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ALGM Q1 Earnings Beat Estimates on Data Center Strength
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Key Takeaways
ALGM's Q1'27 earnings rose 155.6% as revenues increased 27.5% to $259 million.
Record Data Center sales reached 17% of total sales, with current sensors up 66% sequentially.
ALGM expects Q2 revenues of $265-$275 million, with both segments growing sequentially.
Allegro MicroSystems, Inc. (ALGM - Free Report) reported first-quarter fiscal 2027 non-GAAP earnings of 23 cents per share, up 155.6% year over year. The figure beat the Zacks Consensus Estimate by 9.52%.
Revenues increased 27.5% year over year to $259 million and surpassed the consensus mark by 2.47%. Growth was led by record Data Center sales, while bookings rose for the seventh consecutive quarter, and backlog expanded.
ALGM Gains From Data Center Momentum
Industrial and Other revenues climbed 59% year over year and 18% sequentially to $93.9 million. Data Center reached a quarterly record of 17% of total sales after growing 32% from the prior quarter.
Current sensors accounted for 22% of Data Center sales and increased 66% sequentially. Data Center product margins reached the mid-50s, supported by the richer current-sensor mix. Management expects fiscal 2027 Data Center sales to more than double from fiscal 2026 as demand expands across current sensors, intelligent fan drivers and isolated gate drivers.
Allegro MicroSystems, Inc. Price, Consensus and EPS Surprise
Automotive revenues rose 15% year over year and 1% sequentially to $165.3 million. Focus Auto sales, which include xEV and advanced driver-assistance systems, increased 11% year over year and 3% sequentially.
Automotive bookings and design wins each jumped 30% from the prior-year period. Wins included electronic power steering programs in Korea, hybrid traction-inverter current sensors for a Japanese automaker and electromechanical braking applications in China.
ALGM Expands Margins on Operating Leverage
Non-GAAP gross margin improved 290 basis points year over year and 110 basis points sequentially to 51.1%. The increase reflected operating leverage, favorable product mix and an early benefit from selective pricing actions.
Non-GAAP operating margin expanded 830 basis points year over year to 19.4%. Non-GAAP operating expenses were $82 million, down $2 million sequentially, mainly because annual incentive compensation plans reset at the start of the fiscal year.
Allegro Advances Robotics and Product Wins
Allegro secured current-sensor wins with large Chinese humanoid robot manufacturers and an inductive position-sensor design win with a prominent North American humanoid robotics company. Management expects robotics and automation to contribute 3% to 4% of fiscal 2027 sales.
The company estimates addressable content of more than $150 per humanoid robot by 2030. It also introduced an ASIL-D power-management IC with an integrated wheel-speed sensor interface that can eliminate up to nine external components in brake-by-wire systems.
ALGM Posts Broad Product and Regional Growth
Magnetic sensor sales increased 16% year over year and 6% sequentially to $150 million. Power product sales advanced 47% from the prior-year quarter and 7% sequentially to $109 million.
On a ship-to basis, Rest of Asia generated 32% of quarterly sales, followed by China at 25% and Japan at 17%. The Americas and Europe each contributed 13%, highlighting the company's broad geographic revenue mix.
Allegro Strengthens Cash Flow and Liquidity
Cash flow from operations was $22 million in the quarter. Capital expenditures totaled $8 million, resulting in non-GAAP free cash flow of $14 million.
Allegro ended the quarter with $170 million in total cash, term debt of $285 million and net debt of $115 million. Days sales outstanding were 35, while inventory days were 128, both consistent with the prior quarter.
ALGM Issues Strong Second-Quarter View
For the second quarter of fiscal 2027, Allegro expects revenues between $265 million and $275 million. The midpoint implies 26% year-over-year growth, with both Automotive and Industrial projected to post mid-single-digit sequential growth.
The company forecasts non-GAAP gross margin between 50.75% and 51.75%. Non-GAAP operating expenses are projected at $84.5 million, plus or minus $1 million, while non-GAAP earnings are expected between 23 cents and 26 cents per share. The earnings midpoint implies 88% year-over-year growth.
Shares of Analog Devices have rallied 35.2% year to date. The Zacks Consensus Estimate for Analog Devices’ fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating a 59.4% year-over-year increase.
Shares of Applied Materials have skyrocketed 95.2% year to date. The Zacks Consensus Estimate for Applied Materials’ fiscal 2026 earnings is pegged at $12.14 per share, up by 3 cents over the past 30 days, calling for a rise of 28.9% year over year.
Cisco Systems shares have rallied 47.4% year to date. The Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.28 per share, unchanged over the past 30 days, implying an increase of 12.3% year over year.
