亞德諾半導體 (ADI) 2020 Q2 法說會逐字稿

Good morning, and welcome to the Analog Devices Fourth Quarter and Fiscal Year 2019 Earnings Conference Call which is being audio webcast via telephone and over the web.

早安，歡迎參加 Analog Devices 2019 年第四季和財年財報電話會議，該電話會議正在透過電話和網路進行音訊網路直播。

I'd now like to introduce your host for today's call, Mr. Michael Lucarelli, Director of Investor Relations. Sir, the floor is yours.

現在我想介紹一下今天電話會議的主持人，投資者關係總監 Michael Lucarelli 先生。先生，地板是你的了。

Thank you, Cheryl, and good morning, everybody. Thanks for joining our second quarter fiscal 2020 conference call. With me on the call today are ADI's CEO, Vincent Roche; and ADI's CFO, Prashanth Mahendra-Rajah. For anyone who missed the release, you can find it and relating financial schedules at investor.analog.com.

謝謝你，謝麗爾，大家早安。感謝您參加我們的 2020 財年第二季電話會議。今天與我一起參加電話會議的是 ADI 執行長 Vincent Roche；以及 ADI 財務長 Prashanth Mahendra-Rajah。對於那些錯過了該發布的人，您可以在 Investor.analog.com 上找到它以及相關的財務時間表。

Now on to the disclosures. Information we're about to discuss includes forward-looking statements that involve risks and uncertainties. Actual results may differ materially from these forward-looking statements as a result of various factors, including the uncertainty regarding the duration of COVID-19 pandemic and its impact on our business, our customers and suppliers and the global economy and also those discussed in our earnings release in our most recent 10-Q. These forward-looking statements reflect our opinion as of the date of this call. We undertake no obligation to update these forward-looking statements in light of new information or future events.

現在開始披露。我們將要討論的資訊包括涉及風險和不確定性的前瞻性陳述。由於各種因素，實際結果可能與這些前瞻性聲明有重大差異，包括有關COVID-19 大流行持續時間的不確定性及其對我們的業務、我們的客戶和供應商以及全球經濟的影響，以及我們在我們最近 10 個季度的收益發布。這些前瞻性陳述反映了我們截至本次電話會議之日的觀點。我們沒有義務根據新資訊或未來事件更新這些前瞻性聲明。

Our comments today will also include non-GAAP financial measures, which exclude special items. In comparing our results to our historical performance, special items are also excluded from prior periods. Reconciliation of these non-GAAP measures to the most directly comparable GAAP measures and additional information about our non-GAAP measures are included in today's earnings release.

我們今天的評論還將包括非公認會計準則財務指標，其中不包括特殊項目。在將我們的結果與歷史績效進行比較時，前期的特殊項目也被排除在外。這些非公認會計準則衡量指標與最直接可比較的公認會計準則衡量指標的調節以及有關我們非公認會計準則衡量指標的其他資訊均包含在今天的收益發布中。

And with that, I'll turn it over to ADI's CEO, Vincent Roche. Vince?

接下來，我會將其交給 ADI 執行長 Vincent Roche。文斯？

Thank you, Mike, and good morning to you all from Boston. I hope that you and your families are all staying safe and healthy during this period. First, we want to express our gratitude to the health care workers and the many other heroes on the front lines who are protecting the health and the well-being of our communities. Thank you all so very, very much.

謝謝麥克，波士頓的大家早安。我希望您和您的家人在此期間保持安全和健康。首先，我們要向在前線保護我們社區健康和福祉的醫護人員和許多其他英雄表示感謝。非常非常感謝大家。

When we had our last earnings call in mid-February, we were just beginning to understand the depths of the COVID-19 impact in China, and since then, the pandemic has had a profound impact on the world, putting tremendous stress in society and, of course, the global economy.

當我們在2 月中旬召開最後一次財報電話會議時，我們才剛開始了解COVID-19 對中國影響的深度，從那時起，這場流行病就對世界產生了深遠的影響，給社會和民眾帶來了巨大的壓力。當然，還有全球經濟。

To counterbalance this, we've seen an unprecedented response from governments with the deployment of fiscal and monetary policies to soften the downturn and restart economic activity, whenever that may be. While our sector is not immune to the turbulent operating environment, it's my belief that technology will be what modifies the current weakness and drives new demand and business models post pandemic. That's not to say that we're standing still; we've taken actions to curtail spending and reinforce our cash position. And we are learning from this challenging period and adapting quickly while still investing to ensure that we are well positioned in the recovery and for the long term.

為了抵​​消這一影響，我們看到各國政府採取了前所未有的應對措施，部署了財政和貨幣政策，以緩解經濟衰退並重啟經濟活動（無論何時）。儘管我們的行業無法免受動盪的營運環境的影響，但我相信，科技將改變當前的弱點，並在疫情後推動新的需求和商業模式。這並不是說我們會原地踏步。我們已採取行動削減支出並加強我們的現金狀況。我們正在從這個充滿挑戰的時期中吸取教訓，並迅速適應，同時仍然進行投資，以確保我們在復甦和長期發展中處於有利地位。

Our team has embraced the challenges with many of our employees working from home, but obviously, not everyone can work remotely, and I want to acknowledge and thank our manufacturing employees who've continued to perform at exceptional levels and deliver for our customers. For these employees supporting our critical operations, we've implemented safeguards to protect them, including more PPE, increasing social distancing and enhanced sanitization. And we provided them with additional incentives and benefits to allow for continuity during this very difficult time.

我們的團隊已經接受了許多員工在家工作的挑戰，但顯然，並不是每個人都可以遠距工作，我要感謝我們的製造員工，他們繼續表現出色，為我們的客戶提供服務。對於這些支持我們關鍵營運的員工，我們實施了保護措施，包括增加個人防護裝備、增加社交距離和加強消毒。我們為他們提供了額外的激勵和福利，以便在這個非常困難的時期保持連續性。

Our team has also done an excellent job staying close to our customers. We moved quickly to pivot manufacturing lines and prioritize our health care solutions that are needed in the fight against COVID-19. This has allowed us to expedite supply used in products such as ventilators, respirators, imaging systems and patient monitors to our health care customers. And I'm incredibly proud of the resourcefulness and commitment that we've shown in rising to this critical challenge.

我們的團隊在與客戶保持密切聯繫方面也做得非常出色。我們迅速採取行動調整生產線，並優先考慮對抗 COVID-19 所需的醫療保健解決方案。這使我們能夠加快向醫療保健客戶供應呼吸器、呼吸器、影像系統和病患監視器等產品。我對我們在迎接這項嚴峻挑戰時所表現出的足智多謀和承諾感到無比自豪。

Additionally, through the ADI Foundation, we've made multimillion-dollar donations to support both global and local pandemic response efforts. But our work goes beyond financial contributions. We're also partnering with hospitals and biotech start-ups to develop solutions, such as rapid point-of-care diagnostic tests and clinical-grade patient monitoring that leverage our technologies.

此外，我們還透過 ADI 基金會捐贈了數百萬美元，以支持全球和當地的流行病應對工作。但我們的工作不僅僅是財政捐助。我們也與醫院和生技新創公司合作開發解決方案，例如利用我們技術的快速護理點診斷測試和臨床級患者監測。

So now I'd like to discuss the current operating environment a bit. Given the reach and depth of the current crisis, global business activity has been disrupted, and to date, we have seen a deterioration in demand within our automotive, broad-based industrial and consumer businesses. However, our business is proving more resilient than during the global financial crisis. To that end, health care demand is at record levels and communications demand is robust across wireless and indeed, wireline sectors. We're also seeing strength in portions of our industrial instrumentation business and steadiness in our defense business.

所以現在我想討論一下目前的運行環境。鑑於當前危機的影響範圍和深度，全球商業活動受到干擾，迄今為止，我們看到汽車、廣泛的工業和消費業務的需求惡化。然而，事實證明，我們的業務比全球金融危機期間更具彈性。為此，醫療保健需求達到了創紀錄的水平，無線和有線行業的通訊需求也很強勁。我們也看到工業儀器儀表業務的部分實力和國防業務的穩定性。

Now this success is no accident. Through our organic investments and acquisitions of Hittite and LTC, ADI is a very different company than we were a decade ago with more diversity, a broader portfolio across high performance analog, power and RF and higher exposure to more profitable and durable end markets.

