Analog Devices achieves 20% EPS growth and $4 billion free cash flow, positioning for continued revenue expansion in fiscal 2026 amid market challenges.

Good morning and welcome to Analog Devices fourth quarter fiscal year 2025 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. Jeff Ambrose, head of Investor Relations. Sir, the floor is yours.

Thank you, Gigi Good morning everybody. Thanks for joining our fourth quarter fiscal 2025 conference call. Joining me on the call today is ADI CEO and Chair Vincent Roesch and ADI's chief financial officer Richard Puccio. For anyone who missed the release, you can find it in related financial schedules at investor.analog.com the information we're about to discuss includes forward looking statements which are subject to certain risks and uncertainties as further described in our earnings release, periodic reports and other materials filed with the SEC. Actual results could differ materially from the forward looking information as these statements reflect our expectations only as the date of this call, we undertake no obligation to update these statements except as required by law. References to Gross margin, Operating and non operating expenses, operating margin, tax rate, earnings per share and free cash flow in our comments today will be on a non GAAP basis which excludes special items when comparing our results to our historical performance. Special items are also excluded from prior periods. Reconciliations of these non GAAP measures to their most directly comparable GAAP measures and additional information about our non GAAP measures are included in today's earnings release. References to earnings per share are on a fully diluted basis and with that I'll turn the call over to ADI CEO and Chair Vincent Roesch.

