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What changed in ALLEGRO MICROSYSTEMS, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ALLEGRO MICROSYSTEMS, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+524 added−523 removedSource: 10-K (2025-05-22) vs 10-K (2024-05-23)

Top changes in ALLEGRO MICROSYSTEMS, INC.'s 2025 10-K

524 paragraphs added · 523 removed · 389 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

141 edited+35 added−31 removed65 unchanged
Biggest changeSpecifically: • We provide employee wages that are competitive and consistent with employees’ positions, skill levels, experience, knowledge and geographic location. • All non-sales employees participate in one of our annual cash incentive programs, allowing them to share in the profitability and business performance of Allegro. We also generally provide equity grants globally.
Biggest changeSpecifically, and as applicable to individual employees and roles: • We provide short-term incentive and equity awards based on both business and individual performance. • All non-sales employees participate in one of our annual cash incentive programs, allowing them an opportunity to be rewarded with compensation that aligns with both the business performance of Allegro and their own individual performance. • All sales and field applications positions participate in our annual sales incentive plan, allowing them to earn additional cash incentives based on the achievement of specific sales metrics designed to drive our financial performance. • We also provide an opportunity for many of our global employees to earn equity awards.
For example, we released a unique 100V- and 175-degree Celsius capable BCD wafer technology designed to handle automotive voltage and temperature transients while also integrating high-density logic circuits and electrically erasable programmable read-only memory to enable configurable and embedded 11 algorithms, and various Hall-effect and xMR transducer technology on the same silicon wafer.
For example, we released a unique 100V- and 175-degree Celsius capable BCD wafer technology designed to handle automotive voltage and temperature transients while also integrating high-density logic circuits and electrically erasable programmable read-only memory to enable configurable and embedded algorithms, and various Hall-effect and xMR transducer technology on the same silicon wafer.
We augment our internally generated intellectual property through a mix of licensed intellectual property, partnering with industry experts, and through acquisitions. For example, the two businesses we acquired in the past two years, provide leading technology, including TMR and IGD, which will expand our serviced available market, most notably in EV and clean energy.
We augment our internally generated intellectual property through a mix of licensed intellectual property, partnering with industry experts, and through acquisitions. For example, the two businesses we acquired in the past three years provide leading technology, including TMR and IGD, which will expand our serviced available market, most notably in EV and clean energy.
Our TMR angle sensor ICs offer high resolution position feedback and the safety diagnostics required for adoption in advanced ADAS motor position applications. • Speed Sensor ICs: Speed sensor ICs detect and process the magnetic fields created by a rotating gear tooth or ring magnet with the output being a digital reading proportional to speed.
Our TMR angle sensor ICs offer high resolution position feedback and the safety diagnostics required for adoption in advanced ADAS motor position applications. • Speed Sensor ICs: Speed sensor ICs detect and process the magnetic fields created by a rotating gear tooth or ring magnet with the output being a digital reading proportional to speed and direction.
We intend to continue to choose the industry’s leading manufacturing partners to maintain the quality of our products for the automotive market, to ensure continuity of supply and to best protect our intellectual property. 7 Selectively pursue acquisitions and other strategic transactions We evaluate and selectively pursue acquisitions and transactions as an integral part of our strategy to supplement organic growth.
We intend to continue to choose the industry’s leading manufacturing partners to maintain the quality of our products for the automotive market, to ensure continuity of supply and to best protect our intellectual property. Selectively pursue acquisitions and other strategic transactions We evaluate and selectively pursue acquisitions and transactions as an integral part of our strategy to supplement organic growth.
Allegro’s compensation programs are designed to align the compensation of our employees, who operate in a highly competitive and technologically challenging environment, with Allegro’s business performance and to provide the 13 proper incentives to attract, retain and motivate employees to achieve superior performance. The structure of our compensation programs provides incentive earnings for both short-term and long-term performance.
Allegro’s compensation programs are designed to align the compensation of our employees, who operate in a highly competitive and technologically challenging environment, with Allegro’s business performance and to provide the proper incentives to attract, retain and motivate employees to achieve superior performance. The structure of our compensation programs provides incentive earnings for both short-term and long-term performance.
We believe we can reduce our manufacturing costs by leveraging the advanced manufacturing capabilities of our strategic suppliers, implementing more cost-effective packaging technologies and leveraging both internal and external assembly and test capacity to reduce our capital requirements, lower our operating costs, enhance reliability of supply and support our continued growth.
We believe we can continue to reduce our manufacturing costs by leveraging the advanced manufacturing capabilities of our strategic suppliers, implementing more cost-effective packaging technologies and leveraging both internal and external assembly and test capacity to reduce our capital requirements, lower our operating costs, enhance reliability of supply and support our continued growth.