現在看來，這項成功絕非偶然。透過我們對Hittite 和LTC 的有機投資和收購，ADI 與十年前相比已經是一家截然不同的公司，擁有更多的多樣性、涵蓋高性能模擬、功率和射頻的更廣泛的產品組合，以及對利潤更高、更持久的終端市場的更大敞口。

So now let me move to the other side of the equation and talk a little bit about supply. Across the world, supply chains were disrupted when many governments ordered shelter-in-place mandates and closed their borders. For ADI, capacity was reduced at our back-end tests and assembly sites in mid-March across the Philippines, Malaysia and Singapore. Once granted essential status, we acted quickly, yet responsibly to ensure employee safety and improve our capacity. And today, I'm glad to say we're operating at normal capacity levels. This demonstrates the agility of our global operations and the dedication of ADI's employees around the world.

現在讓我轉到等式的另一邊，談談供應。在世界各地，當許多政府下令就地避難並關閉邊境時，供應鏈受到干擾。對 ADI 來說，3 月中旬，我們在菲律賓、馬來西亞和新加坡的後端測試和組裝工廠的產能減少。一旦獲得必要地位，我們就迅速且負責任地採取行動，以確保員工安全並提高我們的能力。今天，我很高興地說我們正在以正常的產能水準運作。這體現了我們全球營運的靈活性以及 ADI 世界各地員工的奉獻精神。

Despite the fluid and uncertain demand and supply environment, we delivered revenue of $1.32 billion and EPS of $1.08. This was in line with the original range we provided on our first quarter earnings call, underscoring the resiliency and flexibility of our business model in any economic backdrop.

儘管供需環境不穩定且不確定，我們仍實現了 13.2 億美元的營收和 1.08 美元的每股盈餘。這與我們在第一季財報電話會議上提供的原始範圍一致，強調了我們的業務模式在任何經濟背景下的彈性和靈活性。

Now as we've mobilized preserve ADI strength in the near term, we're capitalizing on the many opportunities we see to fortify and expand our market position for the long term. Our team remains focused on our 3 strategic priorities, so let me provide you with a brief update on each.

現在，隨著我們在短期內保持 ADI 實力，我們正在利用我們看到的許多機會來鞏固和擴大我們的長期市場地位。我們的團隊仍然專注於我們的 3 個策略重點，所以讓我為您提供每個策略重點的簡要更新。

First is the efficient use of capital. Importantly, ADI has ample financial liquidity to meet the needs of our business across critical investments, dividend payments and servicing our debt. Despite the current macro environment, we've generated $1.8 billion of free cash flow or 32% of sales over the trailing 12 months. This continues to place ADI in the top 10% of the S&P 500.

首先是資本的有效利用。重要的是，ADI 擁有充足的財務流動性，可滿足我們在關鍵投資、股利支付和償債方面的業務需求。儘管面臨當前的宏觀環境，我們在過去 12 個月內仍產生了 18 億美元的自由現金流，佔銷售額的 32%。這使 ADI 繼續躋身標準普爾 500 指數前 10% 之列。

Throughout our 55-year history, we've encountered and navigated several black swan events successfully by taking a disciplined and balanced approach to financial management. Specifically, the first call on our capital is funding new product development. This means investing smartly in both our people and technologies to ensure we continue to deliver disruptive innovation. In the quarter just passed, we invested 19% of revenue in R&D, spending 95% on the most attractive opportunities across our B2B markets.

縱觀我們 55 年的歷史，我們透過採取嚴格和平衡的財務管理方法，成功應對並應對了許多黑天鵝事件。具體來說，我們的資金首先是為新產品開發提供資金。這意味著對我們的人員和技術進行明智的投資，以確保我們繼續提供顛覆性創新。在剛剛過去的這個季度，我們將 19% 的收入投資於研發，其中 95% 的資金用於 B2B 市場中最具吸引力的機會。

We also remain committed to strong shareholder returns, with our dividend as the cornerstone. In the quarter, we returned over $340 million to shareholders through dividends and share repurchases.

我們也持續致力於以股利為基石，實現強勁的股東回報。本季度，我們透過股利和股票回購向股東返還超過 3.4 億美元。

So let me turn to our second priority, which is about maximizing customer impact. We are continuously innovating to stay ahead of customer needs, and while COVID-19 has brought new challenges, it has also revealed new opportunities in a reordered world.

那麼讓我談談我們的第二要務，即最大限度地提高客戶影響力。我們不斷創新，以領先於客戶需求，雖然 COVID-19 帶來了新的挑戰，但它也為重新排序的世界帶來了新的機會。

During the quarter, our customer engagement didn't slow down. We hosted hundreds of virtual seminars with thousands of customers in attendance, training them on new solutions and new technologies. These interactions were very productive. We saw increased design activity on new product development across markets and customers. For example, we partnered with a key electric vehicle customer to reimagine how audio is rendered across their fleet. As a result of this increased and focused collaboration, we added our high-performance audio digital signal processors to our A2B platform, more than doubling our content per vehicle.

在本季度，我們的客戶參與度並沒有放緩。我們舉辦了數百場虛擬研討會，數千名客戶參加，並對他們進行新解決方案和新技術的培訓。這些互動非常有成效。我們看到跨市場和客戶的新產品開發設計活動增加。例如，我們與一家重要的電動車客戶合作，重新構想如何在其車隊中呈現音訊。由於這種加強和集中的合作，我們將高效能音訊數位訊號處理器添加到我們的 A2B 平台中，每輛車的內容增加了一倍以上。

And in our instrumentation test business for data center compute, we continue to work with customers on reducing their system complexity and getting to market faster. Our innovative solutions combine our analog mixed-signal and power micromodule portfolios. These solutions deliver 4x the channel density while simultaneously increasing throughput. While these are just 2 examples, there are many more across all of our markets. It's this current flurry of design activity that positions ADI to accelerate post pandemic.

在我們的資料中心計算儀器測試業務中，我們繼續與客戶合作，降低他們的系統複雜性並更快地進入市場。我們的創新解決方案結合了我們的類比混合訊號和電源微模組產品組合。這些解決方案可將通道密度提高 4 倍，同時提高吞吐量。雖然這只是兩個例子，但我們所有市場上還有更多例子。正是目前這一系列的設計活動使 ADI 能夠加速疫情後的發展。

Our third priority is capitalizing on secular trends to expand our addressable markets and drive diversified growth. While every downturn has its own unique characteristics, they all seem to have one thing in common, that is they drive tremendous change. Industries are prioritizing digitalization and connectivity more than ever, and new industries are emerging, focused on the physical and cyber. ADI, where the data is born, is at the center of these exciting secular growth opportunities, and I wanted to share some thoughts with you today.

我們的第三個優先事項是利用長期趨勢來擴大我們的潛在市場並推動多元化成長。雖然每次經濟衰退都有其獨特的特點，但它們似乎都有一個共同點，那就是它們推動了巨大的變化。各行業比以往任何時候都更加重視數位化和連通性，並且新的行業正在興起，重點關注實體和網路。 ADI 是資料的誕生地，也是這些令人興奮的長期成長機會的中心，我今天想與您分享一些想法。

As I noted earlier, our health care business is providing several of the technologies that are critical to the diagnosis and treatment of COVID-19. Taking a step back, ADI has been committed to this market for many years, as we anticipated the opportunity for innovation to deliver better patient outcomes. Now this crisis will challenge us to rethink and hopefully fast-track the accessibility, affordability and wellness focus of global healthcare. To achieve this, health care systems are going to need to be upgraded and clinical-grade patient monitoring will need to be extended from the hospital right down to the patient's home. Massive adoption of sensing, computing and cloud capabilities is going to be required, and we believe that ADI's technologies will be at the forefront of this transformation.

正如我之前指出的，我們的醫療保健業務正在提供對 COVID-19 的診斷和治療至關重要的多項技術。退一步來說，ADI 多年來一直致力於這個市場，因為我們期待創新機會來提供更好的病患治療效果。現在，這場危機將挑戰我們重新思考並希望快速追蹤全球醫療保健的可近性、可負擔性和健康焦點。為了實現這一目標，醫療保健系統需要升級，臨床級患者監測需要從醫院延伸到患者家中。需要大規模採用感測、運算和雲端功能，我們相信 ADI 的技術將處於這項轉型的最前線。

The communications market is moving at a rapid pace to keep up with the strains put on bandwidth and latency, as more people work remotely, transact business more digitally and consume media from everywhere. Here, ADI is playing a critical role in building out the infrastructure required for an always connected world. Our integrated transceiver, power and optical control portfolios are enabling customers to economically scale their investments to build the next-generation networks. We continue to innovate to meet future performance, size and power needs, positioning us to gain share and to capture additional value.

