Analog Devices Inc (NASDAQ:ADI) Q1 2017 Earnings Conference Call - Final Transcript

Feb 15, 2017 • 10:00 am ET


Analog Devices Inc (NASDAQ:ADI) Q1 2017 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the Analog Devices First Quarter Fiscal Year 2017 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. Ali Husain, Treasurer and Director of Investor Relations. Sir, the floor is yours.

Ali Husain

Great. Thanks, Jennifer. Good morning, everybody. Thanks for joining the Analog Device's first quarter 2017 earnings conference call. You can find our press release, relating financial schedules and the CFO commentary at With me on today's call are ADI's CEO, Vincent Roche; and ADI's CFO, Dave Zinsner. (Forward-Looking Cautionary Statements)

With the exception of revenue, our commentary about ADI's first quarter financial results will exclude special items which, in the aggregate, totaled $85 million for the quarter. When comparing our first quarter results to our historical performance, special items are also excluded from the prior quarter and year-over-year results, and reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures are included in Schedules E and F in today's earnings release which we have posted at

So with that, let's get started and I'll turn the call over to Vince.

Vincent Roche

Thanks very much, Ali, and good morning, everyone. So by any measure, our January quarter results were stellar. Revenue of $984 million was well above the high-end of our guidance, growing 28% over the prior year and we had broad strength across all our markets. And we expanded operating margins over 700 basis points from the prior year to 35% of sales. Earnings per share of $0.94 was up 68% from the prior year and $0.16 better than the high-end of our guidance. Importantly, we have generated $1.2 billion in free cash flow over the past 12 months. So this was a terrific start to the fiscal year and we continue to see momentum in our business and in our customer engagements.

Our R&D efforts are squarely focused on the most exciting trends in the industrial, automotive, communications infrastructure, healthcare and consumer markets. And I'd like to give you just a few examples of where ADI's technology is making a real difference. So in the area of data converters, which are in many ways the backbone of our mixed-signal franchise, for example, where we're the market leader, we've once again established new performance benchmarks with our next generation of high-speed ADCs and DACs that exploit 28 nanometer CMOS technology combined with proprietary architectures and algorithms.

By providing four times improvement in critical high dynamic range parameters, these converter platforms are enabling the next wave of gigahertz bandwidth, software defined systems for 4G and 5G communications, for test equipment and also in several aerospace and defense applications. It's the radio or radar equivalent of going from watching television using the old bunny ears to watching high-definition TV.

We can now give our customers the ability to see things that they did not know were even there, and this is a real game-changer. In addition, our