AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Proprietary processes and technology reuse are established capabilities, but their superiority or economic protection relative to competing offerings is not demonstrated.
durability · — · Similar process capabilities appear in 2023 and 2025 disclosures, but no evidence establishes durable excess returns attributable to a defensible mechanism.
customer dependency · — · Customer-specific products suggest customization, but the disclosed consequence is ADI's inventory exposure. Customer switching difficulty or dependency is not established.
erosion resilience · — · Realized competitive erosion in some markets coexists with strong recent operating recovery. The passages cannot establish whether a structural advantage withstands competitive erosion across the business.
Pricing power38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · Competition has actually reduced average selling prices in certain markets. This supports weak observed pricing protection there; company-wide pricing outcomes remain unquantified.
retention · 2/4 · Revenue growth across every disclosed end market supports continuing demand indirectly. It does not distinguish repeat customers from new demand, and easy order cancellation limits contractual stickiness.
margin resilience · 2/4 · Nine-month gross margin improved to 66.6% from 60.8%, demonstrating recovery. Utilization and product mix explain the improvement, while realized competitive margin pressure prevents treating it as durable pricing resilience.
contractual freedom · 1/4 · Most orders permit cancellation or delivery delays without significant penalty, and certain distributors receive price credits and return rights. ADI retains discretion over some concessions, but the terms provide weak revenue and price protection.
Predictability74
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 31.83
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 3.27
Financial strength80
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 85.60
- netDebtEbitGrade
- 58.45
- interestCoverageGrade
- 74.82
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 2.01
- Net debt / operating income (x)
- 2.08
- Interest coverage (x)
- 9.23
- Current ratio (x)
- 2.19
Capital allocation81
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 7.12
- 3-year average dilution (%)
- -1.61
- 3-year average SBC / revenue (%)
- 2.71
- cashConversionGrade
- 100.00
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Strong operating cash generation and net share reduction are demonstrated. However, in the first nine months of 2026, repurchases and dividends exceeded operating cash after capital expenditure, alongside $1.54 billion of acquisition spending and increased net commercial-paper borrowing. Property impairment and unproven acquisition returns temper the assessment.
incentive alignment · 3/4 · Actual incentive payouts varied substantially with performance, and existing equity incentives use three-year operating-profit measurement. Ownership guidelines, clawbacks and hedging restrictions support alignment. Adjusted-profit exclusions, partial change-in-control acceleration and missing ownership-compliance data limit confidence.
execution · 3/4 · Nine-month revenue increased from $7.94 billion to $10.81 billion and operating income approximately doubled, with growth across all end markets and higher operating cash generation. These are strong demonstrated operating outcomes, although management attribution is indirect and cyclical recovery contributes.
governance · 3/4 · Annual director elections, nine independent directors out of eleven at the proxy disclosure date, and implemented peer assessments establish substantive governance practices. Combined CEO and Chair roles and limited evidence of oversight outcomes preclude an exceptional grade.
Evidence
The Company uses a highly-integrated approach in developing its products in that discrete technologies developed by the Company are frequently integrated across many of its products, and substantially all of the Company’s ICs are manufactured under similar processes with raw materials in either the Company’s own production facilities or by third-party wafer fabricators using proprietary processes.
Notes to consolidated financial statements / integrated technologies and proprietary manufacturing processes · Filed 25/11/2025
We utilize, develop and employ a wide variety of manufacturing processes, primarily based on bipolar and complementary metal-oxide semiconductor (CMOS) transistors, which are specifically tailored for use in fabricating high-performance analog, DSP and mixed-signal ICs.
Business / Production Resources / tailored manufacturing processes · Filed 25/11/2025
We utilize, develop and employ a wide variety of manufacturing processes, primarily based on bipolar and complementary metal-oxide semiconductor (CMOS) transistors, which are specifically tailored for use in fabricating high-performance analog, DSP and mixed-signal ICs.
Business / Production Resources / tailored manufacturing processes · Filed 21/11/2023
Many companies have sufficient financial, manufacturing, technical, sales and marketing resources to develop and market products that compete with our products.
