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Allegro MicroSystems (ALGM) Q1 FY27 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q1 FY27)· Information Technology· Jul 30, 2026

Source: earnings call transcript

Executive summary

Allegro MicroSystems Q1 FY27 — Record Data Center Sales and Strong Bookings Growth

Allegro MicroSystems commenced fiscal 2027 with robust performance, driven by record data center sales and strong bookings growth across its key end markets. The company continues to benefit from megatrends in AI, electrification, and automation, expanding its content per vehicle and per data center rack. Management is focused on operational excellence and strategic investments to sustain growth and margin expansion, while navigating inflationary pressures and supply chain dynamics.

Highlights

5

  • First quarter sales were $259 million, above the high end of guidance and representing a 27% increase year-over-year.

  • First quarter EPS was $0.23, increasing 156% over Q1 of fiscal 2026.

  • Data center sales increased 32% sequentially to a new quarterly record, establishing 17% of total sales.

  • Automotive sales grew 15% year-over-year, outpacing the long-term target of greater than 10% growth.

  • Bookings increased for the seventh consecutive quarter, with auto bookings up 30% year-over-year.

Concerns

2

  • Majority of auto customer contracts saw low single-digit price declines at the beginning of the calendar year.

  • Some in-lead-time orders in data center and auto could not be shipped in Q1, building delinquency for future quarters.

Guidance & targets

CategoryTargetConfidence
Q2 FY27 Sales
$265 million to $275 million
high materiality
High
Q2 FY27 Non-GAAP Gross Margin
50.75% and 51.75%
medium materiality
High
Q2 FY27 Operating Expenses
$84.5 million, plus or minus $1 million
medium materiality
High
Q2 FY27 Interest Expense
$4 million
low materiality
High
Q2 FY27 Non-GAAP Tax Rate
approximately 10%
low materiality
High
Q2 FY27 Weighted Average Diluted Share Count
188 million shares
low materiality
High
Q2 FY27 Non-GAAP EPS
$0.23 and $0.26 per share
high materiality
High
FY27 Data Center Sales Growth
more than double
high materiality
High
FY27 Robotics and Automation Sales Contribution
3% to 4% of our FY '27 sales
medium materiality
High
Automotive End Market Sequential Growth
mid-single-digit sequential growth
medium materiality
High
Industrial End Market Sequential Growth
mid-single-digit sequential growth
medium materiality
High
Long-term Gross Margin
55% and beyond
high materiality
High
Automotive Growth Target
double-digit growth
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Automotive
Outpacing long-term target of >10% growth. Focus auto (xEV and ADAS) increased 3% sequentially and 11% over Q1 FY26. Auto design wins were up 30% YoY, and auto bookings were up 30% YoY and high single digits sequentially.
$165 million15%1%—
Industrial and Other
Led by continued strength in data center to record levels. General industrial sales had an uptick, with excess inventory largely gone.
$94 million59%18%—
Data Center
New quarterly record. Product margins in the mid-50s due to the mix shift towards higher-margin current sensors.
Percentage of Q1 sales: 17%Percentage of Q1 sales (Q4 FY26): 14%Percentage of Q1 sales (Q3 FY26): 10%Sensor solutions as % of Q1 data center sales: 22%Sensor solutions sequential growth: 66%
$44.03 million—32%mid-50s

Orderbook & backlog

Bookings increased for the seventh consecutive quarter Q1 FY27 end
Backlog continued to expand Q1 FY27 end

Some in-lead-time orders could not be shipped in Q1, building delinquency to be shipped over the next couple of quarters.

Auto bookings up 30% year-over-year Q1 FY27 end

up high single digits sequentially

Product announcements

ProductTypeDetails
Generation 2 isolated gate driverlaunch

Deals & partnerships

leading provider design wins for 5 megahertz current sensors in high-volume, high-voltage DC power supply

Secured design wins for multiple important programs using market-leading 5 megahertz current sensors.

prominent North American humanoid robotics OEM large design win for inductive position sensors in robotics joints

Secured a large design win using inductive position sensors in robotics joints.

large Chinese humanoid robot OEMs current sensor wins

Secured current sensor wins with large Chinese humanoid robot OEMs.

