Analog Devices Q3 2021 Earnings Call Transcript

Quartr
Provided by Quartr
August 17, 2021

There are 12 speakers on the call.

Operator

Good morning, and welcome to the Analog Devices Third Quarter Fiscal Year 2021 Earnings Conference Call, which is being audio webcast via telephone I'd now like to introduce your host for today's call, Mr. Michael Lucarelli, Senior Director of Investor Relations. Sir, the floor is yours.

Speaker 1

Thank you, Shelby, and good morning, everybody. Thanks for joining our Q3 fiscal 2021 conference call. With me on the call today are ADI's CEO, Vincent Roche and ADI's CFO, Prashanth Mahendra Raja. For anyone who missed the release, you can find it and relating financial schedules at investor. Analog.com.

Speaker 1

Now onto the disclosures. The information we're about to discuss include forward looking statements, which and are subject to certain risks and uncertainties as further described in our earnings release and our most recent 10 Q and other periodic reports and materials filed with the SEC. Call. Actual results could differ materially from these forward looking information as these statements reflect our expectations only as of the date of this call. We undertake no obligation to update these statements except as required by law.

Speaker 1

Our comments today will also include non GAAP financial measures, which exclude special items. When 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. And with that, I'll turn it over to ADI's CEO, Vincent Roche. Vince?

Speaker 2

Thank you, Mike, and a very good morning to everybody. So ADI delivered a 2nd consecutive quarter of record revenue and earnings Despite the challenging supply environment, our strong performance was driven by continued operational excellence Broadly speaking, the economic recovery continues to take shape with demand still far exceeding supply. We like many others in our industry will face a constrained supply environment into 2022. Despite this backdrop, our business continues to achieve record results as our investments and design wins over the last few years are matched with strong demand across our end markets. So looking ahead, the combination of robust bookings, lean inventories and ongoing capacity additions position ADI to close fiscal 2021 on a high note and continue to grow in the next year.

Speaker 2

So moving to our 3rd quarter results, Revenue was $1,760,000,000 up 21% year over year. All markets increased sequentially with industrial and automotive once again achieving records. Gross margin expanded to over 71% and operating margin over 43%. Adjusted EPS of $1.72 increased 27% year over year. Despite elevated capital spending to increase our capacity, free cash flow over the trailing 12 months was $2,200,000,000 This equates to a 34% free cash flow margin, maintaining our position in the top 10% of the S and P 500.

Speaker 2

So overall, I'm very pleased with our performance and our team's outstanding execution. As you know at ADI, our ethos of innovation and deep customer engagements ensure that we stay ahead of what's possible. We invest more than $1,000,000,000 annually in R and D, which have accelerated in the economic recovery. Now let me share some recent highlights with you. Our industrial business is our most diverse segment across customers, products and applications and features sticky long product life cycles.

Speaker 2

This is truly a performance driven market that aligns perfectly to our high performance precision signal chain, power management and RF portfolios. Importantly, instrumentation and test is aligned with all secular growth trends from connectivity with more advanced performance capabilities. Today, ADI is the leader in communications tests and we're collaborating with Keysight, for example, to advance the development of O RAN solutions. This partnership will enable the fastest path for designing cost effective and power efficient radio units. Looking ahead, we're already beginning to partner with our customers to test emerging 6 gs technologies.

Speaker 2

Our innovations in the instrumentation market also have a positive impact on human and planetary health. One particular area is our environmental monitoring business, where there is an increased need for highly reliable and accurate instruments to improve the standard of living globally. Our market leading portfolio of precision converters enables 10 times And increase their use of robots and cobots. Specifically, cobots require ADI's precision signal chain and power franchises, sensing technologies and robust wired and wireless connectivity. This new vector of growth Increases our SAM opportunity by 3 times that of a traditional robot.

Speaker 2

To that end, teleconference. In collaboration with Universal Robots to design smaller, smarter and easier to use robots that helps scale tasks safely and transform workforces. Well, turning now to our communications business. 5 gs is beginning to broaden globally, especially in North America as carriers look to deploy newly acquired C band spectrum. Deployment targets.

Speaker 2

This includes Vodafone, where our technologies are very well represented. This quarter, we extended our market leading position in 5 gs radio solutions with the introduction of the industry's first software defined transceiver that includes a fully integrated digital front end. Our innovative radio architecture greatly improves power efficiency, thereby reducing radio weight, size and carrier expenses. This high level of integration eliminates FPGAs to simplify implementation and facilitate the proliferation of these emerging O RAN networks. Our next generation SINCEVA platform is already designed in at a major Tier 1 global supplier that is gaining share in these 5 gs and O RAN deployments across North America as well as Europe.

