Allegro MicroSystems Reports 30.9% Revenue Decline and Net Loss for Fiscal Year Ending March 2025

Allegro MicroSystems, Inc. reported a significant decline in financial performance for the fiscal year ending March 28, 2025, with total net sales of $725.0 million, a decrease of 30.9% from $1,049.4 million in the previous fiscal year. The company experienced a net loss of $72.8 million compared to a net income of $152.9 million in fiscal year 2024. This downturn was attributed to reduced customer demand and inventory rebalancing across all end markets, particularly in the automotive sector, which accounted for approximately 73.8% of total net sales. The decline in shipments affected various applications, including e-Mobility products and industrial applications.

In terms of operational changes, Allegro completed the acquisition of Crocus Technology for $411.8 million in cash on October 31, 2023, which is expected to enhance its product offerings in the semiconductor market. The company also undertook a restructuring initiative in January 2025, aimed at optimizing its cost structure, which included workforce reductions and facility consolidations. These strategic moves are part of Allegro's broader goal to maintain its leadership in the magnetic sensor and power management IC markets, particularly as demand for electric vehicles and advanced driver assistance systems continues to grow.

Allegro's operational metrics reflected a challenging environment, with gross profit decreasing to $321.5 million, resulting in a gross margin of 44.3%, down from 54.8% in the previous year. Research and development expenses increased to $179.6 million, representing 24.8% of total net sales, as the company continued to invest in innovative technologies. Selling, general, and administrative expenses decreased to $161.7 million, but as a percentage of sales, they rose to 22.3% due to the decline in net sales.

The company reported a significant increase in interest expenses, totaling $30.4 million, primarily due to higher debt levels following the refinancing of its term loans. Allegro's liquidity position showed a decrease in cash and cash equivalents to $121.3 million, down from $212.1 million in the previous year. The company indicated that it would continue to focus on managing its working capital and exploring additional funding options to support its growth strategy.

Looking ahead, Allegro remains optimistic about its long-term prospects, particularly in the automotive and industrial sectors, where it anticipates increased semiconductor content driven by the electrification of vehicles and advancements in automation. However, the company acknowledged the ongoing challenges posed by market volatility, inflation, and geopolitical factors that could impact its operations and financial performance in the near term.