During the Bernstein 41st Annual Strategic Decisions Conference on May 29, 2025, Analog Devices, Inc. CFO Richard Puccio provided insights into the company's business model and strategic initiatives. He emphasized the resilience demonstrated during a significant industry downturn, noting that products continue to generate revenue 25 years after launch.
Puccio detailed the company's hybrid manufacturing process, which allows approximately 70% of its revenue-generating products to be manufactured either internally or externally by the end of the current year. This flexibility was crucial in maintaining gross margins in the high 60s despite a peak-to-trough revenue drop exceeding 30%.
The CFO also discussed the drivers behind Analog Devices' long-term growth target of 7% to 10% CAGR, attributing it to differentiated offerings and idiosyncratic market drivers. He acknowledged the impact of variable compensation on operating margins during the current upturn but projected improved operating margin expansion in future years.
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