Our LED driver ICs and modules are used in smart lighting systems to improve system safety, efficiency and size. 8 • Isolated Gate Drivers: These devices combine isolated DC-DC and IGDs into a single package. They are designed to complement GaN and SiC switches in high-efficiency power conversion systems.
Our LED driver ICs and modules are used in smart lighting systems to improve system safety, efficiency and size. • Isolated Gate Drivers: These devices combine isolated DC-DC and IGDs into a single package. They are designed to complement GaN and SiC switches in high-efficiency power conversion systems.
For example: • We target our patented sensor IC, and power-related intellectual property to address increasing electronics content in automotive applications based on the growing adoption of electric powertrains and advanced safety systems for semi-autonomous and autonomous vehicles. • We are investing in advanced current sensor IC and sensor-less motor control technologies to target industrial clean energy applications where we believe the trend towards increasing energy efficiency provides an opportunity to apply our rich history of innovation to rapidly accelerate our growth. • We are aligning our application domain knowledge, sensor design skills and power management and motor control algorithm expertise to capitalize on the trend towards increasing automation and electronics content inherent in the industrial automation transformation.
For example: • We target our patented sensor IC, and power-related intellectual property to address increasing electronics content in automotive applications based on the growing adoption of electric powertrains and advanced safety systems for semi-autonomous and autonomous vehicles. • We are investing in advanced current sensor IC, IGD and sensor-less motor control technologies to target industrial clean energy applications where we believe the trend towards increasing energy efficiency provides an opportunity to apply our rich history of innovation to rapidly accelerate our growth. • We are aligning our application domain knowledge, sensor design skills and power management and motor control algorithm expertise to capitalize on the trend towards increasing automation and electronics content inherent in the transformation and adoption of robotics.
We support customers through design and application centers located in North America, South America, Asia and Europe. Our local teams in these centers work closely with our customers on their unique design requirements, often acting as an extension of a customer’s development team.
We support customers through design, application and customer support centers located in North America, South America, Asia and Europe. Our local teams in these centers work closely with our customers on their unique design requirements, often acting as an extension of a customer’s development team.
To succeed in these conditions, Allegro implements key recruitment and retention strategies, objectives and effectiveness measures as part of the overall management of our business. These core strategies are advanced through the following programs, policies and initiatives: Competitive Pay and Benefits.
To succeed in these conditions, Allegro implements key recruitment and retention strategies, objectives and effectiveness measures as part of the overall management of our business. These core strategies are advanced through the following programs, policies and initiatives: 14 Competitive Pay and Benefits.
We provide ongoing technical training to our distributor and sales representatives to keep them informed of our existing and new products. 10 We maintain an internal marketing organization that is responsible for increasing our brand awareness and promoting our products to prospective customers.
We provide ongoing technical training to our distributor and sales representatives to keep them informed of our existing and new products. We maintain an internal marketing organization that is responsible for increasing our brand awareness and promoting our products to prospective customers.
Our current strategic semiconductor process innovations include the following: Automotive Quality and Safety We have developed, characterized and qualified our wafer and package technologies to meet or exceed the rigorous automotive requirements that our customers demand.
Our current strategic semiconductor process innovations include the following: 12 Automotive Quality and Safety We have developed, characterized and qualified our wafer and package technologies to meet or exceed the rigorous automotive requirements that our customers demand.
In the U.S. and the United Kingdom, we offer an employee stock purchase plan to our non-executive employees, which allows them to purchase shares of Allegro stock at a discounted price.
Additionally, in the U.S. and the United Kingdom, we offer an employee stock purchase plan to our non-executive employees, which allows them to purchase shares of Allegro stock at a discounted price.
Our “first of its kind” approach took the complexity of magnetic systems design and embedded it within our solutions, dramatically simplifying the customers’ design effort while increasing system reliability. This is a pattern we have repeated over consecutive generations of products, enabling us to establish a strong presence in the most rigorous and demanding automotive markets.
Our “first of its kind” approach took the complexity of magnetic systems design and embedded it within our solutions, dramatically simplifying customers’ design efforts while increasing system reliability. This is a pattern we have repeated over consecutive generations of products, enabling us to establish a strong presence in the most rigorous and demanding automotive markets.
We believe the automotive market is very attractive due to the rigorous quality and safety requirements that create meaningful challenges for new competitors and the significant technology shifts currently underway that are expected to significantly increase semiconductor content per vehicle. Part of our served available market expansion is through acquisitions that open new sockets and new applications to us.
