Financial Data and Key Metrics Changes - Revenue reached a record $237.7 million, reflecting a 9% sequential increase and a 23% year-over-year growth [9][23] - Gross margin was 56.2%, with operating income increasing to 27.9% of sales, demonstrating strong operating leverage [22][25] - Net income was $59.8 million, or $0.31 per share, marking a 27% sequential increase [25][26] Business Line Data and Key Metrics Changes - Automotive sales increased by 5% sequentially and 25% year-over-year, with e-mobility representing 41% of automotive sales, up from 35% a year ago [23][17] - Industrial sales grew by 20% sequentially and 33% year-over-year, driven by Industry 4.0, clean energy, and data centers [23][18] - Power IC business saw a 21% sequential growth and nearly 50% year-over-year growth [18] Market Data and Key Metrics Changes - Sales by geography were balanced: 26% in China, 19% in Japan, 24% in the rest of Asia, 17% in Europe, and 14% in North America [24] - Demand in China remains strong, particularly in automotive and industrial markets, despite potential headwinds from export restrictions [38][37] Company Strategy and Development Direction - The company is focusing on enhancing customer intimacy by creating OEM-focused business development teams for automotive and industrial markets [12] - A new Chief Technology Officer has been appointed to accelerate innovation and enhance product roadmaps [13] - The acquisition of Heyday Integrated Circuits aims to expand the company's market presence in high voltage applications [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges increasing uncertainty in the macroeconomic environment but remains positive about growth expectations [19][30] - The company expects sales in Q3 to range from $240 million to $250 million, with an increased sales growth expectation for FY '23 to approximately 24% [27][30] Other Important Information - The company ended Q2 with cash and equivalents of $303 million, and free cash flow was $35 million [26] - The effective tax rate for the quarter was 10%, with an expectation of 12% for the full year [25][28] Q&A Session Summary Question: Growth projection for fiscal year '24 - Management indicated that the increase in growth projection is primarily due to additional supply from TSMC and other partners, with constrained supply expected to continue [34] Question: Exposure to China - Sales in China were robust, accounting for 26% of total sales, with strong demand in automotive and industrial sectors [37][38] Question: Gross margins improvement - The improvement in gross margins was largely attributed to favorable foreign exchange, with average selling price and product mix also playing a role [40][41] Question: Banking distribution agreement - The change in Japan aims to enhance customer intimacy and direct engagement with OEMs, allowing engineers to work closely with customers [42][43] Question: Automotive product demand changes - Demand remains strong across all automotive product segments, with backlog for automotive actually increasing [60] Question: Foreign exchange benefits - The foreign exchange benefit is expected to continue into Q3, with a potential impact on gross margins if the current rates stabilize [61] Question: Design win pipeline for xEV - The e-mobility design wins increased by 68% quarter-over-quarter, indicating strong engagement with major OEMs [71]

Allegro MicroSystems, Inc. (NASDAQ:ALGM) Q1 2023 Earnings Conference Call July 28, 2022 8:30 AM ET Company Participants Leanne Sievers - President, Shelton Group Investor Relations Vineet Nargolwala - President & Chief Executive Officer Derek D'Antilio - Chief Financial Officer Conference Call Participants Gary Mobley - Wells Fargo Alessandra Vecchi - William Blair Joshua Buchalter - Cowen Blayne Curtis - Barclays Vijay Rakesh - Mizuho Group Srini Pajjuri - SMBC Trevor Janoskie - Needham & Company Operator ...

Financial Data and Key Metrics Changes - Allegro achieved record annual revenue of $769 million in fiscal 2022, representing a 30% year-over-year increase [10] - Non-GAAP gross margin expanded by 410 basis points to 54.1%, while GAAP gross margin increased to 53% from 47.2% in fiscal 2021 [12] - Non-GAAP diluted earnings per share grew by 70% year-over-year to $0.78, more than double the revenue growth percentage [13] Business Line Data and Key Metrics Changes - Automotive revenue increased by 34% year-over-year, significantly outpacing the automotive semiconductor growth of 30% [11] - Industrial revenue surged by 40% year-over-year to $133 million, while other revenue grew by 6% to $104 million [11] - Magnetic sensors accounted for 65% of sales, up 29% year-over-year, while power products represented 35% of sales, increasing by 32% [18][19] Market Data and Key Metrics Changes - Automotive market represented 69% of total revenue, up 33% year-over-year, with xEV and ADAS contributing 36% of sales, up from 33% [20] - Industrial market accounted for 17% of revenue, also up 40% year-over-year, driven by automation and EV charging infrastructure [23] - Data center business more than doubled year-over-year and is expected to approach 7% of total sales by the end of the year [24] Company Strategy and Development Direction - Allegro's strategic focus is on vehicle electrification, autonomous vehicle control, and efficient motion control, which are expected to drive long-term growth [7] - The company is expanding its manufacturing capabilities and securing long-term commitments with foundry partners to address supply constraints [25] - The transition to a hybrid working model, Flex@Allegro, aims to enhance the company's culture and attract talent [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, supported by strong design win momentum and alignment with secular growth trends [7][27] - The company anticipates continued revenue growth in the high-teens percentage for fiscal 2023, driven by automotive and industrial sectors [27] - Management acknowledged ongoing supply-demand imbalances, particularly in 200mm wafer availability, impacting short-term operations [10][42] Other Important Information - Ravi Vig announced his retirement after 38 years, with Vineet Nargolwala set to succeed him as CEO [8] - The company ended fiscal 2022 with $290 million in cash and equivalents and $25 million in long-term debt [13] Q&A Session Summary Question: Background on Ravi Vig's retirement - Ravi Vig confirmed that discussions regarding his retirement had been ongoing for months, with the board conducting a disciplined search for a successor [32] Question: Fiscal 2023 revenue outlook and TSMC's role - Management expects revenue to accelerate quarter-over-quarter, particularly in fiscal Q3 and Q4, supported by increased capacity from TSMC [34] Question: Differences in forecast between automotive and industrial segments - Management indicated that industrial is expected to modestly outgrow automotive, driven by strong demand in ADAS and xEV areas [36] Question: Supply chain and inventory normalization - Management does not foresee significant changes in inventory levels in the near future due to ongoing supply constraints [42] Question: Future gross margin expectations - Management expects gross margins to normalize and continue to seek strategic price increases and internal efficiencies [44] Question: Vehicle production and content growth in fiscal 2023 - Management anticipates a 9% year-over-year growth in vehicle production, with a similar growth in capital content [48] Question: Wafer capacity increases from foundry partners - Management confirmed increases in wafer supply from all foundry partners, including TSMC, UMC, and Polar [50]

