Analog Devices, Inc.
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ITEM 1. BUSINESS
Company Overview, Strategy and Mission
Analog Devices, Inc. (we, Analog Devices or the Company) is a global semiconductor leader dedicated to solving our customers’ most complex engineering challenges. We deliver innovations that connect technology to human breakthroughs and play a critical role at the intersection of the physical and digital worlds by providing the building blocks to sense, measure, interpret, connect and power. We design, manufacture, test and market a broad portfolio of solutions, including integrated circuits (ICs), software and subsystems that leverage high-performance analog, mixed-signal and digital signal processing technologies. Our comprehensive product portfolio, deep domain expertise and advanced manufacturing capabilities extend across high-performance precision and high-speed mixed-signal, power management and processing technologies – including data converters, amplifiers, power management, radio frequency (RF) ICs, edge processors and other sensors.
The Intelligent Edge is characterized by ubiquitous sensing, hyper-scale and edge computing, artificial intelligence (AI) and pervasive connectivity. These technological trends drive new generations of applications that expand the demand for Analog Devices’ high-performance analog, mixed-signal, power and RF ICs. We have positioned our business to capitalize on these long-term growth opportunities and to deliver innovative solutions across industries. Central to our strategy is our focus on solving challenges that our customers face across the most impactful application areas. This strategy is built around the following key priorities, which we believe will continue to drive our long-term success:
•Efficient use of capital. Research and development (R&D) is critical to continuing our cycle of innovation, driven by a diverse array of engineering talent who “engineer good” for our planet and society. We are committed to realizing targeted shareholder value creation from acquisitions to complement our R&D and drive long-term value creation. Through the development of cutting-edge innovations and our ability to solve difficult problems across a broad array of applications, we generate significant cash flow and are committed to delivering strong shareholder returns.
•Deepening customer-centricity. Close customer relationships influence all aspects of our business: from our broad range of product portfolios and application expertise to manufacturing capabilities in high-performance power management and precision and high-speed signal processing technologies. We believe that our engineering talent continues to be an important competitive differentiator in the semiconductor space that will enable us to deepen our relationships with customers. We strive to be the destination for the world’s best engineering talent, with a team of approximately 13,000 engineers. Together, our products and our engineering talent enable us to partner with our customers, leveraging our analog domain expertise and the full breadth of our technology capabilities to develop complete and innovative solutions.
•Capitalizing on secular trends. We are positioned to capitalize on critical long-term growth trends to drive advancements in digitized factories, mobility and digital healthcare, combat climate change and reliably connect humans and the world. We are well aligned with the key B2B markets driving the increase in data at the Intelligent Edge and will continue to be a critical partner in the collection, creation and communication of our customers’ edge data. In addition, we incorporate AI capabilities across our technologies, business operations, products and services to enhance performance and drive smarter, more efficient solutions.
We were incorporated in Massachusetts in 1965 with our corporate headquarters near Boston in Wilmington, Massachusetts. We have manufacturing facilities primarily in the United States, Ireland and Southeast Asia. Our common stock is listed on the Nasdaq Global Select Market under the symbol ADI and is included in the Standard & Poor’s 500 Index. Our fiscal year is the 52-week or 53-week period ending on the Saturday closest to the last day in October; November 1, 2025 (fiscal 2025) was a 52-week fiscal period, while the fiscal year ended November 2, 2024 (fiscal 2024) was a 53-week fiscal period and the fiscal year ended October 28, 2023 (fiscal 2023) was a 52-week fiscal period. The additional week in fiscal 2024 was included in the first quarter ended February 3, 2024. Therefore, fiscal 2025 and fiscal 2023 include one less week of operations as compared to fiscal 2024.
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Available Information
We maintain a website with the address www.analog.com. We make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (including exhibits), and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission (SEC). We also make available on our website our by-laws, corporate governance guidelines, the charters for the committees of our Board of Directors, our code of business conduct and ethics, which applies to our directors, officers and employees, and other governance documents. Such information is available in print and free of charge to any shareholder of Analog Devices who requests it. In addition, we intend to disclose on our website any amendments to, or waivers from, our code of business conduct and ethics that are required to be publicly disclosed pursuant to rules of the SEC or Nasdaq.
We have included our website address in this Annual Report on Form 10-K as an inactive textual reference. We are not including the information contained on our website as a part of, or incorporating it by reference into, this Annual Report on Form 10-K.
