Q2 2026 Allegro Microsystems Inc Earnings Call Transcript
Key Points
- Allegro Microsystems Inc (ALGM) achieved multiyear highs in second quarter bookings and backlog, with strong design win activity in strategic focus areas such as e-mobility and data centers.
- The company reported strong second quarter results with sales of $214 million, a gross margin of 49.6%, and EPS of $0.13, all above the midpoint of guidance ranges.
- Automotive sales showed broad strength, with significant growth in e-mobility and other auto sectors, driven by increased adoption of ICs in xEV powertrain systems.
- Data center sales established a new quarterly record, fueled by server power architecture upgrades supporting next-generation AI workloads.
- Allegro Microsystems Inc (ALGM) released the industry's first 10 megahertz TMR current sensor, enhancing its competitive advantage and expected to accelerate sales growth.
- Industrial and other sales declined by 1% sequentially, indicating some remaining inventory burn in consumer and broad-based industrial sectors.
- Operating expenses were $76 million, approximately $3 million above outlook due to increased variable compensation expense and further weakening of the US dollar.
- Sales in Europe experienced seasonal declines, highlighting regional demand challenges.
- The company continues to navigate geopolitical challenges, particularly in China, although no material pull-in activity from customers in response to tariffs was reported.
- Gross margin improvements face headwinds from rising commodity costs and foreign exchange fluctuations, impacting profitability.
Good morning, and welcome to Allegro Microsystems second quarter fiscal year 2026 earnings conference call. 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, Kathy. Good morning, and thank you for joining us today to discuss Allegro's fiscal second quarter 2026 results. I'm joined today by Allegro's President and Chief Executive Officer, Mike Doogue; and Allegro's Chief Financial Officer, Derek D'Antilio. They will provide highlights of our business, review our quarterly financial performance and share our third quarter outlook. We will follow our prepared remarks with a Q&A session.
Our earnings release and prepared remarks include certain non-GAAP financial measures. The non-GAAP financial measures that are discussed today are not intended to replace or be a substitute for our GAAP
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