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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 4, 2024
    OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission File No. 1-7819
Analog Devices, Inc.
(Exact name of registrant as specified in its charter) 
Massachusetts 04-2348234
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
One Analog Way,Wilmington,MA 01887
(Address of principal executive offices) (Zip Code)
(781) 935-5565
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock $0.16 2/3 par value per shareADINasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer   Accelerated filer 
Non-accelerated filer   Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes     No  
As of May 4, 2024 there were 496,216,857 shares of common stock of the registrant, $0.16 2/3 par value per share, outstanding.



PART I — FINANCIAL INFORMATION
ITEM 1.Financial Statements


ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)

 Three Months EndedSix Months Ended
 May 4, 2024April 29, 2023May 4, 2024April 29, 2023
Revenue$2,159,039 $3,262,930 $4,671,743 $6,512,560 
Cost of sales979,004 1,118,384 2,017,767 2,243,673 
Gross margin1,180,035 2,144,546 2,653,976 4,268,887 
Operating expenses:
Research and development354,862 415,754 746,289 829,849 
Selling, marketing, general and administrative244,129 324,251 534,207 650,535 
Amortization of intangibles188,944 253,021 379,276 506,163 
Special charges, net5,977 23,136 22,117 23,136 
Total operating expenses793,912 1,016,162 1,681,889 2,009,683 
Operating income:386,123 1,128,384 972,087 2,259,204 
Nonoperating expense (income):
Interest expense77,103 63,252 154,244 123,705 
Interest income(15,269)(12,575)(24,438)(23,404)
Other, net(314)(10,216)4,260 (2,493)
Total nonoperating expense (income)61,520 40,461 134,066 97,808 
Income before income taxes324,603 1,087,923 838,021 2,161,396 
Provision for income taxes22,361 110,267 73,052 222,266 
Net income$302,242 $977,656 $764,969 $1,939,130 
Shares used to compute earnings per common share – basic496,130 504,715 495,947 505,918 
Shares used to compute earnings per common share – diluted498,533 508,725 498,637 509,955 
Basic earnings per common share$0.61 $1.94 $1.54 $3.83 
Diluted earnings per common share$0.61 $1.92 $1.53 $3.80 








See accompanying notes.
1




ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(in thousands)
Three Months EndedSix Months Ended
May 4, 2024April 29, 2023May 4, 2024April 29, 2023
Net income$302,242 $977,656 $764,969 $1,939,130 
Foreign currency translation adjustments264 (864)649 1,635 
Change in fair value of derivative instruments designated as cash flow hedges, net1,306 (2,109)9,326 23,358 
Changes in pension plans, net2,514 344 1,126 796 
Other comprehensive income (loss)4,084 (2,629)11,101 25,789 
Comprehensive income$306,326 $975,027 $776,070 $1,964,919 






















See accompanying notes.
2


ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share amounts)

May 4, 2024October 28, 2023
ASSETS  
Current Assets
Cash and cash equivalents$1,939,695 $958,061 
Short-term investments424,117  
Accounts receivable1,004,628 1,469,734 
Inventories1,479,081 1,642,214 
Prepaid expenses and other current assets346,100 314,013 
Total current assets5,193,621 4,384,022 
Non-current Assets
Net property, plant and equipment3,415,220 3,219,157 
Goodwill26,909,775 26,913,134 
Intangible assets, net10,434,776 11,311,957 
Deferred tax assets2,146,321 2,223,272 
Other assets762,153 742,936 
Total non-current assets43,668,245 44,410,456 
TOTAL ASSETS$48,861,866 $48,794,478 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable$422,683 $493,041 
Income taxes payable360,951 309,046 
Debt, current898,776 499,052 
Commercial paper notes548,235 547,224 
Accrued liabilities1,066,677 1,352,608 
Total current liabilities3,297,322 3,200,971 
Non-current Liabilities
Long-term debt6,611,681 5,902,457 
Deferred income taxes2,887,952 3,127,852 
Income taxes payable266,625 417,076 
Other non-current liabilities549,497 581,000 
Total non-current liabilities10,315,755 10,028,385 
Shareholders’ Equity
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding
  
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 496,216,857 shares outstanding (496,261,678 on October 28, 2023)
82,704 82,712 
Capital in excess of par value25,103,737 25,313,914 
Retained earnings10,239,549 10,356,798 
Accumulated other comprehensive loss(177,201)(188,302)
Total shareholders’ equity35,248,789 35,565,122 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$48,861,866 $48,794,478 






See accompanying notes.
3


ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(in thousands)