Risk Factors / competition / competing companies' resources · Filed 25/11/2025
Increased competition in certain markets has resulted in and may continue to result in declining average selling prices, reduced gross margins and loss of market share in those markets.
Risk Factors / competition / realized selling-price, margin and market-share erosion · Filed 25/11/2025
As is customary in the semiconductor industry, we allow most orders to be canceled within a reasonable notification period or deliveries to be delayed by customers without significant penalty, while also allowing 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.
Business / order cancellations, delivery delays and distributor concessions · Filed 25/11/2025
Gross Margin Three Months Ended Nine Months Ended August 1, 2026 August 2, 2025 $ Change % Change August 1, 2026 August 2, 2025 $ Change % Change Gross margin $ 2,707,544 $ 1,789,748 $ 917,796 51 % $ 7,192,318 $ 4,831,661 $ 2,360,657 49 % Gross margin % 67.3 % 62.1 % 66.6 % 60.8 % Gross margin percentage increased by 520 and 580 basis points in the three- and nine-month periods ended August 1, 2026 as compared to the same periods of the prior fiscal year, primarily due to higher utilization of our manufacturing fixed costs as a result of increased customer demand and favorable mix of products sold into our end markets.
MD&A / Gross Margin / utilization and product-mix explanation · Filed 19/08/2026
Three Months Ended August 1, 2026 August 2, 2025 Revenue % of Revenue* Y/Y% Revenue % of Revenue* Industrial $ 1,971,926 49 % 53 % $ 1,292,988 45 % Automotive 998,227 25 % 16 % 857,146 30 % Communications 654,515 16 % 84 % 354,768 12 % Consumer 397,231 10 % 6 % 375,446 13 % Total revenue $ 4,021,899 100 % 40 % $ 2,880,348 100 % Nine Months Ended August 1, 2026 August 2, 2025 Revenue % of Revenue* Y/Y% Revenue % of Revenue* Industrial $ 5,269,825 49 % 50 % $ 3,512,896 44 % Automotive 2,685,246 25 % 9 % 2,454,845 31 % Communications 1,659,553 15 % 72 % 965,036 12 % Consumer 1,191,003 11 % 18 % 1,010,813 13 % Total revenue $ 10,805,627 100 % 36 % $ 7,943,590 100 % * The sum of the individual percentages may not equal the total due to rounding.
MD&A / Revenue Trends by End Market · Filed 19/08/2026
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except per share amounts) Three Months Ended Nine Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Revenue $ 4,021,899 $ 2,880,348 $ 10,805,627 $ 7,943,590 Cost of sales 1,314,355 1,090,600 3,613,309 3,111,929 Gross margin 2,707,544 1,789,748 7,192,318 4,831,661 Operating expenses: Research and development 533,480 454,251 1,510,203 1,298,980 Selling, marketing, general and administrative 397,326 325,706 1,105,389 913,171 Amortization of intangibles 187,985 187,415 563,285 562,245 Special charges, net (24,216) 4,348 23,766 69,980 Total operating expenses 1,094,575 971,720 3,202,643 2,844,376 Operating income: 1,612,969 818,028 3,989,675 1,987,285 Nonoperating expense (income): Interest expense 88,728 79,592 262,692 229,559 Interest income (25,377) (27,083) (86,199) (72,295) Other, net 3,749 2,110 (3,386) 5,108 Total nonoperating expense (income) 67,100 54,619 173,107 162,372 Income before income taxes 1,545,869 763,409 3,816,568 1,824,913 Provision for income taxes 205,779 244,891 469,302 345,309 Net income $ 1,340,090 $ 518,518 $ 3,347,266 $ 1,479,604 Shares used to compute earnings per common share – basic 486,021 494,390 487,500 495,560 Shares used to compute earnings per common share – diluted 488,837 496,726 490,317 497,865 Basic earnings per common share $ 2.76 $ 1.05 $ 6.87 $ 2.99 Diluted earnings per common share $ 2.74 $ 1.04 $ 6.83 $ 2.97 See accompanying notes.
