Allegro MicroSystems, Inc. (NASDAQ:ALGM) is one of the Best Small-cap EV Stocks to Buy According to Analysts. Allegro MicroSystems, Inc. (NASDAQ:ALGM) is expected to release its fiscal second quarter results for 2026 on October 30, 2025. Wall Street has been bullish on the stock ahead of the company’s earnings release. The company topped expectations during the FQ1 2026 results. Its revenue of $203.41 million grew 21.86% year-over-year, exceeding the expectations by $5.18 million. Moreover, the EPS of $0. ...

MANCHESTER, N.H., Oct. 09, 2025 (GLOBE NEWSWIRE) -- Allegro MicroSystems, Inc. (Nasdaq: ALGM) today announced it plans to release financial results for its second quarter fiscal year 2026 prior to the market open on Thursday, October 30, 2025. Following the press release, Mike Doogue, President and Chief Executive Officer, and Derek D’Antilio, Executive Vice President and Chief Financial Officer, will host a conference call at 8:30 a.m. Eastern Time to discuss the Company’s results and business outlook. Ana ...

Summary of Semiconductor Industry Conference Call Industry Overview - The conference call focused on the North American semiconductor industry, particularly the upcoming SEMICON West event and August Semiconductor Industry Association (SIA) data [1][2][3]. Key Insights - **SEMICON West Expectations**: The event is not expected to be a significant catalyst for the semiconductor sector. It is primarily a technology showcase rather than a financial event, limiting discussions on customer equipment orders and 2026 expectations [2][3]. - **Memory Market Outlook**: - The company is bullish on memory wafer fabrication equipment (WFE) with a projected growth of 22% year-over-year into 2026. This is supported by strong memory pricing, which is anticipated to lead to increased capital expenditures in memory [2][14]. - DRAM and NAND markets are expected to see a reacceleration in capital expenditures in the second half of the year, with significant equipment shipments anticipated in 2026 [2][13]. SIA Data Highlights - **August Performance**: - SIA data showed semiconductor sales increased by 11.3% month-over-month, surpassing the estimate of 4.5% and the 10-year average of 7.9%. Year-over-year growth accelerated from 20.6% to 21.7% [8][10]. - Memory sales were particularly strong, with DRAM sales up 45.4% month-over-month, exceeding the estimate of 30.3% [16]. - NAND sales also performed well, increasing by 39.0% month-over-month, compared to an estimate of 36.1% [16]. Geographic Trends - **Sales by Region**: - Asia Pacific saw the highest growth at 53.5%, followed by The Americas at 15.7%, China at 15.1%, and Europe at 2.5%. Japan experienced a decline of 9.1% [8]. Pricing Dynamics - **Memory Pricing**: - DRAM prices per gigabit increased by 1.2% to $0.4610, reflecting a year-over-year increase of 14.4%. NAND prices per gigabit decreased by 5.3% to $0.0085, with a year-over-year decline of 22.9% [21][24]. Future Projections - **Forecast Adjustments**: - The forecast for 2025 revenue growth was raised from 17.7% to 22.2%, and the 2026 forecast was adjusted to 15.1% ($887 billion) from 10.6% ($821 billion), primarily due to memory pricing trends [14]. - A new cycle for memory is anticipated to begin in 2026, driven by current market dynamics [13][14]. Risks and Considerations - **Geopolitical Factors**: Recent policy disruptions, including anti-dumping investigations and new regulations affecting equipment suppliers, may pose risks to the semiconductor sector. However, the near-term outlook remains optimistic for memory companies and AI beneficiaries [18]. Conclusion - The semiconductor industry is experiencing robust growth, particularly in the memory segment, with positive trends expected to continue into 2026. However, external factors such as geopolitical tensions and market dynamics will need to be monitored closely.

Allegro MicroSystems Inc. (NASDAQ:ALGM) is one of the best lidar stocks to buy right now. On September 5, analysts at Bank of America reiterated a ‘Buy’ rating on the stock. However, they cut the price target to $38 from $45. Bank of America Asserts Allegro MicroSystem’s Inc. (ALGM) ‘Buy’ Rating, Cuts Price Target Photo by Yogesh Phuyal on Unsplash The price target cut comes amid growing concerns that the company, like other analog and automotive semiconductor companies, faces a weaker-than-expected rec ...