Thanks Jeff and good morning everyone. So our fourth quarter results reflect the ongoing business recovery with with continued growth in revenue and earnings per share, both of which finished above the midpoint of our outlook. Now broadening the perspective to our full fiscal 25. Revenue accelerated throughout the year and returned to meaningful growth despite the persistent macro and geopolitical headwinds. All of our end markets increased by double digits reflecting both cyclical and company specific drivers including strong execution and against our maximum revenue synergy targets. Top line strength combined with margin expansion resulted in earnings per share growth of more than 20% in fiscal 25. Our strong operating results and reduced CapEx enable us to generate record free cash flow of more than $4 billion or 39% of revenue. We also returned more than $4 billion to our shareholders, supporting an 8% divide as well as share count reduction. Innovation has always been integral to adi's brand and our value proposition, forming the foundation for strong financial performance. Consequently, R and D activities receive capital prioritization with record investments made in FY25 to advance our leadership in analog, mixed signal and power technologies. We've also intensified our focus on software, digital and artificial intelligence capabilities to strengthen our core franchise, enabling us to address increased customer complexity and expedite their innovation cycles and time to market. Our comprehensive technology portfolio combined with extensive application domain expertise uniquely positions us to proactively identify and resolve the most complex engineering challenges for our customers. As a result, we're realizing stronger value capture as reflected in the increase in our average selling prices, particularly in new products where ASPs significantly exceed those of legacy offerings. Beyond product innovation, our dedication to customer success encompasses ongoing investments to streamline and accelerate their product development activities. To this end, we are rapidly expanding our development support environment from research to deployment with a combination of proprietary Analog Devices tools and leading ecosystem and open source platforms. Furthermore, following the acquisition of Maxim, we've allocated over $3 billion in capital expenditures to substantially enhance capacity, optionality and resiliency for our customers, supporting our long term vision for sustained growth. Now, as you've seen, our relentless focus on driving customer success translated to strong results and a diverse design pipeline that grew more than 20% in fiscal 25, so I'd like to share a few examples of our success this past year. Within industrial, every sector grew, driven by improved cyclical dynamics and powerful secular trends such as AI, automation and the drive for efficient and reliable energy generation, transmission and distribution. For example, the exponential growth in demand for AI and high performance compute drove a record year in our automatic test equipment business, building upon and extending our strong position in the SOC and memory test markets. We anticipate Further growth in FY26 due to our expanding design pipeline, industry transitions to HBM4 and expected double digit growth in hyperscaler capex in 25. Robust automation design and growth was propelled by the burgeoning demand for enhanced productivity, efficiency and reliability across key sectors such as manufacturing, logistics and healthcare. This momentum was particularly evident within our robotics segment which saw notable expansion as customers increasingly prioritized automation to streamline operations and improve business outcomes. As highlighted in our previous quarter, we foresee tremendous long term opportunity as advancements in AI fuel the emergence of content rich humanoid robots, positioning ADI at the forefront of the next wave of robotics innovation. Within healthcare, the proliferation of robot assisted surgical systems represents a vibrant vector of growth alongside our imaging and diagnostics segments. Additionally, we expect growing demand for our suite of diabetes management solutions to continue to contribute to growth in FY26. Energy was our fastest growing industrial segment this past year, driven by high demand from the industrial, transportation and data center sectors. Design and activity was especially strong for grid management and battery storage systems and we anticipate continued growth in 26 and well beyond. Aerospace and defence achieved record results and we expect further growth in the year ahead driven by our expanding portfolio of advanced sensor, mixed signal and power solutions coupled with an increasingly strong opportunity pipeline. We also expect to maintain our strong presence in the growing low earth orbit satellite market. Turning to automotive Advances in autonomous driving and cabin digitalization led to a record year for ADI in fiscal 25, with growth outpacing light vehicle production. Our intelligent audio and video connectivity solutions, which avoid bulky and expensive cabling, drove multiple new growth awards across GMSL A2B and our signal processing and safe power portfolios. Building on this success, our new E2B Ethernet Bus is expanding our market, simplifying customer systems, boosting power efficiency and lowering costs as it gains traction in the communications sector. AI capex investment led to a record year for our data center segment with design and activity more than doubling. Strong demand for high throughput connectivity and power delivery solutions support our confidence in continued growth through 26. Wireless communications was one of the few areas of softness in 25, but we believe customers have completed their inventory digestion phase and that the market bottomed during the year. In addition, we see a positive impact of new products such as our software defined AI enabled macro base station on a chip solution for which we secured design ins from leading OEMs and service providers and see additional opportunity beyond telecommunications in private industrial networks as well as other secure communications applications. And finally, as consumer markets rapidly evolve, we're expanding our SAM and growing a diverse pipeline by delivering integrated solutions in hearables, wearables, gaming, ar, VR and many related areas. For example, our new acoustics platform combines analog power, digital software and machine learning for advanced environmental awareness and adaptive noise cancellation. We've secured design wins for these solutions in consumer and healthcare segments, enabling ADI to triple the value generated over legacy designs. We've also captured several new power management design wins in premium handsets and smart glasses in FY25, positioning us for further growth in 26. So in summary, our diversified business model has proven agile and consistently capable of generating superior outcomes reflected in both last year's resilient margins and this year's strong rebound in profitable growth. While we're mindful of the macro environment and the continued impacts of tariffs and trade uncertainty, we remain confident in our growth in FY26 and beyond as we continue to leverage our key differentiators, namely an enviable technology leadership position at the intelligent edge as it becomes a center of gravity for a host of secular growth markets, unrivaled application, domain expertise, and the trusted brand that we have developed and strengthened with our customers over the decades. And so with that, I'll pass it over to Rich thank you Vince, and.

