Analog Devices Q2 Earnings Beat Estimates, Revenues Rise Y/Y

Analog Devices ADI reported second-quarter fiscal 2025 non-GAAP earnings of $1.85 per share, which beat the Zacks Consensus Estimate by 9.5%. This company reported earnings of $1.40 per share in the year-ago period.

Analog Devices’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 6%.

Analog Devices’ second-quarter fiscal 2025 revenues of $2.64 billion beat the Zacks Consensus Estimate by 5.51%. The top line increased from the year-ago quarter’s $2.16 billion.

ADI’s top and bottom line results were driven by stronger-than-expected performance in the consumer, industrial, communications and automotive end markets.

Analog Devices’ Q2 Details

Industrial: Revenues from this segment were $1.16 billion, which represented 44% of total revenues and increased 17% year over year. The figure beat the Zacks Consensus Estimate of $1.15 billion.

Automotive: Revenues reached $849.5 million (or 32% of total revenue), reflecting 24% year-over-year growth. The figure beat the Zacks Consensus Estimate of $758.6 million.

Consumer: The segment generated $317.8 million (or 12% of revenue), marking a 30% increase compared to the same quarter last year. The figure beat the Zacks Consensus Estimate of $315.4 million.

Communications: Revenues were $315.1 million, which accounted for 12% of total revenues and increased 32% from the prior-year quarter. The figure beat the Zacks Consensus Estimate of $279.9 million.

The adjusted gross margin expanded 270 basis points to 69.4%, while the adjusted operating margin came in at 41.2%, up 220 basis points year over year.

Analog Devices’ Balance Sheet & Cash Flow

As of May 3, 2025, cash and cash equivalents were $2.38 billion compared with $2.72 billion as of Feb. 1, 2025. The company had no short-term investments in the second quarter.

Long-term debt was $6.65 billion, marginally up from $6.61 billion in the previous quarter.

Analog Devices generated $819 million in operating cash flow and $729 million in free cash flow during the second quarter of fiscal 2025.

ADI also returned $740 million to shareholders, comprising $491 million in dividends and $249 million in share repurchases.

ADI Offers Strong Q3 Guidance

For third-quarter fiscal 2025, management expects net sales of $2.75 billion (+/- $100 million). The Zacks Consensus Estimate for the same is pegged at $2.61 billion, indicating year-over-year growth of 12.8%.

The company anticipates a non-GAAP operating margin of 41.5% (+/- 100 bps).

Non-GAAP earnings are expected to be $1.92 (+/-10 cents) per share. The consensus mark for the same is pinned at $1.80 per share, unchanged over the past 60 days, indicating a year-over-year rise of 13.9%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Zacks Rank and Stocks to Consider

Currently, ADI carries a Zacks Rank #3 (Hold).

Amphenol APH, Juniper Networks JNPR and Upwork UPWK are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. APH, JNPR and UPWK sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

APH shares have gained 26.4% for the past year. The Zacks Consensus Estimate for APH’s full-year 2025 earnings is pegged at $2.62 per share, up by 4 cents over the past seven days, suggesting a growth of 38.6% from the year-ago quarter’s reported figure.

JNPR shares have gained 4.8% in the past year. The Zacks Consensus Estimate for JNPR’s full-year fiscal 2025 earnings has been revised upward to $2.09 in the past 30 days, suggesting year-over-year growth of 21.5%.

UPWK shares have gained 38% over the past year. The Zacks Consensus Estimate for UPWK’s full-year 2025 earnings is pegged at $1.14 per share, implying a rise of 9.62% from the year-ago quarter’s levels.

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This article originally published on Zacks Investment Research (zacks.com).

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