[Executive Summary](index=1&type=section&id=Executive%20Summary) 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](index=1&type=section&id=First%20Quarter%20Fiscal%20Year%202026%20Highlights) 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](index=1&type=chunk)[2](index=2&type=chunk) - Non-GAAP Diluted EPS **was $0.09**, increasing **nearly 3x** year-over-year[2](index=2&type=chunk) - Free cash flow **was $51 million**, or **25%** of sales, with **$35 million** in voluntary debt repayments during the quarter[2](index=2&type=chunk) 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](index=1&type=section&id=Business%20Outlook%20for%20Second%20Quarter%20Fiscal%20Year%202026) 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](index=3&type=chunk) - Non-GAAP Gross Margin is expected to be **between 48% and 50%**[5](index=5&type=chunk) - Non-GAAP Operating expenses are expected to be **approximately $73 million**[5](index=5&type=chunk) - 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](index=5&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) Allegro MicroSystems is a global leader in power and sensing semiconductor solutions, driving innovation in automotive, clean energy, and industrial automation [About Allegro MicroSystems](index=2&type=section&id=About%20Allegro%20MicroSystems) 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](index=8&type=chunk) - Propels automotive, clean energy, and industrial automation forward with solutions that enhance efficiency, performance, and sustainability[8](index=8&type=chunk) - Reinforces its status as a pioneer in 'automotive grade' technology[8](index=8&type=chunk) [GAAP Financial Results - First Quarter Fiscal Year 2026](index=5&type=section&id=GAAP%20Financial%20Results%20-%20First%20Quarter%20Fiscal%20Year%202026) 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](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) 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](index=5&type=section&id=Supplemental%20Schedule%20of%20Total%20Net%20Sales%20by%20Market) 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](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) 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](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) 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](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) 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](index=8&type=section&id=Introduction%20to%20Non-GAAP%20Measures) 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](index=23&type=chunk) - 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](index=23&type=chunk) - Exclusions include costs related to acquisition and integration, amortization of acquired intangible assets, stock-based compensation, restructuring actions, and related-party activities[24](index=24&type=chunk) [Non-GAAP Gross Profit and Gross Margin](index=8&type=section&id=Non-GAAP%20Gross%20Profit%20and%20Gross%20Margin) 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](index=9&type=section&id=Non-GAAP%20Operating%20Expenses) 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](index=9&type=section&id=Non-GAAP%20Operating%20Income%20and%20Operating%20Margin) 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](index=10&type=section&id=EBITDA%2C%20Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Margin) 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](index=10&type=section&id=Non-GAAP%20Profit%20before%20Tax) 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](index=10&type=section&id=Non-GAAP%20Income%20Tax%20Provision%20and%20Effective%20Tax%20Rate) 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](index=11&type=section&id=Non-GAAP%20Net%20Income%20and%20Earnings%20per%20Share) 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](index=11&type=section&id=Non-GAAP%20Free%20Cash%20Flow) 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](index=2&type=section&id=Additional%20Information) This section provides details on the earnings webcast, forward-looking statements, non-GAAP measure disclaimers, and investor contact information [Earnings Webcast Information](index=2&type=section&id=Earnings%20Webcast%20Information) 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](index=6&type=chunk) - Michael C. Doogue (President and CEO) and Derek P. D'Antilio (EVP and CFO) discussed the results[6](index=6&type=chunk) - The webcast and its recording are available on the Investor Relations section of the Company's website at investors.allegromicro.com[7](index=7&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) 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](index=9&type=chunk) - 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](index=9&type=chunk) - 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](index=11&type=chunk) [Non-GAAP Financial Measures Disclaimer](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20Disclaimer) 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](index=14&type=chunk) - There are limitations related to the use of these non-GAAP financial measures, as other companies may calculate them differently, reducing comparability[14](index=14&type=chunk) [Investor Contact](index=11&type=section&id=Investor%20Contact) Contact information for investor relations is provided for inquiries - Investor Contact: Jalene Hoover, VP of Investor Relations & Corporate Communications[36](index=36&type=chunk) - Contact details: +1 (512) 751-6526, jhoover@allegromicro.com[36](index=36&type=chunk)

Core Insights - Allegro MicroSystems reported a strong first quarter with sales of $203 million, representing a 22% year-over-year increase, driven by significant growth in e-Mobility and Industrial sectors, which grew by 31% and 50% respectively [1][2][19] - The company achieved a non-GAAP EPS of $0.09, nearly tripling year-over-year, indicating substantial operating leverage in its business model [2] - Free cash flow for the quarter was $51 million, accounting for 25% of sales, alongside voluntary debt repayments totaling $35 million [2][11] Financial Performance - Total net sales for the quarter were $203.4 million, up from $166.9 million in the same period last year, marking a $36.5 million increase [19] - Automotive sales reached $144.3 million, a 13% increase from $127.4 million, while Industrial and Other sales surged to $59.1 million, a 50% increase from $39.5 million [19] - Gross margin improved to 44.9% from 44.8% year-over-year, while non-GAAP gross margin was reported at 48.2% [18][28] Business Outlook - For the second quarter of fiscal year 2026, Allegro expects total net sales to range between $205 million and $215 million, implying a 12% year-over-year growth at the midpoint [3] - The company anticipates a gross margin between 48% and 50% and operating expenses of approximately $73 million [3] Cash Flow and Debt Management - Allegro's free cash flow was $51 million for the quarter, with a focus on improving cash flow and return on invested capital [2] - The company made voluntary debt repayments of $35 million during the quarter, following $105 million in the previous fiscal year [2][11] Earnings Webcast - A webcast discussing the financial results and business outlook was scheduled for July 31, 2025, featuring the President and CEO along with the CFO [5][6]