Products
Semiconductor components are the building blocks used in electronic systems and equipment. These components are classified as either discrete devices, such as individual transistors, or as ICs, in which a number of transistors and other elements are combined to form a more complicated electronic circuit.
Our ICs are designed to address a wide range of real-world signal processing applications. We sell our ICs to customers worldwide, many of whom use products spanning our core technologies in a wide range of applications. Our IC product portfolio includes both general-purpose products used by a broad range of customers and applications, as well as application-specific products designed for specific target markets. By using readily available, high-performance, general-purpose products in their systems, our customers can reduce the time they need to bring new products to market. Given the high cost of developing more customized ICs, our standard products often provide a cost-effective solution for many low to medium volume applications. Our analog ICs monitor, condition, amplify or transform continuous analog signals associated with physical properties, such as temperature, pressure, weight, light, sound or motion, and play an important role in bridging real world phenomena to a variety of electronic systems. Our analog ICs also provide voltage regulation and power control to electronic systems.
We also work with customers to design application-specific solutions. We begin with our existing core technologies, which leverage our analog and mixed signal, power management, RF and microwave, edge processors and other sensors, and devise solutions that more closely meet the needs of a specific customer or group of customers. In certain cases, because we have already developed the core technology platform for our general-purpose products, we can create application-specific solutions quickly and efficiently.
Our analog and mixed-signal IC technology have been the foundation of our business for six decades, and we are one of the world’s largest suppliers of high-performance analog ICs. Our analog signal processing ICs are primarily high-performance devices, offering higher dynamic range, greater bandwidth and other enhanced features. We believe that the principal advantages these products have as compared to competitors’ products include higher accuracy, higher speed, smaller size, lower power consumption and fewer components, resulting in improved performance and reliability. Our product portfolio includes several thousand analog ICs, many of which can have several hundred end customers. Our analog ICs typically have long product life cycles. Our customers include original equipment manufacturers (OEMs) and customers who build electronic subsystems for integration into larger systems.
We continue to expand our capabilities in software, digital platforms and AI to support the evolving needs of our customers and markets. These efforts are intended to enhance system-level performance, improve design efficiency, reduce complexity and help customers accelerate time to market for their products and solutions. Our strategic goal is to bridge the domains of analog and mixed-signal, digital and embedded and AI and software technologies to enable intelligent systems that can sense, process and respond to real-world conditions. This integrated approach supports the development of differentiated solutions across industrial, automotive, communications, consumer and healthcare applications.
Our product offerings include more than 75,000 stock keeping units (SKUs) that can be aggregated into the following general categories:
•Analog and Mixed Signal—We are a leading supplier of data converter products. Data converters translate real-world analog signals into digital data and also translate digital data into analog signals. Data converters remain our largest and most diverse product family and an area where we are continuously innovating to enable our customers to redefine and differentiate their products. Our converter products combine sampling rates and accuracy with the low noise, power, price and small package size required by industrial, automotive, consumer and communications electronics.
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•Power Management & Reference—Power management and reference products, which include functions such as power conversion, driver monitoring, sequencing and energy management, provide efficient solutions for power management and conversion applications in the automotive, communications, industrial and high-end consumer markets. Our high-performance power ICs include powerful performance, integration and software design simulation tools to provide fast and accurate power supply designs.
•Amplifiers/RF and Microwave—We are also a leading supplier of high-performance amplifiers which are used to condition analog signals. High performance amplifiers emphasize the performance dimensions of speed and precision. Within this product portfolio we provide precision, instrumentation, high-speed, intermediate frequency/RF/microwave, broadband and other amplifiers. Our analog product line also includes a broad portfolio of high-performance RF and microwave ICs covering the entire RF signal chain. Our high-performance RF and microwave ICs support the high-performance requirements of cellular infrastructure and a broad range of applications in our target markets, including instrumentation, aerospace and automotive.
•Sensors & Actuators—Our analog technology portfolio is comprised of sensor and actuator products, including products based on micro-electro-mechanical systems (MEMS) technology. MEMS technology enables us to build extremely small sensors that incorporate an electromechanical structure and the supporting analog circuitry for conditioning signals obtained from the sensing element. Our MEMS product portfolio includes accelerometers used to sense acceleration, gyroscopes used to sense rotation, inertial measurement units used to sense multiple degrees of freedom combining multiple sensing types along multiple axes, and broadband switches suitable for radio and instrument systems. We offer other high-performance sensors, from temperature to magnetic fields, that are deployed in a variety of systems. In addition to sensor products, our other analog product category includes isolators that enable designers to implement isolation in designs without the cost, size, power, performance and reliability constraints found with optocouplers.
