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    ALGM
    Earnings call· Jun 2026(Q1 FY27)

    ALLEGRO MICROSYSTEMS Q1 FY27 earnings call ALGM

    Jul 30, 2026 Source

    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

    13
    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

    3
    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

    Operational metrics

    31
    Non-GAAP EPS
    $0.2335% sequentially, 156% over the year ago quarter
    Q1 FY27

    Demonstrates significant operating leverage.

    Non-GAAP gross margin
    51.1%up from 50% in Q4, improved by 290 basis points from 48.2% in Q1 of fiscal '26
    Q1 FY27

    Improvements driven by operating leverage, product mix, and to an early and lesser extent, recent pricing actions.

    Non-GAAP operating margin
    19.4%compared to 15.6% in Q4, increase of 830 basis points compared to 11.1% in Q1 of fiscal '26
    Q1 FY27

    Non-GAAP basis.

    Adjusted EBITDA
    23.9%
    Q1 FY27

    As a percentage of sales.

    Cash and investments balance
    $170 million
    Q1 FY27 end

    Total cash.

    Net debt
    $115 million
    Q1 FY27 end

    Ended Q1 with term debt of $285 million.

    Capex
    $8 million
    Q1 FY27

    Capital expenditures.

    Diluted share count
    188 million shares
    Q1 FY27

    Weighted average diluted share count.

    Effective tax rate
    9.7%
    Q1 FY27

    For the quarter.

    Interest expense
    $4 million
    Q1 FY27

    For the quarter.

    DSO
    35 daysconsistent with Q4
    Q1 FY27 end

    Days Sales Outstanding.

    Inventory days
    128consistent with Q4
    Q1 FY27 end

    Inventory days.

    Automotive content per vehicle (ICE)
    $40
    current

    Content in legacy ICE vehicles.

    Automotive content per vehicle (BEV)
    upwards of $100
    current

    Content in next-generation battery electric vehicles.

    Robotics content per humanoid
    exceed $150
    by 2030

    Estimated addressable content.

    Data center content per rack (old)
    $150
    current

    Content in older data racks.

    Data center content per rack (AI-forward)
    $425
    current

    Theoretical content in AI-forward racks.

    Data center content per rack (future)
    hundreds of dollars more
    future

    Potential additional content from isolated gate drivers and new sensor areas.

    Data center current sensor share of data center sales
    22%increasing 66% sequentially
    Q1 FY27

    Meaningful new growth pillar within data center.

    Data center product margins
    mid-50s
    Q1 FY27

    Driven by the increasing contribution of current sensors.

    EV production growth
    25%year-over-year
    FY27

    Based on recent S&P data, adjusted to Allegro's fiscal year.

    China sales
    25%grew 6% sequentially
    Q1 FY27

    On a ship-to basis.

    Rest of Asia sales
    32%
    Q1 FY27

    Includes Korea, Taiwan, and India.

    Japan sales
    17%
    Q1 FY27

    On a ship-to basis.

    Americas sales
    13%
    Q1 FY27

    On a ship-to basis.

    Europe sales
    13%
    Q1 FY27

    On a ship-to basis.

    Magnetic sensor sales
    $150 million6% sequentially, 16% year-over-year
    Q1 FY27

    From a product perspective.

    Power product sales
    $109 million7% sequentially, 47% over the prior year quarter
    Q1 FY27

    From a product perspective.

    Disti sales
    60%
    Q1 FY27

    Distribution channel sales.

    Direct sales
    40%
    Q1 FY27

    Direct sales.

    Sell-in vs Sell-through
    pretty equal
    Q1 FY27

    POS was a record this quarter.

    Industry KPIs

    7
    MetricValueDetails
    Lead timesextending
    Backlog order bookcontinued to expand
    Ai data center revenue17%% of total sales
    Bookings net order intakeincreased for the seventh consecutive quarter
    Design wins socket pipelineup 30%%
    Inventory channel inventory128days
    End market segment revenue mixAutomotive: $165 million (63.7% of total sales), Industrial and Other: $94 million (36.3% of total sales)USD, %

    Orderbook & backlog

    3
    Bookingsincreased for the seventh consecutive quarterQ1 FY27 end
    Backlogcontinued to expandQ1 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 bookingsup 30% year-over-yearQ1 FY27 end

    up high single digits sequentially

    Product announcements

    1
    ProductTypeDetails
    Generation 2 isolated gate driverlaunch

    Deals & partnerships

    7
    leading providerdesign 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 OEMlarge 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 OEMscurrent 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 OEMsizable 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 OEMsfirst major TMR angle sensor programs for ADAS steering motors

    Demonstrates share gain potential of market-leading TMR technology.

    Risks & headwinds

    3
    Inflationary headwinds

    from commodity costs and other costs

    Mitigation: taking selective price actions

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

    low single-digit declines

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

    In-lead-time orders unable to shipQ1 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

    5

    Data Center Sales Growth

    Q2 FY27 and beyond
    Current32% sequential growth in Q1 FY27, 17% of total sales
    TargetContinued 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.

    Q&A highlights

    6

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.