Allegro MicroSystems (ALGM) Q2 2026 earnings summary

Executive summary

• Q2 net sales reached $214.3 million, up 14% year-over-year, with strong growth in e-Mobility, Industrial, and Data Center segments, and record design win activity.

• Non-GAAP EPS was $0.13, up over 60% year-over-year and above guidance midpoint; GAAP diluted EPS was $0.03.

• Automotive sales grew 12% year-over-year, led by 21% growth in e-Mobility and increased ADAS adoption; Industrial and Other sales rose 23%, driven by Data Center strength.

• Free cash flow was $13.9 million (6.5% of sales), and a $25 million voluntary debt repayment was made.

• Major share repurchase from Sanken reduced its ownership and increased free float by ~30%.

Financial highlights

• Q2 net sales: $214.3 million, up 14% year-over-year; gross margin: 49.6% non-GAAP, 46.3% GAAP.

• Non-GAAP operating margin: 13.9%; GAAP operating margin: 2.9%.

• Non-GAAP EPS: $0.13; GAAP diluted EPS: $0.03.

• Free cash flow: $13.9 million (6.5% of sales); cash balance: $117.5 million.

• Adjusted EBITDA margin: 19.0% for Q2 2026.

Outlook and guidance

• Q3 sales expected between $215 million and $225 million, midpoint implies 24% year-over-year growth.

• Q3 non-GAAP gross margin projected at 49%-51%; non-GAAP EPS expected between $0.12 and $0.16.

• Long-term targets: low double-digit annual sales growth, gross margin above 58%, operating margin above 32%, and free cash flow above 25%.