. Yeah. Channel is very lean. We're still under shipping real consumption of the market. Parts of industrial have been just in inventory digestion mode for actually a couple of years.

So we're starting to get that behind us. But if you look at the strength of our aerospace and defense business, you know, I mentioned there a little while ago, we're actually supply limited there. Very, very strong backlog. ATE, which is supporting the build out of AI chips and infrastructure, very, very strong, strong demand. And we've begun to see the recovery of the automation business over the last two, three quarters.

When you couple that as well with healthcare, which has been really damp in terms of demand, you know, ever since the kind of the peak of the pandemic there, that should come good as well, and we're seeing signs of stabilization, but that should come good over the next few quarters. So I think you put all that together, the breadth and the depth, the customer count, the product count, you know, some of the idiosyncratic trends that we've captured, as well as just the overall rising tide in demand across the board bodes well for the industrial business.

Thank you. Our next question comes from Chris Danely with Citi. You may proceed.

Hey, thanks guys. Can you just give us a little more color on why the utilization rates came down? And then where utilization rates are, where you expect them to go and any other gross margin drivers going forward as well? Thanks.

I think we had, as Rich said, a one time event in our European fab during the last quarter. That was the primary dampening effect on the gross margin. So it became an absorption issue. I will say as well, pricing has been very, very steady, and as our mix improves on the industrial side of things, we get the benefit of that in the gross margin. And I don't expect a repeat of what was a onetime event in one of our factories in the last quarter to repeat.

So I don't I know you always like to ask me this question. They're increasing. We're not yet back to the utilization level we were obviously in the pandemic era nor do we expect to get all the way there. But we are continuing to increase, as I mentioned, other than this one time hiccup which is now behind us. We are back increasing as given the growth we're seeing and the planned starts in the factories, we're getting higher utilizations.

You know, I think as well, we have talked many, many times about the CapEx that we've deployed to strengthen the resiliency of the internal fabs at ADI, so we have built we've more than doubled the footprint of the internal fabs that support largely the industrial business, so we're absorbing that cost. And as the industrial business continues to increase in strength, you know, that absorption strengthens as well. So I think you've got to bear those things in mind.

Thank you. Our next question comes from Joe Moore with Morgan Stanley. You may proceed.

Great, thank you. A couple of minutes ago, you talked about seeing some supply limitations in aerospace and defense. And I wanted to just follow-up on that and talk ask where those supply constraints might be coming from. And are you seeing any supply constraints in any other part of your industrial business as things get stronger?

You know, I think we've just seen a tremendous upsurge in demand. It just takes time to lay in the capacity, the tooling in the aerospace and defense area. And you know, it's a highly diversified business with an incredible array of product complexities. So, you know, it's really just a case of, you know, each quarter we're laying in more capacity, but the demand keeps increasing. It's a very, very high quality problem that we have.

Demand is surging ahead of our ability to manufacture right now, but we've been laying in the CapEx, the tools, to make sure that we capture the opportunity, and pretty much everything we do there is sole source. Mean, these are proprietary products, and we see this, we've increased our footprint, we've an internal factory that's very, very important to the manufacturing of our aerospace and defense solutions, so we've been tooling that facility as well. So I think generally speaking, we're in better and better position, but really the problem, it's a high quality problem of surging demand.

So I'll put an even finer point on it for you, Joe. We're actually deploying tools into the aerospace and defense manufacturing in the third and fourth some in the third and more in the fourth quarter to alleviate some of the stress Vince just described. And from an overall business perspective, we certainly have supply right now to cover all of the near term demand that we have on the books.

I think the rest of the industrial business is in good shape overall regarding supply.

Thank you. Our next question comes from Joshua Buchalter with TD Cowen. You may proceed.

Hey, guys. Thank you for taking my question, and congrats on the good results. I apologize for being nitpicky in an objectively good quarter. I did want to ask about gross margins though. I think a couple of quarters ago, had mentioned $2,700,000,000 being sort of the level at which you'd hit 70% gross margins.

It looks like that's seemingly around $3,000,000,000 I guess. Can you maybe walk through what's changed and how we should think about fall through from here going forward? Thank you.

Thanks, Josh. And we have talked about this a lot, and I think that the part two of what we've said all along is getting to 2.7% and getting back to a 70% margin would require us to get back to a more normal industrial mix. So near term, as you saw, we were only 45% industrial. When we were building all those models, we were a much larger percentage. So we have said we would need to have that mix.

And obviously the mix is shifting as the industrial grows. And if you look to where we expect our Q4 to go with the industrial growth we've talked about, we will probably exit Q4 with more like a 49% industrial mix which is part of the reason we think we'll get back into that 70% range in our fourth quarter. So as we talked at the beginning a little bit, it is also mix constrained given the industrial piece is our most profitable business.

Understood. Thank you for the color there.

Thank you. Our next question comes from Ross Seymore with Deutsche Bank. You may proceed.

Hi, guys. Thanks for letting me ask the question. Just wanted to pivot over to the OpEx side of things. Any sort of color for your fiscal fourth quarter? And probably more importantly, as we look into fiscal 'twenty six, I know you guys have a big variable component to your OpEx.

This year, it looks like it's up, I don't know, high teens, something like that in fiscal 'twenty five. Any sort of color on how the OpEx would relate to revenues in fiscal 'twenty six? Thank you.

So, yeah, so from a fiscal 'twenty five perspective, assuming the midpoint for Q4, we expect we'll deliver about 100 basis points of operating leverage versus 'twenty four, which I feel very good about because when we started the year knowing we were going to have a pretty significant headwind on the variable comp, we thought we might have a pretty flat operating leverage year. But we are going to deliver some additional leverage. Now a lot of that is coming from the gross margin expansion as we've talked about. Because of variable, our OpEx is growing at a higher rate than we would normally expect. And that is as we've talked about in the prior year, given our bonus pays on revenue growth and profitability and the fact that '24 had no revenue growth and margins were muted, bonus was very low, which was part of the reason we were able to hold our 40% operating margin in the trough year.

Now with a return to significant growth, our variable comp is normalizing to a much higher level from a very low payout in the prior year. So if you look forward to 'twenty six, I would expect that acceleration piece that we saw from the variable comp to decline. We obviously would expect to have variable comp in a growth year. But given the new baseline of 'twenty six, we would expect in the revenue growth that we would get some continued leverage as the variable won't increase as radically as it did '24 to '25. And then, excuse me, obviously all of these points of view are contingent on revenue growing, which we're assuming from a top line perspective.

Thank you. And our final question comes from Chris Caso with Wolfe Research. You may proceed.

Yes, thanks. Good morning. Just a question on business in China right now. And you mentioned in some of your earlier comments that China auto was strong last quarter. Could you give us some sense of what the totality of the China business looked like?

And again, in that case, outside of auto, is there any fear of any pull forwards within that business or any anomalies you may have seen within the China business in the last quarter?

Sure. So obviously, we've talked about China is a very competitive place for us. But I continue to be very confident in our ability to to win and to grow in China, which we've done for decades. If you think about how we're positioned in the market, we tend to get a premium for our performance. And that's the innovation premium you've all heard me talk about.

Where performance matters, they're going to continue to pick us, which is why we tend to get higher ASPs. It also makes it very challenging for those that make products that are good enough to compete with us in that market. So we feel from a competitive perspective, we feel very well. Obviously, the other thing for us that's significant is scale is really important, especially in analog with the broad base of components. We've got six decades of experience building that with 70,000 SKUs.

Analog Devices (ADI) Q3 2025 Earnings Call Transcript

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