Executive Summary

Q4 FY24 revenue $240.6M and non-GAAP EPS $0.25, both above the high end of guidance; GAAP diluted EPS was $(0.04) driven by a high GAAP tax provision and one-time charges .
Sequential/YoY softness reflected inventory rebalancing (auto tiers/CMs) and channel digestion (industrial), with targeted, one-time pricing support; management expects Q1 FY25 to be the trough and sequential growth resuming in Q2 with low-to-mid double-digit QoQ growth thereafter .
Non-GAAP gross margin compressed to 53.8% in Q4 (vs. 54.6% in Q3) and is guided to 49–50% in Q1 FY25, largely from underutilization in the Philippines back-end and product/channel mix; pricing impact ~100 bps vs ~300 bps from underutilization in Q1 guide framing .
Q1 FY25 guidance: revenue $160–$170M, non-GAAP EPS $0.01–$0.03, GM 49–50%, OpEx $72–$73M; company made a $50M voluntary term loan repayment (annualized interest expense -~$4M), framing a trough setup and expected snapback as inventories normalize .
Consensus (S&P Global) comparison unavailable for this period; focus likely shifts to cadence of sequential recovery, margin inflection as utilization improves, and durability of e‑Mobility design-win pipeline as catalysts .

What Went Well and What Went Wrong

What Went Well
- Delivered Q4 revenue and EPS above the high end of guidance despite macro/channel headwinds; record FY24 sales >$1B and record non‑GAAP EPS $1.35 .
- E‑Mobility remained the structural growth driver: FY24 e‑Mobility +38% YoY; Q4 auto sales +2% YoY to ~$182M (76% of sales) with e‑Mobility at 49% of auto .
- Product/tech pipeline strengthened: >30 new products launched; Crocus TMR integrated under XtremeSense brand; upcoming SiC high‑voltage gate drivers, high‑speed current/position sensors and 48V portfolio broaden TAM across auto/industrial (incl. data center liquid cooling pumps) .
What Went Wrong
- Inventory normalization weighed on volumes and mix: Q4 sales -6% QoQ and -11% YoY; industrial -29% YoY; “Other” -48% YoY; distribution channel digestion persisted .
- Margin pressure intensified with underutilization (assembly/test in Philippines) and targeted pricing support; management sized ~300 bps from underutilization vs ~100 bps price/mix into Q1 framework .
- GAAP loss in Q4 (diluted EPS $(0.04)), reflecting a $24.3M GAAP tax provision (GAAP ETR 141%) and an impairment of long‑lived assets ($13.2M), highlighting sensitivity to discrete/non‑cash items in lower revenue quarters .

Financial Results

Quarterly P&L (non-GAAP where noted) – Sequential trend

Metric	Q2 FY2024	Q3 FY2024	Q4 FY2024
Total Net Sales ($M)	$275.5	$255.0	$240.6
Gross Margin % (non-GAAP)	58.3%	54.6%	53.8%
Operating Margin % (non-GAAP)	31.3%	27.2%	23.8%
Diluted EPS (non-GAAP)	$0.40	$0.32	$0.25
Diluted EPS (GAAP)	$0.34	$0.17	$(0.04)

YoY comparison (Q4)

Metric	Q4 FY2023	Q4 FY2024
Total Net Sales ($M)	$269.4	$240.6
Gross Margin % (non-GAAP)	57.8%	53.8%
Operating Margin % (non-GAAP)	30.2%	23.8%
Diluted EPS (non-GAAP)	$0.37	$0.25
Diluted EPS (GAAP)	$0.32	$(0.04)

End-market mix (net sales, $M)

Market	Q2 FY2024	Q3 FY2024	Q4 FY2024
Automotive	$205.9	$194.8	$181.9
Industrial	$51.1	$45.9	$43.8
Other	$18.5	$14.3	$14.9
Total	$275.5	$255.0	$240.6

KPIs (Q4 FY2024)

KPI	Q4 FY2024
Magnetic Sensor revenue ($M)	$146
Power Products revenue ($M)	$94
Auto as % of total sales	76%
e‑Mobility as % of auto	49%
Geography: China / RoA / Japan / Europe / Americas	27% / 26% / 18% / 16% / 13%
Operating Expenses (non-GAAP, $M)	$72
Quarterly non‑GAAP tax rate	9.5%
DSO (days) / DOH (days)	45 / 126
Q4 OCF/FCF excluding Crocus IP tax ($M)	$54 / $40
Q4 GAAP OCF / non‑GAAP FCF ($M)	$12.8 / $(1.5)

Estimates vs Actuals

S&P Global consensus estimates for Q4 FY2024 and Q1 FY2025 were unavailable at the time of analysis; the company stated Q4 revenue and EPS exceeded the high end of internal guidance ranges (Q4 guide: revenue $230–$240M; EPS $0.19–$0.23; actuals: revenue $240.6M; non‑GAAP EPS $0.25) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q1 FY2025	N/A	$160–$170	First issuance
Gross Margin % (non-GAAP)	Q1 FY2025	N/A	49–50%	First issuance
OpEx ($M, non-GAAP)	Q1 FY2025	N/A	$72–$73	First issuance
Diluted EPS (non-GAAP)	Q1 FY2025	N/A	$0.01–$0.03	First issuance
Tax rate (non-GAAP)	Q1 FY2025	N/A	~12%	First issuance
Diluted share count (M)	Q1 FY2025	N/A	~196	First issuance
Interest expense	FY2025 run-rate	N/A	~$4M annualized reduction from $50M voluntary term loan payment	New item