Group 1 - Allegro MicroSystems is entering a new growth cycle as its Automotive and Industrial & Other segments return to year-over-year top-line growth [1] - The company is diversified across geographies, which helps to minimize the full direct impact of U.S. tariff policies [1] - Recent trade deals have been announced, potentially benefiting the company's operations [1]

Company Overview - Allegro MicroSystems, Inc. (ALGM) is part of the Computer and Technology sector, which consists of 605 individual stocks and holds a Zacks Sector Rank of 6 [2] - The company currently has a Zacks Rank of 2 (Buy), indicating a favorable outlook based on earnings estimates and revisions [3] Performance Analysis - ALGM has achieved a year-to-date return of approximately 40.5%, significantly outperforming the average gain of 12.7% in the Computer and Technology sector [4] - Within the Electronics - Semiconductors industry, which includes 44 companies, ALGM is ranked 165 and has outperformed the industry's average gain of 19% this year [6] Comparative Analysis - Another notable stock in the Computer and Technology sector is Axcelis Technologies (ACLS), which has returned 13.8% year-to-date and has a Zacks Rank of 1 (Strong Buy) [5] - The Electronics - Manufacturing Machinery industry, to which Axcelis belongs, has seen a decline of 22.4% year-to-date, contrasting with the performance of ALGM [7]

[Forward-Looking Statements](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) [Summary of Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements%20Summary) The report contains forward-looking statements involving risks and uncertainties that may cause actual results to differ - Forward-looking statements cover future results of operations, financial position, business strategy, and prospective products[9](index=9&type=chunk) - Such statements are identifiable by terms like **'aim,' 'may,' 'will,' 'expect,' 'plan,'** and **'anticipate'**[10](index=10&type=chunk) - Actual results may differ materially due to factors identified in the **MD&A and Risk Factors sections**[11](index=11&type=chunk) [PART I. Financial Information](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the three months ended June 27, 2025 - The accompanying unaudited condensed consolidated financial statements are prepared in accordance with **U.S. GAAP**[29](index=29&type=chunk) - These interim financial statements should be read in conjunction with the **2025 Annual Report on Form 10-K**[29](index=29&type=chunk) - The results reported are **not necessarily indicative** of results that may be expected for the entire year[29](index=29&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets, liabilities, and stockholders' equity decreased slightly from March 28, 2025, to June 27, 2025 **Condensed Consolidated Balance Sheets** | Metric | June 27, 2025 (in thousands) | March 28, 2025 (in thousands) | | :--- | :--- | :--- | | Total assets | $1,389,208 | $1,420,961 | | Total liabilities | $464,951 | $489,861 | | Total stockholders' equity | $924,257 | $931,100 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported increased net sales and a reduced net loss for the three months ended June 27, 2025 **Condensed Consolidated Statements of Operations** | Metric | Three-Month Period Ended June 27, 2025 (in thousands) | Three-Month Period Ended June 28, 2024 (in thousands) | Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Net sales | $203,405 | $166,919 | $36,486 | 21.9% | | Gross profit | $91,302 | $74,771 | $16,531 | 22.1% | | Operating loss | $(2,740) | $(10,630) | $7,890 | (74.2)% | | Net loss | $(13,162) | $(17,613) | $4,451 | (25.3)% | | Net loss attributable to Allegro MicroSystems, Inc. | $(13,227) | $(17,675) | $4,448 | (25.2)% | | Basic Net loss per common share | $(0.07) | $(0.09) | $0.02 | (22.2)% | | Diluted Net loss per common share | $(0.07) | $(0.09) | $0.02 | (22.2)% | [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive loss improved significantly due to a positive foreign currency translation adjustment **Condensed Consolidated Statements of Comprehensive Loss** | Metric | Three-Month Period Ended June 27, 2025 (in thousands) | Three-Month Period Ended June 28, 2024 (in thousands) | | :--- | :--- | :--- | | Net loss | $(13,162) | $(17,613) | | Foreign currency translation adjustment, net of tax | $4,596 | $(3,188) | | Comprehensive loss | $(8,631) | $(20,863) | [Condensed Consolidated Statements of Changes in Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Total stockholders' equity decreased slightly due to net loss, partially offset by stock-based compensation **Condensed Consolidated Statements of Changes in Equity** | Metric | March 28, 2025 (in thousands) | June 27, 2025 (in thousands) | | :--- | :--- | :--- | | Total Stockholders' Equity | $931,100 | $924,257 | | Net loss | $(13,227) | $(13,162) | | Stock-based compensation | $10,728 | $10,734 | | Foreign currency translation adjustment | $4,579 | $4,596 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated significantly higher cash from operations, resulting in a net increase in cash and equivalents **Condensed Consolidated Statements of Cash Flows** | Metric | Three-Month Period Ended June 27, 2025 (in thousands) | Three-Month Period Ended June 28, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $61,618 | $34,196 | | Net cash used in investing activities | $(10,600) | $(10,977) | | Net cash used in financing activities | $(44,190) | $(60,378) | | Net increase (decrease) in cash and cash equivalents and restricted cash | $8,272 | $(37,984) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide essential details for the unaudited condensed consolidated financial statements - The Company is a leading global fabless manufacturer of **sensing and power solutions** for automotive and industrial markets[28](index=28&type=chunk) - The financial statements are prepared in accordance with **GAAP** and should be read with the annual 10-K[29](index=29&type=chunk) - The first quarter of fiscal year 2026 ended **June 27, 2025**, and the first quarter of fiscal year 2025 ended **June 28, 2024**[30](index=30&type=chunk) [Note 1. Nature of the Business and Basis of Presentation](index=9&type=section&id=Note%201.