Let me add my welcome to our fourth quarter earnings call. I'll start with a brief overview of Our full fiscal 25 financial performance. Revenue for the year came in at just over 11 billion, up 17% from fiscal 24 with double digit growth across all end markets. Gross margin finished at 69.3%, up 140 basis points driven by higher utilizations. Operating margin finished up 100 basis points at 41.9% and includes the headwind associated with the normalization of variable comp. All told, earnings per share of $7.79 increased 22% versus fiscal 2024. Now onto our fourth quarter results. Revenue in the fourth quarter came in toward the higher end of our outlook at $3.08 billion, growing 7% sequentially and 26% year over year. Industrial represented 46% of our fourth quarter revenue, finishing up 12% sequentially and 34% year over year. The stronger than seasonal results underpins the cyclical momentum we see across Industrial as well as the secular growth unfolding in AI infrastructure which drove record quarter for our ATE business. For the full year, industrial increased 15% with growth across every major application including record years for aerospace and Defense and ATE. Automotive represented 28% of quarterly revenue finishing up 1% sequentially and up 19% year over year. Double digit year over year growth continues to be the driving excuse me, continues to be driven by our leading connectivity and functionally safe power solutions. For the full year, automotive increased 16% to an all time high driven predominantly by a higher content and share position across Level 2 + ADAS systems. Globally. Communications represented 13% of quarterly revenue, finishing up 4% sequentially and 37% year over year. Our data center segment surpassed a $1 billion run rate this quarter and on a year over year basis has now grown more than 50% for three consecutive quarters fueled by continued strength in the AI infrastructure market. Wireless revenue was up double digits year over year for the second straight quarter owing to improving cyclical dynamics. For the full year, Communications was our fastest growing market increasing 26% driven by our data center segment which had a record year while wireless revenue was flat. Lastly, consumer represented 13% of quarterly revenue, finishing up 7% both sequentially and and year over year. For the full year consumer increased 19% driven by strong growth in handsets gaming and a record year for our hearables and wearables segment. Now on to the rest of the P&L fourth quarter gross margin was 69.8%, up 60 basis points sequentially and 190 basis points year over year driven by higher utilization and favorable mix. OPEX in the quarter was 809 million, resulting in an operating margin of 43.5%, up 130 basis points sequentially and up 240 basis points year over year. Non operating expenses finished at 60 million and the tax rate for the quarter was 12.7%. All told, Earnings Per Share (EPS) was $2.26 up 10% sequentially and 35% year over year. Now I'd like to highlight a few items from our balance sheet and cash flow statements. Cash and short term investments finished the quarter at 3.7 billion and our net leverage ratio decreased to 0.9. As I discussed previously, we continue to build die bank buffers for our fastest growing applications. As such, our Inventories were higher by $59 million sequentially while days of inventory declined by 1 to 159. Channel inventory increased but remains lean at approximately six weeks. Fiscal 25 operating cash flow and capex were 4.8 billion and 5 billion respectively, resulting in record free cash flow of 4.3 billion or 39% of revenue, up from 33% in 2024. In total, we returned $4.1 billion to shareholders through dividends and share repurchases. As a reminder, we target 100% free cash flow return over the long term, using 40 to 60% for our dividend and the remainder for share count reduction. Now moving on to our first quarter of 2026 outlook. Revenue is expected to be 3.1 billion plus or minus 100 million. Operating margin at the midpoint is expected to be 43.5% plus or minus 100 basis points. Our tax rate is expected to be 12 to 14% and based on these inputs, adjusted Earnings Per Share (EPS) is expected to be $2.29 plus or minus $0.10. In closing, fiscal 2025 was a strong year highlighted by a return to growth, margin expansion and record free cash flow. Importantly, I'm confident in our ability to continue navigating macro and geopolitical challenges and believe we are well positioned to drive further profitable growth in 2026. With that, I'll give it back to Jeff for Q and A.

All right, thank you Rich. Now let's get to our Q and a session, we ask that you limit yourself to one question in order to allow for additional participants on the call this morning. If you have a follow up question, please re queue and we will take your question if time allows. With that, can we have our first question please?

For those participating by telephone, dial in. If you have a question, please press star11 on your phone to enter the queue. If your question has been answered and you wish to be removed from the queue, please press star 11 again. If you are listening on a speakerphone, please pick up the handset when asking your question. We'll pause for just a moment to compile the Q and A roster. Our first question comes from the line of Vivek Arya from Bank of America securities.

Thank you for taking my question. I had a near and a medium term on the near term I think you're guiding Q1, you know slightly up which is a little bit above seasonal. So I was hoping you could give us some color by segment where you are seeing the strength because I do think industrial was slightly below what you had thought in Q4. So just any dynamics going into Q1 and then if we zoom out, if I were to just annualize Q1 guidance that suggests a very strong kind of 12 13% sales growth year in fiscal 26. And I was really hoping to get your perspectives as you start the new fiscal year on what you're seeing from a broader macro perspective and whether this kind of growth rate is possible in fiscal 26.