隨著越來越多的人遠距工作、更數位化地處理業務並消費來自世界各地的媒體，通訊市場正在快速發展，以應對頻寬和延遲帶來的壓力。在這裡，ADI 在建立始終互聯的世界所需的基礎設施方面發揮關鍵作用。我們的整合式收發器、電源和光控制產品組合使客戶能夠經濟地擴展投資以建立下一代網路。我們不斷創新，以滿足未來的性能、尺寸和功率需求，使我們能夠獲得份額並獲得額外價值。

Another secular trend we're benefiting from is the rise of Industry 4.0. Now while this trend isn't so new, the pandemic is moving it to the forefront of our customers' minds. It's clear that post pandemic, supply chains will be reimagined, and new ones will be built, ones that are more flexible, automated and perhaps sovereign. To serve the economic burden that comes with this, customers will further automate their businesses with intelligent and connected factory floors and the increased use of robots, cobots and analytics. This creates additional demand for our precision signal chain and power franchises and extends ADI into new areas like software IO, depth sensing, condition-based monitoring and robust connectivity.

我們受益的另一個長期趨勢是工業 4.0 的興起。現在，雖然這種趨勢並不新鮮，但大流行正在將其推到我們客戶的腦海中。很明顯，疫情後，供應鏈將被重新構想，新的供應鏈將被建立，這些供應鏈更加靈活、自動化，或許還有主權。為了減輕隨之而來的經濟負擔，客戶將透過智慧和互聯的工廠車間以及更多地使用機器人、協作機器人和分析來進一步實現業務自動化。這對我們的精密訊號鍊和電源特許經營權產生了額外的需求，並將 ADI 擴展到軟體 IO、深度感測、基於狀態的監控和強大連接等新領域。

Outside of these secular growth trends, I'm also personally inspired by the tremendous sustainability benefits that we've seen in a short amount of time. For example, we've seen sizable decreases in carbon dioxide and nitrous oxide and carbon monoxide. I believe that ADI and the industry at large can and should be leveraging its creative brainpower to be better stewards of the planet. We recently published our comprehensive corporate responsibility report entitled Engineering Good, and I can assure you there will be more to come as I'm deeply committed to ADI's leadership here.

除了這些長期成長趨勢之外，我個人也受到我們在短時間內看到的巨大永續發展效益的啟發。例如，我們看到二氧化碳、一氧化二氮和一氧化碳的排放量大幅減少。我相信 ADI 和整個行業可以而且應該利用其創造性人才來更好地管理地球。我們最近發布了題為「良好工程」的全面企業責任報告，我可以向您保證，隨著我堅定地致力於 ADI 的領導地位，還會有更多報告發布。

So in closing, the shape of the economic recovery is still very, very uncertain and dependent on many variables. While we're confident in our outlook provided today, this unprecedented macro backdrop will continue to influence supply and demand dynamics for some time to come. We're embracing these short-term challenges and by leveraging the collective power of our talent, our technology and customer engagements, I'm very confident we will emerge stronger.

因此，總而言之，經濟復甦的形式仍然非常非常不確定，並且取決於許多變數。儘管我們對今天提供的前景充滿信心，但這種前所未有的宏觀背景將在未來一段時間內繼續影響供需動態。我們正在迎接這些短期挑戰，透過利用我們的人才、技術和客戶參與的集體力量，我非常有信心我們會變得更加強大。

So with that, I'd like to turn it over to Prashanth.

因此，我想將其交給 Prashanth。

Thank you, Vince. Let me add my welcome to our second quarter earnings call. As a reminder, my comments today, with the exception of revenue and nonop expenses, will be on an adjusted basis, which excludes special items outlined in today's press release.

謝謝你，文斯。讓我對第二季財報電話會議表示歡迎。提醒一下，我今天的評論，除收入和非營運費用外，都將在調整後的基礎上進行，其中不包括今天新聞稿中概述的特殊項目。

Back in March, we withdrew our guidance for the second quarter as the spread of COVID created an enormous amount of uncertainty and impacted our supply chain. However, we acted quickly and decisively, and I'm pleased to say that our second quarter results were within our original guidance, with revenue of $1.32 billion, operating margin of 38% and EPS of $1.08. Without those capacity limitations, we believe revenue would have been above our original midpoint provided at our first quarter earnings or approximately $50 million higher.

早在三月份，我們就撤回了第二季的指引，因為新冠疫情的傳播造成了巨大的不確定性並影響了我們的供應鏈。然而，我們行動迅速而果斷，我很高興地說，我們第二季度的業績在我們最初的指導範圍內，收入為 13.2 億美元，營業利潤率為 38%，每股收益為 1.08 美元。如果沒有這些產能限制，我們相信營收將高於第一季財報中提供的原始中點，即高出約 5,000 萬美元。

So let's get into the market results. Our B2B markets, while very volatile intra-quarter due to COVID-19, performed relatively in line with our expectations. B2B revenue increased 3% sequentially, and if not for supply constraints, we would have delivered on our outlook of growing mid- to high single digits sequentially. Notably, we achieved these results while reducing channel inventory by $60 million in the quarter.

那麼讓我們來看看市場結果。我們的 B2B 市場雖然由於 COVID-19 而在季度內波動很大，但表現相對符合我們的預期。 B2B 營收季增 3%，如果不是供應限制，我們本可以實現環比中高個位數成長的預期。值得注意的是，我們在取得這些成果的同時，本季通路庫存減少了 6,000 萬美元。

Industrial, which represented 54% of revenue during the quarter, finished up 4% sequentially and declined 8% year-over-year. While we experienced broad-based weakness across most applications, our health care, memory test and energy verticals all grew from the year ago period.

工業佔本季營收的 54%，季增 4%，年減 8%。雖然我們在大多數應用程式中都經歷了廣泛的弱點，但我們的醫療保健、記憶體測試和能源垂直領域均較去年同期有所增長。

Communications, which accounted for 21% of revenue, finished up 15% sequentially, and given the tough compare, decreased 24% year-over-year with weakness across both wireless and wired. This market is and will remain lumpy, but over the long term, will be a high-growth market for ADI, given our positioning in 5G and optical control systems.

佔營收 21% 的通訊業務比上一季成長了 15%，但考慮到嚴峻的比較，由於無線和有線業務均表現疲軟，通訊業務比去年同期下降了 24%。這個市場現在和將來都會不穩定，但從長遠來看，鑑於我們在 5G 和光控制系統方面的定位，這將是 ADI 的一個高成長市場。

Automotive, which represented 14% of revenue, down 12% sequentially and 23% year-over-year, with declines across all major applications. Not surprisingly, our auto business was impacted by low vehicle sales and a global slowdown in production as many customers were required to suspend their operations in response to COVID-19.

汽車佔收入的 14%，季減 12%，年減 23%，所有主要應用均下降。毫不奇怪，我們的汽車業務受到汽車銷售低迷和全球生產放緩的影響，因為許多客戶因應對 COVID-19 而被迫暫停營運。

Lastly, consumer, which represented 11% of revenue, was down 14% sequentially and 5% year-over-year as lower consumer spending impacted both portables and prosumer. Notably, we continue to expect 2020 to be the bottom for our consumer segment.

最後，消費者支出佔收入的 11%，季減 14%，年減 5%，因為消費者支出下降對便攜式設備和產消者都產生了影響。值得注意的是，我們仍然預期 2020 年將是我們消費領域的底部。

Let's go to the P&L for the second quarter. Gross margin came in at 67.7%, down both sequentially and year-over-year related to low utilizations from reduced production levels and the factory closures I mentioned earlier. As a reminder, we expect to realize $100 million of cost of goods savings exiting fiscal 2021 through the optimization of our manufacturing footprint.

讓我們來看看第二季的損益表。毛利率為 67.7%，環比和同比均下降，這與我之前提到的生產水準下降和工廠關閉導致利用率低有關。提醒一下，我們預計透過優化我們的製造足跡，到 2021 財年將實現 1 億美元的商品成本節省。

OpEx was $390 million, down 5% sequentially, marking the sixth consecutive quarter of decline. This was driven by a combination of the quick aggressive measures we took in response to the pandemic, as well as our continued focus on cost management. Operating margin finished at 38%, up over 100 basis points sequentially and down year-over-year. Non-op expenses were $49 million, up sequentially but down over $10 million compared to last year. Our tax rate for the quarter was approximately 11%, and all told, second quarter adjusted EPS came in at $1.08.