Speaker 2

Stepping back, we expect our communications business to return to growth in 2022. We have strong design momentum and our geographic mix has shifted with North America, Europe and Korea representing our largest sources of revenue. Moving now on to automotive. Over the last 2 years, we've realigned our business to focus on electrification teleconference and the in cabin human experience. We're seeing the benefits of this strategy as we continue to scale our market leadership in battery management, power management, audio systems and connectivity.

Speaker 2

Starting firstly with our battery management systems or BMS, Our wired and wireless portfolios provide unmatched accuracy to deliver market leading vehicle range and can measure all key battery chemistries, including 0 cobalt LFP. Additionally, our solutions incorporate ASIL D functional safety In addition, this quarter marked the first time we recognized revenue for our wireless BMS solution as General Motors prepares to ship its first of 30 EV models powered by the Ultium battery platform. And this is just the beginning Turning to audio systems and connectivity, as complexity continues to increase, there's very strong demand for our market leading audio systems with signal processing, A2B connectivity and active road noise cancellation. Our solutions offer the highest fidelity performance During the quarter, 2 leading OEMs adopted A2B and the top 3 European vehicle manufacturer implemented A2B as its audio connectivity standard across its entire fleet. In total, A2B is now designed in at over 30 OEMs, telephone.

Speaker 2

We are designed in at 9 OEMs, up from 5 just a year ago, including Hyundai and a leading EV manufacturer. This added capability can more than double the value of our A2B solution. In all, these are just a few of the countless examples of the tremendous work underway at ADI. We remain focused on delivering breakthrough innovations So in closing, I've never been more confident about ADI's future. Over the last decade, we've built an industry leading portfolio with unparalleled breadth and depth of capabilities that's aligned with more profitable end markets.

Speaker 2

And our portfolio and leadership position will only get stronger with the acquisition of Maxim, enabling us to deliver strong returns in the years to come. And so with that, I'll hand you over to Prashant.

Speaker 3

Thank you, Vince. Good morning and welcome to our Q3 earnings call. My comments today with the exception of revenue and non op expenses will be on an adjusted basis, which excludes special items outlined in today's press release. ADI delivered exceptional 3rd quarter results, underpinned by our ability to increase production. Revenue and EPS reached all time highs for the 2nd straight quarter with continued gross and operating margin expansion.

Speaker 3

If we look at performance by end market, industrial represented 57% of revenue and increased 3% sequentially and 29% year over year. Notably, this business surpassed $1,000,000,000 of quarterly revenue for the first time. We experienced broad based strength across applications and geographies. All sub segments increased double digits year over year Except healthcare, given the elevated pandemic demand a year ago. Communications represented 16% of revenue As we outlined last quarter, we believe our communications revenue has bottomed and will continue to grow as 5 gs deployments broaden globally, especially in North America.

Speaker 3

Automotive represented 16% of revenue and increased 13% sequentially to a large European Tier 1 auto supplier. This resulted in the immediate revenue recognition of $24,000,000 in the quarter. Consumer represented 10% of revenue and increased 16% both sequentially and year over year. Our strategy to diversify and grow this business in fiscal 2021 is working, as strength across home entertainment, Gross margin expanded sequentially and year over year finishing at 71.6%, mainly due to the cost savings from the LTC manufacturing optimization and the IP license agreement. OpEx in the quarter was 493,000,000 This netted an op margin of 43.6%, which marks the 5th straight quarter of year over year op margin expansion, and our tax rate was approximately 12%, which gives us an adjusted EPS at $1.72 including $0.05 of upside attributable to the IP licensing agreement.

Speaker 3

Moving on to the balance sheet, we finished the quarter with an ending cash balance of $1,500,000,000 and a net leverage ratio of 1.2 times. Relative to the Q2, inventory dollars increased $16,000,000 driven entirely by raw materials and work in process. Days of inventory were unchanged at 118 weeks of channel inventory remain well below the low end of our 7 to 8 week target as sell through remains stronger than sell in. CapEx for the quarter was $86,000,000 We will continue to increase capacity in the Q4, resulting in full year capital intensity above our long term model of 4%. And turning to free cash flow, we generated more than $2,200,000,000 over the trailing 12 months, up 23% from a year ago.

