Allegro MicroSystems, Inc.

Q4 sales were $243 million, up 6% sequentially and 26% year over year, and non-GAAP EPS was $0.17, nearly tripling year over year. Q4 gross margin was 50%, operating margin was 15.6%, and adjusted EBITDA was 20.4%. FY26 sales increased 23% year over year to $890 million, gross margin was 49.4%, operating margin was 14.1%, adjusted EBITDA was 19.1% of sales, and EPS was $0.54. For the balance sheet, Allegro ended Q4 with $175 million of cash, $285 million of debt, and $116 million of net debt; full-year free cash flow was a record $125 million, and the company made $60 million in voluntary debt payments. For Q1 FY27, management guided to sales of $245 million to $255 million, gross margin of 50% to 51%, operating expenses of $80 million plus or minus $2 million, interest expense of $4 million, a tax rate of approximately 9%, and non-GAAP EPS of $0.19 to $0.23.

Mike Doogue said the company exited FY26 with strong momentum, citing a fifth straight quarter of sales growth, record backlog, and more than 30% growth in design wins. He emphasized that automotive growth is being driven by content expansion and share gains, while data center is emerging as a major multi-year growth pillar as Allegro’s content scales with higher power density architectures. His tone was confident and forward-looking, repeatedly pointing to product innovation, new design wins, and a growing pipeline in both auto and industrial markets.

Derek D’Antilio highlighted the quarter’s profitability and leverage, noting 50% gross margin, 15.6% operating margin, $36 million of operating cash flow, $17 million of capex, and $19 million of free cash flow in Q4. He said FY26 gross margin improved 140 basis points to 49.4% despite a roughly 200 basis point gold headwind, and he pointed to factory efficiencies and operating leverage as key offsets. He also noted $60 million of voluntary debt paydown, $175 million of cash at quarter-end, and first-quarter guidance that implies sequentially lower opex at $80 million plus or minus $2 million, with gross margin still expected in the 50% to 51% range.

Analysts focused on the durability of data center growth, the mix between legacy fan drivers and newer current sensor and isolated gate driver products, and how much of the Q1 guide assumes a slowdown versus simply a larger base. Management said data center growth should remain well above 20% in FY27, with fan drivers still the majority of the business but current sensors ramping more in FY27 and isolated gate drivers still 18 to 24 months away from meaningful revenue. Questions also centered on gross margin expansion, foundry costs, and price increases; management said gold and freight/fuel are the main cost pressures, while select price increases are expected to begin at the end of Q1, alongside ongoing gold-to-copper conversions and factory efficiencies.