%20Nature%20of%20the%20Business%20and%20Basis%20of%20Presentation) Allegro MicroSystems is a global fabless manufacturer of sensing and power solutions for key growth markets - **Company Profile**: A leading global designer, developer, fabless manufacturer, and marketer of sensing and power solutions[28](index=28&type=chunk) - **Fiscal Periods**: First quarter of fiscal 2026 ended June 27, 2025; first quarter of fiscal 2025 ended June 28, 2024[30](index=30&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=9&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines key accounting policies, including the use of estimates and segment information - **Use of Estimates**: Management makes estimates for intangible asset valuation, goodwill, inventory, and income taxes[31](index=31&type=chunk) - **Credit Risk**: No single customer accounted for **10% or more** of trade accounts receivable or total net sales[32](index=32&type=chunk) - **Segment Information**: The Company operates as **one reportable segment**[33](index=33&type=chunk) - **Recent Accounting Pronouncements**: ASU 2024-03 and ASU 2023-09 will be effective in future annual periods[34](index=34&type=chunk)[35](index=35&type=chunk) [Note 3. Revenue from Contracts with Customers](index=10&type=section&id=Note%203.%20Revenue%20from%20Contracts%20with%20Customers) Net sales grew 21.9%, driven by strong performance in Automotive and Industrial markets, particularly in Greater China **Net Sales by Market (in thousands)** | Market | June 27, 2025 | June 28, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Automotive | $144,264 | $127,394 | $16,870 | 13.2% | | Industrial and other | $59,141 | $39,525 | $19,616 | 49.6% | | **Total Net Sales** | **$203,405** | **$166,919** | **$36,486** | **21.9%** | **Net Sales by Product (in thousands)** | Product | June 27, 2025 | June 28, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Magnetic sensors | $129,166 | $115,109 | $14,057 | 12.2% | | Power integrated circuits | $74,239 | $51,810 | $22,429 | 43.3% | | **Total Net Sales** | **$203,405** | **$166,919** | **$36,486** | **21.9%** | **Net Sales by Geography (in thousands)** | Geography | June 27, 2025 | June 28, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Americas | $32,622 | $27,491 | $5,131 | 18.7% | | EMEA (Europe) | $30,473 | $26,906 | $3,567 | 13.3% | | Asia (Greater China) | $57,569 | $31,860 | $25,709 | 80.7% | | Asia (Japan) | $33,653 | $40,643 | $(6,990) | (17.2)% | | Asia (South Korea) | $19,603 | $21,773 | $(2,170) | (10.0)% | | Asia (Other Asia) | $29,485 | $18,246 | $11,239 | 61.6% | | **Total Net Sales** | **$203,405** | **$166,919** | **$36,486** | **21.9%** | - An immaterial misclassification of net sales by market was identified and corrected with **no impact on total net sales**[38](index=38&type=chunk)[39](index=39&type=chunk) [Note 4. Fair Value Measurements](index=12&type=section&id=Note%204.%20Fair%20Value%20Measurements) Financial assets measured at fair value totaled $44.5 million, primarily in money market funds and time deposits **Fair Value Measurement of Assets (in thousands)** | Asset Category | June 27, 2025 | March 28, 2025 | | :--- | :--- | :--- | | Money market fund deposits | $41,419 | $40,587 | | Time deposits | $3,065 | $0 | | **Total Assets** | **$44,484** | **$40,587** | - The fair value of the Company's debt was **$310.4 million** as of June 27, 2025, classified as Level 2[45](index=45&type=chunk) [Note 5. Trade Accounts Receivable, net](index=12&type=section&id=Note%205.%20Trade%20Accounts%20Receivable,%20net) Net trade accounts receivable increased to $89.4 million as of June 27, 2025 **Trade Accounts Receivable, net (in thousands)** | Metric | June 27, 2025 | March 28, 2025 | | :--- | :--- | :--- | | Trade accounts receivable | $124,038 | $119,071 | | Less: Provision for expected credit losses | $(1,192) | $(618) | | Less: Returns and sales allowances | $(33,467) | $(33,855) | | **Total** | **$89,379** | **$84,598** | [Note 6. Inventories](index=13&type=section&id=Note%206.%20Inventories) Total inventories decreased to $173.8 million, primarily due to a reduction in finished goods **Inventories (in thousands)** | Category | June 27, 2025 | March 28, 2025 | | :--- | :--- | :--- | | Raw materials and supplies | $7,306 | $7,354 | | Work in process | $131,972 | $127,651 | | Finished goods | $34,518 | $48,909 | | **Total** | **$173,796** | **$183,914** | - The Company recorded inventory provisions totaling **$2.9 million** for the three-month period ended June 27, 2025[47](index=47&type=chunk) [Note 7. Property, Plant and Equipment, net](index=13&type=section&id=Note%207.%20Property,%20Plant%20and%20Equipment,%20net) Net property, plant and equipment increased slightly, with $16.5 million in assets classified as held for sale **Property, Plant and Equipment, net (in thousands)** | Category | June 27, 2025 | March 28, 2025 | | :--- | :--- | :--- | | Total cost | $841,831 | $828,774 | | Less accumulated depreciation | $(536,636) | $(525,855) | | **Total** | **$305,195** | **$302,919** | - Assets held for sale were measured at **$16.5 million** as of June 27, 2025[50](index=50&type=chunk) - Total depreciation expense amounted to **$9.2 million** for the three-month period ended June 27, 2025[48](index=48&type=chunk) [Note 8. Goodwill and Intangible Assets](index=14&type=section&id=Note%208.%20Goodwill%20and%20Intangible%20Assets) Goodwill increased slightly due to foreign currency translation, while net intangible assets decreased **Goodwill and Intangible Assets (in thousands)** | Metric | June 27, 2025 | March 28, 2025 | | :--- | :--- | :--- | | Goodwill | $203,328 | $202,475 | | Net Intangible assets | $256,414 | $262,115 | - Intangible assets amortization expense was **$6.7 million** for the three-month period ended June 27, 2025[51](index=51&type=chunk) [Note 9. Debt and Other Borrowings](index=15&type=section&id=Note%209.%20Debt%20and%20Other%20Borrowings) Total debt decreased to $312.3 million due to repayments on the 2025 Refinanced Loans **Debt Obligations (in thousands)** | Metric | June 27, 2025 | March 28, 2025 | | :--- | :--- | :--- | | Term Loan Facility | $310,000 | $345,000 | | Unamortized debt issuance costs | $(5,211) | $(6,071) | | Finance lease liabilities | $7,536 | $7,197 | | **Total debt** | **$312,325** | **$346,126** | - The Company entered into a Third Amendment for a new **$375 million tranche of term loans** maturing in 2030[54](index=54&type=chunk) - Payments totaling **$35.0 million** were applied to the outstanding balance of the 2025 Refinanced Loans[55](index=55&type=chunk) - The Company was in **compliance with its debt covenants** as of June 27, 2025[55](index=55&type=chunk)[59](index=59&type=chunk) [Note 10. Commitments and Contingencies](index=17&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) The company is not aware of any material pending legal proceedings that could adversely affect its financial condition - An accrual for legal contingencies is recorded when a liability is **probable and reasonably estimable**[60](index=60&type=chunk) - The Company is not aware of any pending legal proceeding that could have a **material adverse effect** on its business[60](index=60&type=chunk) [Note 11. Net Loss per Share](index=17&type=section&id=Note%2011.