Allegro MicroSystems, Inc. (NASDAQ:ALGM) Q3 2022 Earnings Conference Call February 1, 2022 8:30 AM ET Company Participants Katherine Blye - Investor Relations Ravi Vig - President and Chief Executive Officer Derek D’Antilio - Senior VP & CFO Conference Call Participants Gary Mobley - Wells Fargo Securities Vijay Rakesh - Mizuho Securities Quinn Bolton - Needham & Company Srinivas Pajjuri - SMBC Nikko Securities Natalia Wendler - Jefferies John Pitzer - Credit Suisse Disclaimer*: This transcript is designed ...

Financial Data and Key Metrics Changes - Revenue for Q2 fiscal 2022 was $193.6 million, a 3% sequential increase and exceeding expectations due to favorable inventory mix [8] - GAAP gross margin improved to 53%, up 300 basis points sequentially, while non-GAAP gross margin was 53.8%, up 160 basis points [13][15] - GAAP net income for Q2 was $33.2 million, with earnings per diluted share increasing to $0.17, while non-GAAP earnings per diluted share rose 11% to $0.20 [15][16] Business Line Data and Key Metrics Changes - Automotive revenue was $126 million, representing 65% of total revenue, down 6% sequentially but outperforming global car production, which declined 16% [10] - Magnetic sensor revenue increased nearly 50% year-over-year, while power ICs revenue rose 30% year-over-year [8][19] - Industrial revenue grew double digits sequentially to $36.3 million, accounting for 19% of total revenue [11] Market Data and Key Metrics Changes - Demand continues to exceed supply, with backlog at historic levels and extended visibility [11][12] - Automotive revenue growth was driven by a shift towards higher-value, feature-rich vehicles, with xEV and ADAS representing over 35% of automotive revenue [10][21] - Industrial performance was strong across categories, particularly in data center applications, with expectations for continued growth [20] Company Strategy and Development Direction - The company is focused on high-growth markets such as xEV, ADAS, Industry 4.0, and data centers, with a strategic emphasis on structural improvements in gross margins [17][23] - The transition to feature-rich vehicles and electrification is expected to drive content increases per vehicle, enhancing revenue potential [21][22] - The company aims for low to mid-teens annual revenue growth in fiscal 2023, supported by design wins and market demand [24][25] Management's Comments on Operating Environment and Future Outlook - Management anticipates a temporary impact on Q3 revenue due to supply chain disruptions but expects a return to growth in Q4 [24] - The company has confidence in its ability to achieve approximately 28% annual growth in fiscal 2022, despite current challenges [9][24] - Management highlighted the importance of maintaining pricing power to offset rising input costs [11][12] Other Important Information - Cash and equivalents reached a historic high of $256 million, with operating cash flow of $31.4 million generated in the quarter [16] - The company has begun shipping products from TSMC, with supply recovery underway following COVID-related disruptions [12][24] Q&A Session Summary Question: Capacity support for fiscal 2023 revenue growth - Management confirmed that commitments from foundry partners support growth projections for fiscal 2023 [29] Question: Inventory accumulation concerns - Management clarified that the increase in automotive revenue is due to higher content in feature-rich vehicles, not inventory accumulation [30][31] Question: Impact of supply chain constraints on Q3 revenue - Management indicated that specific supply chain issues in Malaysia would affect Q3 revenue but expects recovery in Q4 [34][38] Question: Gross margin outlook and pricing strategies - Management expressed confidence in achieving a gross margin target of 55% and indicated ongoing price increases to mitigate rising costs [35][53] Question: Visibility on fiscal year 2023 growth - Management highlighted strong demand in automotive and data center sectors as key drivers for growth in fiscal 2023 [41][42] Question: Inventory levels and long-term targets - Management aims for on-balance sheet inventory levels of 100 to 110 days in the long term, currently at 77 days [44][45]