What were the key takeaways from Allegro’s earnings call?

What were the key takeaways from Allegro's earnings call?

What is the market's earnings forecast for Allegro next quarter?

What factors drove the changes in Allegro's revenue and profit?

Did Allegro beat or miss consensus estimates last quarter?

What is the revenue and EPS growth rate for Allegro year over year?

What guidance did Allegro's management provide for the next earnings period?

What is Allegro's latest dividend and current dividend yield?

- **Revenue Beat**: $229M (+29% YoY) with EPS of $0.15, both above guidance.
- **Strategic Wins**: 
  - Automotive: 46% YoY E-Mobility growth, steer-by-wire wins in 3 regions.
  - Data Center: 10% of sales, record current sensor adoption.
  - Robotics: 150+ sensors per humanoid robot, sampling in 2026.
- **Innovation**: 
  - 200A current sensor in tiny form factor.
  - TMR-based SiC gate driver in sampling.
- **Q4 Outlook**: 
  - Sales $230-240M (+22% YoY)
  - Gross margin 49-51%
  - EPS $0.14-0.18
- **Operating Leverage**: 
  - 60-65% gross margin drop-through
  - OpEx growth constrained to inflation (~3% YoY)
  - Free cash flow 18% of sales

**【CEO Summary Section】**
- **Revenue Growth**: Q3 sales of $229M exceeded high end of guidance, up 7% QoQ and 29% YoY. EPS of $0.15 beat midpoint. 
- **Strategic Wins**: 
  - Automotive: 46% YoY growth in E-Mobility, wins in ADAS (position sensors, motor drivers), xEV (traction inverters), and steer-by-wire systems across North America, China, Europe.
  - Data Center: Record 10% of sales, driven by fan drivers (+31% QoQ) and current sensors. New isolated gate driver for SiC transistors in sampling.
  - Industrial: Robotics engagement with 150+ sensor ICs in humanoid robots, 50+ motor drivers. 
- **Innovation**: 
  - 200A current sensor in postage stamp-sized package, cutting power losses by 90%.
  - TMR-based isolated gate driver for SiC transistors.

**【CFO Financial Commentary】**
- **Q3 Results**: 
  - Gross margin: 49.9% (up 30bps QoQ)
  - Operating margin: 15.4% (up 150bps QoQ)
  - Adjusted EBITDA: 20.1% of sales
  - Free cash flow: $41M (18% of sales)
- **Q4 Outlook**: 
  - Sales: $230-240M (midpoint +22% YoY)
  - Gross margin: 49-51% (midpoint +440bps YoY)
  - EPS: $0.14-0.18
  - OpEx: +3% QoQ due to payroll tax resets
- **Balance Sheet**: 
  - Cash: $163M
  - Term loan: $285M (repriced to SOFR+175bps)
  - DSO: 40 days (down from 45)
  - Inventory days: 133 (flat QoQ)

**【Q&A Highlights】**
- **Gross Margin Dynamics**: 
  - Q3 margin below midpoint due to China mix (30% of sales). Q4 margin improvement driven by lower China exposure and stable pricing.
  - Data Center mix (fan drivers vs. current sensors) impacts margin, but new products like isolated gate drivers will improve margins.
- **Automotive Market**: 
  - 20% below peak shipments, but strong bookings/backlog and design wins suggest recovery. No signs of inventory build at Tier 1s.
  - E-Mobility SAM growing at 16% CAGR, driven by ADAS and xEV adoption.
- **Data Center Growth**: 
  - Fan drivers dominate but current sensors and gate drivers are accelerating. Target $425/rack content vs. $150 today.
- **Robotics Opportunity**: 
  - 150+ sensor ICs and 50+ motor drivers per humanoid robot. Early 2026 sampling, revenue ramp expected 2027-2028.
- **Operating Leverage**: 
  - 60-65% gross margin drop-through. FY26 non-GAAP EPS doubling with 20% sales growth.
  - OpEx growth constrained to inflation (~3% YoY).

Allegro MicroSystems, Inc. (ALGM) Q3 2026 Earnings Call Transcript

- **Revenue Beat**: Q2 $214M (+24% YoY), driven by 8% QoQ automotive growth.
- **Strategic Wins**: ADAS, xEV, and robotics design wins accelerate.
- **Data Center Surge**: 10MHz sensors and 800V gate drivers gain traction.
- **Gross Margin Recovery**: 49.6% Q2, targeting 58% long-term.
- **Q3 Outlook**: $215-225M, $0.12-0.16 EPS, stable pricing environment.

**【CEO Summary Section】**
- Q2 revenue of $214M exceeded midpoint guidance, driven by 8% sequential growth in automotive and 21% YoY in e-mobility.
- Key wins in ADAS (steering systems) and xEV (tractionverter systems) with Chinese and North American OEMs.
- Data center momentum from 10MHz TMR current sensors and high-voltage gate drivers for 48V/800V power supplies.
- Robotics growth with design wins in quadruped and humanoid systems.

