Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| This unique ability helps to capture the upside in strong demand backdrops and better protect our gross margins during more challenging times |
| But net-net, we do feel good about auto being our best performing end market here in 2Q and for the full year '24 |
| He brings tremendous financial experience and capability from complex technology sectors, which I think will be very valuable, as we continue to extend our leadership in the Intelligent Edge era |
| Will it be all complete? By the second quarter, we'll see, but I do feel good about those growth areas continue to grow this year |
| We remain very, very bullish about that |
| Encouragingly, first quarter bookings improved sequentially, growing our confidence that inventory related headwinds will largely subside this quarter |
| Importantly, the strength of our balance sheet, operational agility, and prudent capital management are serving as well during this downturn |
| We've invested heavily in R&D, customer engagement, activity and manufacturing resiliency, fueling our future growth, even as we maintain the industry leading profitability that supports our practice of robust capital returns |
| To that end, I'm pleased to highlight that we announced the 7% dividend increase yesterday, making 2024 the 20th consecutive year of higher dividends for shareholders |
| But yeah, I think we view AI as a tremendous opportunity |
| We've got our lead times back into better shape than most quite quickly |
| This breadth of engineering gives ADI the capabilities to tackle more of our customers' challenges, and grow our sell-in across markets |
| In a world where the story about Analog design engineer capability being so limited and that driving a significant advantage for ADI |
| This strengthens our ability to deliver increasingly stronger innovation from components to physical Edge systems |
| Importantly, with the strength of our financial profile and the growing importance of our technology, we will continue to invest confidently in our future, regardless of where we are in the cycle |
| But even in a more traditional industrial sector like instrumentation, all of these new high-performance computing systems need you test equipment, so that benefits ADI |
| This system approach enables us to capture three times more value, and we expect additional design wins due to high customer interest globally |
| We came in at the high end, a good result given the large drop in industrial that we've been talking about and with an inventory takedown of almost $90 million quarter-over-quarter |
| We’ve recently increased our share at a top three global auto manufacturer extending our position across all their brands and quintupling our GMSL opportunity at that customer |
| So 4Q and 1Q bookings both improved |
| Notably our leading connectivity and functionally safe power solutions collectively increased double digits year-over-year |
| And what's interesting now is you look at our bookings, they're approaching parity, which is a good sign that we just see a pickup in the back half of the year |
| I'm excited to have joined ADI and look forward to helping the company navigate the near term while ensuring we are well positioned to capitalize on the tremendous opportunities ahead of us |
| I have confidence in the steps that we're taking to preserve our capital and navigate the near term challenges while ensuring that we make the necessary investments to increase our competitiveness and accelerate our business in the future |
| Our investments, combined with the support of our foundry partners will enable us to manufacture our products in multiple geographic locations, enhancing our resiliency and giving our customers greater optionality and assurance over their supply chains |
| This advance unlocks a new growth vector for ADI, adding more than $5 billion of new sell-in |
| On a sequential basis, wireline fared relatively well driven by AI-related demand, while wireless decreased as global investments in 5G remain depressed |
| Automotive, which represented 29% of revenue, was up 2% sequentially and 9% versus the year ago period, representing 14 consecutive quarters of growth |
| I think this quarter, you're saying bookings are improving |
| So we're in a great position to address the recovery |
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| And lastly, consumer represented 11% of revenue, down 7% sequentially and 22% year-over-year driven by continued sluggish end demand across applications |
| First quarter gross margin was 69%, down sequentially and year-over-year, driven by unfavorable mix lower revenue and lower utilization |
| The 2Q outlook implies 67% plus or minus, a bit lower than what we thought would be given the weaker revenue, especially in industrial and the fact that we're taking down factory starts further in 2Q to reduce inventory by another $50 million to $100 million |
| Communications, which represented 12% of revenue, declined 10% sequentially and 37% year-over-year |
| I would say comms is also probably worse in the midpoint of your guidance, so down more than the 16% we guided to |
| It was the worst performing geography down about 13% for the full year |
| At the midpoint, we expect all end markets to decline sequentially with the largest decline in industrial as we continue to meaningfully reduce channel inventory |
| As expected, we experienced broad-based weakness as customers continue to work down their inventory levels |
| Industrial represented 48% of revenue in the quarter, down 12% sequentially and 31% year-over-year |
| But I mean like industrial has got to be down probably more than 20% sequentially, and that would probably still assume everything else is down double digit sequentially |
| This includes the impact of unfavorable mix and lower utilization as we further reduce balance sheet inventory |
| Michael Lucarelli So if you take a step back from a geo perspective, whole regions are weak, North America, Europe, China |
| From a utilization standpoint, Rich also pointed out, our starts are low enough to reduce inventory meaningfully |
| There's some areas of pockets of weakness in demand |
| That said, the macro situation remains challenging, and the shape and timing of a second half recovery will be governed by underlying demand |
| I think at a conference a couple of months ago, you had mentioned that sell-in was tracking 15% to 20% below sell-through |
| If I go back to historic drawdowns, you haven't seen revenue fall that far other than 2001, 2009, where we had kind of significant demand destruction |
| The area that we've probably seen, I would say, the biggest correction is in the industrial market |
| And we're clearly under-shipping our customers' current demands |
| And like I said, China is the weakest source of demand |
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