Allegro MicroSystems (ALGM) Q4 2026 earnings summary

Executive summary

• Achieved fifth consecutive quarter of sales growth, with Q4 sales at $243 million, up 26% year-over-year, and full-year sales up 23% to $890 million.

• Q4 non-GAAP EPS was $0.17, nearly tripling year-over-year; full-year non-GAAP EPS more than doubled to $0.54.

• Growth was driven by strong momentum in automotive (xEV, ADAS), industrial, and record data center sales, which comprised 14% of Q4 revenue.

• Design wins increased over 30% year-over-year, with backlog at a multi-year high.

• Record free cash flow of $125 million for the year.

Financial highlights

• Q4 sales grew 6% sequentially and 26% year-over-year; non-GAAP EPS up 13% sequentially and 183% year-over-year.

• Q4 non-GAAP gross margin was 50%, operating margin 15.6%, and adjusted EBITDA 20.4%.

• Full-year non-GAAP gross margin improved to 49.4%; operating margin 14.1%; adjusted EBITDA 19.1%.

• Free cash flow reached $124.9 million (14% of net sales); net leverage below 1:1 at year-end.

• Q4 non-GAAP free cash flow was $18.7 million (7.7% of net sales).

Outlook and guidance

• Q1 FY27 sales expected between $245 million-$255 million, up 23% year-over-year at midpoint.

• Q1 non-GAAP gross margin guided at 50%-51%; operating expenses to be ~$80 million.

• Non-GAAP EPS expected between $0.19 and $0.23.

• Target model projects mid-teens sales growth, gross margin above 55%, and EPS above $2.00 in 3–5 years.