•Digital Signal Processing and System Products (DSPs)—DSPs are optimized for high-speed numeric calculations, which are essential for instantaneous, or real-time, processing of digital data generated, in most cases, from analog to digital signal conversion. Our DSPs are designed to be fully programmable and to efficiently execute specialized software programs, or algorithms, associated with processing digitized real-time, real-world data. Programmable DSPs are designed to provide the flexibility to modify the device’s function quickly and inexpensively using software. Our general-purpose DSP IC customers typically write their own algorithms using software development tools provided by us and third-party suppliers. Our DSPs are designed in families of products that share common architectures and therefore can execute the same software across a range of products.
•Interface—Includes general purpose analog ICs whose primary function is to modify or shape the signal in order to ensure signal integrity for transmission over a distance through a physical medium such as a wire, cable, waveguide or tracks within a printed circuit board. These include devices that shape the signal for transmission over the medium or reconstruct the received signal after transmission to recover the intended signal integrity.
•Software, Digital Platforms and Artificial Intelligence—As part of our evolution from a component supplier to a full-system and solutions provider, we recently introduced an upgrade to our open-source embedded development platform, CodeFusion Studio 2.0, designed to support embedded system design through integrated workflows for signal processing, edge computing and connectivity. CodeFusion Studio 2.0 facilitates prototyping and deployment of applications on ADI platforms and is intended to reduce development time and improve system integration. In fiscal 2025, we also launched Power Studio, a digital simulation and design ecosystem integrating new system-level and IC-level design capabilities into a single product family. Together, the Power Studio family of products is designed to enable faster time to market by streamlining power management design and optimization. These platforms are part of our broader Physical Intelligence vision, which seeks to leverage our deep expertise in electro-physical systems to develop and fine-tune foundational AI models that can reason about and interact with the real world. This initiative integrates signal, power, sensing, time-series sampling, actuation and more to support autonomous operation and enhanced system responsiveness. These software and AI-driven capabilities complement our existing product portfolio and support our strategy to deliver differentiated solutions that address complex customer requirements.
Sales Channel
We sell our products globally through a direct sales force, third-party distributors, independent sales representatives and via our website. We have direct sales offices, sales representatives and/or distributors in approximately 50 countries. We support our worldwide sales efforts through our website and with extensive promotional programs that include editorial coverage and paid advertising in online and printed trade publications, webinars, social media and communities, promotional and training videos, direct mail programs, technical seminars and participation in trade shows. We publish, share and distribute technical content such as data sheets, application guides and catalogs. We maintain a staff of field application engineers who aid
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customers in incorporating our products into their products. In addition, we offer a variety of web-based tools that ease product selection and aid in the design process for our customers.
We believe distributors provide a cost-effective means of reaching a broad range of customers while providing efficient logistics services. From time to time, we may add or terminate distributors in specific geographies, or move customers to a direct support or fulfillment model as we deem appropriate given our strategies, the level of distributor business activity and distributor performance and financial condition.
These distributors typically maintain an inventory of our products. Some of them also sell products that compete with our products, including those for which we are an alternate source. We make sales to distributors under agreements that allow certain distributors to receive price adjustment credits and to return qualifying products for credit, typically as determined by us, in order to reduce the amounts of slow-moving, discontinued or obsolete product from their inventory. These agreements limit such returns to a certain percentage of our shipments to that distributor during the prior quarter. In addition, certain distributors are allowed to return unsold products if we terminate the relationship with the distributor. Additional information relating to our revenue and customer concentration is set forth in Note 2l, Concentrations of Risk; Note 2n, Revenue Recognition; and Note 4, Industry, Segment and Geographic Information, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.
We typically do not have long-term sales contracts with our customers. In some of our markets where end-user demand may be particularly volatile and difficult to predict, some customers place orders that require us to manufacture product and have it available for shipment, even though the customer is unwilling to make a binding commitment to purchase all, or even any, of the product. In other instances, we manufacture product based on forecasts of customer demand. As a result, we may incur inventory and manufacturing costs in advance of anticipated sales and are subject to the risk of cancellation of orders leading to a sharp reduction of sales and backlog. Further, those orders or forecasts may be for products that meet the customer’s unique requirements such that those canceled orders would result in an inventory of unsaleable products, causing potential inventory write-offs.