We believe the automotive market is very attractive due to the rigorous quality and safety requirements that create meaningful challenges for new competitors and the significant technology shifts currently underway that are expected to meaningfully increase semiconductor content per vehicle. Part of our served available market expansion is through acquisitions that open new sockets and new applications to us.
Through our subcontractor manufacturers, we are able to employ our proprietary wafer fabrication processes while leveraging our subcontractors’ manufacturing technologies and high-volume capacity. Our use of both internal and external assembly and test capabilities is designed to balance the protection of our proprietary technology and processes while achieving automotive quality manufacturing at scale.
Through our subcontractor manufacturers, we are able to employ our proprietary wafer fabrication processes while leveraging our subcontractors’ manufacturing technologies and high-volume capacity. Our use of both internal and external assembly as well as test capabilities is designed to balance the protection of our proprietary technology and processes while achieving automotive quality manufacturing at scale.
Additionally, on a quarterly basis, our ESG team updates senior management and the Nominating and Corporate Governance Committee of the Board of Directors on ESG target setting and progress, risks and opportunities, regulatory preparedness, ratings, customer requirements, and other key ESG focus areas. An ESG update is also provided annually to our full Board of Directors.
Additionally, on a quarterly basis, our ESG team updates senior management and the Nominating and Governance Committee of our Board on ESG target setting and progress, risks and opportunities, regulatory preparedness, ratings, customer requirements, and other key ESG focus areas. An ESG update is also provided annually to our full Board.
Prior to that she served as Vice President, Associate General Counsel at Thermo Fisher from 2005 to 2017. Ms. Briansky received a B.A. in Political Science from the University of North Carolina in 1995 and a J.D. from Boston University School of Law in 1998. Michael C.
Prior to that she served as Vice President, Associate General Counsel at Thermo Fisher from 2005 to 2017. Ms. Briansky received a B.A. in Political Science from the University of North Carolina in 1995 and a J.D. from Boston University School of Law in 1998.
Allegro ICs sense the steering angle and torque, measure wheel speed, regulate power to the sensors and control electronics, and drive the actuators needed to operate the steering motors and braking calipers in advanced electronic braking and steering systems which help to improve fuel efficiency in vehicles. • Energy efficiency in HEVs and EVs.
Allegro ICs sense the steering angle and torque, measure wheel speed, regulate power to the sensors and control electronics, and drive the actuators needed to operate the steering motors and braking calipers in advanced electronic braking and steering systems, which also help to improve fuel efficiency in all vehicles. • Energy efficiency in HEVs and EVs.
Our operations are subject to various federal, state, local, international, and non-U.S. laws and regulations governing pollution and environmental protection and occupational health and safety, including those relating to hazardous and toxic materials, product composition, and the investigation and cleanup of contaminated sites.
Our operations are subject to various federal, state, local, international, and non-U.S. laws and regulations governing pollution and environmental protection and occupational health and safety, including those related to hazardous and toxic materials, product composition, and the investigation and cleanup of contaminated sites.
Customers We sell our products to major global OEMs and their key suppliers, primarily in the automotive and industrial markets. We sold to more than 10,000 end customers, directly and through distributors, during each of fiscal years 2024, 2023 and 2022.
Customers We sell our products to major global OEMs and their key suppliers, primarily in the automotive and industrial markets. We sold to more than 10,000 end customers, directly and through distributors, during each of fiscal years 2025, 2024 and 2023.
We offer one of the largest portfolios of current sensors on the market today, including those with integrated components, requiring less board space. Our “lossless” current sensor ICs are used to improve efficiency in power conversion systems.
We offer one of the largest portfolios of current sensors on the market today, including those with integrated components, requiring less board space. Our “lossless” current sensor ICs are used to improve efficiency in power conversion systems and power supplies.
We remain one of the few suppliers who has developed multiple packaging technologies capable of operating up to 175 degrees Celsius and including passive components and high current conductors required to make high efficiency, high voltage current sensor products.
We remain one of the few suppliers who has developed multiple packaging technologies capable of operating at temperatures of up to 175 degrees Celsius and including passive components and high current conductors required to make high-efficiency, high voltage current sensor products.
Similar benefits exist for our sensor products through monolithic integration of transducers with precision analog circuits and intelligent signal processing on a high-voltage IC that can be powered from a 12-volt vehicle battery.
Similar benefits exist for our sensor products through monolithic integration of transducers with precision analog circuits and intelligent signal processing on a high-voltage IC that can be powered from a vehicle battery.
In addition, we strive to operate our business in a socially responsible and environmentally sustainable manner, and with the goals of maintaining a dedication to social responsibility in our supply chain and disclosing the environmental impact of our business operations.