Condensed consolidated statements of income / three and nine months ended August 1, 2026 · Filed 19/08/2026
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended August 1, 2026 August 2, 2025 Cash flows from operating activities: Net income $ 3,347,266 $ 1,479,604 Adjustments to reconcile net income to net cash provided by operations: Depreciation 315,298 301,323 Amortization of intangibles 1,160,358 1,202,179 Stock-based compensation expense 263,651 235,108 Deferred income taxes (281,941) (97,318) Other (19,377) (1,496) Changes in operating assets and liabilities (940,740) (8,008) Total adjustments 497,249 1,631,788 Net cash provided by operating activities 3,844,515 3,111,392 Cash flows from investing activities: Purchases of short-term available-for-sale investments — (1,150,240) Maturities of short-term available-for-sale investments 990,657 372,778 Additions to property, plant and equipment, net (392,677) (318,399) Proceeds from sale of property, plant and equipment, net — 58,892 Proceeds from sale of a subsidiary, net 96,592 — Payments for acquisitions, net of cash acquired (1,536,049) (45,652) Other (32,425) (13,595) Net cash used for investing activities (873,902) (1,096,216) Cash flows from financing activities: Proceeds from debt — 1,490,785 Debt repayments — (399,998) Proceeds from commercial paper notes 13,061,198 6,867,508 Payments of commercial paper notes (12,502,732) (6,866,581) Repurchase of common stock (2,446,409) (1,484,166) Dividend payments to shareholders (1,556,028) (1,437,521) Proceeds from employee stock plans 121,171 104,329 Other 18,651 40,317 Net cash used for financing activities (3,304,149) (1,685,327) Net (decrease) increase in cash and cash equivalents (333,536) 329,849 Cash and cash equivalents at beginning of period 2,499,406 1,991,342 Cash and cash equivalents at end of period $ 2,165,870 $ 2,321,191 See accompanying notes.
Condensed consolidated statements of cash flows / operating cash, investment and financing · Filed 19/08/2026
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited) (in thousands) Three Months Ended August 1, 2026 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, MAY 2, 2026 487,087 $ 81,183 $ 22,287,095 $ 11,525,998 $ (152,243) Net income 1,340,090 Dividends declared and paid - $1.10 per share (535,309) Issuance of stock under stock plans and other 360 59 61,625 Stock-based compensation expense 96,255 Other comprehensive income 3,152 Common stock repurchased (2,882) (480) (1,156,528) BALANCE, AUGUST 1, 2026 484,565 $ 80,762 $ 21,288,447 $ 12,330,779 $ (149,091) Nine Months Ended August 1, 2026 Capital in Accumulated Other Common Stock Excess of Retained Comprehensive Shares Amount Par Value Earnings Loss BALANCE, NOVEMBER 1, 2025 489,654 $ 81,611 $ 23,349,185 $ 10,539,541 $ (154,582) Net income 3,347,266 Dividends declared and paid - $3.19 per share (1,556,028) Issuance of stock under stock plans and other 2,023 337 120,834 Stock-based compensation expense 263,651 Other comprehensive income 5,491 Common stock repurchased (7,112) (1,186) (2,445,223) BALANCE, AUGUST 1, 2026 484,565 $ 80,762 $ 21,288,447 $ 12,330,779 $ (149,091) See accompanying notes.
Condensed consolidated statements of shareholders' equity / repurchases, issuance and compensation · Filed 19/08/2026
For fiscal year 2025 the variable cash incentive payout factor under our executive performance incentive plan was approximately 161% of target, compared to approximately 27% for fiscal year 2024 and approximately 182% for the fiscal year ended October 29, 2023 (fiscal year 2023).
