ALLEGRO MICROSYSTEMS, INC. Q4 FY2025 earnings call

• Strategic priorities include accelerating new product development, unlocking SAM expansion, securing design wins with leading customers, and leveraging innovation for growth. - In the fourth quarter, strong execution was seen with sales above guidance high end. Automotive sales returned to growth led by e-mobility. - Achieved record level design wins in the fourth quarter, with over 70% of these wins in strategic focus areas such as e mobility, robotics and automation, data center, clean energy, and medical.

In the fourth quarter, sales reached $193 million, which was above the high end of the guidance. Non-GAAP EPS was $0.06, above the midpoint of guidance. Magnetic sensor sales increased 3% sequentially to account for 61% of sales. Power products sales saw a 19% sequential increase, led by growth in motor drivers for ADAS and data center applications. Automotive sales returned to growth, rising 8% sequentially with e-mobility driving the growth. Industrial and other sales increased 9% sequentially, with data center and robotics and automation contributing to the growth. For the full fiscal year 2025, sales totaled $725 million. Gross margin was 48%, operating margin was 9.5%, and non-GAAP earnings per share were $0.24.

• First - quarter sales are expected to be in the range of $192 million to $202 million. - Gross margin is anticipated to be between 46 - 48%. - OpEx is expected to be approximately $72 million. - Non - GAAP EPS is expected to be between $0.06 and $0.10 per share.

• Tariffs present uncertainties with indirect impacts hard to predict. - There are signs of potential raw material shortages.

Q: Timothy Arcuri asked about the China for China strategy and progress on taping out new products in SMIC fab.

A: Mike Duke stated that they have made significant progress on the China for China supply chain initiative, with first revenues from the China for China supply chain expected later in the year.

Q: Timothy Arcuri inquired about gross margin and when costs would catch up with price declines.

A: Derek D'Angelio said that pricing negotiations and cost reductions will impact the P&L, with the variable contribution margin still holding well.

Q: Joe Quatrochi asked about backlog growth and related areas.

A: Mike Duke said that design wins in e - mobility and industrials are driving backlog growth.

Q: Gary Mobley asked about inventory in the distribution channel and gross margin.

A: Derek D'Angelio said distribution channel inventories were down 25% exiting the fourth quarter, and gross margin is expected to improve with cost reductions.

Q: Chris Caso asked about strategic changes as CEO and the Arno offer.

A: Mike Duke said he will lean in on innovation, and the board considered fiduciary duties when evaluating the Arno offer.

Q: Joshua Buchalter asked about new products and the restructuring.

A: Mike Duke was confident in growth above the market, and Derek D'Angelio said restructuring benefits would start in the first quarter.

Q: Vijay Rakesh asked about eMobility mix and China competition.

A: Derek D'Angelio said eMobility mix in auto was about 50% in the quarter, and Mike Duke said they were still seeing good traction in China.

Q: Quinn Bolton asked about pricing and margin pressure.

A: Mike Duke said there was a normal pricing cadence and no abnormal requests for price declines due to tariffs.

Q: Joseph Moore asked about shortages and automotive pull - ins.

A: Derek D'Angelio said there were signs of raw material shortages, and Mike Duke said there was no material evidence of upside demand from tariff pull - ins