Allegro Sales Rise 29% to $276.884 Million as Data Centers Set Record

Key Facts

Allegro MicroSystems reported on October 29 results for its fiscal second quarter ended September 25, 2026, with net sales of $276.884 million, up 29% year over year from $214.294 million. The company said sales growth spanned the automotive and industrial markets and was led by data centers, which set a new record. Revenue increased as sales rose in automotive, industrial and other markets, though growth rates differed sharply between the two segments. The company also posted its seventh consecutive quarter of sequential sales growth, according to the chief executive. The results put quarterly sales above the year-earlier period, with growth broadening beyond automotive.

Automotive sales rose to $172.492 million, compared with $155.845 million in the second quarter of the previous fiscal year, an 11% year-over-year increase. Sales in industrial and other markets reached $104.392 million, versus $58.449 million a year earlier, a 79% increase. Growth in this group was much faster than in automotive sales, while the company said data center sales set a record. The chief executive described annual sales growth as broad across automotive and industrial markets, with data centers leading the performance. The company therefore does not attribute the overall increase mainly to automotive; it highlights data centers' contribution and broader sales across industrial and other markets.

Profitability metrics improved from the same quarter a year earlier: GAAP gross margin rose to 49.2% from 46.3%, and operating margin climbed to 12.8% from 2.9%. On a sequential basis, gross margin increased to 49.2% from 48.5% in the first quarter of fiscal 2027, and operating margin rose to 12.8% from 9.8%. GAAP diluted earnings per share were about $0.12, compared with $0.03 a year earlier. Non-GAAP diluted earnings per share were about $0.26, compared with $0.13 in the year-earlier quarter. The annual and sequential comparisons showed higher margins, alongside increased earnings per share on both measures reported by the company.

In the first half of fiscal 2027, net sales were $536.127 million, compared with $417.699 million in the same period of the previous fiscal year, an increase of 28%. The figures show that growth was not confined to the second quarter, as sales also rose across the first six months from the year-earlier period. The company said sales had recorded a seventh consecutive sequential increase and data center sales had reached a record. As for forward-looking business indicators, bookings rose for an eighth consecutive quarter, according to the company. It also said new design wins were at their highest level since its 2020 initial public offering and had increased nearly 40% year over year.

Results exceeded analyst estimates cited in Investing.com coverage: earnings per share were $0.26 versus an estimate of $0.24, while revenue reached $276.88 million against a consensus estimate of $270.81 million. The company's shares, ALGM, closed at $33.03 on October 29, 2026, according to EL7 data. Investing.com coverage published on the day of the results reported a closing price of $35.37 and said the stock had fallen 14.77% over the previous three months and risen 16.85% over the previous twelve months. These figures show different readings for the closing price on the day of the announcement, while $33.03 remains the figure in EL7 data. The EL7 data provided did not include the stock's daily trading range.

The company voluntarily repaid an additional $25 million of debt on September 30, 2026, after the end of the second fiscal quarter, according to its statement. For its outlook, Allegro is targeting net sales of between $278 million and $288 million in the third fiscal quarter, which ends on December 25, 2026. At the midpoint of the sales range, that would represent annual growth of 23%. The company expects non-GAAP gross margin of between 51.5% and 52.5%, and operating expenses of $87 million, plus or minus $1 million. It also expects diluted earnings per share of between $0.25 and $0.29. The company said leading indicators across its business give it high confidence in a trajectory that exceeds its target model for annual sales growth in the mid-teens.