Note: Q4 FY2024 guidance (from Q3 call) was $230–$240M revenue, $0.19–$0.23 non‑GAAP EPS; actuals beat both ranges .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 FY24 and Q3 FY24)	Current Period (Q4 FY24)	Trend
e‑Mobility/Auto outgrowth	Q2: Auto +31% YoY; e‑Mobility 50% of auto; record new products; Crocus integration progressing . Q3: Auto +18% YoY; e‑Mobility +45% YoY to 54% of auto .	Auto $182M (+2% YoY), e‑Mobility 49% of auto; sustained record design-win pace .	Strong but moderating mix vs Q3; secular intact .
Inventory digestion	Q3: Industrial digestion and emerging auto tier/CM rebalancing; Q1 FY25 expected trough .	Q4 softness from auto rebalancing and industrial channel digestion; Q1 guided trough, sequential growth from Q2 .	Clearing event into Q1; recovery expected Q2+ .
Pricing dynamics	Q3: Early channel pricing pressure; negotiating annual OEM contracts .	One‑time, targeted distributor price support; price/mix ~100 bps of Q4→Q1 margin move vs ~300 bps underutilization .	Transitory pricing action; not structural .
Underutilization	Q3: Gross margin held up via flexible model .	Underutilization in Philippines assembly/test the majority of margin headwind into Q1 guide; ability to snap back quickly .	Temporary; improves with volume .
China strategy	Q3: Localizing supply chain with China-for-China plan; OSAT/foundry engagement .	CEO reaffirms importance of China; nearly half of China auto sales are xEV; doubled down on local presence .	Execution progressing .
Product roadmap	Q3: Isolated gate drivers; Crocus TMR under XtremeSense; data center cooling design wins (pumps) .	30+ launches in FY24; FY25 launches include SiC gate drivers, high-speed current/position sensors, TMR into medical, 48V portfolio .	Broadening into adjacencies .
Industrial end markets	Q3: Muted; recovery 2H CY24 or later .	Still muted; “U‑shaped” correction; expect recovery in 2H FY25; green shoots in POS but early .	Stabilizing; recovery later .

Management Commentary

“We are pleased to have delivered fourth quarter revenue and EPS above the high end of our guidance range despite a challenging macro environment.”
“E‑Mobility... accounted for more than half of our design wins in fiscal year 2024.”
“Our first quarter guide comprehends... reduce inventory in the channel and return to normalized business levels... We continue to expect a return to sequential growth in the second quarter.”
“Pricing support [is] temporary and very targeted... only about 100 basis points is due to price and mix… about 300 basis points is really the underutilization.”
“We don’t own a fab… underutilization is happening in our assembly and test operations in the Philippines… we retain the ability to snap back very quickly.”

Q&A Highlights

Inventory clearing and recovery cadence: Management reiterated Q1 FY25 as trough with low-to-mid double-digit sequential growth in Q2 and likely for “a couple of quarters” as they climb back to normal run-rates .
Pricing: One-time, targeted distributor price support to clear channel; ASPs on 30+ FY24 new products remain higher and “holding up really well” .
Margin bridge: Pricing/mix ~100 bps vs underutilization ~300 bps into Q1 dynamics; as utilization rises, margins should recover .
Industrial outlook: Prolonged U‑shaped correction, interest-rate sensitivity at OEMs; cautious near term with potential 2H FY25 improvement .
China focus: Continued investment in localized supply chain; strong support from Chinese OEMs/Tier 1s as xEV penetration remains high .

Estimates Context

S&P Global consensus estimates for Q4 FY2024 (actuals comparison) and Q1 FY2025 (guidance comparison) were unavailable at the time of analysis. The company reported that Q4 revenue and non‑GAAP EPS exceeded the high end of its internal guidance (Q4 guide: revenue $230–$240M; EPS $0.19–$0.23 vs actual $240.6M and $0.25) .
Implication: Near-term estimate revisions may trend lower for Q1 (trough revenue/EPS guide) and then higher for Q2+ as sequential recovery materializes, with margin re‑expansion contingent on utilization and mix normalization .

Key Takeaways for Investors

Trough set-up: Q1 FY25 guide ($160–$170M revenue; $0.01–$0.03 non‑GAAP EPS; GM 49–50%) frames a clearing event; watch order patterns, channel POS, and utilization inflection heading into Q2 .
Margin recovery lever: Underutilization, not price, is the primary near-term headwind; as volumes normalize, GM should lift toward mid‑50s per company framework .
Structural growth intact: e‑Mobility design wins, 48V transition, SiC gate drivers, and XtremeSense TMR broaden content and support above-market auto outgrowth through cycle .
China execution: Localized supply chain and strong OEM/Tier 1 engagement are critical as Chinese OEMs expand globally; monitor China-for-China milestones .
Industrial timing risk: Recovery likely back‑half FY25; exposure targeted to clean energy, data center (incl. liquid cooling pumps), and automation—watch macro/interest‑rate sensitivity .
Capital/interest tailwind: $50M voluntary debt paydown reduces annualized interest by ~$4M; supports EPS/FCF into recovery .
Trading setup: Near-term sentiment driven by depth of Q1 trough and visibility to Q2 rebound; durable design-win pipeline and one-time nature of pricing support underpin medium-term thesis .

Source Notes

Q4 FY2024 8‑K and press release (Exhibit 99.1) .
Q4 FY2024 earnings call transcript .
Prior quarters: Q3 FY2024 8‑K and call ; Q2 FY2024 8‑K .

Consensus estimates via S&P Global were unavailable for this analysis window.

ALLEGRO MICROSYSTEMS, INC. (ALGM)·Q4 2024 Earnings Summary