Three Months Ended May 4, 2024
Capital inAccumulated
Other
 Common StockExcess ofRetainedComprehensive
SharesAmountPar ValueEarningsLoss
BALANCE, FEBRUARY 3, 2024
495,908 $82,653 $25,253,256 $10,393,449 $(181,285)
Net income302,242 
Dividends declared and paid - $0.92 per share
(456,142)
Issuance of stock under stock plans and other1,487 247 14,270 
Stock-based compensation expense58,396 
Other comprehensive income4,084 
Common stock repurchased(1,178)(196)(222,185)
BALANCE, MAY 4, 2024
496,217 $82,704 $25,103,737 $10,239,549 $(177,201)
Six Months Ended May 4, 2024
Capital inAccumulated
Other
Common StockExcess ofRetainedComprehensive
SharesAmountPar ValueEarningsLoss
BALANCE, OCTOBER 28, 2023
496,262 $82,712 $25,313,914 $10,356,798 $(188,302)
Net income764,969 
Dividends declared and paid - $1.78 per share
(882,218)
Issuance of stock under stock plans and other2,163 360 63,976 
Stock-based compensation expense128,211 
Other comprehensive income11,101 
Common stock repurchased(2,208)(368)(402,364)
BALANCE, MAY 4, 2024
496,217 $82,704 $25,103,737 $10,239,549 $(177,201)




















See accompanying notes.

4


ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(in thousands)

Three Months Ended April 29, 2023
Capital inAccumulated
Other
Common StockExcess ofRetainedComprehensive
SharesAmountPar ValueEarningsLoss
BALANCE, JANUARY 28, 2023505,852 $84,306 $27,319,566 $9,297,347 $(169,734)
Net income977,656 
Dividends declared and paid - $0.86 per share
(435,213)
Issuance of stock under stock plans and other1,764 294 25,480 
Stock-based compensation expense69,102 
Other comprehensive loss(2,629)
Common stock repurchased(6,198)(1,029)(1,151,922)
BALANCE, APRIL 29, 2023
501,418 $83,571 $26,262,226 $9,839,790 $(172,363)
Six Months Ended April 29, 2023
Capital inAccumulated
Other
Common StockExcess ofRetainedComprehensive
SharesAmountPar ValueEarningsLoss
BALANCE, OCTOBER 29, 2022509,296 $84,880 $27,857,270 $8,721,325 $(198,152)
Net income1,939,130 
Dividends declared and paid - $1.62 per share
(820,665)
Issuance of stock under stock plans and other2,381 397 66,615 
Stock-based compensation expense144,143 
Other comprehensive income25,789 
Common stock repurchased(10,259)(1,706)(1,805,802)
BALANCE, APRIL 29, 2023
501,418 $83,571 $26,262,226 $9,839,790 $(172,363)














See accompanying notes.
5


ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)

  
Six Months Ended
 May 4, 2024April 29, 2023
Cash flows from operating activities:
Net income$764,969 $1,939,130 
Adjustments to reconcile net income to net cash provided by operations:
Depreciation173,172 165,581 
Amortization of intangibles880,376 1,003,713 
Stock-based compensation expense128,211 144,143 
Deferred income taxes(164,348)(280,110)
Other13,370 2,768 
Changes in operating assets and liabilities150,935 (487,339)
Total adjustments1,181,716 548,756 
Net cash provided by operating activities1,946,685 2,487,886 
Cash flows from investing activities:
Purchases of short-term available-for-sale investments(424,117) 
Additions to property, plant and equipment(411,167)(460,496)
Other14,106 (81)
Net cash used for investing activities(821,178)(460,577)
Cash flows from financing activities:
Proceeds from debt1,087,856  
Early termination of debt (65,688)
Proceeds from commercial paper notes5,383,401 253,635 
Payments of commercial paper notes(5,382,390) 
Repurchase of common stock(402,732)(1,807,508)
Dividend payments to shareholders(882,218)(820,665)
Proceeds from employee stock plans64,336 67,012 
Other(12,126)52,942 
Net cash used for financing activities(143,873)(2,320,272)
Net increase (decrease) in cash and cash equivalents981,634 (292,963)
Cash and cash equivalents at beginning of period958,061 1,470,572 
Cash and cash equivalents at end of period$1,939,695 $1,177,609 










See accompanying notes.
6


ANALOG DEVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED MAY 4, 2024 (UNAUDITED)
(all tabular amounts in thousands except per share amounts and percentages)

Note 1 – Basis of Presentation
In the opinion of management, the information furnished in the accompanying condensed consolidated financial statements reflects all normal recurring adjustments that are necessary to fairly state the results for these interim periods and should be read in conjunction with Analog Devices, Inc.’s (the Company) Annual Report on Form 10-K for the fiscal year ended October 28, 2023 (fiscal 2023) and related notes. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for the fiscal year ending November 2, 2024 (fiscal 2024) or any future period.
The Company has a 52-53 week fiscal year that ends on the Saturday closest to the last day in October. Fiscal 2024 is a 53-week fiscal year and fiscal 2023 was a 52-week fiscal year. The additional week in fiscal 2024 was included in the first quarter ended February 3, 2024. Therefore, the first six months of fiscal 2024 included an additional week of operations as compared to the first six months of fiscal 2023.
Note 2 – Shareholders' Equity
As of May 4, 2024, the Company had repurchased a total of approximately 207.0 million shares of its common stock for approximately $14.8 billion under the Company's share repurchase program. As of May 4, 2024, an additional $1.8 billion remains available for repurchase of shares under the current authorized program. The Company also repurchases shares in settlement of employee tax withholding obligations due upon the vesting of restricted stock units/awards or the exercise of stock options as well as for the Company's employee stock purchase plan. Future repurchases of common stock will be dependent upon the Company's financial position, results of operations, outlook, liquidity and other factors deemed relevant by the Company.
Note 3 – Accumulated Other Comprehensive (Loss) Income
The following table provides the changes in accumulated other comprehensive (loss) income (AOCI) by component and the related tax effects during the first six months of fiscal 2024.
Foreign currency translation adjustmentUnrealized holding gains (losses) on derivativesPension plansTotal
October 28, 2023$(72,544)$(102,043)$(13,715)$(188,302)
Other comprehensive income before reclassifications649 6,868 94 7,611 
Amounts reclassified out of other comprehensive income 4,207 1,032 5,239 
Tax effects (1,749) (1,749)
Other comprehensive income649 9,326 1,126 11,101 
May 4, 2024$(71,895)$(92,717)$(12,589)$(177,201)
The amounts reclassified out of AOCI into the Condensed Consolidated Statements of Income and the Condensed Consolidated Statements of Shareholders' Equity with presentation location during each period were as follows:
7


