Analog Devices EPS Beats and Raises Q3 Guidance, Plans $1.5B AI Power Unit Acquisition
Analog Devices reported Q2 adjusted EPS of $3.09, beating the $2.90 expectation, with revenue climbing 37.2% year-over-year to $3.62 billion. The company issued Q3 guidance for $3.15-$3.45 EPS and $3.8-4.0 billion revenue, and announced a $1.5 billion Empower Semiconductor acquisition to expand AI power management.
1. Q2 Earnings and Revenue
Analog Devices delivered adjusted earnings of $3.09 per share, surpassing the $2.90 estimate, while revenue rose 37% year-over-year to $3.62 billion. Growth was broad-based, led by Industrial up 56% and Communications up 79%, with Automotive and consumer segments also posting gains.
2. Q3 Guidance
The company issued third-quarter adjusted EPS guidance of $3.15 to $3.45, above the $3.00 consensus midpoint of $3.30, and revenue guidance of $3.8 to $4.0 billion versus the $3.61 billion analyst estimate, signaling sustained demand across end markets.
3. Acquisition of Empower Semiconductor
Analog Devices agreed to acquire Empower Semiconductor for $1.5 billion in cash to bolster its AI power management portfolio, aiming to address energy efficiency bottlenecks in data centers and high-performance computing applications.
4. Cash Flow and Stock Reaction
Operating cash flow reached $872 million, or 24% of revenue, with trailing twelve-month cash flow at $5.1 billion and free cash flow of $4.6 billion. Shares dipped 0.5% despite the beat, reflecting profit-taking after the strong report.