**【CFO Financial Commentary】**
- Gross margin improved to 49.6% (up 140bps QoQ), EPS of $0.13 vs. $0.08 YoY.
- Q3 guidance: $215-225M revenue (24% YoY), 49-51% gross margin, $0.12-0.16 EPS.
- Inventory burn continues in consumer/industrial, but automotive demand strong.
- 2026 capex ~$6M (3% of sales), targeting 58% long-term gross margin.

**【Q&A Key Highlights】**
- **Automotive Strength**: 8% QoQ growth in automotive, 21% YoY in e-mobility.
- **Data Center Expansion**: 7%+ revenue from cooling/power, potential $425M/rack content.
- **Inventory Dynamics**: Distributor burn of $5M, but end-customer restocking possible.
- **Pricing Stability**: Competitor price hikes signal stable environment.
- **Robotics Opportunity**: Design wins in advanced mobility systems.
- **Supply Chain**: Rare earth metal diversification underway.

Allegro MicroSystems, Inc. (ALGM) Q2 2026 Earnings Call Transcript

- **Revenue Growth**: Q1 $203M (+22% YoY) driven by 31% e-Mobility growth and 50% Industrial expansion. Non-GAAP EPS of $0.09 beat expectations.
- **Strategic Wins**: Major Chinese OEM win for xEV inverter, 75%+ design wins in e-Mobility/Data Center. New U-core and ASIL-C sensors optimize EV inverters.
- **Financial Strength**: 48.2% gross margin (vs. 45.6% Q4), $51M free cash flow, $35M debt repayment reducing net debt by 20%.
- **Future Outlook**: Q2 guidance for 12% YoY revenue growth, 48-50% gross margin, and 50% EPS growth. China-for-China fabs set to begin production late 2026.

**【CEO Summary Section】**
- Q1 revenue of $203 million exceeded high-end guidance, with 15% YoY growth driven by e-Mobility and Industrial segments. Non-GAAP EPS of $0.09 beat midpoint of guidance.
- E-Mobility sales grew 31% YoY, led by xEV current sensors for traction inverters and onboard chargers. Secured a major win with a Chinese OEM for a traction inverter.
- Industrial growth of 50% YoY was fueled by Data Center (motor drivers for cooling fans), Robotics/Automation, and TMR technology wins. Introduced new U-core current sensors and ASIL-C compliant ICs for xEV inverters.
- Design wins in Q1 exceeded 75% in strategic areas (e-Mobility, Data Center, Robotics). China-for-China supply chain initiatives reduced costs and improved competitiveness.

**【CFO Financial Commentary】**
- Q1 gross margin of 48.2% (vs. 45.6% Q4) reflected cost optimizations and higher-margin product mix. Sequential COGS reduction of 260bps offset FX headwinds.
- Operating expenses of $75 million (11.1% of sales) included one-time R&D and variable comp costs. Free cash flow of $51 million (25% of sales) supported $35 million debt repayment, reducing net debt to $181 million.
- Q2 outlook: Revenue $205-215 million (12% YoY), gross margin 48-50%, non-GAAP EPS $0.10-0.14 (50% YoY growth at midpoint).

**【Q&A Highlights】**
- **Demand Trends**: Strong bookings (+22% YoY), reduced distributor inventories (-28% YoY), and expedited orders suggest recovery in automotive and Industrial markets. China-for-China supply chain is gaining traction with select customers.
- **Gross Margin Drivers**: Sequential COGS reduction of 260bps from TMR device yield improvements. 2026 target of 50%+ gross margin achievable through utilization leverage and mix shift to higher-margin products.
- **Automotive Recovery**: S&P revised 2026 automotive production outlook to flat vs. prior decline. Allegro seeing expedited orders for xEV inverters and ADAS sensors, despite global production flatness.
- **China Strategy**: 28% of revenue from China, with focus on high-end products (ASIL-C sensors, isolated gate drivers). China-for-China fabs (SMIC) on track to begin wafer production late 2026.
- **Tariff Impact**: <15% of sales into U.S., no direct tariff exposure. Potential pull-ins from customers facing supply chain constraints seen as immaterial.


Allegro MicroSystems, Inc. (ALGM) Q1 2026 Earnings Call Transcript

- **Revenue rebound**: Q4 2025 sales $193M (+8% QoQ), first YoY growth since Q3 2024.
- **TMR leadership**: 30% CAGR to 2030, Q4 wins in biomedical and XEV thermal management.
- **Power expansion**: $3B SAM with isolated gate drivers, first automotive win in China.
- **Gross margin recovery**: Q1 2026 guidance 46-48%, targeting 58%+ long-term.
- **China supply chain**: 15% wafers from SMIC, first revenues late FY26.
- **Operational efficiency**: $15M annual savings from restructuring, 10-20% margin uplift from new products.