Three Months EndedSix Months Ended
Comprehensive (Loss) Income ComponentMay 4, 2024April 29, 2023May 4, 2024April 29, 2023Location
Unrealized holding (gains) losses on derivatives:
Currency forwards $(521)$1,342 $(592)$283 Cost of sales
(203)570 (272)123 Research and development
(1,500)344 (2,391)(953)Selling, marketing, general and administrative
Interest rate derivatives3,732 3,731 7,462 7,458 Interest expense
1,508 5,987 4,207 6,911 Total before tax
(30)(701)(878)(1,503)Tax
$1,478 $5,286 $3,329 $5,408 Net of tax
Amortization of pension components included in the computation of net periodic pension cost:
Actuarial losses$516 $376 $1,032 $746 Net of tax
Total amounts reclassified out of AOCI, net of tax$1,994 $5,662 $4,361 $6,154 
Note 4 – Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share:
 Three Months EndedSix Months Ended
 May 4, 2024April 29, 2023May 4, 2024April 29, 2023
Net income$302,242 $977,656 $764,969 $1,939,130 
Basic shares:
Weighted-average shares outstanding496,130 504,715 495,947 505,918 
Earnings per common share basic:$0.61 $1.94 $1.54 $3.83 
Diluted shares:
Weighted-average shares outstanding496,130 504,715 495,947 505,918 
Assumed exercise of common stock equivalents2,403 4,010 2,690 4,037 
Weighted-average common and common equivalent shares498,533 508,725 498,637 509,955 
Earnings per common share diluted:$0.61 $1.92 $1.53 $3.80 
Anti-dilutive shares related to:
Outstanding stock-based awards66 387 140 354 
8


Note 5 – Special Charges, Net
Liabilities related to special charges, net are included in Accrued liabilities and Other non-current liabilities in the Condensed Consolidated Balance Sheets. The activity is detailed below:
Accrued Special ChargesGlobal Repositioning Actions
Q4 2023 Plan
Balance at October 28, 2023$36,981 $110,446 
Employee severance and benefit costs, net 11,977 
Severance and benefit payments(4,420)(87,013)
Balance at February 3, 2024$32,561 $35,410 
Employee severance and benefit costs, net(5,106)23,172 
Severance and benefit payments(5,767)(40,559)
Balance at May 4, 2024$21,688 $18,023 
Accrued liabilities$7,834 $18,023 
Other non-current liabilities$13,854 $ 
Note 6 – Commitments and Contingencies
On March 17, 2022, Walter E. Ryan and Ryan Asset Management, LLC, purported stockholders of Maxim Integrated Products, Inc. (Maxim), filed a putative class action in the Court of Chancery of the State of Delaware (C.A. No. 2022—0255) against the Company and the former directors of Maxim. The complaint alleged breaches of fiduciary duties by the individual defendants in connection with Maxim’s agreement, as part of the merger negotiations with the Company, to suspend Maxim dividends for up to four quarters prior to the closing of the Company's acquisition of Maxim. The complaint further alleged that the Company aided and abetted those alleged breaches of fiduciary duties. The plaintiffs sought damages in an amount to be determined at trial, plaintiffs’ costs and disbursements, including reasonable attorneys’ and experts’ fees, costs and other expenses. On May 2, 2023, the Court of Chancery entered an order dismissing the action in its entirety and with prejudice. On May 9, 2023, the plaintiffs filed a Motion for Reargument, which the Court of Chancery denied on May 30, 2023. On June 21, 2023, the plaintiffs filed a Notice of Appeal to the Delaware Supreme Court. On February 26, 2024, the Delaware Supreme Court issued an order affirming the dismissal of the action.
Note 7 – Revenue
Revenue Trends by End Market
The following tables summarize revenue by end market. The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the “sold to” customer information, the “ship to” customer information and the end customer product or application into which the Company’s product will be incorporated. As data systems for capturing and tracking this data and the Company's methodology evolves and improves, the categorization of products by end market can vary over time. When this occurs, the Company reclassifies revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market.
9


