Q3 2026 Allegro Microsystems Inc Earnings Call Transcript
Key Points
- Allegro Microsystems Inc (ALGM) reported strong third-quarter results with sales of $229 million, exceeding the high end of their guidance range.
- The company achieved significant design wins in strategic focus areas such as ADAS, xEV, and data centers, indicating robust future growth potential.
- Sales in the data center segment reached a new quarterly record, accounting for 10% of total sales and growing 31% sequentially.
- The introduction of innovative products, such as a current sensor that reduces power-related losses by up to 90%, showcases Allegro's commitment to relentless innovation.
- Allegro's automotive sales growth was driven by increased adoption of xEV and ADAS systems, with e-Mobility leading the quarter.
- Gross margin was at the midpoint of guidance despite revenue exceeding expectations, partly due to geographic and product mix.
- The automotive segment is still shipping 20% below its peak, indicating a slower recovery compared to some peers.
- Operating expenses increased by approximately $3 million due to variable compensation, impacting overall profitability.
- The company expects automotive sales to be flat to marginally down in the upcoming quarter, influenced by the Chinese New Year.
- Pricing reductions, although low, are still expected in 2026 due to longer-term contracts with customers.
Good morning, and welcome to the Allegro MicroSystems Third Quarter Fiscal Year 2026 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Jalene Hoover, Vice President of Investor Relations and Corporate Communications. Please go ahead, ma'am.
Thank you, Michelle. Good morning, and thank you for joining us today to discuss Allegro's fiscal third 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 fourth quarter outlook. We will follow our prepared remarks with a Q&A session.
Today includes remarks about future expectations, plans and prospects, which are forward-looking statements. Such statements are
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