%20Net%20Loss%20per%20Share) Basic and diluted net loss per common share improved to $(0.07) from $(0.09) in the prior year **Net Loss per Common Share (in thousands, except per share amounts)** | Metric | Three-Month Period Ended June 27, 2025 | Three-Month Period Ended June 28, 2024 | | :--- | :--- | :--- | | Net loss attributable to Allegro MicroSystems, Inc. | $(13,227) | $(17,675) | | Basic net loss per common share | $(0.07) | $(0.09) | | Diluted net loss per common share | $(0.07) | $(0.09) | | Basic weighted average common shares | 184,587,027 | 193,465,708 | | Diluted weighted average common shares | 184,587,027 | 193,465,708 | - Contingently issuable shares under RSUs and PSUs were **excluded from diluted EPS calculation** due to their antidilutive effect[61](index=61&type=chunk) [Note 12. Common Stock and Stock-Based Compensation](index=18&type=section&id=Note%2012.%20Common%20Stock%20and%20Stock-Based%20Compensation) Total pre-tax stock-based compensation expense increased to $10.8 million for the quarter **Stock-Based Compensation Expense (in thousands)** | Expense Category | Three-Month Period Ended June 27, 2025 | Three-Month Period Ended June 28, 2024 | | :--- | :--- | :--- | | Cost of goods sold | $888 | $561 | | Research and development | $2,911 | $3,735 | | Selling, general and administrative | $6,963 | $5,822 | | **Total pre-tax stock-based compensation expense** | **$10,762** | **$10,118** | - As of June 27, 2025, **3.3 million RSUs** were outstanding with **$80.6 million** in unrecognized compensation expense[62](index=62&type=chunk) - As of June 27, 2025, **2.4 million PSUs** were outstanding with **$20.5 million** in unrecognized compensation cost[63](index=63&type=chunk) [Note 13. Income Taxes](index=19&type=section&id=Note%2013.%20Income%20Taxes) The income tax provision was $3.2 million, resulting in an effective tax rate of (31.7)% **Income Tax Provision** | Metric | Three-Month Period Ended June 27, 2025 | Three-Month Period Ended June 28, 2024 | | :--- | :--- | :--- | | Income tax provision | $3,169 | $1,040 | | Effective tax rate | (31.7)% | (6.3)% | - The effective income tax rate fluctuates due to the **mix of U.S. and foreign income** and discrete transactions[66](index=66&type=chunk) - The 'One Big Beautiful Bill Act' (OBBB) was enacted on July 4, 2025, with impacts **not included** in the current quarter's results[68](index=68&type=chunk) [Note 14. Restructuring](index=19&type=section&id=Note%2014.%20Restructuring) The company incurred $0.6 million in restructuring costs, with the January 2025 plan now materially complete - The Company incurred **$0.6 million** in severance and other restructuring costs during the quarter[69](index=69&type=chunk) - Cumulative costs associated with the January 2025 Restructuring reached **$6.4 million**[69](index=69&type=chunk) - The January 2025 restructuring is **materially complete**, and no additional material charges are expected[69](index=69&type=chunk) [Note 15. Related Party Transactions](index=19&type=section&id=Note%2015.%20Related%20Party%20Transactions) The company engaged in significant share repurchases with Sanken Electric, which remains a major shareholder - The Company repurchased **38.8 million shares** from Sanken Electric for an aggregate consideration of **$853.8 million**[70](index=70&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) - The share repurchase resulted in a **loss of $34.8 million** on the change in fair value of the forward repurchase contract[75](index=75&type=chunk) - As of June 27, 2025, Sanken held approximately **32.3%** of the Company's outstanding common stock[77](index=77&type=chunk) - The Short-Term Distribution Agreement with Sanken was **extended by 12 months** on March 31, 2025[79](index=79&type=chunk) - The Company owns approximately **10.2%** of Polar Semiconductor, LLC (PSL)[80](index=80&type=chunk) - Purchases of in-process products from PSL totaled **$8.3 million** for the three-month period ended June 27, 2025[82](index=82&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial performance, condition, and cash flows for the three months ended June 27, 2025 - This discussion should be read in conjunction with the **unaudited condensed consolidated financial statements**[84](index=84&type=chunk) - The discussion contains **forward-looking statements** that involve risks, uncertainties, and assumptions[85](index=85&type=chunk) - The Company operates on a **52- or 53-week fiscal year** ending on the last Friday of March[86](index=86&type=chunk) [Overview](index=23&type=section&id=Overview) Allegro MicroSystems is a leading global designer of sensor and power ICs for automotive and industrial markets - Allegro MicroSystems is a leading global designer, developer, and **fabless manufacturer** of sensor and power ICs[87](index=87&type=chunk) - The Company ships over **1.5 billion units annually** to more than 10,000 customers worldwide[88](index=88&type=chunk) - For the three-month period ended June 27, 2025, total net sales were **$203.4 million** and net loss was **$13.2 million**[88](index=88&type=chunk) [Other Key Factors and Trends Affecting Our Operating Results](index=23&type=section&id=Other%20Key%20Factors%20and%20Trends%20Affecting%20Our%20Operating%20Results) Operating results are influenced by inflation, design wins, customer demand fluctuations, and industry cyclicality - **Inflation** has led to higher labor, material, transportation, and energy costs[89](index=89&type=chunk) - Future sales are highly dependent on winning **new design mandates** from customers[90](index=90&type=chunk) - Customer demand is highly dependent on **end-market conditions** and is subject to seasonality and cyclicality[91](index=91&type=chunk) - Gross margin is affected by **ASPs, product mix, material costs, and manufacturing efficiencies**[92](index=92&type=chunk) - The semiconductor industry is **highly cyclical** and characterized by rapid technological change[93](index=93&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) This section details financial