Allegro MicroSystems(ALGM) - 2026 Q1 - Quarterly Results

Executive Summary Allegro MicroSystems reported strong Q1 FY2026 results with significant sales growth and increased non-GAAP EPS, projecting continued growth and improved profitability for Q2 FY2026 First Quarter Fiscal Year 2026 Highlights Allegro MicroSystems reported strong Q1 FY2026 results with significant year-over-year sales growth driven by e-Mobility and Industrial sectors, alongside a substantial increase in non-GAAP EPS and robust free cash flow - Sales increased 22% year-over-year to $203 million, led by growth in e-Mobility (31% YoY) and Industrial and Other (50% YoY)[1][2] - Non-GAAP Diluted EPS was $0.09, increasing nearly 3x year-over-year[2] - Free cash flow was $51 million, or 25% of sales, with $35 million in voluntary debt repayments during the quarter[2] Key Financial Metrics (in thousands) | Metric | June 27, 2025 (in thousands) | June 28, 2024 (in thousands) | YoY Change (%) | | :-------------------- | :------------ | :------------ | :------------- | | Total Net Sales | $203,405 | $166,919 | 22% | | Automotive Net Sales | $144,264 | $127,394 | 13% | | Industrial & Other Net Sales | $59,141 | $39,525 | 50% | | GAAP Gross Margin % | 44.9% | 44.8% | 0.1 pp | | Non-GAAP Gross Margin % | 48.2% | 48.8% | -0.6 pp | | GAAP Diluted EPS | $(0.07) | $(0.09) | 22.2% | | Non-GAAP Diluted EPS | $0.09 | $0.03 | 200% | Business Outlook for Second Quarter Fiscal Year 2026 The company projects continued growth for Q2 FY2026, with anticipated net sales between $205 million and $215 million, and improved non-GAAP profitability metrics - Total net sales are expected to be in the range of $205 million to $215 million, implying a 12% year-over-year growth at the midpoint[3] - Non-GAAP Gross Margin is expected to be between 48% and 50%[5] - Non-GAAP Operating expenses are expected to be approximately $73 million[5] - Non-GAAP Diluted Earnings per Share is expected to be between $0.10 and $0.14, up 50% year-over-year at the midpoint[5] Company Overview Allegro MicroSystems is a global leader in power and sensing semiconductor solutions, driving innovation in automotive, clean energy, and industrial automation About Allegro MicroSystems Allegro MicroSystems is a global leader in power and sensing semiconductor solutions, leveraging decades of expertise to drive innovation in automotive, clean energy, and industrial automation sectors with a focus on efficiency, performance, and sustainability - Leverages over three decades of expertise in magnetic sensing and power ICs[8] - Propels automotive, clean energy, and industrial automation forward with solutions that enhance efficiency, performance, and sustainability[8] - Reinforces its status as a pioneer in 'automotive grade' technology[8] GAAP Financial Results - First Quarter Fiscal Year 2026 Q1 FY2026 GAAP results show increased net sales and gross profit, an improved operating loss, and strong operating cash flow, with Automotive leading sales Condensed Consolidated Statements of Operations For Q1 FY2026, Allegro reported increased net sales and gross profit compared to the prior year, but still recorded an operating loss and net loss under GAAP, albeit improved from the previous year Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | June 27, 2025 (in thousands) | June 28, 2024 (in thousands) | YoY Change (in thousands) | | :-------------------- | :------------ | :------------ | :--------- | | Net sales | $203,405 | $166,919 | +$36,486 | | Cost of goods sold | $112,103 | $92,148 | +$19,955 | | Gross profit | $91,302 | $74,771 | +$16,531 | | Total operating expenses | $94,042 | $85,401 | +$8,641 | | Operating loss | $(2,740) | $(10,630) | +$7,890 | | Loss before income taxes | $(9,993) | $(16,573) | +$6,580 | | Net loss | $(13,162) | $(17,613) | +$4,451 | | Diluted EPS | $(0.07) | $(0.09) | +$0.02 | Supplemental Schedule of Total Net Sales by Market The