Allegro Extends Sales Streak as Data-Center Mix Hits Record
Fiscal first-quarter sales reached $259.2 million, topping Allegro’s outlook.
Allegro MicroSystems (ALGM), a semiconductor maker, extended its sales-growth streak to six quarters as revenue rose 27% from a year earlier and 6.6% sequentially.
The quarter marked a further shift toward industrial and data-center demand. Data-center sales reached a record 17% of total sales, up from a record 14% in the preceding quarter, while xEV and advanced driver-assistance systems remained areas of strength.
Fiscal first-quarter net sales rose to $259.2 million from $243.2 million in the prior quarter, with year-over-year growth accelerating slightly from 26%. GAAP diluted earnings swung to $0.08 a share from losses of $0.09 sequentially and $0.07 a year earlier. Adjusted earnings increased to $0.23 a share from $0.17 and $0.09, respectively, marking a fifth consecutive quarterly increase.
Industrial and Other sales climbed 59% from a year earlier and 18.4% sequentially to $93.9 million. Automotive sales rose 15% year over year and 0.9% from the preceding quarter to $165.3 million, leaving the industrial business as the stronger source of incremental growth.
Profitability widened alongside the sales gains. GAAP gross margin reached 48.5%, compared with 47.0% sequentially and 44.9% a year earlier, while GAAP operating margin increased to 9.8% from 2.2% and negative 1.3%, respectively. Operating expenses declined sequentially to $100.1 million despite higher sales. Restructuring costs fell to $0.7 million from $5.0 million, and the preceding quarter’s $6.6 million asset-impairment charge did not recur.
For the fiscal second quarter, Allegro expects sales of $265 million to $275 million. The $270 million midpoint implies about 26% year-over-year growth and 4.2% sequential growth, extending the trajectory after first-quarter sales exceeded the high end of the company’s prior outlook by $4.2 million.
Cash conversion weakened even as earnings improved. Operating cash flow fell to $22.0 million from $35.7 million sequentially and $61.6 million a year earlier, while free cash flow declined to $14.0 million from $18.7 million and $51.0 million, respectively. Inventory increased to $188.1 million from $181.8 million at the end of the preceding quarter.