performance, showing increased net sales and gross profit, and a reduced net loss **Summary of Results of Operations (in thousands, except percentages)** | Metric | June 27, 2025 | % of Net Sales | June 28, 2024 | % of Net Sales | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total net sales | $203,405 | 100.0% | $166,919 | 100.0% | $36,486 | 21.9% | | Cost of goods sold | $112,103 | 55.1% | $92,148 | 55.2% | $19,955 | 21.7% | | Gross profit | $91,302 | 44.9% | $74,771 | 44.8% | $16,531 | 22.1% | | Total operating expenses | $94,042 | 46.2% | $85,401 | 51.2% | $8,641 | 10.1% | | Operating loss | $(2,740) | (1.3)% | $(10,630) | (6.4)% | $7,890 | (74.2)% | | Loss before income taxes | $(9,993) | (4.9)% | $(16,573) | (9.9)% | $6,580 | (39.7)% | | Net loss | $(13,162) | (6.5)% | $(17,613) | (10.6)% | $4,451 | (25.3)% | [Total net sales](index=26&type=section&id=Total%20net%20sales) Total net sales increased by 21.9% to $203.4 million, driven by growth in data center and e-Mobility products **Total Net Sales (in thousands)** | Period | Amount | % Change YoY | | :--- | :--- | :--- | | Three-Month Period Ended June 27, 2025 | $203,405 | 21.9% | | Three-Month Period Ended June 28, 2024 | $166,919 | | - The increase was primarily driven by **data center applications, industrial automation, and e-Mobility products** (ADAS and EV)[96](index=96&type=chunk) [Sales Trends by Market](index=26&type=section&id=Sales%20Trends%20by%20Market) Automotive net sales grew 13.2% and Industrial and other net sales surged by 49.6% **Net Sales by Market (in thousands)** | Market | June 27, 2025 | June 28, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Automotive | $144,264 | $127,394 | $16,870 | 13.2% | | Industrial and other | $59,141 | $39,525 | $19,616 | 49.6% | | **Total Net Sales** | **$203,405** | **$166,919** | **$36,486** | **21.9%** | - Automotive net sales increased primarily due to an increase in **e-Mobility products**, including ADAS and EV[99](index=99&type=chunk) - Industrial and other net sales increased primarily due to demand for **data center and medical applications**[100](index=100&type=chunk) [Sales Trends by Product](index=27&type=section&id=Sales%20Trends%20by%20Product) Magnetic sensors sales increased by 12.2%, while Power integrated circuits sales grew significantly by 43.3% **Net Sales by Product (in thousands)** | Product | June 27, 2025 | June 28, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Magnetic sensors ("MS") | $129,166 | $115,109 | $14,057 | 12.2% | | Power integrated circuits ("PIC") | $74,239 | $51,810 | $22,429 | 43.3% | | **Total Net Sales** | **$203,405** | **$166,919** | **$36,486** | **21.9%** | - The increase in MS sales was primarily due to demand for **magnetic speed and TMR sensor solutions**[102](index=102&type=chunk) - The increase in PIC sales was primarily driven by demand for **motor products and high-performance power products**[102](index=102&type=chunk) [Sales Trends by Geographic Location](index=27&type=section&id=Sales%20Trends%20by%20Geographic%20Location) Greater China sales surged by 80.7%, while Japan and South Korea experienced declines in net sales **Net Sales by Geographic Location (in thousands)** | Geography | June 27, 2025 | June 28, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Americas | $32,622 | $27,491 | $5,131 | 18.7% | | Europe | $30,473 | $26,906 | $3,567 | 13.3% | | Greater China | $57,569 | $31,860 | $25,709 | 80.7% | | Japan | $33,653 | $40,643 | $(6,990) | (17.2)% | | South Korea | $19,603 | $21,773 | $(2,170) | (10.0)% | | Other Asia | $29,485 | $18,246 | $11,239 | 61.6% | | **Total Net Sales** | **$203,405** | **$166,919** | **$36,486** | **21.9%** | - **Greater China** net sales increased primarily driven by an increase in net sales of ADAS and EV[104](index=104&type=chunk) - **Japan** net sales declined primarily in automotive, specifically in safety, comfort, and convenience applications[104](index=104&type=chunk) - **South Korea** net sales declined in automotive, primarily in ADAS and EV[104](index=104&type=chunk) [Cost of goods sold](index=27&type=section&id=Cost%20of%20goods%20sold) Cost of goods sold increased by 21.7% to $112.1 million due to higher production volume **Cost of Goods Sold (in thousands)** | Period | Amount | % of Net Sales | % Change YoY | | :--- | :--- | :--- | :--- | | Three-Month Period Ended June 27, 2025 | $112,103 | 55.1% | 21.7% | | Three-Month Period Ended June 28, 2024 | $92,148 | 55.2% | | - The increase was primarily due to **higher production volume** in support of higher product sales[105](index=105&type=chunk) - The decrease as a percentage of total net sales was primarily due to the **increase in production volume**[105](index=105&type=chunk) [Gross profit and gross margin](index=27&type=section&id=Gross%20profit%20and%20gross%20margin) Gross profit increased by 22.1% to $91.3 million, with gross margin improving slightly to 44.9% **Gross Profit and Gross Margin (in thousands)** | Period | Gross Profit | Gross Margin | % Change YoY (Gross Profit) | | :--- | :--- | :--- | :--- | | Three-Month Period Ended June 27, 2025 | $91,302 | 44.9% | 22.1% | | Three-Month Period Ended June 28, 2024 | $74,771 | 44.8% | | - The increase in gross profit and gross margin was primarily due to the **increase in net sales and a change in product mix**[106](index=106&type=chunk) [Research and development expenses](index=27&type=section&id=Research%20and%20development%20expenses) R&D expenses increased by 2.9% to $46.5 million, primarily due to higher personnel costs **Research and Development Expenses (in thousands)** | Period | Amount | % of Net Sales | % Change YoY | | :--- | :--- | :--- | :--- | | Three-Month Period Ended June 27, 2025 | $46,500 | 22.9% | 2.9% | | Three-Month Period Ended June 28, 2024 | $45,204 | 27.1% | | - R&D expenses increased primarily due to the increase of **R&D personnel costs**[107](index=107&type=chunk) - R&D expenses as a percentage of total net sales decreased primarily due to the **increase in net sales**[107](index=107&type=chunk) [Selling, general and administrative expenses](index=29&type=section&id=Selling,%20general%20and%20administrative%20expenses) SG&A expenses increased by 18.3% to $47.5 million, mainly due to higher outside service and personnel costs **Selling, General and Administrative Expenses (in thousands)** | Period | Amount | % of Net Sales | % Change YoY | | :--- | :--- | :--- | :--- | | Three-Month Period Ended June 27, 2025 | $47,542 | 23.4% | 18.3% | | Three-Month Period Ended