Three Months Ended
 May 4, 2024April 29, 2023
 Revenue% of Revenue*Y/Y%Revenue% of Revenue*
Industrial$1,014,847 47 %(44)%$1,823,831 56 %
Automotive658,238 30 %(10)%732,869 22 %
Communications240,776 11 %(45)%436,542 13 %
Consumer245,178 11 %(9)%269,688 8 %
Total revenue$2,159,039 100 %(34)%$3,262,930 100 %
Six Months Ended
May 4, 2024April 29, 2023
Revenue% of Revenue*Y/Y%Revenue% of Revenue*
Industrial$2,210,226 47 %(38)%$3,573,211 55 %
Automotive1,395,923 30 %(1)%1,411,430 22 %
Communications543,791 12 %(41)%914,794 14 %
Consumer521,803 11 %(15)%613,125 9 %
Total revenue$4,671,743 100 %(28)%$6,512,560 100 %
* The sum of the individual percentages may not equal the total due to rounding.
Revenue by Sales Channel
The following tables summarize revenue by channel. The Company sells its products globally through a direct sales force, third party distributors, independent sales representatives and via its website. Distributors are customers that buy products with the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment manufacturers. Other customers include the U.S. government, government prime contractors and certain commercial customers for which revenue is recorded over time.
Three Months Ended
May 4, 2024April 29, 2023
ChannelRevenue% of Revenue*Revenue% of Revenue*
   Distributors$1,248,382 58 %$1,996,410 61 %
   Direct customers873,593 40 %1,224,786 38 %
   Other37,064 2 %41,734 1 %
Total revenue$2,159,039 100 %$3,262,930 100 %
Six Months Ended
May 4, 2024April 29, 2023
ChannelRevenue% of Revenue*Revenue% of Revenue*
    Distributors$2,783,592 60 %$4,007,733 62 %
    Direct customers1,813,568 39 %2,420,320 37 %
    Other74,583 2 %84,507 1 %
Total revenue$4,671,743 100 %$6,512,560 100 %
* The sum of the individual percentages may not equal the total due to rounding.
Note 8 – Fair Value
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
The tables below, set forth by level, present the Company’s financial assets and liabilities, excluding accrued interest components that were accounted for at fair value on a recurring basis as of May 4, 2024 and October 28, 2023. The tables exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of May 4, 2024 and October 28, 2023, the Company held $877.4 million and $642.1 million, respectively, of cash that is excluded
10


from the tables below.
 May 4, 2024
 
Fair Value Measurement at
Reporting Date Using:
 
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Total
Assets
Cash equivalents and short-term investments:
Available-for-sale:
Government and institutional money market funds$538,938 $ $538,938 
Corporate obligations (1) 947,461 947,461 
Other assets:
Forward foreign currency exchange contracts (2)
$ $1,847 1,847 
Deferred compensation plan investments88,615  88,615 
Total assets measured at fair value$627,553 $949,308 $1,576,861 
Liabilities
Forward foreign currency exchange contracts (2)
$ $8,744 $8,744 
Interest rate derivatives (3)
 60,408 60,408 
Total liabilities measured at fair value$ $69,152 $69,152 
(1)The amortized cost of the Company's investments classified as available-for-sale as of May 4, 2024 was $950.4 million.
(2)The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements.
(3)The carrying value of the related debt was adjusted by an equal and offsetting amount. The fair value of interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivatives. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements.

 October 28, 2023
 
Fair Value Measurement at
Reporting Date Using:
 
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Total
Assets
Cash equivalents:
Available-for-sale:
Government and institutional money market funds$315,980 $ $315,980 
Other assets:
Forward foreign currency exchange contracts (1) 1,940 1,940 
Deferred compensation plan investments78,246  78,246 
Total assets measured at fair value$394,226 $1,940 $396,166 
Liabilities
Forward foreign currency exchange contracts (1)$ $13,515 $13,515 
Interest rate derivatives (2) 81,602 81,602 
Total liabilities measured at fair value$ $95,117 $95,117 
(1)The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements.
11