In addition, we strive to operate our business in a socially responsible and environmentally sustainable manner, and with the goals of reducing costs and maintaining a dedication to social responsibility in our supply chain and disclosing the environmental impact of our business operations.
Company Products and Solutions Our product portfolio includes over 1,000 products across a range of high-performance analog mixed-signal semiconductors.
Company Products and Solutions Our product portfolio includes over 1,500 products across a range of high-performance analog mixed-signal semiconductors.
We apply our deep technology know-how to deliver magnetic sensing IC and power IC solutions to: • Sense speed, position, and current to enable electric powertrains, improve vehicle fuel efficiency and CO2 emissions, enable safer cars through ADAS safety features, and enhance factory automation and clean energy systems; • Regulate systems to improve safety and power efficiency and ultimately reduce solution size; and • Drive motors through our advanced, proprietary algorithms that provide industry leading reliability and energy efficiency, with minimal audible noise and vibration.
We apply our deep technology know-how to deliver magnetic sensing IC and power IC solutions to: • Sense speed, position, and current to enable electric powertrains, improve ICE vehicle fuel efficiency and meet customer demands for lower CO2 emissions, enable safer cars through ADAS safety features, and enhance factory automation and clean energy systems; • Regulate systems to improve safety and power efficiency and ultimately reduce solution size; and • Drive motors through our advanced, proprietary algorithms that provide industry-leading reliability and energy efficiency, with minimal audible noise and vibration.
Magnetic Sensor ICs We offer what we believe to be the industry’s leading portfolio of integrated magnetic sensor ICs. Our solutions are based on our monolithic Hall-effect, GMR and TMR technology that allows customers to develop contactless sensor solutions that reduce mechanical wear and provide greater measurement accuracy and system control.
Magnetic Sensor ICs We offer what we believe to be the industry’s leading portfolio of integrated magnetic sensor ICs. Our solutions are based on our monolithic Hall-effect, GMR and TMR technologies that allow customers to develop contactless sensor solutions that reduce mechanical wear and provide greater measurement accuracy and system control.
Our motor driver ICs utilize embedded algorithms to improve energy efficiency and motion control in HEV and EV systems, automotive fans and pumps, data center cooling fans, automation and home appliances. • Regulator and LED Driver ICs : As the industry transitions to more highly integrated products, our portfolio of regulator ICs, and power management ICs (“PMICs”) is used extensively in under-hood automotive ADAS and powertrain systems.
Our motor driver ICs utilize embedded algorithms to improve energy efficiency and motion control in HEV and EV systems, automotive fans and pumps, data center cooling fans, robotics, automation and home appliances. • Regulators, power management ICs and LED Driver ICs : As the industry transitions to more highly integrated products, our portfolio of regulator ICs, and power management ICs (“PMICs”) is used extensively in advanced ADAS and powertrain systems.
As HEVs and EVs become a meaningful share of the automotive market, OEMs face challenges and opportunities to change system architectures in order to reduce complexities while achieving optimal system efficiency and vehicle range.
As HEVs and EVs become a meaningful share of the automotive market, OEMs face challenges and opportunities to change system architectures to reduce complexities while achieving optimal energy efficiency and vehicle range.
Current sensor ICs are used to improve energy efficiency in a broad range of applications, including on-board chargers, DC-DC converters, inverters, industrial motors, solar inverters, and EV charging infrastructure. • Position Sensor ICs : Position sensor ICs provide an analog or digital voltage output that measures the intensity of a magnetic field, thereby establishing a precise position.
Current sensor ICs are used to improve energy efficiency in a broad range of applications, including on-board chargers, DC-DC converters, inverters, industrial motors, solar inverters, robotics, data center power supplies and EV charging infrastructure. • Position Sensor ICs : Position sensor ICs provide an analog or digital voltage output that measures the intensity of a magnetic field, thereby establishing a precise position.
High-Voltage Technology Our intellectual property developed over years of experience in automotive applications includes advanced mixed-signal integration of high-voltage solutions with our high-precision analog designs. For example, our innovative wafer technology enables high-voltage power transistors to be combined with embedded digital logic and precision analog circuits on a monolithic motor control IC.
High-Voltage Technology Our intellectual property, developed over years of experience in automotive applications includes advanced mixed-signal integration of high-voltage solutions with our high-precision analog designs. For example, our innovative wafer technology enables 100V capable power transistors to be combined with embedded digital logic and precision analog circuits on a monolithic motor control IC suitable for emerging 48V automotive applications.
