Allegro MicroSystems(US:ALGM)2023-05-11 16:34Financial Data and Key Metrics Changes - Allegro MicroSystems reported record sales of $269 million in Q4 2023, representing a 35% year-over-year increase [7] - Non-GAAP earnings per share reached $0.37, an increase of over 75% year-over-year [7] - Full fiscal year 2023 sales totaled $974 million, up 27% year-over-year [17] Business Line Data and Key Metrics Changes - Automotive sales were $182 million in Q4, accounting for 68% of total sales, with a 29% year-over-year increase [14] - E-mobility sales within automotive increased to 47% of Q4 automotive sales, up from 36% in 2022 [8] - Industrial sales reached $58 million in Q4, a 67% year-over-year increase [15] Market Data and Key Metrics Changes - Sales in strategic growth areas, including e-mobility, clean energy, and automation, grew 46% year-over-year to $477 million, representing 49% of total sales [7] - Sales by geography were well balanced, with 26% in China, 24% in the rest of Asia, 17% in both Japan and Europe, and 16% in the Americas [18] Company Strategy and Development Direction - The company is focusing R&D investments on strategic growth areas, which now account for nearly half of total sales [10] - Allegro aims to benefit from megatrends in electrification and automation within automotive and industrial markets [12] - The company is committed to innovation, particularly in magnetic sensors, which represented approximately 60% of Q4 sales [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategy and ability to execute, highlighting strong momentum in e-mobility and clean energy [13] - The company anticipates continued strength in automotive and industrial markets, with auto production growth projected at 4% and EV growth at approximately 30% for fiscal 2024 [19] - Management noted that they have largely overcome wafer capacity constraints and are aligning backend capacity with projected demand [19] Other Important Information - The effective tax rate for Q4 was 11.6%, and diluted share count was 195 million shares [16] - Cash flow from operations for the full year was $193 million, with free cash flow of $113 million [18] Q&A Session Summary Question: Can you provide more details on the increase in e-mobility? - Management noted that e-mobility is a strong focus, with significant design wins and customer investments in electrifying fleets and adding safety features [24] Question: What are the current lead times and delinquent backlog status? - The delinquent backlog peaked at about 30% but has been significantly reduced, with ongoing efforts to manage scheduling and cancellations [26] Question: Can you clarify the revenue guidance for Q1 and the factors driving it? - The sequential increase in Q1 is driven by strength in automotive and industrial markets, with inventory replenishment not being a primary driver [30] Question: How is the company performing in the China market? - The China market remains important, with consistent ordering patterns and strong design win performance, particularly in the EV segment [32] Question: What is the outlook for EV market share and design pipeline? - The company is pivoting R&D investments towards e-mobility, with over two-thirds of investment focused in this area, indicating strong growth potential [35] Question: Are there any indications of changing order patterns in China? - Management indicated that while normalization of order patterns is expected, high demand for products continues, particularly in the EV sector [48]