(2)The carrying value of the related debt was adjusted by an equal and offsetting amount. The fair value of interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivatives. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements.
Assets and Liabilities Not Recorded at Fair Value on a Recurring Basis
The table below presents the estimated fair values of certain financial instruments not recorded at fair value on a recurring basis. Given the short tenure of the Company's commercial paper notes, the carrying value of the outstanding commercial paper notes approximates the fair values, and therefore, are excluded from the table below ($548.2 million and $547.2 million as of May 4, 2024 and October 28, 2023, respectively). The fair values of the senior unsecured notes are obtained from broker prices and are classified as Level 1 measurements according to the fair value hierarchy.
May 4, 2024October 28, 2023
Principal Amount OutstandingFair Value Principal Amount Outstanding Fair Value
2024 Notes, due October 2024$500,000 $499,851 $500,000 $499,473 
2025 Notes, due April 2025400,000 391,286 400,000 385,231 
2026 Notes, due December 2026900,000 869,227 900,000 851,023 
2027 Notes, due June 2027440,212 420,964 440,212 408,595 
2028 Notes, due October 2028750,000 656,300 750,000 628,999 
2031 Notes, due October 20311,000,000 823,145 1,000,000 773,404 
2032 Notes, due October 2032300,000 285,033 300,000 269,828 
2034 Notes, due April 2034550,000 550,399   
2036 Notes, due December 2036144,278 128,119 144,278 118,554 
2041 Notes, due October 2041750,000 532,369 750,000 479,078 
2045 Notes, due December 2045332,587 323,805 332,587 292,248 
2051 Notes, due October 20511,000,000 658,194 1,000,000 590,666 
2054 Notes, due April 2054550,000 537,865   
Total senior unsecured notes
$7,617,077 $6,676,557 $6,517,077 $5,297,099 
Note 9 – Derivatives
Foreign Exchange Exposure Management — The total notional amounts of forward foreign currency derivative instruments designated as hedging instruments of cash flow hedges denominated in Euros, British Pounds, Philippine Pesos, Thai Baht, South Korean Won and Japanese Yen as of May 4, 2024 and October 28, 2023 were $249.0 million and $322.6 million, respectively. The fair values of forward foreign currency derivative instruments designated as hedging instruments in the Company’s Condensed Consolidated Balance Sheets as of May 4, 2024 and October 28, 2023 were as follows:
Fair Value At
Balance Sheet LocationMay 4, 2024October 28, 2023
Forward foreign currency exchange contractsPrepaid expenses and other current assets$553 $471 
Forward foreign currency exchange contractsAccrued liabilities$5,498 $9,897 
As of May 4, 2024 and October 28, 2023, the total notional amounts of undesignated hedges related to forward foreign currency exchange contracts were $242.2 million and $334.7 million, respectively. The fair values of undesignated hedges in the Company’s Condensed Consolidated Balance Sheets as of May 4, 2024 and October 28, 2023 were as follows:
Fair Value At
Balance Sheet LocationMay 4, 2024October 28, 2023
Undesignated hedges related to forward foreign currency exchange contracts
Prepaid expenses and other current assets$1,294 $1,469 
Undesignated hedges related to forward foreign currency exchange contracts
Accrued liabilities$3,246 $3,618 
Interest Rate Exposure Management — The Company does not consider the risk of counterparty default to be significant. The gain or loss on the Company's interest rate swap transactions attributable to the hedged benchmark interest rate risk and the offsetting gain or loss on the related interest rate swaps were recorded as follows:
12


May 4, 2024
Balance Sheet LocationLoss on SwapsGain on Note
Accrued liabilities$60,408 $ 
Long-term debt
$ $60,408 
For information on the unrealized holding gains (losses) on derivatives included in and reclassified out of AOCI into the Condensed Consolidated Statements of Income related to forward foreign currency exchange contracts, see Note 3, Accumulated Other Comprehensive (Loss) Income, in these Notes to Condensed Consolidated Financial Statements for further information.
Note 10 – Inventories
Inventories at May 4, 2024 and October 28, 2023 were as follows:
May 4, 2024October 28, 2023
Raw materials$115,509 $128,142 
Work in process1,060,237 1,125,819 
Finished goods303,335 388,253 
Total inventories$1,479,081 $1,642,214 
Note 11 – Debt
Senior Notes Offering. On April 3, 2024, in an underwritten public offering, the Company issued $550.0 million aggregate principal amount of 5.050% senior notes due April 1, 2034 (the 2034 Notes) with semi-annual fixed interest payments due on April 1 and October 1 of each year, commencing October 1, 2024. The net proceeds of the offering were $545.5 million, after discounts and issuance costs. Prior to January 1, 2034 (three months prior to the maturity date of the 2034 Notes), the Company may, at its option, redeem the 2034 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to the greater of: (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the 2034 Notes matured on January 1, 2034) on a semi-annual basis at the applicable treasury rate plus 15 basis points less (b) interest accrued to the date of redemption, and (2) 100% of the principal amount of the 2034 Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to the redemption date. On or after January 1, 2034, the Company may, at its option, redeem the 2034 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the 2034 Notes being redeemed plus accrued and unpaid interest thereon to the redemption date. The 2034 Notes are unsecured and rank equally in right of payment with all of the Company’s other existing and future unsecured senior indebtedness.
On April 3, 2024, in an underwritten public offering, the Company issued $550.0 million aggregate principal amount of 5.300% senior notes due April 1, 2054 (the 2054 Notes) with semi-annual fixed interest payments due on April 1 and October 1 of each year, commencing October 1, 2024. The net proceeds of the offering were $542.3 million, after discounts and issuance costs. Prior to October 1, 2053 (six months prior to the maturity date of the 2054 Notes), the Company may, at its option, redeem the 2054 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to the greater of: (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the 2054 Notes matured on October 1, 2053) on a semi-annual basis at the applicable treasury rate plus 15 basis points less (b) interest accrued to the date of redemption, and (2) 100% of the principal amount of the 2054 Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to the redemption date. On or after October 1, 2053, the Company may, at its option, redeem the 2054 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the 2054 Notes being redeemed plus accrued and unpaid interest thereon to the redemption date. The 2054 Notes are unsecured and rank equally in right of payment with all of the Company’s other existing and future unsecured senior indebtedness.
The 2034 Notes and the 2054 Notes were issued pursuant to a base indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented by a supplemental indenture, which contains certain covenants, events of default and other customary provisions. The covenants applicable to the 2034 Notes and the 2054 Notes limit the Company’s ability to incur, create, assume or guarantee any debt secured by a lien upon a principal property; enter into sale and lease-back transactions with respect to a principal property; and consolidate with or merge into, or transfer or lease all or substantially all of its assets to, any other party. As of May 4, 2024, the Company was in compliance with these covenants.
13