營運支出為 3.9 億美元，季減 5%，連續第六個季度下降。這是我們為應對這場流行病而採取的快速積極措施以及我們對成本管理的持續關注共同推動的。營業利益率最終達到 38%，較上季上升超過 100 個基點，但年減。非營運費用為 4,900 萬美元，比上一季增加，但與去年相比減少了 1,000 萬美元以上。我們本季的稅率約為 11%，總而言之，第二季調整後每股收益為 1.08 美元。

So now let's go to the balance sheet and cash flow. During the quarter, we proactively bolstered our strong liquidity position. We retired a $300 million bond and subsequently raised $400 million from the semiconductor industry's first ever green bond, and as a cautionary measure, we also temporarily suspended our share repurchase program midway through the quarter. As a result, we finished the quarter with approximately $800 million of cash and about $5.6 million in total debt. Our net debt-to-EBITDA ratio is 1.9x on a trailing 12-month basis.

現在讓我們來看看資產負債表和現金流量。本季度，我們積極增強強勁的流動性狀況。我們註銷了 3 億美元的債券，隨後從半導體行業首個綠色債券中籌集了 4 億美元，作為謹慎措施，我們還在本季度中暫停了股票回購計劃。結果，本季結束時，我們擁有約 8 億美元的現金和約 560 萬美元的總債務。我們過去 12 個月的淨負債與 EBITDA 比率為 1.9 倍。

Between cash on our balance sheet and the commitments under our revolving credit facility, ADI has more than $2 billion of liquidity, easily eclipsing our annual dividend payment and the debt due in January of 2021. Inventory was essentially flat from the first quarter. However, days of inventory fell to 126 from 133. Our sell-in revenue was well below our sell-through revenue at distributors. As I mentioned, we reduced channel inventory by about $60 million in the second quarter. This brings our total channel reduction to around $100 million in the first half of fiscal 2020. Channel inventory currently sits comfortably at the low end of our 7- to 8-week range.

在資產負債表上的現金和循環信貸安排下的承諾之間，ADI 擁有超過20 億美元的流動性，輕鬆超過我們的年度股息支付和2021 年1 月到期的債務。庫存與第一季基本持平。然而，庫存天數從 133 天下降到 126 天。我們的直銷收入遠低於經銷商的直銷收入。正如我所提到的，我們在第二季減少了約 6,000 萬美元的通路庫存。這使得我們在 2020 財年上半年的通路總削減額達到約 1 億美元。通路庫存目前處於我們 7 至 8 週範圍的低端。

So finishing on cash flow for the quarter, cash flow from ops was $429 million, and CapEx was $60 million. We expect CapEx to decline meaningfully in the second half and finish the year below our normal target range of 4% of revenue. In the quarter, ADI paid approximately $230 million in dividends and repurchased $114 million of our stock.

因此，結束本季的現金流後，營運現金流為 4.29 億美元，資本支出為 6,000 萬美元。我們預計下半年資本支出將大幅下降，年底時將低於我們佔收入 4% 的正常目標範圍。本季度，ADI 支付了約 2.3 億美元的股息，並回購了 1.14 億美元的股票。

On a trailing 12-month basis, free cash flow finished at $1.8 billion or 32% of revenue. Over this period, we reduced debt by roughly $400 million and returned around $830 million to shareholders via dividends and an additional $500 million via repurchases.

過去 12 個月的自由現金流最終達到 18 億美元，佔營收的 32%。在此期間，我們減少了約 4 億美元的債務，並透過股息向股東返還了約 8.3 億美元，並透過回購額外返還了 5 億美元。

As a reminder, our capital return policy is to return all free cash flow after debt reduction to shareholders. In fiscal 2020, we expect to reduce debt by $300 million to $500 million and return 100% of the remaining free cash flow.

提醒一下，我們的資本返還政策是將債務減免後的所有自由現金流量回饋給股東。 2020財年，我們預計將債務減少3億至5億美元，並100%返還剩餘自由現金流。

Before moving to our outlook, I want to highlight what we are seeing in terms of demand and supply. As Vince mentioned earlier, our business is performing quite well under the current macro backdrop. Health care is very strong, and we expect this strength to persist into the back half of the year. We are seeing robust demand in communications across both wireless from 5G deployments and wireline from data center and networking upgrades. This strength is benefiting our industrial instrumentation business where we sell high-performance solutions used in both memory and 5G testing.

在展望我們的前景之前，我想強調一下我們在需求和供應方面所看到的情況。正如文斯之前提到的，在目前的宏觀背景下，我們的業務表現相當不錯。醫療保健非常強勁，我們預計這種強勁勢頭將持續到今年下半年。我們看到 5G 部署的無線通訊以及資料中心和網路升級的有線通訊需求強勁。這一優勢有利於我們的工業儀器業務，我們銷售用於記憶體和 5G 測試的高效能解決方案。

And lastly, defense is typically a steady business against all economic backdrops. All told, these markets represent almost half of ADI's revenue over the last year. From a supply standpoint, we enter our fiscal third quarter at normal capacity levels. This is quite remarkable, and I want to echo Vince's appreciation for the dedicated manufacturing teams across the world.

最後，在所有經濟背景下，國防通常都是一項穩定的業務。總而言之，這些市場幾乎佔 ADI 去年收入的一半。從供應角度來看，我們以正常產能水準進入第三財季。這是非常了不起的，我想回應文斯對世界各地敬業的製造團隊的讚賞。

And that brings us to our third quarter outlook. Revenue is expected to be flat sequentially at $1.32 billion, plus or minus $70 million, which is a wider range than usual to account for the uncertain environment. This outlook includes approximately $50 million of revenue that was pushed from second quarter due to capacity constraints. We are assuming no change in channel inventory in this plan. We anticipate robust sequential growth in comms, modest sequential declines in industrial and consumer and a sharp sequential decline in automotive. All told, B2B should increase slightly sequentially and decline just under 10% year-over-year. We anticipate op margins to be approximately 38.3%, plus or minus 150 bps, planning for the tax rate in the quarter to be between 12% and 13%. And based on these inputs, adjusted EPS is expected to be $1.08, plus or minus $0.11.

這給我們帶來了第三季的展望。營收預計將與上一季持平，為 13.2 億美元，上下浮動 7,000 萬美元，考慮到不確定的環境，該收入範圍比平時更大。這一前景包括由於產能限製而從第二季度推算的約 5000 萬美元的收入。我們假設該計劃中渠道庫存沒有變化。我們預期通訊產業將出現強勁的環比成長，工業和消費品產業將出現溫和的環比下降，而汽車產業將大幅環比下降。總而言之，B2B 業務應會環比小幅成長，年減略低於 10%。我們預計營運利潤率約為 38.3%，上下浮動 150 個基點，計劃本季稅率在 12% 至 13% 之間。根據這些投入，調整後每股收益預計為 1.08 美元，上下浮動 0.11 美元。

As Vince said, we are confident in our third quarter outlook, but we are mindful of the tremendous uncertainty around this. Our operating model is to plan conservatively and execute aggressively to preserve free cash flow in the near term. At the same time, we remain focused on the long term, continuing to invest to capture and create value across several exciting secular growth areas.

正如文斯所說，我們對第三季的前景充滿信心，但我們也注意到這方面存在著巨大的不確定性。我們的營運模式是保守計劃並積極執行，以在短期內保持自由現金流。同時，我們仍然著眼於長期，繼續投資，在幾個令人興奮的長期成長領域中捕捉和創造價值。

Let me pass it back to Mike now to start our Q&A.

現在讓我將其傳回給麥克以開始我們的問答。

Okay. Thank you, Prashanth. Now let's get to our Q&A session. Please limit yourself to 1 questions. After our initial response, we'll give you an opportunity for follow-up questions. Cheryl, can we have our first question, please?

好的。謝謝你，普拉珊特。現在讓我們進入問答環節。請限制自己提出 1 個問題。在我們做出初步答覆後，我們將為您提供提出後續問題的機會。謝麗爾，我們可以問第一個問題嗎？

Our first question comes from John Pitzer from Crédit Suisse.

我們的第一個問題來自瑞士信貸銀行的約翰‧皮策。

Congratulations on the solid results given the backdrop. Vince, I guess the question that I'm getting this morning from investors is just relative to your July quarter guidance. Most of your peers have been guiding anywhere from 10 to 15 percentage points below seasonal. You guys are guiding about 5 percentage points below seasonal. And I guess the question that's being asked is, to what extent are you just not being as conservative as your peers? To what extent are there some idiosyncratic drivers? Could you help us parse that out?