Core Viewpoint - Allegro MicroSystems, Inc. (ALGM) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook driven by an upward trend in earnings estimates [1][4][11] Earnings Estimates and Revisions - The Zacks Consensus Estimate for Allegro MicroSystems is projected at $0.53 per share for the fiscal year ending March 2026, showing no year-over-year change [9] - Over the past three months, the Zacks Consensus Estimate for Allegro MicroSystems has increased by 21.8% [9] Zacks Rating System - The Zacks rating system is based solely on a company's changing earnings picture, which is a key determinant of stock ratings [2][3] - The system classifies stocks into five groups, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8] - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions [10][11] Market Implications - Rising earnings estimates and the Zacks rating upgrade suggest an improvement in Allegro MicroSystems' underlying business, which could lead to higher stock prices [6][4] - The correlation between earnings estimate revisions and near-term stock movements highlights the importance of tracking these revisions for investment decisions [7][5]

Core Viewpoint - Allegro MicroSystems, Inc. is set to announce its financial results for the first quarter of fiscal year 2026 on July 31, 2025, with a subsequent conference call to discuss the results and business outlook [1]. Group 1: Financial Results Announcement - The financial results for the first quarter of fiscal year 2026 will be released before market open on July 31, 2025 [1]. - A conference call will be hosted by the CEO and CFO at 8:30 a.m. Eastern Time to discuss the results [1]. Group 2: Conference Call Details - Analysts and investors can join the conference call scheduled for July 31, 2025, at 8:30 a.m. EDT [2]. - Advanced registration is required for dial-in participants to receive a dedicated PIN for accessing the call [2]. - A live and archived audio webcast will be available for at least 90 days on the company's website [2]. Group 3: Company Overview - Allegro MicroSystems leverages over three decades of expertise in magnetic sensing and power ICs to advance automotive, clean energy, and industrial automation [3]. - The company is recognized for its commitment to quality and innovation in "automotive grade" technology [3].

Core Viewpoint - Allegro MicroSystems, Inc. is well-positioned to continue its earnings-beat streak in upcoming reports, having surpassed earnings estimates consistently in recent quarters [1][5]. Earnings Performance - In the last reported quarter, Allegro MicroSystems achieved earnings of $0.06 per share, exceeding the Zacks Consensus Estimate of $0.05 per share, resulting in a surprise of 20.00% [2]. - In the previous quarter, the company was expected to post earnings of $0.06 per share but delivered $0.07 per share, yielding a surprise of 16.67% [2]. Earnings Estimates and Predictions - Recent estimates for Allegro MicroSystems have been trending higher, with a positive Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [5][8]. - The current Earnings ESP for Allegro MicroSystems is +5.88%, suggesting increased analyst optimism regarding its near-term earnings potential [8]. Statistical Insights - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have historically produced a positive surprise nearly 70% of the time, indicating a high probability of beating consensus estimates [6][8]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7].

Group 1 - Allegro MicroSystems, Inc. (ALGM) is a notable stock within the Computer and Technology sector, which ranks 5 among 16 sector groups according to the Zacks Sector Rank [2] - The Zacks Rank for ALGM is currently 2 (Buy), indicating a positive analyst sentiment with a 21.8% increase in the full-year earnings estimate over the past quarter [3] - Year-to-date, ALGM has achieved a return of approximately 64.4%, significantly outperforming the average gain of 8.2% for the Computer and Technology sector [4] Group 2 - ALGM is part of the Electronics - Semiconductors industry, which consists of 44 companies and currently ranks 143 in the Zacks Industry Rank, with the industry gaining about 14.9% year-to-date [5] - Another stock in the Computer and Technology sector, Jabil (JBL), has also outperformed the sector with a year-to-date increase of 57.1% and holds a Zacks Rank of 1 (Strong Buy) [4][5] - The Electronics - Manufacturing Services industry, to which Jabil belongs, has seen a year-to-date increase of 47.6% and is currently ranked 47 [6]

Company Overview - Allegro MicroSystems, Inc. (ALGM) currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy) [3][4] - The company has shown strong performance in the semiconductor industry, with shares up 8.06% over the past week compared to the Zacks Electronics - Semiconductors industry, which is up 1.65% [6] - Over the past month, ALGM's price change is 24.66%, significantly outperforming the industry's 7.22% [6] Price Performance - In the last three months, ALGM shares have risen 24.37%, while in the past year, they are up 17.08% [7] - In comparison, the S&P 500 has only moved 6.01% and 13.18% over the same periods [7] Trading Volume - The average 20-day trading volume for ALGM is 1,693,278 shares, indicating a bullish trend as the stock is rising with above-average volume [8] Earnings Outlook - Over the past two months, 2 earnings estimates for ALGM have moved higher, while 1 has moved lower, resulting in an increase in the consensus estimate from $0.47 to $0.53 [10] - For the next fiscal year, 2 estimates have moved upwards with no downward revisions during the same period [10] Conclusion - Considering the positive momentum indicators and earnings outlook, ALGM is positioned as a promising investment opportunity with a Momentum Score of B [12]