Note 12 – Income Taxes
The Company’s effective tax rates for the three- and six-month periods ended May 4, 2024 and April 29, 2023 were below the U.S. statutory tax rate of 21.0%, due to lower statutory tax rates applicable to the Company's operations in the foreign jurisdictions in which it earns income. The Company's effective tax rate also includes the effects of the mandatory capitalization and amortization of research and development expenses which began in fiscal 2023 under the Tax Cuts and Jobs Act of 2017. The mandatory capitalization requirement decreases the Company's effective tax rate primarily by increasing the foreign-derived intangible income deduction.
It is reasonably possible that the balance of gross unrealized tax benefits, including accrued interest and penalties, could decrease by as much as approximately $139.0 million within the next twelve months due to the completion of tax audits, including any administrative appeals.
The Company has numerous audits ongoing throughout the world including: an IRS income tax audit for the fiscal years ended October 30, 2021, November 2, 2019 and November 3, 2018; a pre-acquisition IRS income tax audit for Maxim's fiscal years ended June 27, 2015 through August 26, 2021; and various U.S. state and local audits and international audits, including an Irish corporate tax audit for the fiscal year ended November 2, 2019. The Company's U.S. federal income tax returns prior to the fiscal year ended November 3, 2018 are no longer subject to examination, except for the applicable Maxim pre-acquisition fiscal years noted above.
Note 13 – New Accounting Pronouncements
Standards Implemented
Acquired Contract Assets and Contract Liabilities
In October 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2021-08, Business Combinations (Topic 805): Accounting for Acquired Contract Assets and Contract Liabilities. Under this guidance (ASC 805-20-30-28), the acquirer should determine what contract assets and/or contract liabilities it would have recorded under ASC 606 (the revenue guidance) as of the acquisition date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquiree. The recognition and measurement of those contract assets and contract liabilities will likely be comparable to what the acquiree has recorded on its books under ASC 606 as of the acquisition date. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2021-08 in the first quarter of fiscal 2024. Upon adoption, ASU 2021-08 did not have a material impact on the Company's financial position and results of operations.
Standards to be Implemented
Segment Reporting
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances the disclosure requirements for reportable segments. ASU 2023-07 requires segment disclosure to include significant segment expense categories and amounts, and qualitative detail of other segment items. Disclosure of multiple measures of segment profit and loss may also be reported. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact, if any, adoption will have on its financial position and results of operations.
Income Taxes
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires the disaggregation of information in existing income tax disclosures related to the effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact, if any, adoption will have on its financial position and results of operations.
Note 14 – Subsequent Events
On May 21, 2024, the Board of Directors of the Company declared a cash dividend of $0.92 per outstanding share of common stock. The dividend will be paid on June 17, 2024 to all shareholders of record at the close of business on June 4, 2024 and is expected to total approximately $456.5 million.
14