恭喜您在這一背景下取得了紮實的成果。文斯，我想我今天早上從投資者那裡得到的問題只是與你們七月份季度的指導有關。大多數同行的指導價比季節性低 10 到 15 個百分點。你們的指導價比季節性低約 5 個百分點。我想大家提出的問題是，你在多大程度上不像你的同儕那麼保守？在多大程度上存在一些特殊的驅動因素？能幫我們解析一下嗎？

Yes. Thanks, John. So I think, first and foremost, we've seen tremendous strength in our health care business over the last quarter, and we expect that -- that will also continue. Also, generally speaking, with virtualized commerce, work from home, we're seeing, again, very, very strong demand for the communications products. The optical cable portfolios of ADI are doing particularly well. And of course, 5G, especially in China and Asia, the 5G build-out is moving at pace. So what we're seeing -- what we're predicting looking ahead is based on the order streams that we've seen. And whatever -- what others are predicting, we feel comfortable based on the strength in the areas I've just mentioned. Our defense business continues quite strong. Also, businesses attached to, let's say, the build-out of data centers and cloud, like advanced instrumentation test systems for memory, storage and so on and so forth, are also doing particularly well. So our -- the overall industrial business holds in there, as Prashanth said, probably see a modest decline or seasonal decline in the third quarter. So overall, they are the drivers. And as Prashanth said, we expect a steep decline in the automotive business. But when you look at the puts and takes, that's how we see the quarter shaping up.

是的。謝謝，約翰。因此，我認為，首先也是最重要的是，我們在上個季度看到了醫療保健業務的巨大實力，我們預計這種情況也將持續下去。此外，一般來說，透過虛擬化商務、在家工作，我們再次看到對通訊產品的非常非常強勁的需求。 ADI 的光纜產品組合表現尤其出色。當然，5G，特別是在中國和亞洲，5G 建設正在快速推進。所以我們所看到的——我們對未來的預測是基於我們所看到的訂單流。不管怎麼說——其他人的預測是什麼，基於我剛才提到的領域的優勢，我們感到很舒服。我們的國防業務仍然相當強勁。此外，附屬於資料中心和雲端建置的企業，例如用於記憶體、儲存等的先進儀器測試系統，也表現得特別好。因此，正如普拉山斯所說，我們的整體工業業務可能會在第三季出現小幅下降或季節性下降。總的來說，他們是驅動力。正如普拉山斯所說，我們預期汽車業務將急劇下滑。但當你看看看跌期權和賣出期權時，我們就會看到這個季度的情況。

That's helpful, Vince. And just maybe -- go ahead, Prashanth.

這很有幫助，文斯。只是也許——繼續吧，Prashanth。

John, maybe -- I was going to give a little bit more background on kind of the orders and outlook, which may help investors as to why our guide came in where it is. So very quickly, kind of, as expected, Feb was weak. March came back very strong, largely driven by China, but also some pretty strong demand outside from customer concerns, and then it began to correct. So April was soft, continued into May. We finished with kind of book-to-bill above 1.0 in all of our markets, except auto. So as we thought about the outlook, we -- we built our outlook on the expectation that orders are going to continue to slow through the quarter or best case, stabilize. The guide that we have out there is built on 100% backlog coverage, which is much higher than we would normally use when we're at this point in the quarter. We're working terms with our customers, and we're enforcing them pretty stringently. So any customers or disty orders are noncancelable within a 35-day window, unless we agree to grant an exception. So that's helping to kind of clean through the backlog and limit order cancellations. So all in, I think the assumptions are reasonable given the amount of uncertainty. And we did put a little bit wider range on there, plus or minus 70 to reflect the uncertainty. You follow that, John?

約翰，也許 - 我打算提供更多有關訂單和前景的背景信息，這可能有助於投資者了解為什麼我們的指南會出現在這個位置。很快，正如預期的那樣，2 月表現疲軟。 3 月的表現非常強勁，這主要是由中國推動的，但由於客戶的擔憂，外部需求也相當強勁，然後開始調整。所以四月的疲軟一直持續到五月。我們在所有市場（汽車除外）的訂單出貨比均高於 1.0。因此，當我們考慮前景時，我們的前景是基於這樣的預期：訂單將在整個季度繼續放緩，或在最好的情況下趨於穩定。我們提供的指南建立在 100% 積壓工作覆蓋率的基礎上，這比我們在本季度此時通常使用的水平要高得多。我們與客戶簽訂了合作條款，並且非常嚴格地執行這些條款。因此，除非我們同意例外，否則任何客戶或 Disty 訂單在 35 天內都不可取消。因此，這有助於清理積壓訂單並限制訂單取消。總而言之，考慮到不確定性，我認為這些假設是合理的。我們確實放寬了一點範圍，正負 70 以反映不確定性。你明白了嗎，約翰？

That's great color, guys. And then, Vince, just as my follow-up. As you mentioned in your prepared comments, the concept of Industry 4.0 has been around for a while, but it does seem like COVID has the potential of actually shining a spotlight on that in a way that we have it. And I guess, in my mind, that probably also helps the 5G build-out because it's hard to have an intelligent factory floor without that 5G backbone. But I was hoping maybe you could help us define that market opportunity for you. When you look at sort of the intelligent factory floor, what percent of your industrial business is it today? And how should we think about potential growth rates 3 to 5 years out, if this really starts to accelerate?

夥計們，這顏色真棒。然後，文斯，就像我的後續行動一樣。正如您在準備好的評論中所提到的，工業 4.0 的概念已經存在了一段時間，但新冠疫情似乎確實有潛力以我們現有的方式真正讓人們關注這一點。我想，在我看來，這可能也有助於 5G 建設，因為如果沒有 5G 主幹網，就很難擁有智慧工廠車間。但我希望您能幫助我們為您定義市場機會。當您觀察某種智慧工廠車間時，您現在的工業業務中它所佔的百分比是多少？如果這種情況真的開始加速，我們應該如何考慮 3 到 5 年後的潛在成長率？

Yes. It's a good question, John. I would say today, what we would consider to be Industry 4.0 with a highly cloud connected industrial sector is quite small. I think today, it's probably less than 10% of the total installations of factory automation and process control systems. But the intelligence we're getting from many of our customers now is that there are 2 things driving the need for the deployment of industry -- probably 3 things. One, the need for them to understand how to gather and utilize data analytics to improve the outcomes for their customers. So that assumes automatically that you deploy 5G, you deploy optical connectivity, many forms of shorter -- shorter robust connectivity. I think also the -- we're seeing the fragility of the supply chain globally. And customers are telling us they're expecting to bring more machine capability into managing the supply chain. And I think thirdly is the regionalization or the suburbanization of supply chains, and we can see the pressures there globally. And not to mention the demographics. Many of the societies that are producing lots of capital goods and consumer good outputs like Germany, China and as America begins to regionalize supply chain, we're likely to see the adoption of cobotics and more robotics technologies in general. So I think it's a long way to go, John. We're in the early innings of the Industrial 4.0, the adoption of that.

是的。這是個好問題，約翰。今天我要說的是，我們所認為的具有高度雲端連接工業部門的工業 4.0 規模相當小。我認為今天，它可能還不到工廠自動化和製程控制系統總安裝量的 10%。但我們現在從許多客戶那裡得到的情報是，有兩件事推動了產業部署的需求——可能是三件事。第一，他們需要了解如何收集和利用數據分析來改善客戶的結果。因此，自動假設您部署了 5G，您部署了光纖連接，以及多種形式的更短、更短的穩健連接。我認為我們也看到了全球供應鏈的脆弱性。客戶告訴我們，他們希望將更多的機器功能用於管理供應鏈。我認為第三是供應鏈的區域化或郊區化，我們可以看到全球的壓力。更不用說人口統計了。許多生產大量資本貨物和消費品的社會，如德國、中國，隨著美國開始供應鏈區域化，我們很可能會看到協作機器人和更多機器人技術的採用。所以我認為還有很長的路要走，約翰。我們正處於工業 4.0 的早期發展階段。

Our next question comes from Tore Svanberg from Stifel.

我們的下一個問題來自 Stifel 的 Tore Svanberg。

Congratulations on the results.

祝賀結果。

Thanks, Tore.

謝謝，托雷。

First question is for Vince. Vince, you talked quite a bit about sort of investing in this time frame. And you highlighted, again, medical and industrial. What about the automotive market? Are you seeing sort of a secular change there? Are you still investing? Or will you still be investing as heavily in automotive going forward?