Speaker 3

And this represented a 34% free cash flow margin. Over the same period, we have returned nearly 85% of free cash flow after debt repayments via $970,000,000 in dividends and over $500,000,000 in share repurchases. And now onto the 4th quarter outlook. Revenue is expected to be $1,780,000,000 plus or minus $70,000,000 up sequentially as additional capacity comes online. At the midpoint excluding the automotive IP licensing revenue, we expect each of our B2B markets to increase sequentially led by communications and consumer to be up high single digits.

Speaker 3

Based on the midpoint of guide, we expect to deliver a record gross margin and for operating margins to be 43.7 percent plus or minus 100 bps. Our tax rate is expected to fall toward the upper end of our range. And based on these inputs, adjusted EPS is expected to be 1.72 plus or minus $0.11 So before moving to the Q and A, I'd like to give a brief update on Maxim. Our discussions with the Chinese regulatory authorities have been productive and we're working towards closing within the initial timeframe. We plan on closing no later than the 3rd business day after China approval has been granted.

Speaker 3

As we shared before, shortly after the close, We will hold a conference call to provide an update on our capital return plans. Once combined, we anticipate having nearly $4,000,000,000 of cash on our balance sheet, a leverage ratio well below 1 and more than $3,000,000,000 of annual free cash flow. I'll now turn it over to Mike to start the Q and A.

Speaker 1

Thanks, Prashanth. 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. Via

Operator

If your question has been answered and you wish to be removed from the queue, please press the pound key. If you are listening on a speakerphone, and answer session. Your first question is from Vivek Arya of Bank of America Securities.

Speaker 4

Thanks for taking my question. Once you mentioned demand far exceeds supply. I was hoping if you could help us quantify that. Are you under shipping by 5%, 10%, how much of a demand cushion Does ADI have right now? And kind of Part B of that is how much incremental capacity are you planning to bring online in the next year?

Speaker 4

And is that kind of a proxy for what kind of sales growth we should be looking at? Thank you.

Speaker 3

Thanks, Vivek. So demand continues to grow across our markets. All end markets are up and our book to bill was above 1.2. Supply is also expanding. We grew 4% sequentially in the 3rd quarter and we're at the midpoint, we're going to be up another 3% for the 4th quarter.

Speaker 3

So you look at that math and it says the supply demand gap is growing or said another way backlog is increasing quarter over quarter And it now extends well into 2022. Our view is this gap is likely to persist into calendar year 2022 given the long lead time it takes to add supply in the industry plus just the broad strength of the demand.

Speaker 2

Yes. I think the second part of that question, Vivek, just a little bit of color. So we're layering in investments in CapEx And we need this capital now to meet the demand, but also in the longer term, we're very, very Optimistic about the tailwinds in right across our business from automation to electrification, connectivity and so on and so forth. So The outlook we've just given you is supply feasible and it is certainly the governor, I would say, right now on revenue for the company.

Speaker 4

Thank you.

Speaker 1

Thanks, Vivek. Go to the next question please.

Operator

Your next question is from Tore Svanberg of Stifel.

Speaker 5

Yes, thank you. I was hoping you could just elaborate a little bit more on the Maxim merger. You said that you'd still expect it to Happened within the time frame you had announced. I believe you had said the summer of 2021. Correct me if that was wrong.

Speaker 5

And related to that is, again, China the only remaining obstacle before you can close the deal?

Speaker 2

Thanks, Tore. So look, our confidence of the closing remains unchanged. And as we said in the prepared comments, our discussions with the Chinese regulatory authorities have been productive positive and productive, and we're working towards closing Within the initial timeframe. So China is the only outstanding regulatory approval need at this point in time. And I will remind you as well that All of the other regulatory bodies across the globe have approved our deal without condition, without remedies.

Speaker 5

Great. Thank you for that Vince.

Speaker 1

Thanks, Tore. Go to next question.

Operator

Your next question is from John Pitzer of Credit Suisse.

Speaker 6

Yes, good morning guys. Thanks for letting me ask the question. Vince, I wanted to pick up on your prepared comments about your industrial business. You're now going in the 3rd consecutive quarter of sort of record revenues in that business. You have to go back to, I think, April of 2018 before which was the last peak.