Automotive segment continued to be the largest contributor to net sales with solid growth, while the Industrial and Other segment demonstrated significantly higher year-over-year growth Total Net Sales by Market (in thousands) | Market (in thousands) | June 27, 2025 (in thousands) | June 28, 2024 (in thousands) | Amount Change (in thousands) | % Change | | :-------------------- | :------------ | :------------ | :------------ | :------- | | Automotive | $144,264 | $127,394 | $16,870 | 13% | | Industrial and other | $59,141 | $39,525 | $19,616 | 50% | | Total net sales | $203,405 | $166,919 | $36,486 | 22% | Condensed Consolidated Balance Sheets As of June 27, 2025, the company's total assets slightly decreased from March 28, 2025, primarily due to a reduction in current assets, while long-term debt also saw a notable decrease Condensed Consolidated Balance Sheets (in thousands) | Metric | June 27, 2025 (in thousands) | March 28, 2025 (in thousands) | Change (in thousands) | | :-------------------------- | :------------ | :------------- | :----- | | Total assets | $1,389,208 | $1,420,961 | $(31,753) | | Total liabilities | $464,951 | $489,861 | $(24,910) | | Total stockholders' equity | $924,257 | $931,100 | $(6,843) | | Cash and cash equivalents | $129,106 | $121,334 | +$7,772 | | Inventories | $173,796 | $183,914 | $(10,118) | | Long-term debt | $310,790 | $344,703 | $(33,913) | Condensed Consolidated Statements of Cash Flows Operating cash flow significantly increased year-over-year, while cash used in investing activities remained stable and cash used in financing activities decreased due to lower debt repayments compared to the prior year Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Three-Month Period Ended June 27, 2025 (in thousands) | Three-Month Period Ended June 28, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :----- | | Net cash provided by operating activities | $61,618 | $34,196 | +$27,422 | | Net cash used in investing activities | $(10,600) | $(10,977) | +$377 | | Net cash used in financing activities | $(44,190) | $(60,378) | +$16,188 | | Repayment of term loan | $(35,000) | $(50,000) | +$15,000 | | Net increase (decrease) in cash and cash equivalents and restricted cash | $8,272 | $(37,984) | +$46,256 | Non-GAAP Financial Measures & Reconciliations This section details non-GAAP financial measures, including gross profit, operating expenses, EBITDA, and EPS, providing a clearer view of core operational performance Introduction to Non-GAAP Measures Allegro uses various non-GAAP financial measures to evaluate business performance, identify trends, and make strategic decisions, excluding certain non-cash or infrequent items to provide a clearer view of core operations - Non-GAAP measures are used to evaluate business, measure performance, identify trends, prepare financial forecasts, and make strategic decisions[23] - These measures exclude certain gains, losses, and charges of a non-cash nature or that occur relatively infrequently and/or are considered unrelated to core operations[23] - Exclusions include costs related to acquisition and integration, amortization of acquired intangible assets, stock-based compensation, restructuring actions, and related-party activities[24] Non-GAAP Gross Profit and Gross Margin Non-GAAP Gross Profit and Gross Margin for Q1 FY2026 were higher than GAAP figures, primarily due to adjustments for purchased intangible amortization and stock-based compensation Non-GAAP Gross Profit and Gross Margin Reconciliation (in thousands) | Metric | June 27, 2025 (in thousands) | March 28, 2025 (in thousands) | June 28, 2024 (in thousands) | | :-------------------------- | :------------ | :------------- | :------------ | | GAAP Gross Profit | $91,302 | $79,879 | $74,771 | | GAAP Gross Margin (% of net sales) | 44.9% | 41.4% | 44.8% | | Total Non-GAAP Adjustments | $6,682 | $8,004 | $6,635 | | Non-GAAP Gross Profit | $97,984 | $87,883 | $81,406 | | Non-GAAP Gross Margin (% of net sales) | 48.2% | 45.6% | 48.8% | Non-GAAP Operating Expenses Non-GAAP Operating Expenses were significantly lower than GAAP figures, reflecting adjustments for stock-based compensation, restructuring costs, and other non-recurring items across R&D and SG&A Non-GAAP Operating Expenses Reconciliation (in thousands) | Metric | June 27, 2025 (in thousands) | March 28, 2025 (in thousands) | June 28, 2024 (in thousands) | | :-------------------------------- | :------------ | :------------- | :------------ | | GAAP Operating Expenses | $94,042 | $93,077 | $85,401 | | Non-GAAP Research and Development Expenses | $42,420 | $39,780 | $40,271 | | Non-GAAP Selling, General and Administrative Expenses | $32,892 | $30,718 | $31,170 | | Total Non-GAAP Adjustments | $18,730 | $22,579 | $13,960 | | Non-GAAP Operating Expenses | $75,312 | $70,498 | $71,441 | Non-GAAP Operating Income and Operating Margin While GAAP reported an operating loss, Non-GAAP Operating Income showed a positive trend, significantly improving year-over-year and quarter-over-quarter, reflecting the impact of various adjustments Non-GAAP Operating Income and Operating Margin Reconciliation (in thousands) | Metric | June 27, 2025 (in thousands) | March 28, 2025 (in thousands) | June 28, 2024 (in thousands) | | :-------------------------- | :------------ | :------------- | :------------ | | GAAP Operating Loss | $(2,740) | $(13,198) | $(10,630) | | GAAP Operating Margin (% of net sales) | (1.3)% | (6.8)% | (6.4)% | | Total Non-GAAP Adjustments | $25,412 | $30,583 | $20,595 | | Non-GAAP Operating Income | $22,672 | $17,385 | $9,965 | | Non-GAAP Operating Margin (% of net sales) | 11.1% | 9.0% | 6.0% | EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA for Q1 FY2026 showed a substantial increase year-over-year, demonstrating improved operational performance after accounting for non-GAAP adjustments EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation (in thousands) | Metric | June 27, 2025 (in thousands) | March 28, 2025 (in thousands) | June 28, 2024 (in thousands) | | :-------------------------- | :------------ | :------------- | :------------ | | GAAP Net Loss | $(13,162) | $(14,738) | $(17,613) | | EBITDA | $12,348 | $4,138 | $4,768 | | Adjusted EBITDA | $33,368 | $28,451 | $21,949 | | Adjusted EBITDA Margin (% of net sales) | 16.4% | 14.8% | 13.1% | Non-GAAP Profit before Tax Non-GAAP Profit before Tax for Q1 FY2026 was positive, contrasting with the GAAP loss, and showed significant growth compared to prior periods, driven by various non-GAAP adjustments Non-GAAP Profit before Tax Reconciliation (in thousands) | Metric | June 27, 2025 (in thousands) | March 28, 2025 (in thousands) | June 28, 2024 (in thousands) | | :-------------------------- | :------------ | :------------- | :------------ | | GAAP Loss before Income Taxes | $(9,993) | $(18,438) | $(16,573) | | Total Non-GAAP Adjustments | $27,703 | $30,670 | $23,300 | | Non-GAAP Profit before Tax | $17,710 | $12,232 | $6,727 | Non-GAAP Income Tax Provision and Effective Tax Rate The Non-GAAP effective tax rate for Q1 FY2026 was 9.5%, a significant shift from the GAAP effective tax rate of (31.7)%, primarily due to the tax effect of non-GAAP adjustments Non-GAAP Income Tax Provision and Effective Tax Rate Reconciliation (in thousands) | Metric | June 27, 2025 (in thousands) | March 28, 2025 (in thousands) | June 28, 2024 (in thousands) | | :-------------------------- | :------------ | :------------- | :------------ | | GAAP Income Tax Provision (Benefit) | $3,169 | $(3,700) | $1,040 | | GAAP effective tax rate | (31.7)% | 20.1% | (6.3)% | | Tax effect of adjustments to GAAP results | $(1,483) | $4,126 | $(395) | | Non-GAAP Income Tax Provision | $1,686 | $426 | $645 | | Non-GAAP effective tax rate | 9.5% | 3.5% | 9.6% | Non-GAAP Net Income and Earnings per Share Non-GAAP Net Income