ITEM 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
This information should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended October 28, 2023 (fiscal 2023).
This Quarterly Report on Form 10-Q, including the following discussion, contains forward-looking statements regarding future events and our future results that are subject to the safe harbor created under the Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “potential,” “may,” “could” and “will,” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections regarding our future financial performance or results; our anticipated growth and trends in our businesses; the effects of business, economic, political, legal and regulatory impacts or conflicts upon our global operations; changes in demand for semiconductors and the related changes in demand and supply for our products; manufacturing delays, product availability and supply chain disruptions; our ability to recruit or retain our key personnel; our future liquidity, capital needs and capital expenditures; our development of technologies and processes and research and development investments; our future market position and expected competitive changes in the marketplace for our products; the anticipated result of litigation matters; our plans to pay dividends or repurchase stock; servicing our outstanding debt; our plans to borrow under our third amended and restated revolving credit agreement, as amended, and issue notes under our commercial paper program and the planned use of proceeds from such borrowing and issuing; our expected tax rate; expected cost savings; the effect of new accounting pronouncements; our plans to integrate or realize the benefits or synergies expected of acquired businesses and technologies; our Global Repositioning Actions and Q4 2023 Plan; and other characterizations of future events or circumstances are forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors.
The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in the forward-looking statements: economic, political, legal and regulatory uncertainty or conflicts; changes in demand for semiconductor products; manufacturing delays, product and raw materials availability and supply chain disruptions; products that may be diverted from our authorized distribution channels; changes in export classifications, import and export regulations or duties and tariffs; our development of technologies and research and development investments; our future liquidity, capital needs and capital expenditures; our ability to compete successfully in the markets in which we operate; our ability to recruit and retain key personnel; risks related to acquisitions or other strategic transactions; security breaches or other cyber incidents; adverse results in litigation matters; reputational damage; changes in our estimates of our expected tax rates based on current tax law; risks related to our indebtedness; unanticipated difficulties or expenditures relating to integrating Maxim; the discretion of our board of directors to declare dividends and our ability to pay dividends in the future; factors impacting our ability to repurchase shares; and uncertainty as to the long-term value of our common stock. Additional factors that could cause actual results to differ materially from those described in these forward-looking statements include the risk factors included in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for fiscal 2023. We undertake no obligation to revise or update any forward-looking statements, including to reflect events or circumstances occurring after the date of the filing of this report, except to the extent required by law.
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Results of Operations
Overview
(all tabular amounts in thousands except per share amounts and percentages)
 Three Months Ended
 May 4, 2024April 29, 2023$ Change% Change
Revenue$2,159,039 $3,262,930 $(1,103,891)(34)%
Gross margin %54.7 %65.7 %
Net income$302,242 $977,656 $(675,414)(69)%
Net income as a % of revenue14.0 %30.0 %
Diluted EPS$0.61 $1.92 $(1.31)(68)%
Six Months Ended
May 4, 2024April 29, 2023$ Change% Change
Revenue$4,671,743 $6,512,560 $(1,840,817)(28)%
Gross margin %56.8 %65.5 %
Net income$764,969 $1,939,130 $(1,174,161)(61)%
Net income as a % of revenue16.4 %29.8 %
Diluted EPS$1.53 $3.80 $(2.27)(60)%
We have a 52-53 week fiscal year that ends on the Saturday closest to the last day in October. The fiscal year ending November 2, 2024 (fiscal 2024) is a 53-week fiscal year and fiscal 2023 was a 52-week fiscal year. The additional week in fiscal 2024 was included in the first quarter ended February 3, 2024. Therefore, the first six months of fiscal 2024 included an additional week of operations as compared to the first six months of fiscal 2023.
Revenue Trends by End Market
The following tables summarize revenue by end market. The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the “sold to” customer information, the “ship to” customer information and the end customer product or application into which our product will be incorporated. As data systems for capturing and tracking this data and our methodology evolves and improves, the categorization of products by end market
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can vary over time. When this occurs, we reclassify revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market.
Three Months Ended
 May 4, 2024April 29, 2023
 Revenue% of
Revenue*
Y/Y%Revenue% of
Revenue*
Industrial$1,014,847 47 %(44)%$1,823,831 56 %
Automotive658,238 30 %(10)%732,869 22 %
Communications240,776 11 %(45)%436,542 13 %
Consumer245,178 11 %(9)%269,688 %
Total revenue$2,159,039 100 %(34)%$3,262,930 100 %
Six Months Ended
May 4, 2024April 29, 2023
Revenue% of
Revenue*
Y/Y%Revenue% of
Revenue*
Industrial$2,210,226 47 %(38)%$3,573,211 55 %
Automotive1,395,923 30 %(1)%1,411,430 22 %
Communications543,791 12 %(41)%914,794 14 %
Consumer521,803 11 %(15)%613,125 %
Total revenue$4,671,743 100 %(28)%$6,512,560 100 %
* The sum of the individual percentages may not equal the total due to rounding.
Revenue decreased 34% and 28% in the three- and six-month periods ended May 4, 2024, respectively, as compared to the same periods of the prior fiscal year, primarily as a result of broad-based decline in demand for our products. The decrease in the six-month period was partially offset by an additional week of operations in the first quarter of fiscal 2024 as compared to the first quarter of fiscal 2023.
Revenue by Sales Channel
