Allegro MicroSystems(ALGM) - 2025 Q1 - Quarterly Results

First Quarter Financial Highlights and Business Outlook First Quarter 2025 Financial Highlights Allegro reported Q1 FY2025 sales of $167 million and non-GAAP EPS of $0.03, alongside inventory rebalancing and capital actions Q1 FY2025 Key Financial Metrics (GAAP vs. Non-GAAP) | Financial Metric | Q1 FY2025 (ended June 28, 2024) | Q4 FY2024 (ended Mar 29, 2024) | Q1 FY2023 (ended June 30, 2023) | | :--- | :--- | :--- | :--- | | Total Net Sales | $166.9M | $240.6M | $278.3M | | GAAP Gross Margin % | 44.8% | 51.2% | 56.8% | | GAAP Operating Margin % | (6.4)% | 6.6% | 25.4% | | GAAP Diluted EPS | $(0.09) | $(0.04) | $0.31 | | Non-GAAP Gross Margin % | 48.8% | 53.8% | 57.8% | | Non-GAAP Operating Margin % | 6.0% | 23.8% | 30.8% | | Non-GAAP Diluted EPS | $0.03 | $0.25 | $0.39 | Q1 FY2025 Net Sales by Market (vs. Prior Periods) | Market | Q1 FY2025 (ended June 28, 2024) | Q4 FY2024 (ended Mar 29, 2024) | Q1 FY2023 (ended June 30, 2023) | | :--- | :--- | :--- | :--- | | Automotive | $131.2M | $181.9M | $185.4M | | Industrial and other | $35.7M | $58.6M | $92.9M | - Made a $50 million voluntary debt repayment during the quarter[2] - Announced a repurchase and retirement of 39 million shares from its majority shareholder, which is expected to broaden ownership and increase liquidity[2][3] Business Outlook for Second Quarter 2025 Allegro projects Q2 FY2025 net sales of $182-192 million, expecting low double-digit growth and non-GAAP EPS of $0.04-0.08 Q2 FY2025 Non-GAAP Outlook | Metric | Expected Range/Value | | :--- | :--- | | Net Sales | $182M - $192M | | Gross Margin | 49% - 51% | | Interest Expense | Approx. $7M | | Diluted EPS | $0.04 - $0.08 | - The company expects a return to low double-digit sequential sales growth in the second quarter[2] - Allegro noted that it cannot provide a reconciliation of its forward-looking non-GAAP measures to GAAP measures without unreasonable effort due to the unpredictability of certain factors[6] Financial Statements (GAAP) Condensed Consolidated Statement of Operations Allegro reported Q1 FY2025 net sales of $166.9 million (40% decrease), leading to a GAAP operating loss of $10.6 million and net loss of $17.7 million Q1 FY2025 Statement of Operations Summary (Year-over-Year) | Metric (in thousands) | Q1 FY2025 (ended June 28, 2024) | Q1 FY2024 (ended June 30, 2023) | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $166,919 | $278,293 | (40.0)% | | Gross Profit | $74,771 | $157,950 | (52.7)% | | Operating (Loss) Income | $(10,630) | $70,746 | N/A | | Net (Loss) Income | $(17,613) | $60,889 | N/A | | Diluted (Loss) Income per Share | $(0.09) | $0.31 | N/A | Q1 FY2025 Net Sales by Market (Year-over-Year) | Market (in thousands) | Q1 FY2025 | Q1 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Automotive | $131,184 | $185,430 | (29)% | | Industrial and other | $35,735 | $92,863 | (62)% | | Total Net Sales | $166,919 | $278,293 | (40)% | Condensed Consolidated Balance Sheets Allegro's total assets decreased to $1.45 billion, with liabilities reduced to $339.0 million and equity at $1.11 billion as of June 28, 2024 Balance Sheet Summary (Quarter-over-Quarter) | Account (in thousands) | June 28, 2024 | March 29, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $173,136 | $212,143 | | Inventories | $175,901 | $162,302 | | Total Assets | $1,448,890 | $1,530,603 | | Long-term debt | $202,589 | $249,611 | | Total Liabilities | $339,048 | $398,887 | | Total Stockholders' Equity | $1,109,842 | $1,131,716 | Condensed Consolidated Statements of Cash Flows Q1 FY2025 net cash from operations was $34.2 million, with $11.0 million used in investing and $60.4 million in financing, resulting in a $38.0 million cash decrease Cash Flow Summary (Year-over-Year) | Cash Flow Activity (in thousands) | Q1 FY2025 (ended June 28, 2024) | Q1 FY2024 (ended June 30, 2023) | | :--- | :--- | :--- | | Net cash provided by operating activities | $34,196 | $49,663 | | Net cash used in investing activities | $(10,977) | $(34,939) | | Net cash used in financing