Allegro MicroSystems, Inc.

Good morning and welcome to the Allegro Microsystems First Quarter Physical Year 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jaylene Hoover, Vice President of Investor Relations and Corporate Communications.

Thank you, Haley. Good morning, and thank you for joining us today to discuss Allegro's fiscal first quarter 2026 results. of our business, review our quarterly financial performance, and share our second quarter outlook. We will follow our prepared remarks at the Q&A session. Our earnings release and prepared remarks include certain non-GAAP financial measures. The non-GAAP financial measures that are discussed today are not intended to replace or be a substitute for our GAAP financial results. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings release, which is available in the investor relations page of our website at www.alegro-micro.com. This call is also being webcast and a replay will be available in the events and presentations section of our IR page shortly. During the course of this conference call, we will make projections and other forward-looking statements regarding future events and or the future financial performance of the company. We wish to caution that such statements are based on current expectations and assumptions as of today's date and as a result are subject to risks and uncertainties that could cause actual results or events to differ materially from projections. Important factors that can affect our business, including factors that could cause actual results to differ from our forward-looking statements, are described in detail in our earnings release for the first quarter of fiscal 2026, and in our most recent periodic and other filings with the Securities and Exchange Commission. Our estimates, expectations, or other forward-looking statements may change, and the company suits no obligation to update forward-looking statements to reflect actual results, changes to assumptions, or other events that may occur, except as required by law. It is now my pleasure to turn the call over to Allegro's President and CEO, Mike Dude. Mike?

Thank you very much, Delene, and good morning, and thank you all for joining our first quarter earnings conference call. We are encouraged by the positive momentum we are seeing across the business, including continued strong bookings, increasing backlog, and strong design-win activity in our strategic focus areas. This momentum has enabled us to deliver strong first quarter results with a sales and gross margin above the high end of our guidance ranges at $203 million and 48.2% respectively. We also delivered non-GAAP EPS of $0.09 above the midpoint of our guidance range. E-mobility led our automotive sales growth in the first quarter with particular strength in current sensors for XEV applications like high-voltage traction inverters and onboard chargers. We expect this positive e-mobility trend to continue as a result of tailwinds from ADAS-related safety feature adoption and the continued electrification of vehicle powertrains. In our industrial and other end markets, we were encouraged by continued growth in Q1 sales, data center, as well as robotics and automation. Both strategic focus areas for Allegro were significant contributors to our industrial growth in the first quarter. On our May call, I spoke about my strategic priorities as CEO. And as a reminder, one of our top priorities is to demonstrate relentless innovation and that drives performance leadership in new and existing markets and applications to that end i'm proud of the team for releasing an innovative new aclc current sensor this quarter this ic is specifically designed to meet the safety efficiency and commercial needs of xcv inverters these inverters are power electronic systems that power the main traction motor in a hybrid or fully electric vehicle And with this newly released IC, Allegro offers a market-leading device that enables customers to use two current sensors and an inverter, whereas most competitor solutions require three sensors. This new IC optimizes our customers' bill of materials while still achieving rigorous automotive safety standards. During the quarter, the team also released our first U-Core current sensor ICs that enable customers to use smaller magnetic cores or coreless inverter current sensor systems, thereby reducing the cost, size, and weight of the vehicle traction drive while extending vehicle driving range. Together, these innovative new current sensor ICs support our leadership position in XEV inverters, Our teams have already demonstrated an ability to gain market share with these new ICs, highlighting the value of relentless innovation with purpose. During the quarter, we also released a new 48-volt motor driver IC that results in more efficient, quieter, and more reliable cooling fans for use in AI data center installations.