Allegro MicroSystems Reports Second Quarter 2027 Results
ALLEGRO MICROSYSTEMS, INC. (ALGM) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Allegro MicroSystems Reports Second Quarter 2027 Results Second Quarter Sales Increased by 29% Year-over-Year to $277 Million Record Industrial & Other and Data Center Sales GAAP EPS Quadrupled and Non-GAAP EPS Doubled Year-over-Year Manchester, NH, October 29, 2026
How this was made
The 30-second read
Why it matters
The earnings beat and updated guidance reinforce the company's growth narrative, likely attracting momentum traders and sector‑focused investors.
Market read
ALGM's results provide a clear catalyst for the semiconductor niche, potentially influencing related stocks and ETFs.
What to watch
Potential supply‑chain constraints or macro‑economic headwinds could temper growth despite the upbeat numbers.
Second Quarter Sales Increased by 29% Year-over-Year to $277 Million; Record Industrial & Other and Data Center Sales; GAAP EPS Quadrupled and Non-GAAP EPS Doubled Year-over-Year
Second-quarter total net sales increased 29% year-over-year, Industrial and Other sales increased 79%, and GAAP and non-GAAP operating margins expanded to 12.8% and 20.6%, respectively. The company also guided third-quarter net sales to $278 million to $288 million, implying 23% year-over-year growth at the midpoint.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total net sales, three-month period ended September 25, 2026GAAP | $276.9M | – | 29% |
| Gross profit, three-month period ended September 25, 2026GAAP | $136.2M | – | – |
| Gross margin, three-month period ended September 25, 2026GAAP | 49.2% | – | – |
| Operating expenses, three-month period ended September 25, 2026GAAP | $100.7M | – | – |
| Research and development expenses, three-month period ended September 25, 2026GAAP | $55.76M | – | – |
| Selling, general and administrative expenses, three-month period ended September 25, 2026GAAP | $44.96M | – | – |
| Operating income, three-month period ended September 25, 2026GAAP | $35.45M | – | – |
| Operating margin, three-month period ended September 25, 2026GAAP | 12.8% | – | – |
| Net income attributable to Allegro MicroSystems, Inc., three-month period ended September 25, 2026GAAP | $23.26M | – | – |
| Diluted earnings per share, three-month period ended September 25, 2026GAAP | $0.12 | – | quadrupled |
| Income tax provision, three-month period ended September 25, 2026GAAP | $4.51M | – | – |
| Effective tax rate, three-month period ended September 25, 2026GAAP | 16.2% | – | – |
| Non-GAAP gross profit, three-month period ended September 25, 2026non-GAAP | $142.6M | – | – |
| Non-GAAP gross margin, three-month period ended September 25, 2026non-GAAP | 51.5% | – | – |
| Non-GAAP operating expenses, three-month period ended September 25, 2026non-GAAP | $85.63M | – | – |
| Non-GAAP operating income, three-month period ended September 25, 2026non-GAAP | $57.02M | – | – |
| Non-GAAP operating margin, three-month period ended September 25, 2026non-GAAP | 20.6% | – | – |
| Non-GAAP net income attributable to Allegro MicroSystems, Inc., three-month period ended September 25, 2026non-GAAP | $48.14M | – | – |
| Non-GAAP diluted earnings per share, three-month period ended September 25, 2026non-GAAP | $0.26 | – | doubled |
| EBITDA, three-month period ended September 25, 2026other | $49.27M | – | – |
| Adjusted EBITDA, three-month period ended September 25, 2026non-GAAP | $69.23M | – | – |
| Adjusted EBITDA margin, three-month period ended September 25, 2026non-GAAP | 25.0% | – | – |
| Operating cash flow, three-month period ended September 25, 2026GAAP | $36.85M | – | – |
| Operating cash flow as a percentage of net sales, three-month period ended September 25, 2026GAAP | 13.3% | – | – |
| Free cash flow, three-month period ended September 25, 2026non-GAAP | $30.50M | – | – |
| Free cash flow as a percentage of net sales, three-month period ended September 25, 2026non-GAAP | 11.0% | – | – |
| Total net sales, six-month period ended September 25, 2026GAAP | $536.1M | – | 28% |
| Operating income, six-month period ended September 25, 2026GAAP | $60.91M | – | – |
| Net income attributable to Allegro MicroSystems, Inc., six-month period ended September 25, 2026GAAP | $39.13M | – | – |
| Diluted earnings per share, six-month period ended September 25, 2026GAAP | $0.21 | – | – |