Technical Analysis - Allegro MicroSystems, Inc. (ALGM) has reached a key level of support, indicating a potential investment opportunity [1] - A "golden cross" has occurred, with ALGM's 50-day simple moving average crossing above its 200-day simple moving average, suggesting a potential bullish breakout [1] - The golden cross pattern is characterized by a short-term moving average breaking above a long-term moving average, typically indicating stronger breakouts [1] Stock Performance - ALGM shares have increased by 11.2% over the past four weeks, indicating positive momentum [3] - The company currently holds a 2 (Buy) rating on the Zacks Rank, suggesting it may be poised for further breakout [3] Earnings Outlook - There have been no earnings estimate cuts for the current quarter, with two revisions higher in the past 60 days, indicating a positive earnings outlook [3] - The Zacks Consensus Estimate for ALGM has also increased, further solidifying the bullish case for the company [3] Investment Consideration - Given the technical indicators and positive earnings estimates, ALGM should be considered for inclusion on investors' watchlists [5]

Financial Data and Key Metrics Changes - Allegro Microsystems has seen a significant decline in industrial sales, which dropped about 35% during the last six quarters due to an inventory correction [19] - The company reported that distributor inventories decreased by 25% compared to the beginning of the fiscal year [54] - Gross margins are currently below 50%, with a focus on returning to the 50% range in the near term [69] Business Line Data and Key Metrics Changes - Automotive sales account for approximately 75% of overall sales, with e-mobility (ADAS applications and XEV powertrain) representing about half of that segment, growing at a mid-teens growth rate [7][8] - The industrial segment represents about 25% of sales, primarily sold through distributors, with historical applications in clean energy and industrial automation [18][20] - The isolated gate driver technology is expected to provide a content uplift opportunity of about $30 to $40 in automotive and up to $425 in AI server racks [27][28] Market Data and Key Metrics Changes - China is the largest market for Allegro, accounting for 27% of shipments, with a significant portion being re-exported [12][13] - Japan contributes about 20% of sales, North America 15%, and Europe 13% [14] - The company has a well-distributed market presence, serving almost all tier one automotive makers in the Western world [14] Company Strategy and Development Direction - The company aims to leverage its distribution channels more efficiently and has hired a new SVP of sales focused on industrial and power sectors [26] - Allegro is committed to innovation within a spending envelope, focusing on operational efficiency and cost management [48] - The company plans to continue exploring organic growth opportunities while remaining open to strategic acquisitions that align with its core competencies [80] Management's Comments on Operating Environment and Future Outlook - Management has not observed significant changes in customer order patterns despite ongoing geopolitical issues [50] - The focus remains on executing new product sales and improving gross margins above 50% [46][70] - The company is optimistic about the growth potential in the robotics sector, particularly humanoid robotics, which could match automotive content opportunities [22] Other Important Information - Allegro recently underwent a CEO change, appointing Mike Dug, who has been with the company for nearly 28 years, as the new CEO [41] - The company plans to hold an Analyst Day following its fifth anniversary as a public company to reintroduce its leadership team and clarify its strategy [83] Q&A Session Summary Question: How does Allegro's exposure to China compare to other markets? - China accounts for 27% of Allegro's shipments, with a significant portion being re-exported, while Japan is about 20%, North America 15%, and Europe 13% [12][14] Question: What are the key growth drivers in the industrial segment? - The industrial segment has been historically focused on clean energy and automation, with new opportunities in medical and AI data centers [20][21] Question: What is the company's strategy regarding acquisitions? - Allegro is focused on organic growth but remains open to strategic acquisitions that align with its technology and market needs [80]

Company Overview - Allegro MicroSystems, Inc. (ALGM) is currently experiencing significant attention from investors due to high implied volatility in the options market, particularly the June 20, 2025 $12.50 Put option [1] - The company holds a Zacks Rank 2 (Buy) in the Electronics - Semiconductors industry, which is positioned in the Bottom 48% of the Zacks Industry Rank [3] Analyst Insights - Over the past 60 days, one analyst has raised earnings estimates for the current quarter, increasing the Zacks Consensus Estimate from earnings of 7 cents per share to 8 cents per share [3] - The current sentiment among analysts indicates a potential for a significant price movement in Allegro MicroSystems shares, as reflected by the high implied volatility [4] Options Market Dynamics - High implied volatility suggests that investors are anticipating a major price movement, which could be due to an upcoming event that may trigger a rally or sell-off [2] - Options traders often seek to capitalize on high implied volatility by selling premium, aiming for the underlying stock to not move as much as expected by expiration [4]