第一個問題是問文斯的。文斯，你談了很多關於在這個時間範圍內進行投資的事情。您再次強調了醫療和工業。汽車市場又如何呢？您是否看到那裡發生了某種長期的變化？你還在投資嗎？或者您未來仍會在汽車領域投入大量資金嗎？

Well, we've actually been ramping, Tore, our investments in automotive, particularly in the infotainment, the power side of things, and also the electrification of the vehicle, the electric powertrain. So right now, it's a very, very hard market to read, both in terms of demand and, of course, supply. I think automotive has been extremely hard hit by the closures globally. So we see, I would say, the 2 areas of most interest to us, Tore, are the infotainment, the car experience, leveraging, for example, our A2B technology, our heritage and digital signal processing and audio signal processing in general adding, for example, active noise cancellation to the portfolio, and we're deploying that -- starting to deploy that now. So I think the whole infotainment side of things is an important part of the go ahead, and that's a place where we've a lot of heritage and where we're actually increasing investment. We just acquired a company actually during the quarter to enable us to bring more signal processing to the audio space.

嗯，托爾，我們實際上一直在增加對汽車的投資，特別是在資訊娛樂、電力方面，以及車輛的電氣化、電動動力系統方面。所以現在，無論是在需求方面，還是在供應方面，這是一個非常非常難以解讀的市場。我認為汽車行業因全球範圍內的關閉而受到了極其嚴重的打擊。所以我們看到，我想說，Tore，我們最感興趣的兩個領域是資訊娛樂、汽車體驗，例如利用我們的 A2B 技術、我們的傳統以及數位訊號處理和音訊訊號處理，一般來說，例如，產品組合的主動降噪功能，我們正在部署－現在就開始部署。因此，我認為整個資訊娛樂方面是前進的重要組成部分，這是我們擁有大量遺產並且實際上正在增​​加投資的地方。實際上，我們在本季度剛剛收購了一家公司，使我們能夠為音訊領域帶來更多訊號處理。

In the electric vehicle area, I think it's got a long, long road ahead of it. As the electrification today, the powertrain, the -- as a portion of overall car sales, it's only about 1 -- certainly less than 2% of total car sales. So a long, long way to go, and that's an area where we have strong position. We're on our fourth -- our fifth generation of technology node product delivery to that sector. So I'd say in those areas, we are actually increasing investments.

在電動車領域，我認為前面的路還很長很長。隨著當今電氣化的發展，動力系統僅佔汽車總銷量的 1% 左右，當然還不到汽車總銷量的 2%。所以還有很長很長的路要走，而這正是我們擁有強大地位的領域。我們正在向該領域交付第四代、第五代技術節點產品。所以我想說，在這些領域，我們實際上正在增​​加投資。

Power is another area, the cross connective power into our business, particularly in Europe and the U.S., that's an important initiative. And we're seeing some very good green shoots there in terms of early-stage production of designs -- of power designs that we've attached to the single processing portfolio. I think it's also true to say, Tore, that probably on the safety side of things, we've been decreasing our investments over the last several years, particularly in MEMS, you'll recall 3, 4 years ago, we withdrew most of our investments in that area. So I would say safety is more opportunistic, infotainment and electric powertrain more strategic.

電力是另一個領域，將電力交叉連接到我們的業務中，特別是在歐洲和美國，這是一項重要舉措。我們在設計的早期生產方面看到了一些非常好的萌芽——我們已將其附加到單一處理組合的電源設計。我認為，Tore，也許在安全方面，我們在過去幾年中一直在減少投資，特別是在 MEMS 領域，你還記得三四年前，我們撤回了大部分投資。我們在該領域的投資。所以我想說，安全性更具機會主義，資訊娛樂和電動動力系統更具策略性。

Tore, do you have a follow-up?

托雷，你有後續嗎？

Yes. That was very helpful. A follow-up for Prashanth. Prashanth, I do realize, obviously, right now, the orders are kind of all over the place. But if we start to see deterioration, what would be the company's playbook, especially on things like manufacturing utilization inventory because it seems like some of your peers have different playbooks? Just wondering what ADI's playbook will be in response to potentially weaker or continuous weaker orders.

是的。這非常有幫助。普拉珊斯的後續作品。 Prashanth，我確實意識到，顯然，現在訂單遍布各處。但如果我們開始看到情況惡化，該公司的策略是什麼，特別是在製造利用率庫存等方面，因為你的一些同行似乎有不同的策略？只是想知道 ADI 將採取什麼策略來應對潛在的疲軟或持續疲軟的訂單。

Sure. Yes. So Tore, let's do that in 2 pieces. First, think about how we manage our costs. So right, in the near term, how we think about cost, and you've seen it in the OpEx results already. We have a variable comp structure that is intended to act as a shock absorber and that unwinds as revenue falls. On the discretionary side, we've already frozen hiring, we've essentially got travel at 0, we've exited consultants and any discretionary contractors. And perhaps most impactful is we've deferred our merit increase, which is usually 2% to 3% year-over-year. We are on track to realize about $35 million of synergies that we announced last year in November, and we still have $100 million of cost synergies that will come through by the end of 2021. So there are some more permanent actions that we can take, and we have taken in the past, such as furloughing employees until demand returns. We did this back in 2008, 2009. It would certainly put activities like temporary actions on the table. So there are all items we'll think about.

當然。是的。所以托雷，讓我們分成兩個部分來做。首先，考慮一下我們如何管理成本。所以，在短期內，我們如何看待成本，您已經在營運支出結果中看到了這一點。我們有一個可變的薪酬結構，旨在充當減震器，並隨著收入下降而放鬆。在全權委託方面，我們已經凍結了招聘，我們的差旅費基本上為零，我們已經退出了顧問和任何全權委託承包商。也許最有影響力的是我們推遲了績效加薪，通常是年比 2% 到 3%。我們預計將實現去年 11 月宣布的約 3500 萬美元的協同效應，到 2021 年底我們仍有 1 億美元的成本協同效應。因此，我們可以採取一些更持久的行動，我們過去也採取過讓員工休假直到需求恢復的措施。我們早在 2008 年、2009 年就這樣做了。這肯定會把臨時行動等活動擺上桌面。所以我們會考慮所有的項目。

The -- on the manufacturing side, I would emphasize that our utilizations are fairly low right now. So we're kind of at the trough levels. Inventories are, we feel, at a good position. So I don't think we have kind of the same inventory exposure that we would have had at the same time last year. We've reduced on the balance sheet as well as in the channel. So overall, I think we're well positioned if this breaks up or should it break down. Maybe, Vince, do you want to talk a bit more about kind of longer term?

在製造業方面，我要強調的是，我們目前的使用率相當低。所以我們正處於低谷水平。我們認為，庫存狀況良好。因此，我認為我們的庫存敞口與去年同期的庫存敞口有所不同。我們減少了資產負債表和管道。總的來說，我認為如果這種情況破裂或應該破裂，我們處於有利位置。也許，文斯，你想多談談更長遠的事情嗎？

Yes. So I think, Tore, we feel good about the stability -- the diversity and stability of our business and what the profit margins we generate as a company. We're investing to make sure we come out of this trough, as stronger company, both in terms of product development as well as customer engagement. So we also believe very strongly in the persistence and the pervasiveness of our technologies. So I believe that the story for ADI gets stronger with the tailwinds that we have and the portfolio that we have for the future. So look, overall, our goal is to take advantage of the disarray. And while -- I think Prashanth said in his prepared remarks, we're preparing for the worst, but we're executing aggressively for the future.

是的。所以我認為，Tore，我們對穩定性感到滿意——我們業務的多樣性和穩定性以及我們作為一家公司產生的利潤率。我們正在進行投資，以確保我們能夠走出低谷，成為更強大的公司，無論是在產品開發還是客戶參與方面。因此，我們也堅信我們技術的持久性和普遍性。因此，我相信，隨著我們擁有的順風車和未來的產品組合，ADI 的故事會變得更加強勁。所以看，總的來說，我們的目標是利用混亂。我認為普拉山斯在他準備好的演講中說過，我們正在為最壞的情況做準備，但我們正在為未來積極執行。

And our next question comes from Vivek Arya from Bank of America Securities.

我們的下一個問題來自美國銀行證券公司的 Vivek Arya。

Congratulations on the good execution.

祝賀您的良好執行力。

Thank you.

