Allegro MicroSystems, Inc. Q4 FY2026 earnings call

FY26 sales were $890 million, up 23% year-over-year. Automotive end markets had 30% growth in FY26, including XEV and ADAS. Industrial and other end markets had 38% growth in FY26, led by data center and robotics and automation. Fiscal 26 design wins increased over 30% year-over-year. Focus Auto led automotive design win activity, and data center led industrial design wins. Backlog was at a multi-year high. R&D investments focus on differentiated sensor and power technology, with Allegro holding number one position in magnetic sensing, and TMR technology representing ~30% of sensor product releases in FY26.

In fiscal 2026, automotive end markets saw focus auto sales (including XEV and ADAS) increase 30% to $629 million, which was 71% of total sales. Industrial and other end markets grew 38% year-over-year to $261 million, 10% of total FY26 sales. Fourth quarter industrial and other sales increased 23% sequentially, with data center accounting for 14% of Q4 sales, up from 10% in Q3 and 8% in Q2.

First quarter fiscal 2027 sales expected to be in range of $245 to $255 million, midpoint 23% year-over-year increase. Non-GAAP gross margin expected between 50 and 51%. Operating expenses expected to decline sequentially to $80 million plus or minus $2 million. Interest expenses projected at $4 million. Non-GAAP tax rate expected ~9%. Non-GAAP EPS expected between 19 and 23 cents per share.

Q: Gary Mobley asked about backlogs and revenue KPIs by end market.

A: Mike said in last 90 days, data center current sensors ramping and automotive has good signs of strength with design wins.

Q: Quinn Bolton asked about durability of data center growth and product mix.

A: Mike said data center growth rate well north of 20% in FY27, majority still fan drivers with current sensors ramping, isolated gate driver business 18-24 months out.

Q: Joe Quattrochi asked about Focus Auto in March quarter and industrial side.

A: Mike said Focus Auto up ~30% year over year in FY26, positive on future, industrial side has strength in factory automation, energy infrastructure, two-wheeler market.

Q: Timothy Arcuri asked about data center guidance and foundry costs.

A: Derek said data center growth still significant, foundry costs not biggest headwind, biggest headwinds gold and fuel charges, select price increases beginning at end of Q1.

Q: Jay Rakesh asked about data center content growth and auto memory constraints.

A: Mike said data center content growth driven by architectures, no impact of material shortages on auto orders.

Q: Tom O'Malley asked about auto seasonality and China EV exports.

A: Mike said auto guide up couple of percentage points in Q1, confident in China business with good dollar content in Chinese OEMs.

Q: Joshua Bacalter asked about auto inventories and data center fan exposure.

A: Mike said thin auto inventories with no clear restocking signs, data center fan demand still growing with fans in power supplies despite liquid cooling for GPUs.