Thank you. Sure.

Thanks Vivek.

Rich Vivek, I'll take the first part of your question. So you know Q1 which is our weakest sequential quarter with normal seasonality typically down mid single digits and our outlook is for ups, you know, up slightly quarter over quarter reflects our seventh straight quarter of above seasonal growth. And another key point is additionally our outlook assumes sell-in and sell-through are equal. So from an end market color perspective, you know industrial we expect to be up mid single digits above seasonal. We expect auto to be down mid single digits below seasonal. You know where we continue to see some risks there around tariff and some of the macro environment comms, we expect to be up 10% above seasonal. Again as Vince mentioned, we're seeing real strength in the AI infrastructure and demand for our data center products and then consumer seasonally down low double digits and then all markets we expect to be up year over year.

Yeah.

So maybe if we if we look year over year Vivek. So we believe we're well positioned to see broad based growth in 26 and you know I think cyclical as well as well as many idiosyncratic factors giving us tailwinds. My expectation is that in 26 industrial and communications will lead to, will lead the charge. You know I think when you look at industrial and comms, the as I said, the cyclical dynamics are good braille inventories out there. I think both of those markets bottomed some quarters ago. Data center which is going to see again we believe a strong surge in capex. We've got good exposure to that sector and it's two thirds of our comms business at this point in time. Aerospace and defense as well as ate which are together about a third of the industrial market. We've got strong content growth stories in both and you know, coupled with the ADI demand surge in the ATE business I think is very, very well positioned I think as well in consumer. We talked a little bit in the prepared remarks there about the higher content and key applications and so we've got tremendous diversity in that business at a level we never had before as a company. So both in applications and customers and platforms we're well positioned. Last but not least, if I talk a little bit about the auto sector, it's been, I think SAR has remained flat now for quite a while. We see that persistent in 26 and given that, you know, we've been able to show against our 10% content growth per annum, we see that continue given the strength of the pipeline that we've got. But you know, all that said, we've got a very uncertain macro environment but my expectation is all the end markets will be up despite the outlook from a macro perspective.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Joe Moore from Morgan Stanley. Great, thank you.

Speaking of autos, you know I think you guys had indicated when you guided the quarter that you'd be slightly down. You ended up slightly up. Can you talk about what's coming in.

A little bit better? And you guys have been pretty good about helping us understand pull forwards and things like that. Any sign of any activity now? Sure Joe, I'll take that one. So for us, auto has been our strongest market, right? Double-digit CAGR through cycle driven by secular content gains compounded by our share gains particularly in connectivity and power for adas and next gen infotainment systems here. I would note we've had pretty significant share gains in China which where you see a lot of the light vehicle share getting increased. So that's been beneficial near term the market's been more resilient than we and many had predicted. Right. Evidenced by the stronger volumes on vehicles. We do think some of the upside we've seen in the volumes in our business this year was tariff and policy related. We've talked in prior calls about our view that there might have been some pull inside. You know, it can't be precise for certain but we, but we did make that estimation, you know, and given, given this, we did approach Q4 with some caution and expected to see. I think I said on the last call we thought we'd see some of this pre buying unwind in the fourth quarter. You know, that that did not appear to happen to us. You know, our results were fairly seasonal and bookings were normal with a book to build just below 1, which is actually pretty typical for Q4. You know, we're still being a bit cautious on the market as it's unclear how the tariffs and volatilities we saw will ultimately impact us and our customers. And also just given short, short lead time orders. Visibility tends to be pretty low right now, you know. So as we think about our Q1 outlook is a sub seasonal quarter or down mid single digits sequentially but up year over year. And given the content gains in this market and the positive design win traction that Vince mentioned, we do think fiscal 26 can be another strong year.

Very helpful. Thank you very much.

