Q1 2027 Allegro Microsystems Inc Earnings Call Transcript

Jul 30, 2026 / 12:30 PM GMT

Release Date Price: $41.45 (-1.80%)

Transcript 10-Q8-K

Key Points

Positve

Allegro Microsystems Inc (ALGM) delivered its sixth consecutive quarter of sequential sales growth, with Q1 FY2027 sales of $259 million, exceeding the high end of guidance and representing a 27% year-over-year increase.
Data center sales surged to a record 17% of total revenue, driven by a 66% sequential increase in current sensor sales, which now account for 22% of data center revenue.
The company secured significant design wins in robotics, including current sensor wins with large Chinese humanoid robot OEMs and an inductive position sensor win with a prominent North American humanoid robotics OEM, contributing 3-4% of FY2027 sales.
Automotive sales grew 15% year-over-year, outpacing the long-term target, with design wins up 30% year-over-year, particularly in electronic power steering and electromechanical braking systems.
Gross margin improved to 51.1%, up 290 basis points year-over-year, driven by operating leverage, product mix, and selective pricing actions, with a clear path to the 55% target.
Bookings increased for the seventh consecutive quarter, and backlog continued to expand, indicating strong forward demand signals.

Negative

The company experienced within-lead-time orders that could not be shipped in Q1, leading to a slight delinquency that will be shipped over the next couple of quarters, indicating potential capacity constraints.
Gross margin guidance for Q2 is only 50.75%-51.75%, with a lower drop-through rate of 57% due to a higher mix of automotive sales, which have lower margins than industrial.
Operating expenses are expected to increase to $84.5 million in Q2 due to targeted R&D investments and higher variable compensation, potentially pressuring near-term profitability.
The automotive business saw only 1% sequential growth in Q1, with some deceleration in Focus Auto, reflecting a flattening trend compared to peers who are reaccelerating.
Pricing actions are expected to have a more significant impact only in the back half of the fiscal year, limiting near-term gross margin improvement from this lever.
The company noted that the general industrial business, which contributed to the Q1 beat, can be lumpy from quarter to quarter, introducing uncertainty in future industrial revenue.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

ALGM.OQ - Allegro Microsystems Inc
Q1 2027 Allegro Microsystems Inc Earnings Call
Jul 30, 2026 / 12:30PM GMT

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Presentation
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Unidentified_1 [1]
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Good morning and welcome to Allegro Microsystems first quarter fiscal year 2027 earnings conference call.

At this time, all participants are in a listen-only mode.

After the presentation, there will be a question-and-answer session.

To ask a question during the session, you need to press 11 on your telephone.

You will then hear an automated message advising your hand is raised.

To withdraw your question, please press 11 again.

Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Jalene Hoover, Vice President of Investor Relations and corporate communications.

Thank you, Sarah.

Good

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