| Non-GAAP operating income, six-month period ended September 25, 2026non-GAAP | $107.4M | – | – |
| Non-GAAP diluted earnings per share, six-month period ended September 25, 2026non-GAAP | $0.48 | – | – |
| Operating cash flow, six-month period ended September 25, 2026GAAP | $58.84M | – | – |
| Free cash flow, six-month period ended September 25, 2026non-GAAP | $44.48M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Automotive, three-month period ended September 25, 2026Broad year-over-year sales growth in Automotive end markets. | $172.5M | – | 11% |
| Industrial and Other, three-month period ended September 25, 2026Record Industrial & Other sales, led by data center, which established a new record. | $104.4M | – | 79% |
| Automotive, six-month period ended September 25, 2026Broad year-over-year sales growth in Automotive end markets. | $337.8M | – | 13% |
| Industrial and Other, six-month period ended September 25, 2026Record Industrial & Other sales, led by data center, which established a new record. | $198.3M | – | 69% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Third quarter of fiscal year 2027 ending December 25, 2026 outlook
- Revenue$278 million to $288 million
- Gross margin51.5% to 52.5%, non-GAAP
- Operating expenses$87 million, plus or minus $1 million, non-GAAP
- NoteDiluted Earnings per Share is expected to be between $0.25 and $0.29, non-GAAP.
- NoteAt the midpoint of the total net sales range, it implies growth in net sales of 23% year-over-year.
- NoteThe mid-point of the diluted earnings per share range implies an 80% year-over-year increase.
What drove it
- The company reported its seventh consecutive quarter of sequential sales growth.
- Bookings increased for the eighth consecutive quarter.
- Quarterly design-win performance was the highest since the 2020 IPO and was up nearly 40% year-over-year.
- The company cited record design wins, a robust backlog, and expanding content across target Automotive and Industrial markets.
- Data center established a new sales record.
Concerns
- Six-month operating cash flow was $58,837, compared with $81,980 for the six-month period ended September 26, 2025.
- Six-month free cash flow was $44,477, compared with $64,936 for the six-month period ended September 26, 2025.
- Long-term debt was $285,649 as of September 25, 2026.
- The company identified risks including cyclicality in the semiconductor industry, automotive-market disruption, demand volatility in emerging technologies, third-party manufacturing dependence, tariffs and export restrictions, and foreign-currency volatility.
What to watch
- Execution against third-quarter fiscal 2027 total net sales guidance of $278 million to $288 million.
- Whether third-quarter non-GAAP gross margin reaches the guided 51.5% to 52.5% range.
- Third-quarter non-GAAP operating expenses against guidance of $87 million, plus or minus $1 million.
- Continued bookings growth, design-win conversion, backlog development, and data-center sales momentum.
- Cash flow generation and further debt repayment following the $25 million voluntary repayment on September 30, 2026.
Balance sheet and cash flow
- Cash and cash equivalents were $193,039 as of September 25, 2026, compared with $168,753 as of March 27, 2026.
- Restricted cash was $8,062 as of September 25, 2026, compared with $6,604 as of March 27, 2026.
- Current portion of long-term debt was $1,506 as of September 25, 2026, compared with $1,530 as of March 27, 2026.
- Long-term debt was $285,649 as of September 25, 2026, compared with $285,746 as of March 27, 2026.
- On September 30, 2026, following the close of the second quarter, the Company made another $25 million voluntary debt repayment.
- Purchases of property, plant and equipment were $(6,343) for the three-month period ended September 25, 2026 and $(14,360) for the six-month period ended September 25, 2026.
Analysis
Allegro reported a strong fiscal second quarter, with total net sales of $276,884 versus $214,294 in the prior-year quarter and $259,243 in the preceding quarter. Automotive sales were $172,492, while Industrial and Other sales reached $104,392. The Industrial and Other business was the primary reported growth engine, increasing 79% year-over-year, compared with 11% growth in Automotive. Management identified data center as a record contributor within the broad Industrial and Other performance.