Markets
The breakdown of our annual revenue by end market is set out in the table below:
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (all tabular amounts in thousands except per share amounts)
The following discussion includes results of operations and financial condition for the fiscal year ended November 1, 2025 (fiscal 2025) and the fiscal year ended November 2, 2024 (fiscal 2024) and year-over-year comparisons between fiscal 2025 and fiscal 2024. For discussion on results of operations and financial condition for fiscal 2024 and the fiscal year ended October 28, 2023 (fiscal 2023) and year-over-year comparisons between fiscal 2024 and fiscal 2023, please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for fiscal 2024 filed with the Securities and Exchange Commission on November 26, 2024. Our fiscal year is the 52-week or 53-week period ending on the Saturday closest to the last day in October. Fiscal 2025 was a 52-week fiscal period, while fiscal 2024 was a 53-week fiscal period. The additional week in fiscal 2024 was included in the first quarter ended February 3, 2024. Therefore, fiscal 2025 includes one less week of operations as compared to fiscal 2024.
Results of Operations
Overview
| Fiscal Year | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||
| Revenue | $ | 11,019,707 | $ | 9,427,157 | $ | 1,592,550 | 17 | % | |||||||||||||||||||||||||
| Gross margin % | 61.5 | % | 57.1 | % | |||||||||||||||||||||||||||||
| Net income | $ | 2,267,342 | $ | 1,635,273 | $ | 632,069 | 39 | % | |||||||||||||||||||||||||
| Net income as a % of revenue | 20.6 | % | 17.3 | % | |||||||||||||||||||||||||||||
| Diluted EPS | $ | 4.56 | $ | 3.28 | $ | 1.28 | 39 | % | |||||||||||||||||||||||||
Revenue Trends by End Market
The following table summarizes revenue by end market. The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the “sold to” customer information, the “ship to” customer information and the end customer product or application into which our product will be incorporated. As data systems for capturing and tracking this data and our methodology evolves and improves, the categorization of products by end market can vary over time. When this occurs, we reclassify revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market.
Fiscal 2025 | Fiscal 2024 | |||||||||||||||||||||||||||||||||||||||
| Revenue | % of Total Revenue (1) | Y/Y% Change | Revenue | % of Total Revenue (1) | ||||||||||||||||||||||||||||||||||||
| Industrial | $ | 4,929,409 | 45 | % | 15 | % | $ | 4,290,324 | 46 | % | ||||||||||||||||||||||||||||||
| Automotive | 3,277,865 | 30 | % | 16 | % | 2,837,522 | 30 | % | ||||||||||||||||||||||||||||||||
| Consumer | 1,434,568 | 13 | % | 19 | % | 1,207,880 | 13 | % | ||||||||||||||||||||||||||||||||
| Communications | 1,377,865 | 13 | % | 26 | % | 1,091,431 | 12 | % | ||||||||||||||||||||||||||||||||
| Total Revenue | $ | 11,019,707 | 100 | % | 17 | % | $ | 9,427,157 | 100 | % | ||||||||||||||||||||||||||||||
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(1)The sum of the individual percentages may not equal the total due to rounding.
Revenue increased 17% in fiscal 2025 as compared to fiscal 2024 as a result of broad-based increase in demand for our products. In addition to increased demand, the increase in the Industrial end market was primarily due to customer inventory balances normalizing and growth in the test equipment and aerospace and defense sub-markets. In the Automotive end market, the increase was primarily driven by increases from connectivity solutions. The increase in the Consumer end market was primarily related to portable consumer products and the increase in the Communications end market was primarily driven by growth in the wireline sub-market from data center infrastructure expansion in support of AI applications. These increases were partially offset by the impact of an additional week of operations in fiscal 2024 as compared to fiscal 2025.
Revenue by Sales Channel
The following table summarizes revenue by sales channel. We sell our products globally through a direct sales force, third-party distributors, independent sales representatives and via our website. Distributors are customers that buy products with the intention of reselling them. Direct customers are non-distributor customers and consist primarily of original equipment manufacturers (OEMs). Other customers include the U.S. government, government prime contractors and certain commercial
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customers for which revenue is recorded over time.
