Allegro Extends Sequential Sales Streak to Seven Quarters

The Tip Desk · October 30, 2026 · 3 min read

Second-quarter sales were $277 million, up 29% from a year earlier, as Industrial and Other reached a record $104.4 million.

Allegro MicroSystems (ALGM), a maker of power and sensing semiconductors for motion control and energy-efficient systems, reported second-quarter sales of $277 million for the three months ended September 25, 2026, a 29% increase from a year earlier. That year-over-year rate was faster than the 27% gain the company posted in the immediately preceding quarter, and it marked a seventh consecutive period of sequential sales growth.

President and Chief Executive Officer Mike Doogue said broad year-over-year growth in Automotive and Industrial end markets drove the result, led by data center, which set a new record.

Industrial and Other sales were $104.4 million, up 79% from a year earlier, after a 59% year-over-year increase to $93.9 million in the prior quarter. Automotive sales were $172.5 million, up 11% from a year earlier, after a 14% year-over-year increase to $165.3 million.

GAAP diluted earnings were $0.12 a share, quadrupling from $0.03 a year earlier, after $0.08 in the prior quarter. Non-GAAP diluted earnings were $0.26 a share, doubling from $0.13 a year earlier, after $0.23 in the prior quarter.

GAAP operating margin expanded to 12.8% from 9.8% in the prior quarter. Non-GAAP operating margin was 20.6%. GAAP gross margin was 49.2% and non-GAAP gross margin was 51.5%. Adjusted EBITDA was $69.2 million, or a 25.0% margin, after $62.0 million and a 23.9% margin in the prior quarter.

Doogue said forward demand signals strengthened, with the company’s highest quarterly design-win performance since its 2020 IPO, up nearly 40% year-over-year, and bookings increasing for an eighth consecutive quarter. He said record design wins, a robust backlog, and expanding content across target Automotive and Industrial markets give the company high confidence in a path to exceed its target model of mid-teens annual sales growth.

Executive Vice President and Chief Financial Officer Derek D’Antilio said the company continued to expand profitability and generate cash flow. Non-GAAP free cash flow was $30.5 million, or 11.0% of net sales, after $14.0 million and 5.4% of net sales in the prior quarter. On September 30, 2026, after the close of the second quarter, the company made another $25 million voluntary debt repayment. Cash and cash equivalents were $193.0 million at quarter-end.

For the third quarter of fiscal 2027 ending December 25, 2026, Allegro expects total net sales of $278 million to $288 million. At the midpoint, that implies 23% year-over-year growth. The company also estimates non-GAAP gross margin of 51.5% to 52.5%, operating expenses of $87 million plus or minus $1 million, and diluted earnings of $0.25 to $0.29 a share, with the midpoint implying an 80% year-over-year increase.