Allegro MicroSystems Q2 2025 Financial Results

Allegro MicroSystems, a prominent semiconductor company, has released its financial results for the second quarter of fiscal year 2025, reporting sales of $187 million, which represents a 12% increase from the previous quarter, although this marks a 32% decline compared to the same period last year. The company's Non-GAAP earnings per share (EPS) stood at $0.08, aligning with their guidance.

Key Takeaways

• Q2 sales totaled $187 million, up 12% sequentially, down 32% year-over-year.
• Non-GAAP EPS was $0.08, at the high end of guidance.
• Launch of two new XtremeSense TMR current sensors.
• Significant design wins in automotive and medical sectors.
• Strong demand noted in the automotive sector, especially from Chinese OEMs.
• Focus on rebalancing inventory and improving supply chain in China.
• Q3 sales are projected between $170 million and $180 million with a gross margin of 49%-51%.
• A voluntary debt payment reduced the term loan balance to $375 million.
• Allegro incurred a $35 million non-cash GAAP loss in Q2 due to stock price decline.

Company Outlook

• Anticipate Q3 sales between $170 million and $180 million.
• Non-GAAP gross margin expected between 49% and 51%.
• Participation in multiple conferences in December to discuss technology and market stance.
• Recovery in the industrial segment is expected, but short-term inventory issues may persist.
• The outlook for upcoming quarters appears cautious yet optimistic.

Investor Insights

• Allegro's market capitalization is at $4.54 billion, reflecting its solid presence in the semiconductor sector.
• The P/E ratio of 52.92 suggests that investors are factoring in future growth expectations, especially considering ventures in electric vehicles (EVs).
• Despite challenges, Allegro is perceived as a profitable entity with $937.99 million in revenue over the past twelve months and a 52.38% gross profit margin.

Allegro continues to seek growth despite market fluctuations, leveraging the burgeoning EV market, particularly focusing on operational efficiency and innovation. The company's strategic focus remains on driving operational improvements, expanding its product offerings, and recognizing long-term growth opportunities in the EV sector.

Full Transcript Highlights

Operator: Good morning and welcome to Allegro MicroSystems Q2 2025 Earnings Call.

Jalene Hoover: Thank you for joining today. We’ll discuss Allegro’s Q2 results and third quarter outlook.

Vineet Nargolwala: Despite a challenging macro environment, our Q2 sales reached $187 million with a strong focus on new product introductions.

Derek D’Antilio: Gross margin at 48.8% and an operating margin of 11.7% reflects our strong financial performance notwithstanding a year-over-year decline.

Ma ny questions about inventory levels and market challenges arose during the Q&A section. Vineet emphasized ongoing improvement and a cautious yet positive outlook for Q3.

Jalene Hoover: Thank you all for your participation.

Summary

Allegro MicroSystems reported Q2 2025 financial results with $187M sales, reflecting 12% sequential growth but a 32% decline year-over-year. EPS was $0.08, matching guidance.