These shifts also require technology to enable intelligence and automation in factories and energy efficiency in clean energy applications. According to industry experts, these mega trends are expected to dramatically increase the demand for sensing and power solutions like those we develop.
These shifts also require technology to enable intelligence and automation in factories and energy efficiency in robotics, data center and clean energy applications. According to industry experts, these mega trends are expected to increase the demand for sensing and power solutions like those we develop.
We anticipate that we will continue to make research and development investments in order to enhance our leadership position and expand our markets with innovative, high-quality products and services (as exemplified through our acquisition of our high voltage power group and our acquisition of Crocus and its TMR technology).
We anticipate that we will continue to make research and development investments in order to enhance our leadership position and expand our markets with innovative, high-quality products and services (as exemplified through our acquisition of IGD power group and TMR technology).
In both the automotive and industrial markets, major technology shifts driven by disruptive technologies are creating high-growth opportunities in areas such as e-Mobility, clean energy and automation. We believe the convergence of requirements for intelligence and energy efficiency within these emerging markets is directly aligned with our core competencies.
In both the automotive and industrial markets, disruptive technologies are driving major technological shifts and creating high-growth opportunities in areas such as e-Mobility, clean energy and automation. We believe the convergence of requirements for intelligence and energy efficiency within these emerging markets is directly aligned with our core competencies.
We are also a leading provider of specialized crankshaft speed sensor ICs needed to operate the stop/start engine systems designed to reduce emissions through improved efficiency.
We are also a leading provider of specialized camshaft and crankshaft sensor ICs needed to operate the stop/start engine systems designed to reduce emissions through improved efficiency.
ADAS is a precursor to fully autonomous vehicles. While many ADAS-equipped vehicles are being produced today, as ADAS features become more sophisticated and increasingly adopted, demand for our sensor and power ICs is expected to expand in steering and braking systems.
While many ADAS-equipped vehicles are being produced today, as ADAS features become more sophisticated and increasingly adopted, demand for our sensor and power ICs is expected to expand in steering and braking systems.
Two decades of sensor package innovation have led to the development of a family of integrated systems in a package for magnetic current, position and speed sensor ICs as well as power systems.
Two decades of sensor package innovation have led to the development of a family of integrated systems in a package for magnetic current, position and speed sensor ICs.
We believe similar share growth opportunities exist in other adjacent areas of the magnetic sensor IC market. We also plan to grow in the magnetic sensor market through the release of our new TMR technology. We are also leveraging our power IC products to increase our total content within automotive and industrial applications.
We believe similar share growth opportunities exist in other adjacent areas of the magnetic sensor IC market. We also plan to grow in the magnetic sensor market through the release of more products based on our XtremeSense TMR technology. We are also leveraging our power IC products to increase our total content within automotive and industrial applications.
Our global team of highly skilled engineers has extensive semiconductor development experience, including expertise in analog design, test and process technology. As of March 29, 2024, we had approximately 742 employees dedicated to research and development, with centers in the United States, Europe, South America, and Asia.
Our global team of highly skilled engineers has extensive semiconductor development experience, including expertise in analog design, test and process technology. As of March 28, 2025, we had approximately 750 employees dedicated to research and development, with centers in the United States, Europe, South America, and Asia.
Our 100V BCD wafer process technology and galvanically isolated current sensors are suited for higher voltage operation, and we believe the demand for current sensor ICs will increase as more solar and EV applications come to market.
Our 100V BCD wafer process technology and galvanically isolated current sensors are suited for higher voltage operation, and we believe the demand for current sensor ICs will increase as more solar inverters, EV chargers and data servers come to market.
These technologies are fundamental to the transition from 12-volt to 48-volt power supply required in the rapidly emerging HEV and EV markets, and to the next generation of ADAS systems. We are in the process of applying these capabilities to the industrialization of our IGD portfolio.
These technologies are fundamental to the transition from 12V to 48V power supply required in the rapidly emerging HEV and EV markets, and to the next generation of ADAS systems. We are in the process of applying these capabilities to the industrialization of our IGD portfolio.
Growth in the global semiconductor industry has traditionally been driven by the consumer market. Looking ahead, industry growth is expected to be driven by technology mega trends in the automotive and industrial markets. These mega trends have created requirements for new technologies in vehicles, both powertrain and in the cabin, to support vehicle electrification and advanced driver assistance systems (“ADAS”).
Growth in the global semiconductor industry is expected to be driven by technology mega trends in the automotive and industrial markets. These mega trends have created requirements for new technologies in vehicles, both in the powertrain and in the cabin, to support vehicle electrification and advanced driver assistance systems (“ADAS”).