Profitability improved materially. GAAP gross margin was 49.2%, versus 46.3% a year earlier, and GAAP operating margin was 12.8%, versus 2.9%. Non-GAAP gross margin was 51.5% and non-GAAP operating margin was 20.6%, compared with 49.6% and 13.9%, respectively, in the prior-year quarter. GAAP operating income was $35,448 and non-GAAP operating income was $57,020. GAAP diluted earnings per share was $0.12 and non-GAAP diluted earnings per share was $0.26.
The release points to sustained demand indicators rather than a single-quarter improvement. Management reported a seventh consecutive quarter of sequential sales growth, an eighth consecutive quarter of increased bookings, and its highest quarterly design-win performance since the 2020 IPO. It also cited a robust backlog and expanding content across Automotive and Industrial markets. These statements align with the 29% year-over-year sales increase and the sharp Industrial and Other expansion.
Cash generation improved in the quarter but remained below the prior-year level for the first six months. Three-month GAAP operating cash flow was $36,848 and non-GAAP free cash flow was $30,505, compared with $20,362 and $13,918, respectively, a year earlier. For the six-month period, GAAP operating cash flow was $58,837 versus $81,980 and non-GAAP free cash flow was $44,477 versus $64,936. Cash and cash equivalents were $193,039 at quarter end, and the company subsequently made a $25 million voluntary debt repayment on September 30, 2026.
Third-quarter guidance calls for total net sales of $278 million to $288 million, with 23% year-over-year growth at the midpoint. The company expects non-GAAP gross margin of 51.5% to 52.5%, non-GAAP operating expenses of $87 million, plus or minus $1 million, and non-GAAP diluted earnings per share of $0.25 to $0.29. The guide keeps sales near the second-quarter level while calling for continued gross-margin strength and an 80% year-over-year increase in non-GAAP diluted earnings per share at the midpoint.
Management, verbatim
We saw continued strong momentum in our fiscal second quarter, delivering our seventh consecutive quarter of sequential sales growth. Sales were $277 million, representing a 29% increase year-over-year. GAAP earnings per share quadrupled from $0.03 per share in the fiscal second quarter of 2026 to $0.12. Non-GAAP EPS grew to $0.26, doubling over the second quarter of fiscal 2026. Broad year-over-year sales growth in Automotive and Industrial end markets drove this strong performance, led by data center, which established a new record.
Mike Doogue, President and CEO of Allegro
Our forward demand signals strengthened significantly this quarter. We delivered our highest quarterly design-win performance since our 2020 IPO—up nearly 40% year-over-year—and bookings increased for the eighth consecutive quarter. With record design wins, a robust backlog, and expanding content across our target Automotive and Industrial markets, the leading indicators across our business give us high confidence in our path to exceed our target model of mid-teens annual sales growth.
Mike Doogue, President and CEO of Allegro
On September 30, 2026, following the close of the second quarter, we made another $25 million voluntary debt repayment, underscoring the strength of our balance sheet and our confidence in Allegro’s anticipated free cash flow generation.
Derek D’Antilio, Executive Vice President and CFO of Allegro
Not in the filing
stated, not guessed- Previous-quarter outlook was not provided, so no comparison of actual results with prior guidance is available.
- GAAP third-quarter fiscal 2027 guidance for gross margin, operating expenses, and diluted earnings per share was not provided.
- Third-quarter fiscal 2027 tax-rate guidance was not provided.
- Share repurchases and common-stock dividend declarations or payments were not reported.
- A quantitative breakdown of data-center revenue was not provided.
- Quarter-over-quarter percentage changes for the reported segment revenues and financial metrics were not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Allegro MicroSystems is a Nasdaq‑listed provider of power and sensing semiconductor solutions serving automotive, industrial, and data‑center markets.
Ticker impact
ALGM reported Q2 FY2027 results with 29% YoY sales growth to $277M and issued guidance for Q3 net sales $278M-$288M.
likely upward pressure as the market prices in stronger sales and issued guidance
Quarterly earnings exceed prior period and guidance tops prior expectations, indicating improved profitability and growth momentum.
Market effects
Strong performance may boost sentiment in the semiconductor and data‑center components sector.
Positive impact on U.S. tech stocks, especially small‑cap semiconductor names.
Limited to investors tracking semiconductor earnings trends.
Counterpoint
If the guidance is already priced in, the stock could face a short‑term pull‑back.
Key entities
- ExecutiveMike Doogue
President and CEO of Allegro MicroSystems
- ExecutiveDerek D’Antilio
Executive Vice President and CFO of Allegro MicroSystems