Executive Compensation / actual annual incentive payout factors · Filed 23/01/2026
For example: What We Do What We Don’t Do uReview compensation practices of peers aligned with ADI’s business uProvide for annual cash incentives that are based solely on our financial performance uDesign compensation programs to align a significant portion of equity awards to long-term performance achievement uTie incentive awards to challenging performance targets aligned with our corporate strategy uCap payouts for Relative TSR PRSUs at target if absolute TSR is negative and set target objectives at above-median relative TSR performance uProvide for compensation clawbacks pursuant to a clawback policy for our CEO and other officers uRequire significant share ownership by executive officers pursuant to stock ownership guidelines uConduct an annual “say-on-pay” vote uNo hedging and pledging of ADI securities uNo excessive perquisites to our executive officers uNo gross-ups or compensation paid to officers or directors for any income tax owed for approved travel 44 Executive Compensation Process for Determining Compensation Roles and Responsibilities As part of its annual review of our executive compensation programs, including NEO compensation, our Compensation and Talent Committee solicits the input of Mr.
Executive Compensation / ownership guidelines, clawbacks, hedging restrictions and incentive safeguards · Filed 23/01/2026
The Compensation and Talent Committee continued to include Financial Metric PRSUs as part of our annual equity program for our executive officers, based on non-GAAP operating profit in dollars, to incentivize long-term profitable growth measured over a three-year period.
Executive Compensation / existing financial-metric performance equity program · Filed 23/01/2026
For purposes of determining the variable cash incentive payout factor for fiscal year 2025, OPBT margin was calculated to exclude acquisition-related expenses and special charges, net, consistent with the non-GAAP adjustments included in our quarterly earnings releases.
Executive Compensation / exclusions from fiscal 2025 incentive profitability measure · Filed 23/01/2026
Under our 2020 Plan and our 2006 Plan, in the event of a change in control, all of our employees who continue to remain employed on the closing of the change in control, including our NEOs, would have the vesting of one-half of the shares of common stock subject to their then outstanding unvested equity awards accelerate and become immediately exercisable and free from forfeiture.
Executive Compensation / existing change-in-control equity acceleration · Filed 23/01/2026
Wainer Director Election Process All members of our Board of Directors are elected annually by our shareholders.
Board of Directors / annual director elections · Filed 23/01/2026
Our Board of Directors currently consists of eleven directors, of whom nine are deemed to be “independent directors” as defined and in accordance with the Nasdaq Stock Market, Inc.
Board of Directors / disclosed board independence · Filed 23/01/2026
In fiscal year 2025, the Board of Directors enhanced the annual evaluation process by having each director conduct a self-assessment, as well as a peer assessment of each other member of the Board of Directors.
Corporate Governance / implemented director self and peer assessments · Filed 23/01/2026
8 Note 6 – Industry and Segment Information The Company’s Chief Executive Officer and Chair has been identified as its Chief Operating Decision Maker (CODM).
Note 6 / combined Chief Executive Officer and Chair roles · Filed 19/08/2026
As a result of the sublease transaction, the Company recorded an impairment charge of $15.6 million in net special charges, which represented the excess carrying value of the associated asset group over its estimated fair value.
Special Charges / realized San Jose property impairment · Filed 19/08/2026
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.
Business / customer-specific products and cancellation exposure · Filed 25/11/2025
2026 Proxy Statement B-1 Reconciliation of GAAP Measures to Non-GAAP Results (Unaudited) (In thousands, except per-share amounts) Twelve months ended November 1, 2025 Gross margin $ 6,773,478 Gross margin percentage 61.5 % Acquisition related expenses 867,613 Adjusted gross margin $ 7,641,091 Adjusted gross margin percentage 69.3 % Operating income $ 2,932,496 Operating margin 26.6 % Acquisition related expenses 1,619,671 Special charges, net 69,980 Adjusted operating income $ 4,622,147 Adjusted operating margin 41.9 % Diluted EPS $ 4.56 Acquisition related expenses 3.24 Special charges, net 0.14 Tax related items (0.16) Adjusted diluted EPS $ 7.79 Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Unaudited) (In thousands) Twelve months ended November 1, 2025 Revenue $ 11,019,707 Net cash provided by operating activities $ 4,812,202 % of revenue 44 % Capital expenditures $ (533,552) Free cash flow(1) $ 4,278,650 % of revenue 39 % (1)Free cash flow is defined as net cash provided by operating activities, less capital expenditures.
Appendix B / fiscal 2025 reported operating cash flow and capital expenditures · Filed 23/01/2026