**【CEO Opening Remarks】**
- FY25 revenue growth driven by 50% increase in new product releases, targeting $12B SAM expansion.
- TMR magnetic sensors: 30% CAGR through 2030, with Q4 wins in biomedical and XEV thermal management.
- Power solutions: $3B SAM expansion with isolated gate drivers, securing first automotive win in China.
- Automotive e-mobility: $5B SAM with 16% CAGR, Q4 share gain in XEV inverter application.
- Industrial growth: Robotics SAM >$10B by 2035, AI data centers require 2x Allegro content vs legacy servers.
- Operational efficiency: New products with optimized BOM to drive 10-20% gross margin uplift.

**【CFO Financial Highlights】**
- Q4 2025 sales: $193M (8% sequential growth), non-GAAP EPS: $0.06 (beat midpoint).
- Gross margin: 45.6% (temporarily impacted by mix and lower absorption).
- FY25 restructuring: $15M annualized cost savings (50% COGS, 50% OpEx) starting FY26.
- Q1 2026 outlook: Sales $192-202M (18% YoY), gross margin 46-48%, EPS $0.06-0.10.

**【Key Q&A Takeaways】**
- China for China strategy: 15% of wafers now sourced from SMIC, first revenues expected late FY26.
- Tariff impact: Minimal direct effect, no abnormal customer behavior observed.
- Inventory: Distribution channel inventory down 25% YoY, bookings up 20% sequentially.
- Gross margin recovery: Vendor cost reductions + restructuring savings to drive 50%+ gross margin in FY26.
- Design wins: 70%+ in strategic areas (e-mobility, robotics, data center), Q4 bookings highest in 2+ years.


Allegro MicroSystems, Inc. (ALGM) Q4 2025 Earnings Call Transcript

- **Q3 outperformance**: $178M revenue, $0.07 EPS, with bookings up 50% YoY and channel inventory improving.
- **Gross margin challenge**: Q4 guided to 46-48% (200bp headwind), but FY26+ recovery expected from cost reductions.
- **Strategic momentum**: 12 new products launched, China localization on track, and 70%+ e-mobility design wins.
- **Cash management**: $149M cash, $30M debt repayment planned to save $3M annually.

**【CEO Business Overview】**
- Q3 revenue: $178M (above midpoint of guidance), non-GAAP EPS: $0.07.
- Key trends: +50% YoY bookings, channel inventory normalization, China localization progress.
- Product highlights: 12 new product launches, including inductive position sensors, micropower magnetic switches, and integrated current sensor ICs.
- Market focus: xEV growth (48% of auto sales), ADAS adoption, and industrial recovery in datacenters and medical.

**【CFO Financial Details】**
- Q3 gross margin: 49.1%, operating margin: 10.8%, adjusted EBITDA: 17% of sales.
- Auto sales: $130M (-8% QoQ, -33% YoY), e-mobility: $63M (-12% QoQ, 48% of auto sales).
- Industrial sales: $48M (+5% QoQ, -21% YoY), driven by datacenter and medical.
- Q4 outlook: $180-190M revenue, gross margin 46-48% (200bp headwind from pricing resets and inventory charges).

**【Q&A Key Takeaways】**
- **Gross margin trajectory**: Q4 is expected to be trough; FY26+ benefits from wafer price reductions and new product mix.
- **Demand signals**: +50% YoY bookings, lower cancellations, and inventory normalization in North America.
- **China strategy**: Local OSAT shipments underway, targeting 2025 calendar year scale.
- **Competitive positioning**: Leading in magnetic sensing, with no direct competition in China; 70%+ design wins in e-mobility.
- **Cash flow**: $149M cash, $25M debt repayment in Q3, $30M planned in Q4 for $3M annual interest savings.

Actual	0.09	0.13	0.15	0.18	0.2	0.19	0.21	0.24	0.31	0.35	0.37	0.39	0.4	0.32	0.25	0.03	0.08	0.07	0.06	0.09	0.13	0.15
Forecast	0.1012	0.1217	0.14	0.16	0.1801	0.1796	0.205	0.223	0.26	0.3194	0.36	0.371	0.3706	0.2882	0.2134	0.022	0.0637	0.0639	0.0492	0.0834	0.124	0.1433
Surprise	-11.07%	+6.82%	+7.14%	+12.50%	+11.05%	+5.79%	+2.44%	+7.62%	+19.23%	+9.58%	+2.78%	+5.12%	+7.93%	+11.03%	+17.15%	+36.36%	+25.59%	+9.55%	+21.95%	+7.91%	+4.84%	+4.68%

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