Fiscal 2025 | Fiscal 2024 | |||||||||||||||||||||||||||||
| Revenue | % of Total Revenue (1) | Revenue | % of Total Revenue (1) | |||||||||||||||||||||||||||
| Distributors | $ | 6,144,819 | 56 | % | $ | 5,505,779 | 58 | % | ||||||||||||||||||||||
| Direct customers | 4,718,993 | 43 | % | 3,772,945 | 40 | % | ||||||||||||||||||||||||
| Other | 155,895 | 1 | % | 148,433 | 2 | % | ||||||||||||||||||||||||
| Total Revenue | $ | 11,019,707 | 100 | % | $ | 9,427,157 | 100 | % | ||||||||||||||||||||||
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(1)The sum of the individual percentages may not equal the total due to rounding.
As indicated in the table above, the percentage of total revenue sold via each channel has remained relatively consistent in the periods presented but can fluctuate from time to time based on end market revenue trends. As a percentage of total revenue, the decrease in the distributor channel is primarily due to the decrease in the percentage of revenue from our Industrial end market.
Revenue Trends by Geographic Region
Geographic revenue information for fiscal 2025 and fiscal 2024 reflects the geographic location of the distributors or OEMs who purchased the Company’s products. This may differ from the geographic location of the end customers particularly in cases where a third-party contract manufacturer purchases the Company’s products through distributors.
| Fiscal Year | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change (1) | ||||||||||||||||||||||||||||||
| United States | $ | 3,238,145 | $ | 2,840,426 | $ | 397,719 | 14 | % | |||||||||||||||||||||||||
| Rest of North and South America | 162,470 | 62,318 | 100,152 | 161 | % | ||||||||||||||||||||||||||||
| Europe | 2,285,598 | 2,109,529 | 176,069 | 8 | % | ||||||||||||||||||||||||||||
| Japan | 989,916 | 1,085,631 | (95,715) | (9) | % | ||||||||||||||||||||||||||||
| China | 2,858,286 | 2,128,840 | 729,446 | 34 | % | ||||||||||||||||||||||||||||
| Rest of Asia | 1,485,292 | 1,200,413 | 284,879 | 24 | % | ||||||||||||||||||||||||||||
| Total Revenue | $ | 11,019,707 | $ | 9,427,157 | $ | 1,592,550 | 17 | % | |||||||||||||||||||||||||
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(1)The sum of the individual percentages may not equal the total due to rounding.
In all periods presented, the predominant regions comprising “Rest of North and South America” are Mexico and Canada; the predominant regions comprising “Europe” are Germany, the Netherlands, France and Israel; and the predominant regions comprising “Rest of Asia” are Taiwan, South Korea, Malaysia and Singapore.
Total revenue increased in fiscal 2025 as compared to fiscal 2024 in most regions due to broad-based demand increases as discussed above under the heading Revenue Trends by End Market.
Gross Margin
| Fiscal Year | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||
| Gross margin | $ | 6,773,478 | $ | 5,381,343 | $ | 1,392,135 | 26 | % | |||||||||||||||||||||||||
| Gross margin % | 61.5 | % | 57.1 | % | |||||||||||||||||||||||||||||
Gross margin percentage in fiscal 2025 increased by 440 basis points compared to fiscal 2024, primarily due to higher utilization of our factories due to increased customer demand as well as a decrease in amortization expense related to acquired intangible assets.
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Research and Development (R&D)
| Fiscal Year | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||
| R&D expenses | $ | 1,766,001 | $ | 1,487,863 | $ | 278,138 | 19 | % | |||||||||||||||||||||||||
| R&D expenses as a % of revenue | 16 | % | 16 | % | |||||||||||||||||||||||||||||
R&D expenses increased in fiscal 2025 as compared to fiscal 2024, primarily as a result of higher R&D employee related variable compensation expenses and higher salary and benefit expenses, partially offset by the impact of an additional week of operations in fiscal 2024 as compared to fiscal 2025.
R&D expenses as a percentage of revenue will fluctuate from year-to-year depending on the amount of revenue and the success of new product development efforts, which we view as critical to our future growth. We expect to continue the development of innovative technologies and processes for new products. We believe that a continued commitment to R&D is essential to maintain product leadership with our existing products as well as to provide innovative new product offerings.
Selling, Marketing, General and Administrative (SMG&A)
| Fiscal Year | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||
| SMG&A expenses | $ | 1,255,339 | $ | 1,068,640 | $ | 186,699 | 17 | % | |||||||||||||||||||||||||
| SMG&A expenses as a % of revenue | 11 | % | 11 | % | |||||||||||||||||||||||||||||
SMG&A expenses increased in fiscal 2025 as compared to fiscal 2024, primarily as a result of higher SMG&A employee related variable compensation expenses and salary and benefit expenses, partially offset by an additional week of operations in fiscal 2024 as compared to fiscal 2025.