The following tables summarize revenue by sales channel. We sell our products globally through a direct sales force, third party distributors, independent sales representatives and via our website. Distributors are customers that buy products with the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment manufacturers. Other customers include the U.S. government, government prime contractors and certain commercial customers for which revenue is recorded over time.
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Three Months Ended
May 4, 2024April 29, 2023
Revenue% of Revenue*Revenue% of Revenue*
Channel
   Distributors$1,248,382 58 %$1,996,410 61 %
   Direct customers873,593 40 %1,224,786 38 %
   Other37,064 %41,734 %
Total revenue$2,159,039 100 %$3,262,930 100 %
Six Months Ended
May 4, 2024April 29, 2023
Revenue% of Revenue*Revenue% of Revenue*
Channel
   Distributors$2,783,592 60 %$4,007,733 62 %
   Direct customers1,813,568 39 %2,420,320 37 %
   Other74,583 %84,507 %
Total revenue$4,671,743 100 %$6,512,560 100 %
* The sum of the individual percentages may not equal the total due to rounding.
As indicated in the table above, the percentage of total revenue sold via each channel has remained relatively consistent in the periods presented, but can fluctuate from time to time based on end customer demand.
Gross Margin
 Three Months EndedSix Months Ended
 May 4, 2024April 29, 2023$ Change% ChangeMay 4, 2024April 29, 2023$ Change% Change
Gross margin$1,180,035 $2,144,546 $(964,511)(45)%$2,653,976 $4,268,887 $(1,614,911)(38)%
Gross margin %54.7 %65.7 %56.8 %65.5 %
Gross margin percentage decreased by 1,100 and 870 basis points in the three- and six-month periods ended May 4, 2024, respectively, as compared to the same periods of the prior fiscal year, primarily due to lower utilization of our factories due to decreased customer demand, and unfavorable product mix.
Research and Development (R&D)
 Three Months EndedSix Months Ended
 May 4, 2024April 29, 2023$ Change% ChangeMay 4, 2024April 29, 2023$ Change% Change
R&D expenses$354,862 $415,754 $(60,892)(15)%$746,289 $829,849 $(83,560)(10)%
R&D expenses as a % of revenue16 %13 %16 %13 %
R&D expenses decreased in the three- and six-month periods ended May 4, 2024, as compared to the same periods of the prior fiscal year, primarily as a result of lower R&D employee-related variable compensation expenses, partially offset by higher salary and benefit expenses. The decrease in the six-month period was partially offset by an additional week of operations in the first quarter of fiscal 2024 as compared to the first quarter of fiscal 2023.
R&D expenses as a percentage of revenue will fluctuate from year-to-year depending on the amount of revenue and the success of new product development efforts, which we view as critical to our future growth. We expect to continue the development of innovative technologies and processes for new products. We believe that a continued commitment to R&D is essential to maintain product leadership with our existing products as well as to provide innovative new product offerings.
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Selling, Marketing, General and Administrative (SMG&A)
 Three Months EndedSix Months Ended
 May 4, 2024April 29, 2023$ Change% ChangeMay 4, 2024April 29, 2023$ Change% Change
SMG&A expenses$244,129 $324,251 $(80,122)(25)%$534,207 $650,535 $(116,328)(18)%
SMG&A expenses as a % of revenue11 %10 %11 %10 %
SMG&A expenses decreased in the three- and six-month periods ended May 4, 2024, as compared to the same periods of the prior fiscal year, primarily as a result of lower SMG&A employee-related variable compensation expenses and discretionary spending. The decrease in the six-month period was partially offset by an additional week of operations in the first quarter of fiscal 2024 as compared to the first quarter of fiscal 2023.
Amortization of Intangibles
 Three Months EndedSix Months Ended
 May 4, 2024April 29, 2023$ Change% ChangeMay 4, 2024April 29, 2023$ Change% Change
Amortization expenses$188,944 $253,021 $(64,077)(25)%$379,276 $506,163 $(126,887)(25)%
Amortization expenses as a % of revenue%%%%
Amortization expenses decreased in the three- and six-month periods ended May 4, 2024, as compared to the same periods of the prior fiscal year primarily as a result of a portion of our acquired intangible assets becoming fully amortized during fiscal 2023.
Special Charges, Net
 Three Months EndedSix Months Ended
 May 4, 2024April 29, 2023$ Change% ChangeMay 4, 2024April 29, 2023$ Change% Change
Special charges, net$5,977 $23,136 $(17,159)(74)%$22,117 $23,136 $(1,019)(4)%
Special charges, net decreased in the three- and six-month periods ended May 4, 2024, as compared to the same periods of the prior fiscal year primarily due to the timing of charges recorded in each period. Fiscal 2023 charges were primarily related to Global Repositioning Actions, while fiscal 2024 charges were primarily related to the Q4 2023 Plan.
Operating Income
 Three Months EndedSix Months Ended
 May 4, 2024April 29, 2023$ Change% ChangeMay 4, 2024April 29, 2023$ Change% Change
Operating income$386,123 $1,128,384 $(742,261)(66)%$972,087 $2,259,204 $(1,287,117)(57)%
Operating income as a % of revenue17.9 %34.6 %20.8 %34.7 %
The year-over-year decrease in operating income in the three-month period ended May 4, 2024 was primarily the result of a decrease in revenue, which contributed to a decrease in gross margin of $964.5 million, partially offset by a decrease of $222.3 million in net operating expenses.
The year-over-year decrease in operating income in the six-month period ended May 4, 2024 was primarily the result of a decrease in revenue, which contributed to a decrease in gross margin of $1,614.9 million, partially offset by a decrease of $327.8 million in net operating expenses.
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Nonoperating Expense (Income)
 Three Months EndedSix Months Ended
 May 4, 2024April 29, 2023$ ChangeMay 4, 2024April 29, 2023$ Change
Total nonoperating expense (income)$61,520 $40,461 $21,059 $134,066 $97,808 $36,258 
The year-over-year increases in nonoperating expense (income) in the three- and six-month periods ended May 4, 2024, as compared to the same periods of the prior fiscal year, were primarily the result of higher interest expense related to our commercial paper obligations and higher interest rates on certain of our existing debt obligations.
Provision for Income Taxes
 Three Months EndedSix Months Ended
 May 4, 2024April 29, 2023$ ChangeMay 4, 2024April 29, 2023$ Change
Provision for income taxes$22,361