June 28, 2024 | $40,197 | 24.1% | | - SG&A expenses increased primarily due to an increase in **outside service and personnel costs**[108](index=108&type=chunk) - The decrease in SG&A as a percentage of net sales was primarily due to the **increase in net sales**[109](index=109&type=chunk) [Interest expense](index=29&type=section&id=Interest%20expense) Interest expense increased by 18.3% to $6.4 million due to higher interest payments on the term loan facility **Interest Expense (in thousands)** | Period | Amount | % Change YoY | | :--- | :--- | :--- | | Three-Month Period Ended June 27, 2025 | $(6,359) | 18.3% | | Three-Month Period Ended June 28, 2024 | $(5,377) | | - Interest expense increased due to **higher interest payments** on the Refinanced 2023 Term Loan Facility[110](index=110&type=chunk) [Interest income](index=29&type=section&id=Interest%20income) Interest income decreased by 52.6% to $0.2 million, primarily due to lower cash and cash equivalent balances **Interest Income (in thousands)** | Period | Amount | % Change YoY | | :--- | :--- | :--- | | Three-Month Period Ended June 27, 2025 | $234 | (52.6)% | | Three-Month Period Ended June 28, 2024 | $494 | | - Interest income decreased primarily due to **lower cash and cash equivalent balances**[111](index=111&type=chunk) [Other expense, net](index=29&type=section&id=Other%20expense,%20net) Other expense, net, slightly increased to $1.1 million, primarily due to foreign currency losses **Other Expense, Net (in thousands)** | Period | Amount | % Change YoY | | :--- | :--- | :--- | | Three-Month Period Ended June 27, 2025 | $(1,128) | 6.4% | | Three-Month Period Ended June 28, 2024 | $(1,060) | | - The foreign currency loss was primarily due to the **U.S. Dollar weakening against the Euro**[112](index=112&type=chunk) - The Company recorded a gain of **$0.8 million** related to its investment in marketable securities and money market funds[113](index=113&type=chunk) [Income tax provision](index=29&type=section&id=Income%20tax%20provision) The income tax provision increased significantly to $3.2 million, resulting in an effective tax rate of (31.7)% **Income Tax Provision (in thousands)** | Period | Amount | Effective Tax Rate | % Change YoY | | :--- | :--- | :--- | :--- | | Three-Month Period Ended June 27, 2025 | $3,169 | (31.7)% | 204.7% | | Three-Month Period Ended June 28, 2024 | $1,040 | (6.3)% | | - The change in the effective tax rate results mainly from a **decrease in GAAP loss before taxes** and increased non-deductible items[114](index=114&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company had $129.1 million in cash and believes existing liquidity is sufficient for the next 12 months **Liquidity Metrics (in thousands)** | Metric | June 27, 2025 | March 28, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents | $129,106 | $121,334 | | Working capital | $326,400 | $370,800 | - Primary liquidity requirements include **working capital, capital expenditures, and debt payments**[116](index=116&type=chunk) - The capital deployment strategy is to utilize cash to support **growth initiatives and potential acquisitions**[116](index=116&type=chunk) - The Company believes existing cash will be **sufficient to finance operations** for the next 12 months[117](index=117&type=chunk) [Cash Flows from Operating, Investing and Financing Activities](index=30&type=section&id=Cash%20Flows%20from%20Operating,%20Investing%20and%20Financing%20Activities) The company experienced a net increase in cash of $8.3 million, driven by strong operating cash flow **Summary of Cash Flows (in thousands)** | Activity | Three-Month Period Ended June 27, 2025 | Three-Month Period Ended June 28, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $61,618 | $34,196 | | Net cash used in investing activities | $(10,600) | $(10,977) | | Net cash used in financing activities | $(44,190) | $(60,378) | | Net increase (decrease) in cash and cash equivalents and restricted cash | $8,272 | $(37,984) | [Operating Activities](index=30&type=section&id=Operating%20Activities) Net cash from operating activities increased to $61.6 million due to a reduced net loss and noncash charges - Net cash provided by operating activities was **$61.6 million** for the three-month period ended June 27, 2025[119](index=119&type=chunk)[120](index=120&type=chunk) - The increase was primarily from a net loss of **$(13.2) million**, noncash charges of **$26.2 million**, and a **$48.5 million** decrease in net operating assets[119](index=119&type=chunk) [Investing Activities](index=32&type=section&id=Investing%20Activities) Net cash used in investing activities was $10.6 million, consisting entirely of capital expenditures - Net cash used in investing activities was **$10.6 million** for the three-month period ended June 27, 2025[121](index=121&type=chunk) - These activities consisted solely of **purchases of property, plant, and equipment**[121](index=121&type=chunk) [Financing Activities](index=32&type=section&id=Financing%20Activities) Net cash used in financing activities decreased to $44.2 million due to lower payments on term loans - Net cash used in financing activities was **$44.2 million** for the three-month period ended June 27, 2025[122](index=122&type=chunk)[123](index=123&type=chunk) - Key uses included **$35.0 million** in payments on 2025 Refinanced Loans and **$9.0 million** for taxes related to equity awards[122](index=122&type=chunk) [Debt Obligations](index=32&type=section&id=Debt%20Obligations) This section refers to Note 9 for detailed information on the company's debt obligations - Detailed information regarding the Company's debt obligations is provided in **Note 9, 'Debt and Other Borrowings'**[124](index=124&type=chunk) [Recent Accounting Pronouncements](index=32&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for a full description of recent accounting pronouncements - A full description of recent accounting pronouncements is provided in **Note 2, 'Summary of Significant Accounting Policies'**[125](index=125&type=chunk) [Critical Accounting Estimates](index=32&type=section&id=Critical%20Accounting%20Estimates) There have been no material changes in the company's critical accounting policies and estimates since March 28, 2025 - There have been **no material changes** in the Company's critical accounting policies and estimates since March 28, 2025[126](index=126&type=chunk) - Significant accounting policies are described in **Note 2** of the consolidated financial statements in the 2025 Annual