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ALGM Q1 Earnings Beat Estimates on Data Center Strength
Key Takeaways
Allegro MicroSystems, Inc. (ALGM - Free Report) reported first-quarter fiscal 2027 non-GAAP earnings of 23 cents per share, up 155.6% year over year. The figure beat the Zacks Consensus Estimate by 9.52%.
Revenues increased 27.5% year over year to $259 million and surpassed the consensus mark by 2.47%. Growth was led by record Data Center sales, while bookings rose for the seventh consecutive quarter, and backlog expanded.
ALGM Gains From Data Center Momentum
Industrial and Other revenues climbed 59% year over year and 18% sequentially to $93.9 million. Data Center reached a quarterly record of 17% of total sales after growing 32% from the prior quarter.
Current sensors accounted for 22% of Data Center sales and increased 66% sequentially. Data Center product margins reached the mid-50s, supported by the richer current-sensor mix. Management expects fiscal 2027 Data Center sales to more than double from fiscal 2026 as demand expands across current sensors, intelligent fan drivers and isolated gate drivers.
Allegro MicroSystems, Inc. Price, Consensus and EPS Surprise
Allegro MicroSystems, Inc. price-consensus-eps-surprise-chart | Allegro MicroSystems, Inc. Quote
Allegro's Auto Business Extends Growth
Automotive revenues rose 15% year over year and 1% sequentially to $165.3 million. Focus Auto sales, which include xEV and advanced driver-assistance systems, increased 11% year over year and 3% sequentially.
Automotive bookings and design wins each jumped 30% from the prior-year period. Wins included electronic power steering programs in Korea, hybrid traction-inverter current sensors for a Japanese automaker and electromechanical braking applications in China.
ALGM Expands Margins on Operating Leverage
Non-GAAP gross margin improved 290 basis points year over year and 110 basis points sequentially to 51.1%. The increase reflected operating leverage, favorable product mix and an early benefit from selective pricing actions.
Non-GAAP operating margin expanded 830 basis points year over year to 19.4%. Non-GAAP operating expenses were $82 million, down $2 million sequentially, mainly because annual incentive compensation plans reset at the start of the fiscal year.
Allegro Advances Robotics and Product Wins
Allegro secured current-sensor wins with large Chinese humanoid robot manufacturers and an inductive position-sensor design win with a prominent North American humanoid robotics company. Management expects robotics and automation to contribute 3% to 4% of fiscal 2027 sales.
The company estimates addressable content of more than $150 per humanoid robot by 2030. It also introduced an ASIL-D power-management IC with an integrated wheel-speed sensor interface that can eliminate up to nine external components in brake-by-wire systems.
ALGM Posts Broad Product and Regional Growth
Magnetic sensor sales increased 16% year over year and 6% sequentially to $150 million. Power product sales advanced 47% from the prior-year quarter and 7% sequentially to $109 million.
On a ship-to basis, Rest of Asia generated 32% of quarterly sales, followed by China at 25% and Japan at 17%. The Americas and Europe each contributed 13%, highlighting the company's broad geographic revenue mix.
Allegro Strengthens Cash Flow and Liquidity
Cash flow from operations was $22 million in the quarter. Capital expenditures totaled $8 million, resulting in non-GAAP free cash flow of $14 million.
Allegro ended the quarter with $170 million in total cash, term debt of $285 million and net debt of $115 million. Days sales outstanding were 35, while inventory days were 128, both consistent with the prior quarter.
ALGM Issues Strong Second-Quarter View
For the second quarter of fiscal 2027, Allegro expects revenues between $265 million and $275 million. The midpoint implies 26% year-over-year growth, with both Automotive and Industrial projected to post mid-single-digit sequential growth.
The company forecasts non-GAAP gross margin between 50.75% and 51.75%. Non-GAAP operating expenses are projected at $84.5 million, plus or minus $1 million, while non-GAAP earnings are expected between 23 cents and 26 cents per share. The earnings midpoint implies 88% year-over-year growth.
ALGM’s Zacks Rank and Stocks to Consider
Allegro currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are Analog Devices (ADI - Free Report) , Applied Materials (AMAT - Free Report) and Cisco Systems (CSCO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have rallied 35.2% year to date. The Zacks Consensus Estimate for Analog Devices’ fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating a 59.4% year-over-year increase.
Shares of Applied Materials have skyrocketed 95.2% year to date. The Zacks Consensus Estimate for Applied Materials’ fiscal 2026 earnings is pegged at $12.14 per share, up by 3 cents over the past 30 days, calling for a rise of 28.9% year over year.
Cisco Systems shares have rallied 47.4% year to date. The Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is pegged at $4.28 per share, unchanged over the past 30 days, implying an increase of 12.3% year over year.