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Here’s How Analog Devices, Inc. Makes Its Money — The Motley Fool

Analog Devices (NASDAQ:ADI), according to its most recent form 10-K filing, sells a “broad line of high-performance ICs [integrated circuits] that incorporate analog, mixed-signal, and digital signal processing technologies.”

“Our ICs are designed to address a wide range of real-world signal processing applications,” the company explains in its 10-K filing. “We sell our ICs to tens of thousands of customers worldwide, many of whom use products spanning our core technologies in a wide range of applications.”

Image source: Analog Devices.

Before investing in a company’s stock, it’s helpful to know from what market segments a company derives its revenue and roughly how much of its overall revenue comes from each segment. That way, investors can watch broader industry trends and have some idea of how those trends will affect a company.

Let’s go over the four major end markets Analog Devices services.

Largest market segment

Analog Devices’ largest market segment by revenue during its fiscal 2016 was the industrial market, making up 44% of its revenue during that year. In its form 10-K, Analog Devices goes over the major sub-segments within industrial.

The first sub-segment is “industrial and automation,” which the company says includes applications such as robotics, weigh scales, oscilloscopes, environmental control systems, and more.

The next one is “defense/aerospace.” Analog Devices says that, within this end market, its chips are used in applications such as navigation, radar, security, and even space and satellite communications.

The third is “energy management,” which the company says can include chips used in utility meters, wind turbines, and more. 

And, finally, there’s healthcare. Within this sub-segment, Analog Devices says it provides chips for things such as CT scanners, X-ray machines, blood analyzers, ultrasounds, and more. 

So it’s clear why this segment is Analog Devices’…

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