Allegro MicroSystems (ALGM) Q3 2026 earnings summary

Executive summary

• Q3 FY26 sales reached $229M, up 29% year-over-year and above guidance, with non-GAAP EPS at $0.15, driven by strong bookings, backlog, and design wins in ADAS, xEV, and data center markets.

• Automotive sales grew 28% year-over-year, led by e-Mobility (up 46%), with significant content gains and increased adoption of xEV and ADAS systems.

• Data center sales reached a record 10% of total sales, up 31% sequentially, fueled by demand for fan driver and current sensor ICs.

• Net income for the quarter was $8.4M, reversing a net loss from the prior year period.

• Strategic design wins and growing bookings signal robust demand and future growth.

Financial highlights

• Q3 net sales: $229M; non-GAAP EPS: $0.15; gross margin: 49.9% (non-GAAP) and 46.7% (GAAP); operating margin: 15.4% (non-GAAP); adjusted EBITDA: 20.1% of sales.

• Sales up 7% sequentially and 29% year-over-year; automotive sales up 28% year-over-year; e-mobility sales up 46% year-over-year.

• Industrial and other sales up 31% year-over-year, driven by data center strength.

• Free cash flow for the quarter was $41.3M (18% of sales); cash and cash equivalents were $155.2M–$163M.

• Net income for the quarter was $8.3M–$8.4M; diluted share count: 186M.

Outlook and guidance

• Q4 FY26 sales expected between $230M–$240M, midpoint up 22% year-over-year.

• Q4 gross margin expected between 49%–51%, midpoint up 440 bps year-over-year.

• Q4 non-GAAP EPS expected between $0.14–$0.18; operating expenses to rise ~3% sequentially due to payroll tax resets.

• Interest expense projected at $5M in Q4, including $700K from loan repricing; tax rate expected at 8%.

• Continued investment in growth markets and expansion in Asia; restructuring charges of ~$4.2M expected by FY26 year-end.