Thank you. One moment for our next question. Our next question comes from the line of Stacy Rasgan from Bernstein Research.

Hi guys. Thanks for taking my question. I wanted to ask about gross margins. You sort of talked about being at 70% gross margins around $3 billion. So you're sitting over there and you're still, I mean even in the quarter you came in a little below 70. As far as I can tell, the guidance implies gross margins relatively flattish around that 70% range. You can let me know if that's right or not. But I'm just wondering why we're not seeing more leverage on the gross margin line, especially as utilizations are going up and everything else. Like why shouldn't we expect that more leverage on gross margins? Rich, I'll take that one. So obviously with our industry lead in gross margins where you can see the impact that we get from Innovation Premium, we did increase quarter over quarter and year over year and we did have higher utilization and some favorable mix. We didn't get to the 70% as planned as the mix component wasn't as strong as we were expecting. As we've talked about, we had a much stronger result in auto which kept the Industrial mix a bit lower than we planned. And that's what kept us from getting all the way to the 70%. Now if I look out to Q1 gross margin, percent for us is typically lower in Q1 seasonally given the annual shutdown, factories for required maintenance and around the holidays in conjunction with customer shutdowns. However, you know, based on our outlook, we are anticipating that the higher industrial mix in Q1, which we think will offset seasonal, you know, the seasonal component and hold gross margin flat. So you were right, embedded is a lattice gross margin where we get an offset from higher mix which will offset the pressure from the shutdowns. You know, and then I guess in the last piece, you know, as we think about the continued go forward, Stacy, and you know, at this revenue level, you know, one of the things I like to remind is we did have a pretty significant capacity expansion while we were addressing our resilience over the last several years. And so it will take us, you know, higher, higher revenue dollars to continue to expand beyond 70. And also as we've talked about the continued movement in mix and given the strength we see in industrial into going into 26, we expect that that share of our business will continue to increase.

Yeah, I think just one other piece of color, Stacy. The pricing is in good shape, so it's really, it's really a question of mix and continuing to push the utilizations.

Got it. Thank you, guys.

Thanks, Stacey. Move on to our next question, please. Thank you. One moment for our next question. Our next question comes from the line of Christopher Danley from Citi.

Hey, thanks guys. Just to follow up on Stacy's question. Has the relative gross margin levels, have those changed at all between the end markets? Have any of them gone up or down versus the corporate average? I guess just to cut to the chases, have the auto gross margins gotten a little worse relative to the corporate average over the last like two, three years or anything else changed? Chris, I would say that the way we've characterized the individual end market margins versus average has not changed, not in any meaningful way.

Okay, thanks, Rich. Sure.

Thank you. One moment for our next question. Our next question comes from the line of Timothy Arcuri from ubs.

Thanks a lot. Vincent, you talked about maximum revenue synergies. Can you update us on that? I know you said you're on track, but maybe you can give us a sense of where that stands. And then Rich, can you tell us sort of what your sense of like a normal fiscal Q2? It seems like normal, seasonal and fiscal Q2 is up like mid Singles. Is that sort of how you think about a typical fiscal Q2 and then maybe like, you know, what are the puts and takes as you kind of head into fiscal Q2? Thanks.

Yeah. So Tim, I'll start with the synergies. So you know, we began the conversion process, the conversion of the pipeline in 24 and began in earnest in 24. It contributed tens of millions of dollars to ADI's top line in 24. It's clearly accelerated in 25 and you know, it's in the hundreds of millions against our billion dollars by 2027 and we expect an even stronger contribution in 26 given the momentum that we have in terms of new products and cross sell. So you know, we're seeing, as we said, when we acquired Maxim, we saw tremendous complementarity in terms of some technology niches that Maxim filled, particularly in areas like power, these connectivity structures that we use in automobiles and now industrial products. So the complementarity actually works for adi, right across the spectrum of applications, but particularly auto, as I've just said, consumer, healthcare and data center. So I think we are well on track to meet our commitment, possibly even a little earlier than what we thought. Rich, you want to take.