謝謝。

I'm curious, Vince, what in the communications segment, just near term, did you see any level of pull-in from China or Huawei in either April or July? And then as we get beyond the current environment, do you see any further impact from all the restrictions on Huawei? Or do you think that share will be shifted over to Huawei's competitors, so longer term, you can start to regrow your communications segment?

我很好奇，文斯，在通訊領域，就近期而言，您在 4 月或 7 月是否看到來自中國或華為的任何程度的拉動？然後，當我們超越當前的環境時，您認為對華為的所有限制會產生進一步的影響嗎？或者您認為該份額將轉移給華為的競爭對手，因此從長遠來看，您可以開始重新發展您的通訊業務？

Well, Vivek, let me answer the second part of your question first. So we have tremendous coverage. We've got very strong market share across all the providers, all the OEMs of -- for 5G across the globe. So irrespective -- I mean, the networks are going to get built, and whoever builds them will be using our stuff, our transceiver technologies, our microwave portfolios, many, many other ancillary analog technologies. And -- so I feel good about the position that we're in. If share shifts from one to the other, we will pick it up. And -- so the -- yes, in terms of demand, I would say we have reconciled. So it's pretty clear what the carriers are saying about the deployment of 5G globally right now. Our reconciliation in terms of how we balance the demand of the carriers is with -- it is very tightly tied to our supply. So we have a good sense for what the carriers are looking for, and that's how we're planning essentially the factory loadings to support this particular area. So I don't think -- I mean you asked about are we seeing double ordering and so on and so forth. What is characteristic in the base station infrastructure market over many, many years is that you get generations. When a set of contracts are coming due, you see some level of, I would say, core need and a certain amount of redundancy built in, but it's pretty typical. What we're seeing right now in terms of 5G is no different to what we've seen in terms of the dynamics how 4G operated in terms of demand.

好吧，Vivek，讓我先回答你問題的第二部分。所以我們有很大的覆蓋範圍。我們在全球 5G 的所有供應商、所有 OEM 廠商中都擁有非常強大的市場份額。所以無論如何——我的意思是，網路將會建成，無論誰建造它們，都將使用我們的產品、我們的收發器技術、我們的微波產品組合，以及許多其他輔助模擬技術。而且——所以我對我們所處的位置感覺很好。如果份額從一種轉移到另一種，我們會接受它。而且 - 所以 - 是的，就需求而言，我想說我們已經達成了和解。因此，營運商目前對全球 5G 部署的看法非常明確。我們在如何平衡營運商的需求方面的協調是與我們的供應緊密相關的。因此，我們對承運商的需求有很好的了解，這就是我們基本上規劃工廠裝載以支援這一特定區域的方式。所以我不認為——我的意思是你問我們是否看到雙重排序等等。多年來，基地台基礎設施市場的特點是一代又一代。當一組合約到期時，你會看到一定程度的核心需求和一定程度的內建冗餘，但這是非常典型的。我們現在所看到的 5G 與我們所看到的 4G 需求動態沒有什麼不同。

Vivek, I remember on the call, what we said publicly about that large customer in China. A year ago, we talked about them being a mid-single-digit customer. They've been reduced meaningfully since that time. They're more around the low single-digit percent of sales today. As we look forward to our third quarter and beyond, we don't see that changing from there. Do you have a follow-up with that?

Vivek，我記得在電話中我們公開談論過中國的大客戶。一年前，我們談論過他們是中等個位數的客戶。自那時以來，它們已顯著減少。如今，它們更多地圍繞著較低的個位數百分比。當我們展望第三季及以後時，我們認為這種情況不會改變。你對此有後續行動嗎？

Yes, very helpful. On gross margins, how should we think about the trajectory from here? Given all the puts and takes of mix, and I think, Prashanth, you mentioned fab underutilization, but then you also mentioned some of the cost synergies. So let's assume sales stay at similar levels even going into your Q4. What can gross margins do then?

是的，非常有幫助。就毛利率而言，我們該如何思考未來的發展軌跡？考慮到混合的所有投入和投入，我認為 Prashanth，您提到了晶圓廠利用率不足，但隨後您也提到了一些成本協同效應。因此，我們假設即使進入第四季度，銷售額也保持在相似的水平。那麼毛利率能做什麼呢？

Sure. Yes. Good question, Vivek. So our model is 70% long term. And you saw that in good times, we can get up to 72% plus. And in more challenging times, like now, we're sort of in the high 60s. So through and through a cycle, we can average 70%. Getting to 70% is very macro dependent. As demand gets better, we are going to get utilization tailwind. We have, as I mentioned, utilizations are near trough levels now. We have -- what we have in our favor is an additional $100 million of cost of goods synergies. So that should begin to give some tailwind as well to our gross margins. And then as 2021 returns to kind of growth numbers, then I feel that it's reasonable for us to kind of beginning to get back to that 70% level.

當然。是的。好問題，維維克。所以我們的模型是 70% 的長期模型。你也看到了，在經濟好的時候，我們可以達到 72% 以上。在更具挑戰性的時代，例如現在，我們正處於 60 多歲的階段。因此，在一個週期中，我們可以平均達到 70%。達到 70% 非常依賴宏觀。隨著需求的好轉，我們將獲得利用率的順風。正如我所提到的，我們的利用率現在接近低谷水平。對我們有利的是額外 1 億美元的商品成本綜效。因此，這也應該開始為我們的毛利率帶來一些推動力。然後，隨著 2021 年恢復成長數字，我覺得我們開始回到 70% 的水平是合理的。

Cheryl, on the call -- in interest of time, we're going to go to 1 question per caller to get through a bit more.

謝麗爾（Cheryl），在通話中——為了節省時間，我們將針對每個來電者提出 1 個問題，以便進一步解答。

And our next question comes from Ambrish Srivastava from BMO.

我們的下一個問題來自 BMO 的 Ambrish Srivastava。

Prashanth, I had a question for you on couple of quick ones. OpEx trajectory, how should we be thinking about it? And then on capital allocation, is it fair to assume that given all the volatility that share buyback stays paused for now?

Prashanth，我有一個關於幾個快速問題的問題想問你。 OpEx 軌跡，我們該如何思考？然後，在資本配置方面，考慮到股票回購目前暫停的所有波動性，可以公平地假設嗎？

So for OpEx, we are in our sixth quarter of consecutive improvement in OpEx. Some of that is clearly actively managing the spend levels down, but some of it is also the result of this COVID situation where travel is at a freeze. I think it's reasonable to expect that as businesses reopen and customer expectations start to change, and we need to get back in front of folks that some of that is going to climb and as well as some other discretionary spend will come back in. So I wouldn't run this level of OpEx out too long, but I think you've seen that we have been incredibly diligent with managing our OpEx over the last 1.5 years, and that's a muscle that ADI has built, and we're not going to let that go.

因此，對於營運支出而言，我們已經進入營運支出連續改善的第六季。其中一部分顯然是積極控制支出水準下降，但一部分也是由於新冠疫情導致旅行凍結的結果。我認為，隨著企業重新開業和客戶期望開始發生變化，我們可以合理地預期，我們需要回到人們面前，其中一些支出將會攀升，而其他一些可自由支配的支出也會回來。所以我這種水準的營運支出不會持續太久，但我想您已經看到，在過去1.5 年裡，我們在管理營運支出方面非常勤奮，這是ADI 建立的力量，我們不會繼續這樣做。放手吧。

In terms of how to think about the capital allocation, our framework really hasn't changed. The first call is to invest in the business and whether that is organic or inorganic. And then after that, it's really 100% return of free cash flow after debt repayments. So the plan for 2020, we increased the dividend by 15%. We're still intending to reduce debt by $300 million to $500 million in this fiscal year. And then everything after that goes back to shareholders either through dividend or share repo. So I would expect that we would be if business holds out that we would be reactivating the share repo in the coming quarters.

在如何思考資本配置方面，我們的框架確實沒有改變。第一個要求是投資業務，無論是有機業務還是無機業務。然後，在償還債務後，自由現金流就真正實現了100%的回報。所以2020年的計畫是，我們將股利增加了15%。我們仍打算在本財年將債務減少 3 億至 5 億美元。然後，之後的一切都會透過股利或股票回購回到股東手中。因此，如果企業堅持我們將在未來幾季重新啟動股票回購，我預計我們會這樣做。

Our next question comes from Ross Seymore from Deutsche Bank.

