On August 1, 2024, Allegro Microsystems Inc (ALGM, Financial) released its 8-K filing for the first quarter of fiscal year 2025, ending June 28, 2024. Allegro Microsystems Inc is a designer, developer, fabless manufacturer, and marketer of sensor ICs and application-specific analog power ICs for automotive and industrial markets. The company reported financial results that exceeded analyst estimates, with sales reaching $167 million and non-GAAP EPS at $0.03.
Company Overview
Allegro Microsystems Inc specializes in sensor ICs and power ICs, catering primarily to the automotive and industrial sectors. The company's product portfolio includes SENSE (Current Sensors, Switches and Latches, Interface ICs), REGULATE (Regulators, ClearPower Modules, LED Drivers), and DRIVE (BLDC Drivers, Brush DC, and others). Key revenue is generated from Greater China, with additional contributions from the United States, Japan, Europe, and other regions.
Performance and Challenges
Allegro Microsystems Inc reported first-quarter sales of $167 million, surpassing the midpoint of their outlook. Despite this, the company faced challenges with a net loss of $17.6 million, translating to a GAAP diluted EPS of -$0.09. The gross margin also saw a decline to 44.8% from 56.8% in the same quarter last year. The company attributed these challenges to inventory rebalancing efforts across the automotive and industrial markets.
Financial Achievements
Despite the challenges, Allegro Microsystems Inc made significant strides, including a $50 million voluntary debt repayment and the announcement of a share repurchase of 39 million shares from its majority shareholder. These actions are expected to enhance liquidity and governance, potentially driving further value creation.
Key Financial Metrics
| Metric | Q1 2025 | Q4 2024 | Q1 2024 |
|---|---|---|---|
| Total Net Sales | $166.9M | $240.6M | $278.3M |
| Gross Margin (GAAP) | 44.8% | 51.2% | 56.8% |
| Operating Margin (GAAP) | -6.4% | 6.6% | 25.4% |
| Diluted EPS (GAAP) | -$0.09 | -$0.04 | $0.31 |
| Diluted EPS (Non-GAAP) | $0.03 | $0.25 | $0.39 |
Income Statement Highlights
Allegro Microsystems Inc reported a net sales decline of 40% year-over-year, with total net sales dropping from $278.3 million in Q1 2024 to $166.9 million in Q1 2025. The automotive segment saw a 29% decrease, while the industrial and other segments experienced a 62% decline. The company also reported a gross profit of $74.8 million, down from $158 million in the same quarter last year.
Balance Sheet and Cash Flow
As of June 28, 2024, Allegro Microsystems Inc had total assets of $1.45 billion, down from $1.53 billion at the end of the previous quarter. The company reported cash and cash equivalents of $173.1 million. Net cash provided by operating activities was $34.2 million, while net cash used in investing and financing activities were $11 million and $60.4 million, respectively.
Business Outlook
For the second quarter of fiscal year 2025, Allegro Microsystems Inc expects net sales to be in the range of $182 million to $192 million. The company also estimates non-GAAP gross margin to be between 49% and 51%, with diluted earnings per share expected to range from $0.04 to $0.08.
"We delivered results toward the higher end of our commitments while making progress on inventory rebalancing across the Automotive and Industrial markets. First quarter sales were $167 million, above the midpoint of our outlook, and non-GAAP EPS was $0.03, at the high end of our outlook," said Vineet Nargolwala, President and CEO of Allegro.
For more detailed information, readers are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Allegro Microsystems Inc for further details.