Report[126](index=126&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes in the company's exposures to market risk since March 28, 2025 - There have not been any **material changes** in the Company's exposures to market risk since March 28, 2025[127](index=127&type=chunk) - Details on market risks are available in the **2025 Annual Report**[127](index=127&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 27, 2025 - Management evaluated the effectiveness of **disclosure controls and procedures** as of June 27, 2025[129](index=129&type=chunk) - Disclosure controls and procedures were concluded to be **effective at the reasonable assurance level**[129](index=129&type=chunk) - There were **no material changes** in internal control over financial reporting during the period[130](index=130&type=chunk) [PART II. Other Information](index=34&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The Company is **not currently party** to any material legal proceedings[133](index=133&type=chunk) - The Company is not aware of any pending legal proceeding that could have a **material adverse effect** on its business[133](index=133&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the 2025 Annual Report - There have been **no material changes** to the risk factors previously disclosed in the Company's 2025 Annual Report[134](index=134&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds occurred during the reporting period - None[135](index=135&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter - No director or officer adopted or terminated a **'Rule 10b5-1 trading arrangement'** during the three-month period ended June 27, 2025[136](index=136&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL documents - Exhibits include **certifications** of the Principal Executive Officer and Principal Financial Officer[138](index=138&type=chunk) - Includes **Inline XBRL** Instance Document and Taxonomy Extension Schema[138](index=138&type=chunk) - Lists an **amendment to the Distribution Agreement** with Sanken Electric Co, Ltd[138](index=138&type=chunk) [Signatures](index=36&type=section&id=SIGNATURES) [Summary of Signatures](index=36&type=section&id=Signatures%20Summary) The report is duly signed by the CEO and CFO on behalf of Allegro MicroSystems, Inc on August 1, 2025 - The report is signed by **Michael C. Doogue**, President and Chief Executive Officer[143](index=143&type=chunk) - The report is signed by **Derek P. D'Antilio**, Executive Vice President, Chief Financial Officer and Treasurer[143](index=143&type=chunk) - The signing date for the report is **August 1, 2025**[143](index=143&type=chunk)

Core Insights - Allegro MicroSystems reported Q1 FY2026 earnings with revenue of $203.4 million, a 22% increase year-over-year, but missed analysts' GAAP revenue estimates by $33.3 million [1][5] - Non-GAAP earnings per share were $0.09, significantly below the consensus expectation of $0.20, although it represented a 200% increase from the prior year [1][2] - The company highlighted ongoing challenges with demand visibility and market execution despite strong cash generation and growth in key segments [1] Financial Performance - Revenue (GAAP) for Q1 FY2026 was $203.4 million, up from $166.9 million in Q1 FY2025, reflecting a 21.9% year-over-year change [2] - Non-GAAP EPS was $0.09, compared to $0.03 in the same quarter last year, marking a 200% increase [2] - Free cash flow (Non-GAAP) reached $51.0 million, a 119.8% increase from $23.2 million in the prior year [2] Business Segments - The automotive segment generated $144.3 million in revenue, a 13% increase year-over-year, accounting for 71% of total sales [5] - Industrial and other segment revenue was $59.1 million, increasing 50% year-over-year [5] - E-Mobility applications constituted about 50% of automotive segment revenue, reflecting the push for higher semiconductor content in vehicles [5] Margins and Cost Management - Non-GAAP gross margin decreased slightly by 0.6 percentage points year-over-year to 48.2% [2][7] - Operating margin (Non-GAAP) improved to 11.1%, up from 6.0% in the prior year [2][7] - Restructuring efforts are expected to yield $15 million in annualized savings starting in FY2026 [7] Manufacturing and Supply Chain - The company's fabless manufacturing model allowed for adaptability to supply and demand shifts while keeping capital investments modest [8] - Inventory levels decreased by $10.1 million from the previous quarter, indicating improved demand and balanced supply [8] - Voluntary debt repayments of $35 million contributed to a trend of reduced leverage, with over $140 million repaid in the past five quarters [8] Research and Development - R&D spending rose to $46.5 million (GAAP), supporting growth objectives through new design wins in magnetic sensor ICs and power ICs [9] - Competitive wins in biomedical and power applications for electric vehicles were highlighted by management [9] Future Outlook - Management projects Q2 FY2026 revenue between $205 million and $215 million, indicating a midpoint year-over-year growth of 12% [11] - Non-GAAP gross margin is forecasted in the 48–50% range, with EPS expected between $0.10 and $0.14, marking a potential 50% increase over the prior year midpoint [11] - The company remains confident in long-term growth prospects, citing strong bookings and a healthy backlog [11] Investor Considerations - Investors are focused on the company's ability to meet margin targets and sustain sales growth in e-Mobility, automotive, and industrial sectors [12] - Pricing trends in the automotive market and emerging competition in China are noted as areas to monitor [12]