Amortization of Intangibles
| Fiscal Year | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||
| Amortization expenses | $ | 749,662 | $ | 754,784 | $ | (5,122) | (1) | % | |||||||||||||||||||||||||
| Amortization expenses as a % of revenue | 7 | % | 8 | % | |||||||||||||||||||||||||||||
Amortization expenses decreased in fiscal 2025 as compared to fiscal 2024, primarily as a result of a portion of our acquired intangible assets becoming fully amortized.
Special Charges, Net
| Fiscal Year | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||
| Special charges, net | $ | 69,980 | $ | 37,258 | $ | 32,722 | 88 | % | |||||||||||||||||||||||||
| Special charges, net as a % of revenue | 1 | % | — | % | |||||||||||||||||||||||||||||
Special charges, net increased in fiscal 2025 as compared to fiscal 2024, primarily due to increased charges related to our Global Repositioning Actions. See Note 5, Special Charges, Net, of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for more information.
Nonoperating Expense (Income)
| Fiscal Year | |||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||
Nonoperating expense (income) | $ | 220,384 | $ | 255,458 | $ | (35,074) | (14) | % | |||||||||||||||||
The year-over-year decrease in nonoperating expense in fiscal 2025 as compared to fiscal 2024 was primarily the result of higher interest income from higher cash, cash equivalents and short-term investments balances during fiscal 2025.
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Provision for Income Taxes
| Fiscal Year | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||
| Provision for income taxes | $ | 444,770 | $ | 142,067 | $ | 302,703 | 213 | % | |||||||||||||||||||||||||
| Effective income tax rate | 16.4 | % | 8.0 | % | |||||||||||||||||||||||||||||
Our effective tax rates for fiscal 2025 and fiscal 2024 were below the U.S. statutory rate of 21% due to lower statutory tax rates applicable to our operations in the foreign jurisdictions in which we earn income. For fiscal 2025 and fiscal 2024 our pretax income was primarily generated in Ireland at a tax rate of 12.5%. Our effective tax rate for fiscal 2025 was impacted by a net deferred tax expense of $153.8 million related to the remeasurement of our Global Intangible Low-Taxed Income related deferred tax assets and liabilities attributable to the passage of the One Big Beautiful Bill Act.
See Note 10, Income Taxes, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further discussion.
Net Income
| Fiscal Year | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||
| Net income | $ | 2,267,342 | $ | 1,635,273 | $ | 632,069 | 39 | % | |||||||||||||||||||||||||
| Net income, as a % of revenue | 20.6 | % | 17.3 | % | |||||||||||||||||||||||||||||
| Diluted EPS | $ | 4.56 | $ | 3.28 | $ | 1.28 | 39 | % | |||||||||||||||||||||||||
The increase in net income in fiscal 2025 as compared to fiscal 2024 was a result of a $899.7 million increase in operating income and a $35.1 million decrease in nonoperating expense, partially offset by a $302.7 million increase in provision for income taxes.
Liquidity and Capital Resources
At November 1, 2025, our principal source of liquidity was $3.7 billion of cash, cash equivalents and short-term investments, of which approximately $2.4 billion was held in the United States, with the balance held outside the United States in various foreign subsidiaries. We manage our worldwide cash requirements by, among other things, reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in the United States. We do not expect current regulatory restrictions or taxes on repatriation to have a material adverse effect on our overall liquidity, financial condition or results of operations. Our cash, cash equivalents and short-term investments consist of highly liquid investments, including money market funds and corporate and bank obligations. We maintain these balances with counterparties with high credit ratings and continually monitor the amount of credit exposure to any one issuer and diversify our investments in order to minimize our credit risk.
We believe that our existing sources of liquidity and cash expected to be generated from future operations, together with existing and anticipated available short- and long-term financing, will be sufficient to fund operations, capital expenditures, research and development efforts and dividend payments (if any) in the immediate future and for at least the next twelve months.
| Fiscal Year | |||||||||||||||
| 2025 | 2024 | ||||||||||||||
| Net cash provided by operating activities | $ | 4,812,202 | $ | 3,852,529 | |||||||||||
| Net cash provided by operating activities as a % of revenue | 44 | % | 41 | % | |||||||||||
Net cash used for investing activities | $ | (1,321,521) | $ | (1,104,858) | |||||||||||
| Net cash used for financing activities | $ | (2,982,617) | $ | (1,714,390) | |||||||||||
The following changes contributed to the net change in cash and cash equivalents from fiscal 2024 to fiscal 2025.