Yeah, you're absolutely right. Q2 tends to be our seasonally strongest quarter where we tend to be up mid single digits. I think that's the right way to think about it.

Thank you, Tim. Let's move on to our next question, please.

Thank you. One moment for our next question. Our next question comes from the line of CJ Muse from Kantor Fitzgerald.

Yeah, good morning. Thank you for taking the question. Vince, in your prepared remarks you talked about IDEO drivers led by AI in the data center. And I was hoping you could perhaps speak a bit more to a framework that we should be thinking about across both industrial and comms. Obviously you dominate semi test analog. You've got some real design wins on the optical and power side. And then you also spoke about energy strength. So is there kind of a percentage of mix that we should be thinking about that should be growing significantly faster than the rest of your business? And if there's numbers around that, that would be very helpful. Thank you.

Yeah, maybe I'll just give some color and Richard with some numbers. Yeah. So look, specifically when we talk about AI, there's the data center and ate businesses. And if I look at data center in 25 it grew about 50% and the ate business, which also benefits from the skyrocketing compute intensities, the new memory types that are being used as well, new Memory chips, that business. So the AT business grew up 40% last year and we can, we believe we'll see that growth continue in 26. If I just talk about, you know, where we are, data center I think as Rich said in the prepared remarks, is running about a billion dollar run rate at this point in time. And there are really two primary sectors. There are, one is at the electro-optical interface and we're seeing tremendous upsurge in demand for 800 gig. Now we're seeing 1.6 terabit electro-optical interfaces that require very, very sophisticated power management and control systems. And then there's power more generally I think in the areas of protection we're beginning to see a shift in very, very high voltage technologies that require very sophisticated monitoring and control. There's power conversion and power delivery and you know, we're seeing our portfolios in those three areas gain significant traction. On the delivery side we had mentioned before vertical power, that technology now is beginning to be adopted broadly. So we're at the kind of, we use a term in the electronics industry. We're at the nick of the curve. I think we're in place to see exponential growth there ate $800 million run rate and as I said, very, very well positioned with all the key players, both the vertically integrated players as well as the OEMs in chip testing. And you know, as the shift to HBM4 takes place we're going to see higher pin count, more complexity, more speed, basically more instrumentation, compute density in our chips. So I think you know, we're in a good place from a customer engagement standpoint, from a technology standpoint. My sense is we should see double digit growth in both those areas over the next few years. Rich, do you want to add anything?

I will add my concurrence on your view about the outlook for the next few years in these areas. I look at, you know the, if you look at the external factors particularly around the data center piece and the high performance, compute the forecast, continue forecast from all of the hyperscalers and the big buyers in the space continue to go up. And even recently several of the large hyperscalers have added even further increases to their CAPEX plan. So I do think that that near medium term spend is going to continue and we should be a big beneficiary given our strength there.

Thank you. C.J. move on to our next caller please. Thank you. One moment for our next question. Our next question comes from the line of Harlan sewer from J.P. morgan.

Yeah, good morning. Thanks for taking my question. You know, one of the other strong dynamics among several which separates ADI from peers is obviously the strong exposure aerospace and defense. This has been growth area for ADI during this last downturn. I think the business is now driving well over a billion dollars of annualized run rate revenues or roughly greater than 10% of your total revenues. It grew strongly double digits in fiscal 25. Does the team anticipate continued strong double digits growth in fiscal 26 and maybe help us understand like what are some of the ADI specific product cycles here that's going to continue to drive the strong growth profile going forward?