Financial Data and Key Metrics Changes - The company reported sales of $203 million, with a gross margin of 48.2%, and non-GAAP EPS of $0.09, exceeding guidance [8][16] - Q1 sales increased by 5% sequentially and 22% year over year [17] - Operating margin improved to 11.1%, compared to 9% in Q4 and 6% a year ago [19] Business Line Data and Key Metrics Changes - Automotive sales increased by 3% sequentially, led by e-mobility sales, which rose by 16% sequentially and 31% year over year [17] - Industrial and other sales increased by 11% sequentially and 50% year over year, driven by growth in data centers, robotics, and automation [17][18] - Sales of magnetic sensors increased by 10% sequentially and 12% year over year, while power products sales declined by 2% sequentially but increased by 43% year over year [18] Market Data and Key Metrics Changes - Sales by geography were distributed as follows: 28% in China, 24% in the rest of Asia, 17% in Japan, 16% in The Americas, and 15% in Europe [18] - Distributor inventory dollars declined by 13% sequentially and 28% year over year, indicating a tightening supply chain [18] Company Strategy and Development Direction - The company aims to demonstrate relentless innovation to drive performance leadership in new and existing markets [9] - A new ACL C current sensor was released, designed for XEV inverters, optimizing customer bill of materials [10] - The company is focusing on cost innovation to improve gross margins, with a goal of reaching 50% gross margin in the future [14][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong bookings, increasing backlog, and significant orders within lead times [8][16] - The automotive production forecast has been revised to a flat vehicle production landscape, indicating potential recovery [41] - The company expects Q2 sales to be in the range of $205 million to $215 million, reflecting a 12% year-over-year increase [22] Other Important Information - The company ended Q1 with cash of $139 million and free cash flow of $51 million, representing 25% of sales [20] - A voluntary debt repayment of $35 million was made, reducing net debt to $181 million [21] Q&A Session Summary Question: Can you talk about the forward demand picture and inventory needs? - Management noted strong bookings and backlog, with discussions about potential future component shortages indicating increased demand [26][27] Question: Can you elaborate on the industrial exposure and clean energy? - The company highlighted a broad industrial market with strong growth in data centers, robotics, and clean energy, despite some softness in clean energy [30][32] Question: What drove the upside in gross margin? - The gross margin exceeded expectations due to higher revenue and favorable pricing dynamics, with a projected drop-through of 75% moving forward [35][36] Question: How do you see automotive demand recovery? - Management observed positive signs for recovery in automotive demand, with increased discussions about expedited delivery from customers [42] Question: Is the revenue guide shipping to true end demand? - The revenue guide does not yet reflect shipping to end demand, as the company continues to under-ship the distribution channel [46] Question: What trends are seen in China? - The company reported strong momentum in e-mobility and noted the importance of the "China for China" strategy for competitive positioning [62][64] Question: When will capital deployment shift from debt repayment to capital return? - Currently, the focus remains on debt repayment as the most accretive action, with no immediate plans for share buybacks or dividends [100]

Financial Data and Key Metrics Changes - Sales for Q1 2026 were $203 million, with a gross margin of 48.2%, operating margin of 11.1%, and non-GAAP EPS of $0.09, reflecting a 5% sequential increase and a 22% year-over-year increase in sales [14][15][19] - Gross margin improved by 260 basis points sequentially, while operating margin increased from 9% in Q4 to 11.1% [18][19] - Cash flow from operations was $62 million, with free cash flow at $51 million, representing 25% of sales [19] Business Line Data and Key Metrics Changes - Automotive sales increased by 3% sequentially, led by eMobility sales, which rose by 16% sequentially and 31% year-over-year [15] - Industrial and other sales grew by 11% sequentially and 50% year-over-year, driven by data center, robotics, and automation [15][17] - Magnetic sensor sales increased by 10% sequentially and 12% year-over-year, while power products sales declined by 2% sequentially but increased by 43% year-over-year [17] Market Data and Key Metrics Changes - Sales by geography were distributed as follows: 28% in China, 24% in the rest of Asia, 17% in Japan, 16% in The Americas, and 15% in Europe [17] - Distributor inventory dollars declined by 13% sequentially and 28% year-over-year, indicating a tightening supply chain [16] Company Strategy and Development Direction - The company aims to demonstrate relentless innovation to drive performance leadership in new and existing markets, with a focus on eMobility, data centers, robotics, and clean energy [6][7] - New product releases include innovative current sensor ICs for XEV inverters and a 48-volt motor driver IC for AI data centers, enhancing the company's competitive position [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued strong bookings and backlog, with expectations for Q2 sales to range between $205 million and $215 million, reflecting a 12% year-over-year increase [20][21] - The automotive production forecast has been revised to a flat vehicle production landscape, indicating potential recovery signs in the automotive sector [40][41] Other Important Information - The company made a voluntary debt repayment of $35 million, reducing net debt to $181 million [19] - The effective tax rate for the quarter was 9.5%, with interest expense at $5.5 million [19] Q&A Session Summary Question: Can you talk about the forward demand picture and inventory refills? - Management noted strong bookings and backlog, with discussions about potential future component shortages indicating increased demand [25][26] Question: How is the industrial exposure, particularly in clean energy? - The company highlighted a broad industrial market with strong growth in data centers, robotics, and automation, despite some softness in clean energy [30][31] Question: What drove the upside in gross margin? - The gross margin exceeded expectations due to higher revenue and favorable cost dynamics, with a projected increase towards 50% in the coming quarters [35][36] Question: How do you see automotive demand recovery? - Management observed positive signs for automotive demand recovery, with increased customer discussions about expedited material delivery [41] Question: What is the outlook for distribution channel restocking? - The company expects distribution sales to be flat in Q2, with potential restocking of select parts as inventory levels normalize [57][58] Question: Can you discuss trends in China? - The company reported strong momentum in China, particularly in eMobility, while acknowledging competitive pressures and geopolitical concerns [60][61] Question: What is the strategy for capital deployment? - The focus remains on debt repayment as the most accretive action, with no immediate plans for share buybacks or dividends [96][97]