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Operating Activities
Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities. The increase in cash provided by operating activities during fiscal 2025 as compared to fiscal 2024 was primarily a result of higher net income adjusted for noncash items and changes in working capital.
Investing Activities
Investing cash flows generally consist of purchases of property, plant and equipment, available-for-sale investments and acquisitions of other businesses. The change in cash used for investing activities during fiscal 2025 as compared to fiscal 2024 was primarily the result of the net impact of purchases and maturities of available-for-sale investments, partially offset by a decrease in cash used for capital expenditures.
Financing Activities
Financing cash flows generally consist of payments of dividends to shareholders, repurchases of common stock, issuance and repayment of debt and proceeds from the sale of shares of common stock pursuant to employee equity incentive plans. The increase in cash used for financing activities during fiscal 2025 as compared to fiscal 2024 was primarily the result of increased common stock repurchases and dividend payments to shareholders, partially offset by the net proceeds from our debt obligations.
Working Capital
| Fiscal Year | |||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||
| Accounts receivable, net | $ | 1,436,075 | $ | 1,336,331 | $ | 99,744 | 7 | % | |||||||||||
Days sales outstanding (1) | 46 | 54 | |||||||||||||||||
| Inventory | $ | 1,656,323 | $ | 1,447,687 | $ | 208,636 | 14 | % | |||||||||||
Days cost of sales in inventory (1) | 133 | 139 | |||||||||||||||||
_______________________________________
(1)We use the average of the current year and prior year ending net accounts receivable and ending inventory balance in our calculation of days sales outstanding and days cost of sales in inventory, respectively.
The increase in accounts receivable for fiscal 2025 compared to fiscal 2024 was primarily the result of variations in the timing of collections and billings and increased revenue levels in the fourth quarter of fiscal 2025 as compared to the fourth quarter of fiscal 2024.
Inventory increased in fiscal 2025 as compared to fiscal 2024, primarily as a result of our efforts to balance manufacturing production, demand and inventory levels. Our inventory levels are impacted by our need to support forecasted sales demand and variations between those forecasts and actual demand.
Current liabilities increased to $3.2 billion at November 1, 2025 from $3.0 billion recorded at the end of fiscal 2024, primarily due to increases in accrued liabilities and income taxes payable, partially offset by a decrease in current debt.
Revolving Credit Facility
Our Fourth Amended and Restated Revolving Credit Agreement, dated as of April 11, 2025, with Bank of America N.A. as administrative agent and the other banks identified therein as lenders (the Revolving Credit Agreement) provides for a five year unsecured revolving credit facility in an aggregate principal amount not to exceed $3.0 billion (subject to certain terms and conditions).
We may borrow under the Revolving Credit Agreement in the future and use the proceeds for repayment of existing indebtedness, stock repurchases, acquisitions, capital expenditures, working capital and other lawful corporate purposes. The terms of the Revolving Credit Agreement impose restrictions on our ability to undertake certain transactions, to create certain liens on assets and to incur certain subsidiary indebtedness. In addition, the Revolving Credit Agreement contains an interest coverage covenant which requires the ratio of consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) to consolidated interest charges to be greater than 3.0 to 1.0. As of November 1, 2025, we were in compliance with these covenants. See Note 11, Revolving Credit Facility, of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further information on our revolving credit facility.
35
Debt
As of November 1, 2025, we had approximately $8.1 billion of carrying value outstanding on our senior notes. The difference in the carrying value of the debt and the principal is due to the unamortized discount and issuance fees and other adjustments on these instruments. The indentures governing certain of our debt instruments contain covenants that may limit our ability to: incur, create, assume or guarantee any debt or borrowed money secured by a lien upon a principal property; enter into sale and lease-back transactions with respect to a principal property; and consolidate with or merge into, or transfer or lease all or substantially all of our assets to, any other party. As of November 1, 2025, we were compliant with these covenants. See Note 12, Debt of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further information on our outstanding debt.
