Allegro 2026 Q2 Earnings Strong Revenue Growth and Profitability Turnaround

Allegro MicroSystems (ALGM) delivered a robust performance in Q2 2026, with revenue rising 14.4% year-over-year to $214.29 million, surpassing estimates by $3.55 million. The company returned to profitability, reporting net income of $6.58 million and EPS of $0.04, a dramatic improvement from a $33.61 million loss and -$0.18 EPS in the prior-year period. Forward guidance for Q3 2026 was raised, with revenue projected at $215–225 million (midpoint $220 million, +24% YoY) and EPS expected between $0.12–0.16.

Revenue

Allegro’s revenue growth was driven by strong demand in e-Mobility and industrial markets, with automotive sales rising 21% year-over-year and industrial sales up 23%. The company also reported record sales in data center applications, fueled by fan driver and current sensor IC demand. Distribution sales grew 22% sequentially, reflecting improved inventory management.

Earnings/Net Income

The company’s turnaround was marked by a 119.6% increase in net income to $6.58 million, reversing a $33.61 million loss in Q2 2025. Non-GAAP EPS surged to $0.13, a 60% year-over-year increase, driven by improved gross margins (49.6%) and operating leverage. This demonstrates Allegro’s ability to translate top-line growth into profitability.

Guidance

Allegro raised its Q3 2026 guidance to $215–225 million in revenue, with a midpoint of $220 million, representing a 24% year-over-year increase. Non-GAAP EPS is projected at $0.12–0.16, with gross margin expected to remain between 49–51%. The company also highlighted progress in inventory reduction, with days inventory outstanding declining to 135 days.

Post-Earnings Price Action Review

Allegro’s shares surged 13% in premarket trading following the earnings beat, reflecting strong market confidence. However, intraday volatility saw a 10.03% decline on the latest trading day and a 2.32% drop during the prior week, indicating mixed short-term sentiment. While the recent price action suggests optimism about e-Mobility and data center growth, investors should monitor inventory trends and competitive dynamics in high-growth sectors.

CEO Commentary

CEO Michael Doogue emphasized sustained momentum in e-Mobility and data center markets, with multiyear highs in bookings and design wins. The launch of the 10 MHz TMR current sensor and expansion into 800-volt architectures were highlighted as key differentiators. CFO Derek D’Antilio noted stable pricing and operating leverage, with voluntary debt repayments reducing net debt to $168 million.

Additional News

Within the three weeks preceding October 30, 2025, no material M&A activity, C-level changes, or dividend/buyback announcements were reported for Allegro. The company remains focused on organic growth through product innovation and market expansion.

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