Chief Executive Officer and Chair of the Board of Directors at Analog Devices
Thank you, Mike, and very good morning to you all. Well, I'm very pleased to report that ADI delivered another quarter of record revenue, profitability and earnings driven by continued insatiable demand for our products, strong operational execution and accelerated synergy capture. Moreover amidst a dynamic macro environment, we're operating from a position of remarkable strength supported by our record backlog, robust bookings and ongoing capacity expansions, which position us favorably as we enter the second half.
Now moving to a summary of our results, revenue was $2.97 billion above the high end of our outlook, and up 28% year-over-year on a pro form basis. Strength was broad based with all segments up double digits year-over-year. Impressively, adjusted gross margin expanded to 74% and operating margin to 50%, adjusted EPS was $2.40 exceeding the high end of outlook and increasing over 50% from the year ago period.
Overall, I'm very excited with our performance and our teams' outstanding execution. Today, I'd like to reinforce what we shared at our Investor Day, around how our markets are evolving, and how we're investing to solve more of our customers' problems while also improving on our business model. That's both rich with growth opportunities and indeed resiliency.
The next wave in the evolution of the ICT sector is the nascent intelligent edge revolution. It'll be characterized by ubiquitous sensing, hyperscale computing and pervasive connectivity, pushing processing, and intelligence closer to the edge. Semiconductors are the bedrock enabling this next wave and ADI, where data is born is at the center of this revolution.
At our core, we are an innovation-driven enterprise. Over the last decade, through both robust organic investments and strategic M&A, we've built the industry's broadest and highest performance analog mix signal and power portfolio. Our offering span from microwave to bits, nanowatts to kilowatts, sensor to cloud, and increasingly from components to subsystems, our vast arsenal of technologies, along with the deep level of engagement and support we provide our customers has earned us the number one positions in analog mix signal, RF and high-performance power. This coupled with our focus on customer success, awards ADI with an innovation premium that is reflected in our ASPs that are more than three times the industry average and also industry-leading gross margins.
The growing scope of our customer's products is dramatically expanding and complexity and pressuring their product development teams and innovation cycles. To meet these challenges and deliver the next waves of disruptive innovations, we're investing over $1.6 billion in R&D annually. These investments strengthen our broad market franchise and enable us to expand our SAM in vertical applications for more complete solutions are necessary. We achieved this by integrating our core analog technologies with increasing levels of digital algorithms and software.
Now let's look at how our technology is intersecting with our markets. Industries like transportation, energy, telecoms, manufacturing, and healthcare are prioritizing digitalization. This is driving new generations of applications and fueling a host of concurrent secular growth trends. And I'd like to touch on just a few now.
Starting with automotive, here ADI is the market leader in battery management systems, for example, for EVs. Our battery management systems or BMS solutions offer customers the highest levels of accuracy, reliability, safety and security. Our wireless BMS solution offers all the benefits of wired, but also enables rapid battery packed configurability and cost effective scaling of our customer's EV fleets. This innovative solution continues to gain traction in the market and adds to our content per system, by up to two times.
Moving to telecommunications where ADI is the market leader in radio signal chain for 5G with a majority share across the ecosystem. Our latest generation transceiver includes a fully integrated digital front-end and grows our SAM by two times. This innovative radio architecture of reducing system cost and weight and improves power efficiency. Further, the flexibility of these software-defined solutions allows them to be used across traditional 5G networks, as well as in emerging Open-RAN and LEO satellite networks.
Lastly, healthcare, we have a number one position with dominant share in medical imaging, for example. Subsystems like our Photon-to-Bits module are used by the top CT players in the world. Our solution delivers the highest fidelity images while decreasing radiation dosage. And in the process, it allows us to capture four times the sun compared to offering just components alone.
In addition to expanding our innovation edge across these secular trends to amplify growth, the maximum combination creates $1 billion revenue synergy opportunity for us over the next five years. The first opportunity arises from customer cross-selling, leveraging our complimentary relationships to pull through our extended portfolio. Second is fusing together the new product roadmaps of these two premier analog portfolios to push the boundaries of what's possible. And third is power management. Here, the combination with Maxim increases our breadth of power capabilities, creates a more cost competitive portfolio and adds to our engineering talent pool.
As a result, we unlock $4 billion of additional power SAM, and look to double our power revenue in the years ahead. The proliferation of the intelligent edge and our revenue synergy opportunity gives me great confidence that we can bend the growth curve upwards moving from our historical mid-single digits growth rate to our new model of 7% to 10%.
Now I'd like to speak a little to the unique resiliency of our business. The diversity of our portfolio is a source of great strength. We ship 75,000 product SKUs, which support thousands of applications to over 125,000 customers. Notably, 80% of our revenue is derived from products that individually contribute no more than 0.1% of total revenue. And the longevity of our products is unmatched, on average, our products of lifespans of a decade or more, effectively delivering recurring revenue streams for decades. As these characteristics that create a high barrier to entry and an enduring business model.
Finally, we utilize a geographically diverse hybrid manufacturing strategy to tame the complexity and fragmentation of the analog market. This strategy provides us with a broad array of technology and packaging necessary to create innovative solutions from seven nanometers to seven micrometers. At the same time, this model creates a diverse network of internal and external partners to best manage our operations through economic cycles.
As we mentioned at our Investor Day, we're investing in our internal manufacturing operations to build a more robust and cost effective model. To that end, we're doubling the capacity of our internal factories and adding significant capital to our product test operations. These investments will grow our output this year and into 2023 and increase our swing capacity across our network to over 70% of revenue.
So in closing, ADI is a leader in innovating at the edge, and I believe that our best days are still ahead of us as we drive increased value for our customers, shareholders, and society. And with that, I'm going to pass it over to Prashanth, who take you through the financial detail.