Commercial Paper Program
Under our commercial paper program, we may issue short-term, unsecured commercial paper notes in amounts up to a maximum aggregate face amount of $3.0 billion outstanding at any time, with maturities of up to 397 days from the date of issuance. As of November 1, 2025, we had $446.6 million of outstanding borrowings under the commercial paper program recorded in the Consolidated Balance Sheet. We intend to use the net proceeds of the commercial paper program for general corporate purposes, including without limitation, repayment of indebtedness, stock repurchases, acquisitions, capital expenditures and working capital.
Stock Repurchase Program
As of November 1, 2025, our Board of Directors had authorized us to repurchase $26.7 billion of our common stock under our common stock repurchase program and $9.7 billion remained available for repurchases under the current authorized program. Repurchased shares are held as authorized but unissued shares of common stock. Unless terminated earlier by resolution of our Board of Directors, the repurchase program will expire when the full dollar amount of the authorization has been used to repurchase shares under the program. Future repurchases of common stock will be dependent upon our financial position, results of operations, outlook, liquidity and other factors we deem relevant.
Capital Expenditures
Net additions to property, plant and equipment were $533.6 million in fiscal 2025. We expect capital expenditures for fiscal 2026 to be between approximately 4% and 6% of fiscal 2026 revenue. These capital expenditures will be funded with a combination of cash on hand and cash expected to be generated from future operations, together with existing and anticipated available short- and long-term financing.
Dividends
On November 24, 2025, our Board of Directors declared a cash dividend of $0.99 per outstanding share of common stock. The dividend will be paid on December 22, 2025 to all shareholders of record at the close of business on December 8, 2025 and is expected to total approximately $484.8 million. We currently expect quarterly dividends to continue in future periods, although they remain subject to determination and declaration by our Board of Directors. The payment of future dividends, if any, will be based on several factors, including our financial performance, outlook and liquidity.
Contractual Obligations
The table below summarizes our material contractual obligations in specified periods as of November 1, 2025:
| Payment due by period | ||||||||||||||||||||||||||||||
| Less than | More than | |||||||||||||||||||||||||||||
| (thousands) | Total | 1 Year | 1-3 Years | 3-5 Years | 5 Years | |||||||||||||||||||||||||
Debt obligations (1) | $ | 8,663,716 | $ | 446,639 | $ | 2,940,212 | $ | 650,000 | $ | 4,626,865 | ||||||||||||||||||||
| Interest payments associated with debt obligations | 3,192,312 | 290,787 | 517,777 | 389,089 | ||||||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-05-01 | ROCHE VINCENT | Chair & CEO | Sell | -10,000 | $397.91 | -$3,979,100 |
| 2026-04-01 | ROCHE VINCENT | Chair & CEO | Sell | -10,000 | $318.14 | -$3,181,400 |
| 2026-03-11 | STATA RAY | Director | Sell | -3,125 ×5 | $318.62 | -$995,678 |
| 2026-03-10 | STATA RAY | Director | Sell | -3,125 ×6 | $320.18 | -$1,000,553 |
| 2026-03-03 | STATA RAY | Director | Sell | -1,226 | $339.15 | -$415,798 |
| 2026-03-02 | ROCHE VINCENT | Chair & CEO | Sell | -10,000 | $350.00 | -$3,500,000 |
| 2026-02-25 | Sondel Michael | CAO (principal acct. officer) | Sell | -4,199 | $361.02 | -$1,515,926 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-05-21 10-Q expected by 2026-06-12 (in 1 day)
- ~2026-08-19 10-Q expected by 2026-09-10 (in 91 days)
- ~2026-11-24 10-K expected by 2026-12-30 (in 188 days)
- ~2027-02-17 10-Q expected by 2027-03-11 (in 273 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-03-12 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2026-02-18 10-Q Quarterly Report
- 2026-02-18 8-K Earnings Release; Other Events; Financial Statements and Exhibits
- 2026-01-23 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-11-25 10-K Annual Report
- 2025-11-25 8-K Earnings Release; Financial Statements and Exhibits
- 2025-08-20 10-Q Quarterly Report
- 2025-08-20 8-K Earnings Release; Financial Statements and Exhibits
- 2025-06-16 8-K Material Agreement Entered; Financial Statements and Exhibits
- 2025-05-27 8-K Officer/Director Change
- 2025-05-22 10-Q Quarterly Report
- 2025-05-22 8-K Earnings Release; Financial Statements and Exhibits
- 2025-04-11 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2025-02-19 10-Q Quarterly Report
- 2025-02-19 8-K Earnings Release; Other Events; Financial Statements and Exhibits