Speaker 6

But the year to date fiscal year to date that business is up about 30% year over year. And for a lot of investors, they're concerned that perhaps That represents more cyclical excess than sort of structural sustainability. And so I'm kind of curious as you break apart your industrial business, what do you think is being driven by The cycle versus stuff that's a little bit more sustainable.

Speaker 2

Yes. Thanks, John. I think, 1st and foremost, I'd like to remind everybody that ADI's industrial business is built on a foundation of many Individual market segments like automation, instrumentation that I talked about, healthcare, our space business And energy as it moves to renewables and charging infrastructure, for example, the whole need for grid efficiency and stabilization. So that's the foundation. It's a highly diverse business.

Speaker 2

We've got many tens of thousands of customers. And the life cycles in the business are kind of 15 years plus. And it's a very, very, very sticky set of sockets that we've got. Those of you who followed ADI for a long time will remember we about a decade ago, we fairly dramatically increased our focus in terms R and D, go to market activities, in ensuring that we could really grow that business. And the last few years have shown that we've been getting market share across the board there.

Speaker 2

So I think there's a certain amount, John, of There were a lot of programs that were stalled last year, so there's a certain amount of catch up there. But I do think that The breadth of the portfolio that we now have, the investments we've been making in terms of customer engagement, R and D activities And the secular trends that we've got, all these concurrent secular drivers are propelling that business beyond the market.

Speaker 1

Yes. I'll add one thing, John. You're right. If you said in our prepared comments, all the markets did increase double digits year over year. Of our 6 applications that Vince outlined, 2 are still below pre peak levels.

Speaker 1

We do think fiscal 2021 marks a record for all of them and we don't see why they won't hit another record in 2022, given the strong trends that Vince outlined. And with that, we'll go to our next question.

Operator

Your next question is from Stacy Rasgon of Bernstein Research.

Speaker 7

Hi, guys. Thanks for taking my questions. I had a question on the pricing environment. Given the just the tight supply and the shortage situation, We're starting to see some hints of some of your peers starting to take prices up. And I was curious what you guys are seeing in the pricing environment.

Speaker 7

Are Seeing that, are you able to actually do that? Are you treating your own pricing environment more conservatively?

Speaker 3

Yes. Thanks for the question, Stacy. So I would say that for the results that we printed, pricing is on net neutral. We're passing on cost increase, so that we're not impacting margins, But we've made a decision not to take advantage of our customers by structurally increasing pricing in this environment. Our long term model is unchanged and that is 70% plus.

Speaker 3

So the goal really is to Drive the revenue growth and make the trade offs that are necessary to drive that revenue growth focusing on delivering on the op margin and the free cash flow. So you'll see on a if you back out the IP license impact, we had a 71.2% gross margin in the 3rd quarter. And while we don't guide to gross margins, if you impute it from the guide that we give you, we gave you, Q4 is going to be a probably be a record for ADI in terms of gross margins.

Speaker 7

Got it. That's helpful. Thank you.

Speaker 1

Thanks, Stacy. Next question?

Operator

Your next question is from Toshiya Hari of Goldman Sachs.

Speaker 8

Hi, guys. Good morning. Thanks for taking the question. I wanted to ask about the comms business. Vince, you talked about 2022 being a growth year, and you talked about North America, Europe and Korea Being the key drivers for you guys going forward.

Speaker 8

How should we think about the shape of the recovery going forward? Is it going to be A fairly gradual recovery, could it be sort of a V shaped recovery over the next couple of quarters? And When you talk about return to growth in 2022, what sort of implicit assumptions are you making for China? Thank you.

Speaker 3

Okay, thanks. We're going to split that into 2. Let me just quickly talk about what happened and then I'll let Vince speak to kind of more broadly. So in the Q2, as a reminder, we did call the bottom on comps and said that we would grow on a sequential basis. We delivered that in Q3 and we are on track to deliver that for the Q4.

Speaker 3

So we believe we're really well positioned for strong growth into fiscal 2022. And between kind of the 2 sub segments there, Wire demand remains strong and we expect that to continue as both carriers and data centers continue to do the upgrade to their networks. And wireless, while it's always lumpy, growth in the past quarter was really driven by rest of the world, North America. We do think China bottomed in the Q3, so that should also represent some growth momentum for us as we go forward. And then I'll hand off to Vince to kind of speak more broadly about what we're seeing.