This presents a number of new socket opportunities for semiconductors, and we expect our content per vehicle will continue to increase, driven by research and development innovation to serve this high-growth market.
This presents several new opportunities for semiconductors, and we expect our content per vehicle will continue to increase, driven by research and development innovation to serve this high-growth market.
We are a market share leader in the magnetic sensor IC market, and we believe there is considerable opportunity to continue to grow this foundational business. For example, over the last five years, we introduced new position sensor ICs and quickly ramped up revenue in motion control applications, particularly in the ADAS market.
We are a market share leader in the magnetic sensor IC market, and we believe there is considerable opportunity to continue to grow this foundational business. Recently we introduced new position sensor ICs and quickly ramped up revenue in motion control applications, particularly in the ADAS market.
Doogue has served as our Senior Vice President, Chief Technology Officer, since being named as the Company’s first Chief Technology Officer in September 2022. Mr. Doogue joined Allegro in 1998 as a Design Engineer facilitating the development of Allegro’s innovative speed and current sensor ICs. Mr.
Prior to that, he served as our Executive Vice President, Chief Technology Officer, since being named as the Company’s first Chief Technology Officer in September 2022. Mr. Doogue joined Allegro in 1998 as a Design Engineer, facilitating the development of Allegro’s innovative speed and current sensor ICs. Mr.
In addition, our board of directors has a standing Strategy Committee, whose purpose is to provide guidance to management on various technological choices and assist in implementing our strategic direction. Process and Packaging Technology Our product and technology development engineers have long-established expertise in designing mixed signal power and magnetic sensor ICs using proprietary semiconductor process technologies and intelligent packaging.
In addition, our Board has a standing Strategy Committee, whose purpose is to provide leadership and guidance to management on defining and implementing the strategic direction of the Company. Process and Packaging Technology Our product and technology development engineers have long-established expertise in designing mixed signal power and magnetic sensor ICs using proprietary semiconductor process technologies and intelligent packaging.
These innovations improve reliability to avoid factory downtime, accurately measure current to support increased energy efficiency for high-density clean energy applications and reduce the solution footprint to lower total system cost. We have maintained our sensor IC leadership and built our power IC business through successfully developing deep customer relationships over time.
These innovations improve reliability to avoid factory downtime, accurately measure current to support increased energy efficiency or improved motor control and reduce the solution footprint to lower total system cost. We have maintained our sensor IC leadership and built our power IC business through successfully developing deep customer relationships over time.
Our products also provide a non-intrusive, reliable, high-precision and low-cost way to measure power in power monitoring applications. • Energy efficiency in next generation infrastructure . Our power IC products, such as motor driver ICs, are used extensively in data center cooling fan applications.
Our products also provide a non-intrusive, reliable, high-precision and low-cost way to measure power in power monitoring applications, enabling intelligent energy management and grid stabilization. • Energy efficiency in next generation data center infrastructure . Our power IC products, such as advanced motor driver ICs, are used extensively in data center cooling systems.
Our products are foundational to automotive and industrial electronic systems. Our sensor ICs enable our customers to precisely measure motion, speed, position and current, while our power ICs include high-temperature and high-voltage capable motor drivers, power management ICs, light emitting diode (“LED”) driver ICs and isolated gate drivers.
Our sensor ICs enable our customers to precisely measure motion, speed, position and current, while our power ICs include high-temperature and high-voltage capable motor drivers, power management ICs, light emitting diode (“LED”) driver ICs and isolated gate drivers.
Automotive Market IC Solutions Industrial Market IC Solutions Other Market IC Solutions PRODUCTS ▪ Current sensors ▪ Current sensors ▪ Current sensors ▪ Position sensors ▪ Position sensors ▪ Position sensors ▪ Speed sensors ▪ Speed sensors ▪ Motor drivers ▪ LED drivers ▪ LED drivers ▪ Regulators ▪ Motor drivers ▪ Motor drivers ▪ Regulators and PMICs ▪ Regulators ▪ Isolated gate drivers ▪ Isolated gate drivers APPLICATIONS ▪ Electric motor powertrain and charging systems for EV ▪ EV charging infrastructure ▪ Smart home/IoT ▪ ADAS, active safety, including steering and braking systems ▪ Solar power generation, storage, and distribution ▪ PC printers and peripherals ▪ Engine management and transmission systems ▪ Factory automation equipment ▪ Personal electronics ▪ Comfort and convenience including in-cabin motors, HVAC, infotainment, LED lighting ▪ Industrial motors ▪ Energy Star household appliances including white goods ▪ Passive safety including seatbelt switches, wipers, door/window sensors, seat position, suspension ▪ Data center and network infrastructure ▪ Consumer grade medical devices ▪ Personal mobility Environmental, Social and Governance Initiatives Our commitment to sustainability is intrinsic to our core value of “Innovation with Purpose” and is directly aligned to our corporate strategy and growth plans.