Yeah, thanks very much for the question. So. Yeah, the journey for ADI in that aerospace and defense market really took off in earnest when we acquired Hittite and we got Hittite's really high quality RF and microwave portfolio which is central to all the, all the communications activities right across the aerospace and defense market. From you know, defense systems, every type of defense system you can imagine to satellite communications. The primary portfolios we have there are obviously microwave and RF sensors, the highest performance conversion products that we build on the precision and high performance, very, very high speed signal processing side are central. And increasingly, you know, when we, when we acquired LTC and Maxim, we were able to cross connect with all those signal processing technologies, the Powertech, all the power management technology. So you know, if you look then at the, at the market drivers you've got, the world isn't becoming any more peaceful so there's going to be increasing capital deployment to build defense systems globally. We're seeing very strong demand, an increasing demand in Europe and beyond. And you know, we work with all of the primary OEMs and so that all that coupled with increasing ASP. I mean some of these products we build attract tens of thousands of dollars per system. So I think that business has the capacity by the end of the decade to more than double.

Thank you Harlan. We'll move on to our next question.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Joshua Buchalter from TD Cowan.

Hey guys, thank you for taking my questions and congrats on the strong results. I wanted to follow up on the comments about fiscal 2Q being the seasonal plus mid single digit percent. Could you maybe speak to what's driving the confidence and the visibility there? Any metrics you're able to give on lead times and then bigger picture, how has your visibility looking forward changed as the mix has changed, do you think compared to a couple of years ago, there's more of your exposure tied to ADO drivers like Aerospace and defense and data center. And that's increasing your visibility. I'd just be curious to hear because you mentioned there was some uncertainty on the shape of the year in the press release. I'd be curious to hear how you're feeling about visibility. Thank you. Thanks, Josh. So first, I didn't guide for Q2. I confirmed what the historical seasonality is. You know, as we've been talking about.

Right.

We still have, you know, don't have a ton of visibility beyond current quarter plus one. Right. As we talked about, you know, the lead times are, you know, most of our products have lead times sub 13 weeks. So we get a lot of orders in quarter, we get a lot of quarters, a lot of orders with short lead times, which does reduce some of that visibility. So I think on the first part of your question, and I don't think we've necessarily seen an improvement in visibility over the last two years, although I do agree, I think that the, you know, we've now got broad strength in a number of the IDO areas that Vince described. But given, given where we are from an inventory on hand position as well as our cycle times, you know, we're not getting a ton of out outside of a court of visibility.

Thank you, Josh.

And we'll move to our last question, please. Thank you. One moment for our next question. Our next question comes from the line of Tori Svanberg from Stifel.

Yes. Thank you for squeezing me in. So, Vince, ADI has been always very thoughtful about allocating RD dollars and the economy is changing in the front of our eyes structurally quite significantly here. So how are you thinking about prioritizing your R and D spend right now and are there any areas you would like to double down in and perhaps areas you would like to deemphasize as a company?

Thank you. Yeah, thanks, Tory. Yeah. When I look at the analog space in the core analog business, we continue to push the edges of signal processing, data conversion systems and precision as well as very, very high speed. I think power management for Adi is still an opportunity with a lot, a much, much bigger growth story. So that is a place that, you know, as we've gone through our strategy planning cycle in the last last few quarters here, we're doubling down on for sure the there are areas as well of our digital portfolio where we see very, very strong niches for what we do in terms of, for example, low power, low latency, these heterogeneous compute structures as well as algorithmic technologies. So, you know, I mentioned during the prepared remarks how we're enhancing the functionality of our core analog technologies by using machine learning techniques, for example, in base stations and in the consumer areas as But I think most of what we do is making sure that we have the platforms to be able to compete globally across all the geographies, across the spectrum of markets that we find most attractive, solve the most important problems. And what I can tell you is that our customers are asking us to do more and more to tame their complexity and help them speed up their innovation cycle. So that's when we think about, you know, the investment portfolio. We're very opportunity rich and we've got a very high quality problem which is picking the most valuable opportunities in that spectrum of that's replete with opportunity.

Thank you for that.

Thanks, Tory. And thanks everyone for joining us this morning. A copy of this transcript will be available on our website. Thank you. And all available reconciliations and additional information can also be found in the quarterly results section of our investor relations website. Thank you for your continued interest in Analog Devices and Happy Thanksgiving.

This concludes today's Analog Devices conference call. You may now disconnect.