2 leading OEMs (Korea) several electronic power steering wins

Wins included Allegro current and position sensors, motor drivers, and high-performance power solutions.

top Japanese OEM sizable win for current sensors in a hybrid vehicle traction inverter

Market-leading current sensors are driving share gains.

global and local Tier 1s (China) gaining share in 12- and 48-volt electromechanical braking systems

Motor drivers, high-performance PMICs, and position sensors are gaining share.

leading China OEMs first major TMR angle sensor programs for ADAS steering motors

Demonstrates share gain potential of market-leading TMR technology.

Risks & headwinds

Inflationary headwinds

from commodity costs and other costs

Mitigation:taking selective price actions

Low single-digit price declines in auto customer contracts beginning of the calendar year

low single-digit declines

Mitigation:selective price actions, BOM optimizations, surcharges for increasing costs

In-lead-time orders unable to ship Q1 FY27

some of those orders couldn't be shipped in Q1, and we're building a little bit of delinquency

Mitigation:expanding capacity on the back end; back-end equipment rolling on each and every quarter

What to watch in Q2 FY27

Data Center Sales Growth

Q2 FY27 and beyond
Current 32% sequential growth in Q1 FY27, 17% of total sales
Target Continued strong growth, contributing to 'more than double' FY27 sales over FY26

Why it matters

Data center is a key growth driver, and its sustained momentum is critical for overall company performance and the AI thesis.

fiscal 2027 data center sales will more than double over fiscal 2026.

Find out whether ALGM delivers this. Inve re-checks your case every morning.

Q&A highlights

Seeking clarification on the mid-single-digit sequential growth guidance for industrial and auto, specifically the expected growth rate for the data center segment within that.

Data center growth is reflected in the mid-single-digit industrial growth. The company continues to see strong momentum and signals of strength in data center, but some in-lead-time orders could not be shipped in Q1, leading to a build-up of delinquency for future quarters.

“we continue to receive within lead time orders, both in data center and in auto. And so some of those orders couldn't be shipped in Q1, and we're building a little bit of delinquency we'll ship over the next couple of quarters.”

asked by Joseph Quatrochi · answered by Derek D'Antilio

2 min read 6 chapters

Detailed narrative

Data Center Growth & Content Expansion

Allegro's data center business achieved record sales in Q1 FY27, increasing 32% sequentially and comprising 17% of total sales. This growth is fueled by increasing content in next-generation AI servers, particularly with current sensors, which now represent 22% of Q1 data center sales and grew 66% sequentially. The company expects FY27 data center sales to more than double over FY26, driven by rising server power and new design wins for high-speed current sensors and isolated gate drivers, which could add hundreds of dollars of content per rack.

Robotics & Automation Opportunity

The company is seeing increasing adoption of its sensor and power solutions in robotics applications, leveraging its automotive safety heritage. Key design wins include current sensors for large Chinese humanoid robot OEMs and inductive position sensors for a prominent North American humanoid robotics OEM. Robotics and automation are projected to contribute 3-4% of FY27 sales, with addressable content potentially exceeding $150 per humanoid by 2030, building a multiyear sales pipeline.

Automotive Strength & Content Gains

Automotive sales grew 15% year-over-year in Q1 FY27, exceeding the long-term target of greater than 10% growth. This is driven by content expansion in xEV and ADAS, with content per vehicle increasing from approximately $40 in legacy ICE vehicles to upwards of $100 in next-generation battery electric vehicles. Design wins were up 30% year-over-year, including electronic power steering, electromechanical braking, and TMR angle sensors for ADAS.

Gross Margin Expansion Drivers

Gross margin improved to 51.1% in Q1 FY27, up 290 basis points year-over-year, driven by operating leverage, product mix, and selective pricing actions. Management expects further improvement towards a 55% target over the next couple of years through factory efficiencies, product bill of material transitions (e.g., gold to copper wire bonding), and continued pricing impact in the latter half of the fiscal year.

Supply Chain & Order Dynamics

Allegro experienced strong forward demand signals, with bookings increasing for the seventh consecutive quarter and backlog continuing to expand. Some in-lead-time orders, particularly in data center and auto, could not be shipped in Q1, leading to a build-up of delinquency to be shipped in future quarters. The company is actively expanding back-end capacity to address these constraints and ensure continued growth.

TMR Technology Leadership

Allegro is leveraging its TMR technology for market share gains in both automotive and data center applications. TMR motor position sensors secured a win in ADAS steering motors in China, demonstrating penetration into new applications. In data centers, TMR current sensors are winning in power supplies due to their superior speed, which is crucial for silicon carbide and gallium nitride-based power converters, positioning Allegro with the world's fastest magnetic current sensor in this space.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.