我們的下一個問題來自德意志銀行的羅斯·西莫爾。

Congrats on the strong results and challenging times. I just want to go back to the automotive side. You said it would be down sharply. So just a couple of questions on that. Do you mean sequentially year-over-year or both? And given the timing of when the auto factories have been shut down and then are turning back on, how are you viewing the shape of that recovery? And how much of that turning back on dynamic influences your thoughts for both your July guide and your October outlook conceptually?

恭喜您所取得的優異成績和充滿挑戰的時期。我只想回到汽車方面。你說會大幅下跌。對此只有幾個問題。您是指逐年連續還是兩者兼具？考慮到汽車工廠關閉然後重新開工的時間，您如何看待復甦的形狀？這種動態的轉變在多大程度上影響了您對 7 月指南和 10 月展望的概念性想法？

Yes. Thanks for the question, Ross. So I think, first and foremost, we expect sequential and annual declines. It is extremely hard to read the automotive sector right now. I think it's easier to predict how factories will reopen and how supply will happen. I think the bigger question is what is going to happen with demand. And I think the way we view it is that we don't understand the pace of reopenings right now and to what level of utilization or capacity will they operate. So I would say we think it will be tough going for the remainder of this year in automotive. And perhaps, we'll start to see a recovery in the first half of the coming year. But that's how we're viewing it. So the area that we feel kind of most conviction around in terms of demand will be for electric vehicles where our portfolio is making very strong headway, which was originally centered really in China into Europe and, of course, America as well. So very, very hard to read, I would say. But my sense is that remainder of this year will be tough, and we start to see off a pretty paltry bottom, I think, some recovery in the first half of '21.

是的。謝謝你的提問，羅斯。所以我認為，首先也是最重要的是，我們預計會出現環比和年度下降。現在要讀懂汽車產業是極為困難的。我認為更容易預測工廠將如何重新開業以及供應將如何發生。我認為更大的問題是需求將會發生什麼。我認為我們的看法是，我們不了解目前重新開放的速度以及它們的利用率或產能將達到什麼水平。所以我想說，我們認為今年剩餘時間汽車產業將面臨艱難的處境。也許，我們將在明年上半年開始看到復甦。但這就是我們的看法。因此，就需求而言，我們認為最有信心的領域將是電動車，我們的產品組合正在取得非常強勁的進展，最初主要集中在中國到歐洲，當然還有美國。我想說，非常非常難閱讀。但我的感覺是，今年剩下的時間將會很艱難，我認為我們開始看到一個相當微不足道的底部，21 年上半年會出現一些復甦。

And Ross, I would say that is reflected in our guide. We're relatively bearish on automotive in our guide.

羅斯，我想說這反映在我們的指南中。在我們的指南中，我們對汽車產業相對悲觀。

Our next question comes from Toshiya Hari from Goldman Sachs.

我們的下一個問題來自高盛的 Toshiya Hari。

Congrats on the strong results. Vince, I wanted to ask about your BMS business specifically. How did that business trend in the quarter? What's the outlook into July? And if you can give us an update on customer traction with your wireless BMS solution into the back half of the year and potentially into fiscal year 2021, that would be helpful?

祝賀取得強勁的成果。 Vince，我想具體詢問一下你們的 BMS 業務。本季的業務趨勢如何？ 7月的前景如何？如果您能為我們提供有關您的無線 BMS 解決方案在今年下半年以及可能到 2021 財年的客戶吸引力的最新信息，這會有幫助嗎？

Yes. So yes. Overall, in the quarter just gone, we saw a modest decline, I would say, in our BMS revenues, but our design and hit rates are very, very strong. We're set to -- at the present time, we have somewhere in the region of 45% -- 40% to 45% market share in BMS. And we believe that, that share will grow above 50% given the design pipeline that we have and the commitments that we have from customers across the globe. As I mentioned, in the previous answer there, we've managed to take what was a very channel-centric BMS business. We've been taking it across the globe. And that's for essentially the nonwireless set of things. The wireless battery, we're expecting to see our first production of that particular product happened in the kind of, I think, the second half of 2021. So that's how we see it. We're in a great position, I think, right now in North America, China, and we're also beginning to penetrate Japan. And Europe, I think, is in the early stages of adoption at any kind of meaningful level, and I feel good about where we are there. So our portfolio is highly differentiated. There are many pretenders out there. But when it comes to optimizing the miles per charge, we got more than 20% gain in that -- along that metric. So overall, it's a 1% to 2% penetration of the car sector. It will probably go to 25% over the next 5, 10 years. And we're in a very, very good position to see the tailwinds from that as time plays out here.

是的。所以是的。總的來說，在剛剛過去的季度，我們的 BMS 收入略有下降，但我們的設計和命中率非常非常強勁。目前，我們在 BMS 的市佔率約為 45%、40% 至 45%。我們相信，考慮到我們擁有的設計流程以及全球客戶的承諾，這一份額將增長到 50% 以上。正如我在先前的回答中提到的，我們已經成功地開展了以通路為中心的 BMS 業務。我們已經把它帶到了全球各地。這本質上是針對非無線的事情。對於無線電池，我們預計該特定產品的首次生產將在 2021 年下半年進行。這就是我們的看法。我認為，我們現在在北美、中國處於有利地位，我們也開始滲透到日本。我認為，歐洲正處於任何有意義的水平上採用的早期階段，我對我們所處的位置感到滿意。所以我們的產品組合是高度差異化的。那裡有很多冒充者。但當談到優化每次充電的里程數時，我們按照該指標獲得了超過 20% 的收益。總體而言，汽車產業的滲透率為 1% 到 2%。未來5年、10年可能達到25%。隨著時間的推移，我們處於非常非常有利的位置，可以看到由此產生的順風車。

Thank you, Toshi. We'll go to our last question.

謝謝你，托西。我們將討論最後一個問題。

And our last question comes from Chris Danely from Citigroup.

我們的最後一個問題來自花旗集團的克里斯·丹利（Chris Danely）。

I guess, more of -- I guess, more of a clarification than a question. So you mentioned that you've seen a little bit of weakness in the April-May bookings. Does the guide take into account further weakening in the bookings, i.e., did you build in any cushion? Or are you assuming stability from here on out?

我想，更多的是──我想，更多的是澄清而不是問題。您提到您發現 4 月至 5 月的預訂量有些疲軟。該指南是否考慮到預訂量的進一步減弱，即您是否採取了任何緩衝措施？還是你認為從現在開始會保持穩定？

Yes. So I think we feel good about our guide. Chris, we don't put a guide out there that we don't think we can -- based on what we know today, we can get to orders were down in April. May was at a slower pace. Our expectation in the guide is that orders continue to slow through the quarter or best case might stabilize. We've got good coverage from the backlog, more than we normally do. So we're prepared for some cancellations or push-outs because we would have -- we always have some turns of business in there. We're trying to control those cancellations or push outs, as I mentioned, by being pretty tough on the terms that we have for direct or disty customers. And we've also assumed that the channel is relatively flat, inventory levels sequentially. So we think we've calibrated the guide as best as we can, knowing what we know today.

是的。所以我認為我們對我們的導遊感覺很好。克里斯，我們不會發布我們認為不可能的指南 - 根據我們今天所知道的情況，我們可以獲得 4 月訂單下降的情況。五月的步伐較慢。我們在指南中的預期是訂單在整個季度繼續放緩，或者最好的情況可能會穩定下來。我們從積壓的訂單中獲得了良好的覆蓋率，比平常更多。因此，我們已經做好了一些取消或推遲的準備，因為我們總是會有一些業務變動。正如我所提到的，我們正在努力控制這些取消或推出的情況，方法是對直接或不熟悉的客戶制定非常嚴格的條款。而且我們也假設通路相對平坦，庫存水準依序上升。因此，我們認為我們已經根據我們今天所知道的情況，盡可能地校準了該指南。

Thank you. And I'll turn the call back for closing comments.

謝謝。我將回電以徵求結束意見。

Thanks, everyone, for joining us this morning. A copy of the transcript will be available on our website, investor.analog.com, and you can also find our recently published ESG report, Engineering Good there as well. Thanks again for joining us and your continued interest in Analog Devices. Stay healthy.

謝謝大家今天早上加入我們。我們的網站 Investor.analog.com 上提供了該文本的副本，您也可以在那裡找到我們最近發布的 ESG 報告《Engineering Good》。再次感謝您加入我們以及您對 Analog Devices 的持續關注。保持健康。

This concludes today's Analog Devices conference call. You may now disconnect.

今天的 Analog Devices 電話會議到此結束。您現在可以斷開連線。