Automotive Market IC Solutions Industrial and Other Market IC Solutions PRODUCTS ▪ Current sensors ▪ Current sensors ▪ Position sensors ▪ Position sensors ▪ Speed sensors ▪ Speed sensors ▪ LED drivers ▪ LED drivers ▪ Motor drivers ▪ Motor drivers ▪ Regulators and PMICs ▪ Regulators ▪ IGDs ▪ IGDs APPLICATIONS ▪ Electric motor powertrain and charging systems for EV ▪ EV charging infrastructure ▪ Smart home/Internet of things ▪ ADAS, active safety, including steering and braking systems ▪ Solar power generation, storage and distribution ▪ PC printers and peripherals ▪ Engine management and transmission systems ▪ Factory automation and Industrial motors ▪ Personal electronics ▪ Comfort and convenience including in-cabin motors, HVAC, infotainment and LED lighting ▪ Personal mobility ▪ Energy Star household appliances, including white goods ▪ Passive safety including, seatbelt switches, wipers, door/window sensors, seat position and suspension ▪ Data center and network infrastructure ▪ Consumer grade medical devices 9 Environmental, Social and Governance Initiatives Our commitment to “Innovation with Purpose” is a core value that includes operating responsibly and sustainably.
Each of these programs further aligns our employees’ financial interests with the performance of the business and the interests of our stockholders. • We provide short-term incentive and equity awards based on both business and individual performance. • All sales and field applications positions participate in our annual sales incentive plan, allowing them to earn additional cash incentives based on the achievement of specific sales metrics designed to drive our financial performance. • We purchase compensation data from external compensation and benefits consulting firms to ensure we provide competitive compensation in each of the geographic locations in which we operate. • We align our executives’ annual and long-term equity compensation, in the form of performance-based restricted stock units (“PSUs”) and time-based restricted stock units (“RSUs”), with our stockholders’ interests by linking realizable pay with Allegro’s stock performance and other key business and financial operating metrics. • We provide comprehensive benefit options designed to retain our employees and support their families in all areas of health and wellness. • We provide social community benefits, including a global charitable gift matching program, and a global volunteer policy, both of which help our employees give back to the local communities in which we operate.
This stock purchase plan further aligns our employees’ financial interests with the performance of the business and the interests of our stockholders. • We purchase compensation data from external compensation and benefits consulting firms to ensure we provide competitive compensation in each of the geographic locations in which we operate. • We align our executives’ annual and long-term equity compensation, in the form of performance-based restricted stock units (“PSUs”) and time-based restricted stock units (“RSUs”), with our stockholders’ interests by linking realizable pay with Allegro’s stock performance and other key business and financial operating metrics. • We provide comprehensive benefit options designed to retain our employees and support their families in all areas of health and wellness. • We provide social community benefits, including a global charitable gift matching program, and a global volunteer policy, both of which help our employees give back to the local communities in which we operate.
In automotive applications, our position sensor ICs are used to improve safety applications such as ADAS power steering and braking systems, certain HEV powertrain systems such as the shaft position of a starter generator and ICE powertrain systems such as clutch and fork position in advanced transmissions.
In automotive applications, our position sensor ICs are used to improve safety applications such as ADAS power steering and braking systems, certain EV powertrain systems such as the shaft position of a traction motor and ICE powertrain systems such as clutch and pedal position in advanced transmissions.
Our devices enable our customers in these markets to manufacture more energy efficient products with extended battery life. Market Opportunity Within our target markets, a key element of our growth strategy is to increase our revenue through portfolio and customer expansion.
Consumer Markets The consumer markets include smart home applications, gaming, personal medical devices and consumer electronics. Our devices enable our customers in these markets to manufacture more robust and more energy-efficient products with extended battery life. Market Opportunity Within our target markets, a key element of our growth strategy is to increase our revenue through portfolio and customer expansion.
Our latest opportunity to expand our market presence is with our new IGDs. These solutions will have applications in power conversion in EVs, such as on-board chargers and traction inverters, as well as in clean energy.
Our latest opportunity to expand our market presence is with both our IGDs and our XtremeSense TMR technology. IGD solutions have applications in power conversion in EVs, such as on-board chargers and traction inverters, as well as in clean energy systems.
