Allegro MicroSystems (ALGM) Q3 2025 earnings summary

Executive summary

• Q3 FY2025 net sales reached $178 million, with non-GAAP EPS of $0.07, both above guidance midpoint despite a 30% year-over-year sales decline.

• Bookings hit an eight-quarter high, up 50% year-over-year, with order increases and abating cancellations.

• Record new product launches and design wins in automotive, industrial, and data center markets, with doubled product velocity and key wins in XEV and 48V systems.

• Major share repurchase and refinancing transactions completed, including $853.9M buyback and new $400M term loan.

• Inventory reduction efforts and supply chain localization in China continued.

Financial highlights

• Q3 sales declined 5% sequentially and 30% year-over-year to $177.9 million; automotive sales were $130.1 million (73% of total), down 8% sequentially and 33% year-over-year.

• Industrial and other sales were $47.8 million, up 5% sequentially but down 21% year-over-year.

• GAAP gross margin was 45.7% (down from 52.5% YoY); non-GAAP gross margin was 49.1%; adjusted EBITDA margin was 17.0%.

• GAAP net loss was $6.8 million (EPS $(0.04)); non-GAAP net income was $13.2 million (EPS $0.07).

• Cash and equivalents at quarter-end were $138.5 million to $149 million, down from $212.1 million to $223.7 million YoY.

Outlook and guidance

• Q4 FY2025 net sales expected between $180 million and $190 million, up 4% sequentially at midpoint.

• Non-GAAP gross margin forecasted at 46–48%, with a 200 bps headwind from pricing resets, excess inventory, and capacity charges.

• Non-GAAP diluted EPS expected in the range of $0.03 to $0.07.

• Operating expenses to rise ~5% sequentially due to annual payroll tax resets.

• March quarter expected to be the trough for gross margin, with improvement anticipated in subsequent quarters.