attributable to Allegro MicroSystems, Inc. and Non-GAAP Diluted EPS showed positive results for Q1 FY2026, a significant improvement from GAAP net loss, reflecting the impact of various non-GAAP adjustments Non-GAAP Net Income and Earnings per Share Reconciliation (in thousands) | Metric | June 27, 2025 (in thousands) | March 28, 2025 (in thousands) | June 28, 2024 (in thousands) | | :-------------------------------- | :------------ | :------------- | :------------ | | GAAP Net Loss Attributable to Allegro MicroSystems, Inc. | $(13,227) | $(14,800) | $(17,675) | | GAAP Diluted Loss per Share | $(0.07) | $(0.08) | $(0.09) | | Total Non-GAAP Adjustments | $27,703 | $30,670 | $23,300 | | Tax effect of adjustments to GAAP results | $1,483 | $(4,126) | $395 | | Non-GAAP Net Income Attributable to Allegro MicroSystems, Inc. | $15,959 | $11,744 | $6,020 | | Non-GAAP Diluted Earnings per Share | $0.09 | $0.06 | $0.03 | Non-GAAP Free Cash Flow Non-GAAP Free Cash Flow for Q1 FY2026 significantly increased year-over-year and quarter-over-quarter, demonstrating strong cash generation after capital expenditures Non-GAAP Free Cash Flow Reconciliation (in thousands) | Metric | June 27, 2025 (in thousands) | March 28, 2025 (in thousands) | June 28, 2024 (in thousands) | | :-------------------------------- | :------------ | :------------- | :------------ | | GAAP Operating Cash Flow | $61,618 | $20,353 | $34,196 | | GAAP Operating Cash Flow (% of net sales) | 30.3% | 10.6% | 20.5% | | Purchases of property, plant and equipment | $(10,600) | $(5,391) | $(10,977) | | Non-GAAP Free Cash Flow | $51,018 | $14,962 | $23,219 | | Non-GAAP Free Cash Flow (% of net sales) | 25.1% | 7.8% | 13.9% | Additional Information This section provides details on the earnings webcast, forward-looking statements, non-GAAP measure disclaimers, and investor contact information Earnings Webcast Information Allegro MicroSystems hosted an earnings webcast on July 31, 2025, to discuss its business and financial results, with a recording available on its investor relations website - A webcast was held on Thursday, July 31, 2025, at 8:30 a.m., Eastern Time[6] - Michael C. Doogue (President and CEO) and Derek P. D'Antilio (EVP and CFO) discussed the results[6] - The webcast and its recording are available on the Investor Relations section of the Company's website at investors.allegromicro.com[7] Forward-Looking Statements This section contains a standard legal disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that could cause actual results to differ materially from projections - This press release contains forward-looking statements covered by safe harbor provisions of the Private Securities Litigation Reform Act of 1995[9] - These statements involve known and unknown risks, uncertainties, and other important factors that may cause actual results to differ materially from any future results expressed or implied[9] - Forward-looking statements are based on management's current expectations, beliefs, and assumptions and are subject to various factors, including those identified in the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q[11] Non-GAAP Financial Measures Disclaimer This disclaimer clarifies that non-GAAP financial measures are supplementary to GAAP, not replacements, and may not be comparable to measures used by other companies due to differing calculation methodologies - Non-GAAP financial measures are provided in addition to, and not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP[14] - There are limitations related to the use of these non-GAAP financial measures, as other companies may calculate them differently, reducing comparability[14] Investor Contact Contact information for investor relations is provided for inquiries - Investor Contact: Jalene Hoover, VP of Investor Relations & Corporate Communications[36] - Contact details: +1 (512) 751-6526, jhoover@allegromicro.com[36]