Speaker 3

Yes. So, Toshi, why do I have the confidence I

Speaker 2

have about 2022 being a strong growth year? So, maybe I can unpack that a bit for you. So, I think our comms revenue mix is seeing a benefit from the rest of world Beginning to emerge in 5 gs. So today, rest of world outside of China is 3x in terms of TAM. So that's number 1.

Speaker 2

If you look at then the geographies, North America, the auction, the C band auction is complete. Revenue is really just beginning here. And all the indications are that 5 gs revenue here will accelerate in 2022 and indeed beyond. Europe, I would say a step behind, but we're beginning to see good signs of life in that region. Yes, we've talked several times on various calls here about Ora and what's happening, but we're beginning to see revenue.

Speaker 2

We've talked before about Rakuten in Japan. That business continues to accelerate. And European carriers are looking right now to make it also an important part of their And we happen to be very well represented in their systems. And I'm also having conversations with customers You know the characteristics of flexibility, scalability, quicker time to market, cost savings and so on, is enabling private networks to be configured in factory environments, for example. So that's all still on the come, but

Speaker 1

Thanks, Cecilia. We'll go to the next question.

Operator

Your next question is from Ambrish Srivastava of BMO.

Speaker 9

Hi, thank you. Good morning, folks. I had a question on Maxim. And so my investment case for ADI has not been Maxim. And you have a very sticky shareholder base who have been with you before Maxim.

Speaker 9

But I get this question a lot. So I think it's a fair question to ask. If Maxim was not to go through, how do you think about capital allocation? Do you then go back to the playbook and say you would be Changing how you think about capital allocation or you would continue on the M and A path and look at other opportunities? Thank you.

Speaker 3

So, let's do this. Let me just remind everyone what the capital allocation policy is today, because I think that we have a very shareholder friendly capital allocation policy, which is that first call is really to invest in the business and that although not a Traditional definition, we do consider that organically kind of how we spend our R and D and that is heavily pointed towards the B2B markets. And then we think about inorganic really more as it helps the technology portfolio or it finds other ways to help us become more important to customers. But our commitment is to return 100 percent of free cash flow to customers. So we are we're at a 1.2 Despite the confidence that we have in the Maxim deal closing in an environment where that was not to have happened, would not look for us to really We'll be changing that view of having all our incremental free cash flow go into the return to shareholders either through buyback or through dividend.

Speaker 3

And as a reminder, I think over the past 3 years, we've averaged about a 10% increase in our dividend. So a very healthy commitment For our fixed income focused investors as well as the repo. I think we're on track this year for an all time high in terms of our repo activity. Back to the M and A, I'm going to hand that one to Vince to talk more about the alternatives there.

Speaker 2

Yes. So as you know, you've Over the years, we've always acquired very, very high quality assets and that will remain to be our view on things in the years ahead as well.

Speaker 9

Okay. Thank you.

Speaker 1

Thanks, Ambrish. Next caller?

Operator

Your next question is from Blayne Curtis of Barclays.

Speaker 10

Hey, good morning. Thanks for taking

Speaker 3

the question. Just curious on if you look

Speaker 10

at the B2B guidance, it's fairly flattish, I think, on the bookings. Is that gap really supply? Or are you starting to see demand tends to start to settle out at this level?

Speaker 3

That is purely supply. I think I mentioned in maybe the first or second question that book to bill for the quarter telephone was over 1.2 and that's across all markets. So we are seeing very strong interest in products across all markets. Mike indicated in one of the other Q and As that we're likely to have the industrial markets hit an all time high collectively telephone for fiscal year 2021 and expect that to continue to be on track to another record In FY 2022, so very much a supply constrained environment.

Speaker 2

Thanks. And I just wanted

Speaker 10

to follow-up on the gross margin, Prashant. So You indicated the gross margin would be up, and I think that's with the license impact as well. So you saw benefit from the linear. Curious how much more there is of that as a benefit and then maybe just talk about utilizations and other pulls on gross margin as you look over the next couple of quarters.

Speaker 3

Yes. So I presume you're asking kind of with respect to the guide. So in the 4th quarter And we're not guiding gross margins, but we're pretty confident we're going to hit a new record for gross margins that is coming from the LTC synergies. I think we hit the final phase of closing down the manufacturing operation in California. We still have an opportunity As soon as the supply environment allows us to get some additional savings out of Asia because we haven't closed that facility yet because we have no time to ship the tools to their new location.