activities | $(60,378) | $(11,035) | | Net (decrease) increase in cash | $(37,984) | $3,616 | - A significant use of cash in financing activities was a $50.0 million payment on the 2023 term loan facility[18] Non-GAAP Financial Measures and Reconciliations Reconciliation of Non-GAAP Gross Profit Q1 FY2025 non-GAAP gross profit was $81.4 million (48.8% margin), adjusted from GAAP gross profit of $74.8 million by $6.6 million in non-GAAP items Q1 FY2025 GAAP to Non-GAAP Gross Profit Reconciliation (in thousands) | Metric | Q1 FY2025 | | :--- | :--- | | GAAP Gross Profit | $74,771 | | GAAP Gross Margin % | 44.8% | | Total Non-GAAP Adjustments | $6,635 | | Purchased intangible amortization | $4,875 | | Restructuring costs | $1,200 | | Stock-based compensation | $561 | | Non-GAAP Gross Profit | $81,406 | | Non-GAAP Gross Margin % | 48.8% | Reconciliation of Non-GAAP Operating Expenses & Income Q1 FY2025 non-GAAP operating income was $10.0 million (6.0% margin), contrasting with a GAAP operating loss of $10.6 million after $20.6 million in adjustments Q1 FY2025 GAAP to Non-GAAP Operating Income Reconciliation (in thousands) | Metric | Q1 FY2025 | | :--- | :--- | | GAAP Operating (Loss) Income | $(10,630) | | GAAP Operating Margin % | (6.4)% | | Total Non-GAAP Adjustments | $20,595 | | Stock-based compensation | $10,118 | | Purchased intangible amortization | $5,410 | | Restructuring costs | $2,414 | | Transaction-related costs | $1,842 | | Non-GAAP Operating Income | $9,965 | | Non-GAAP Operating Margin % | 6.0% | Reconciliation of EBITDA and Adjusted EBITDA Q1 FY2025 Adjusted EBITDA was $21.9 million (13.1% margin), derived by adjusting the GAAP net loss of $17.6 million for standard add-backs and non-GAAP items Q1 FY2025 GAAP Net Loss to Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 FY2025 | | :--- | :--- | | GAAP Net (Loss) Income | $(17,613) | | Interest expense, net | $4,883 | | Income tax provision | $1,040 | | Depreciation & amortization | $16,458 | | EBITDA | $4,768 | | Stock-based compensation | $10,118 | | Restructuring costs | $2,414 | | Other adjustments | $4,649 | | Adjusted EBITDA | $21,949 | | Adjusted EBITDA Margin % | 13.1% | Reconciliation of Non-GAAP Profit before Tax and Income Tax Provision Allegro's Q1 FY2025 non-GAAP profit before tax was $6.7 million, adjusted from a GAAP loss of $16.6 million by $23.3 million in non-GAAP items Q1 FY2025 GAAP to Non-GAAP Pre-Tax Profit Reconciliation (in thousands) | Metric | Q1 FY2025 | | :--- | :--- | | GAAP (Loss) Income before Income Taxes | $(16,573) | | Total Non-GAAP Adjustments | $23,300 | | Non-GAAP Profit before Tax | $6,727 | Q1 FY2025 GAAP to Non-GAAP Tax Provision Reconciliation (in thousands) | Metric | Q1 FY2025 | | :--- | :--- | | GAAP Income Tax Provision | $1,040 | | GAAP effective tax rate | (6.3)% | | Tax effect of adjustments to GAAP results | $(395) | | Non-GAAP Income Tax Provision | $645 | | Non-GAAP effective tax rate | 9.6% | Reconciliation of Non-GAAP Earnings per Share Allegro reported Q1 FY2025 non-GAAP diluted EPS of $0.03, contrasting with a GAAP loss of ($0.09), derived from a non-GAAP net income of $6.0 million Q1 FY2025 GAAP to Non-GAAP EPS Reconciliation | Metric | Q1 FY2025 | | :--- | :--- | | GAAP Diluted (Loss) Earnings per Share | $(0.09) | | GAAP Net (Loss) Income (in thousands) | $(17,675) | | Total Non-GAAP Adjustments (pre-tax, in thousands) | $23,300 | | Tax effect of adjustments (in thousands) | $395 | | Non-GAAP Net Income (in thousands) | $6,020 | | Diluted weighted average common shares | 194,705,716 | | Non-GAAP Diluted Earnings per Share | $0.03 | Reconciliation of Non-GAAP Free Cash Flow Q1 FY2025 non-GAAP free cash flow was $23.2 million (13.9% of net sales), derived from GAAP operating cash flow of $34.2 million less capital expenditures Q1 FY2025 Free Cash Flow Reconciliation (in thousands) | Metric | Q1 FY2025 | | :--- | :--- | | GAAP Operating Cash Flow | $34,196 | | Purchases of property, plant and equipment | $(10,977) | | Non-GAAP Free Cash Flow | $23,219 | | Non-GAAP Free Cash Flow % of net sales | 13.9% |