Speaker 3

Utilization is also going to provide some level of increase. I would say mix is a bit of a headwind into the 4th quarter and 4th quarters telephone. We typically have some level of challenges in terms of holiday shutdown. So We need to manage through that, which can provide a little bit of headwind for us as well, that we got to work ourselves around. The foundation for our gross margins being where they are is number 1, innovation.

Speaker 3

We produce the best performing

Speaker 2

solutions between the physical and digital worlds and we get a premium. We get very, very well paid for doing that. Also the diversity of our product and customer portfolios, 125,000 customers I think I've said this before, 85% of our sales come from products that individually contribute less than 0.1 percent and the pricing environment as we said earlier on the call has been very, very stable, very steady.

Speaker 1

Thanks, Blayne, for that 2 part, 1 part question. We'll go to the next caller, please.

Operator

Your next question is from Harlan Sur of JPMorgan.

Speaker 11

Good morning and congratulations on the strong results and quarterly execution. Channel inventories continue to remain below your target 7 to 8 week range. You guys can also monitor direct customer inventories, at least for those that are on consignment programs. Any signs that customers have been able to build inventories? I mean, it seems unlikely because the entire value chain appears to be sort of telephone from a chip supply perspective, but wanted to get your views.

Speaker 11

And when do you believe customers will be in a position to start to build back inventories. I'm assuming the soonest is sometime in calendar 2022, but wanted to get your views as well. Yes.

Speaker 3

Thank you, Harlan. So I'll take that. So first a couple of comments on inventory. Inventory on our balance sheet is up year over year and sequentially, but that is exclusively due to raw materials and WIP. We can't keep the finished good in stock.

Speaker 3

So when it's produced, it either goes to the customer or it goes into the channel and then it goes out of the channel immediately. So we are struggling to build finished goods inventory both in ADI Warehouses as well as in our channel partners. Roughly, well, let's say a significant amount of our auto business is on consignment, which gives us good visibility for that direct business as to what's happening there. And that is also we We're seeing that demand kind of pull through pretty quickly and no opportunity for those auto customers to build the inventory within their warehouses, That's on our books. So it's still very much hand to mouth and the focus that we have as we've talked throughout this call and in the prepared remarks is on increasing our capacity or ability to supply by making some significant investments in capacity.

Speaker 3

I don't see this balance coming into some sense of normalcy until sometime in calendar year 2022.

Speaker 11

Great. Thank you.

Speaker 1

All right. We have our last question, please.

Operator

Your next question is from William Stein of Truist Securities.

Speaker 5

Great. Thanks for taking my question. Prashanth, you just talked about inventory not coming to some level of ability to rebuild anything until sometime in 2022. You talked about This supply debate, the balance lasting well into 2022, 1.2 book to bill, etcetera. When we look out to Next quarter, the January quarter, typically, that's a sequentially down quarter in automotive, industrial, consumer and for the whole business as well.

Speaker 5

But given these supply constraints and this very significant backlog, should we think about that seasonality as telephone. Yes. I think the way to

Speaker 3

Yes. I think the way to answer that would be say that seasonality in Today's environment is a bit of a meaningless concept, because revenue growth is really dictated completely by supply. So the print for Q1 is likely to be driven by what more capacity we can get online Between the 4th over the Q4 to allow us again, now we've got a couple of things we need to work through in the Q1 that won't that would be A little bit of an offset in first, there's the holiday season. So we do need to adjust factory capacity for that. And Consumer, Q4 is kind of the key quarter for consumer.

Speaker 3

That's when they build for the holiday season. So There's always going to be a little bit of seasonality impact for consumer just because of the they don't need it in the Q1 or Our fiscal Q1 as that is the holiday period. So maybe that's kind of where I'll We'll finish. Mike, anything you want to

Speaker 1

add to that? Yes, sure. So I guess if you look back, you're right. I mean, we talked about seasonality not being as meaningful now, but just give you a bit of a history lesson. If you look past over the 10 years.

Speaker 1

You're right. Our B2B markets, I would say in Good Times, which I would call now Good Times, is usually flat to down slightly in 1Q. And consumer, I would say, in good and even kind of normal times, it's down kind of 5% or maybe more in 1Q. And with that, I want to thank everyone for joining the call this morning. A copy of the transcript will be available on our website and all reconciliations and additional information can also be found in the quarterly results section.

Speaker 1

Thanks again for joining and your continued interest in ADI.

Operator

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

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Analog Devices Q3 2021
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