At the core of this strategy is to maximize the positive impact of our products. We believe our ICs help address global challenges related to CO2 emissions, energy efficiency and clean, renewable energy in a variety of applications, for example: • Reduced vehicle emissions and improved fuel economy for ICE vehicles.
We believe our ICs help address global challenges related to CO2 emissions, energy efficiency and clean, renewable energy in a variety of applications, for example: • Reduced vehicle emissions and improved fuel economy for ICE vehicles.
Mr. Doogue holds over 70 U.S. patents in the areas of sensors and semiconductors. Mr. Doogue received a B.A. in Physics from Colby College in 1997 and a B.E. in Electrical Engineering from Dartmouth College in 1998. In 2007, Mr. Doogue completed the Stanford Executive Program at the Stanford University Graduate School of Business. Max R.
Mr. Doogue holds over 75 semiconductor-related U.S. patents. Mr. Doogue received a B.A. in Physics from Colby College in 1997 and a B.E. in Electrical Engineering from Dartmouth College in 1998. In 2007, Mr. Doogue completed the Stanford Executive Program at the Stanford University Graduate School of Business. Derek P.
We believe that moving from today’s systems to electromechanical braking and steer-by-wire will nearly double the devices required per system. • According to our internal estimates and third-party sources, we believe that we have a total opportunity of up to approximately $100 of potential content in each battery EV or plug-in EV. • In a popular mid-sized 2022 model sedan shipped worldwide, our content per vehicle increased by over 50% as the vehicle model transitioned from ICE to a battery EV.
We believe that moving from today’s systems to electromechanical braking and steer-by-wire will nearly double the devices required per system. • According to our internal estimates and third-party sources, we believe that we have a total opportunity of up to approximately $100 of potential content in each battery EV or plug-in EV.
Compliance with current or future environmental and occupational health and safety laws and regulations could restrict our ability to expand our business or require us to modify processes or incur other substantial expenses which could harm our business.
Non-compliance with current or future regulations or directives could restrict our ability to expand our business or require us to modify processes and/or materials or incur other substantial expenses which could harm our business.
Although we incur costs to comply with the provisions discussed above and other applicable federal, state, local, international and non-U.S. laws and regulations relating to environmental protection in the ordinary course of our business, such costs have not materially affected, and are not presently expected to materially affect, our capital expenditures, earnings or competitive position. 16 Available Information We file annual, quarterly and current reports and any amendments to those reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”).
Although we incur costs to comply with the provisions discussed above and other applicable federal, state, local, international and non-U.S. laws and regulations relating to environmental protection in the ordinary course of our business, such costs have not materially affected, and are not presently expected to materially affect, our capital expenditures, earnings or competitive position.
These markets are looking for many of the same device specifications that our automotive customers use, from high voltage and high temperature performance to long life cycle, small form factors, integration and unique packaging.
These markets are looking for many of the same device specifications that our automotive customers use, from high voltage and high temperature performance to long life cycle, small form factors, integration and unique packaging. Our automotive quality standards result in solutions that provide robust, high performance over long lifecycles, garnering trust from our industrial customers.
(“Crocus”), we now offer tunnel magnetoresistance (“TMR”) solutions that provide the highest magnetic sensitivity, lower power consumption, and the smallest size by comparison to other magnetic technologies.
We also offer tunneling magnetoresistance (“TMR”) sensor solutions that provide the highest magnetic sensitivity, lowest power consumption, and the smallest size by comparison to other magnetic technologies.
Vehicles equipped with Level 1 ADAS feature sets (i.e., the capability to take control of one functionality) use Allegro devices. We have been helping to increase the safety and drive features in ADAS applications of steering and braking systems for years.
Vehicles equipped with Level 1 ADAS feature sets (i.e., the capability to take control of one functionality) already use Allegro devices. For years, we have been at the forefront of enhancing safety features in ADAS applications, particularly steering and braking systems through continuous innovation and close collaboration with automakers.
For example, the European Union (“EU”) adopted its Restriction of Hazardous Substance Directive (“RoHS”) legislation, EU Directive 2002/95/EC (RoHS) and 2011/65/EU (RoHS II), amended by 2015/863/EU and continues to develop evolving compliance standards, with its most recent restrictions announced as part of RoHS 3, which took effect in July 2019.
For example, the European Union (“EU”) adopted its Restriction of Hazardous Substance Directive (“RoHS”) legislation, EU Directive 2002/95/EC (RoHS) and 2011/65/EU (RoHS II), amended by 2015/863/EU, which took effect in July 2019.
We have fully transitioned from Sanken to third-party distributors and direct to end customers in fiscal year 2024, and Sanken represented approximately 16.5% and 19.4% of our net sales in fiscal years 2023 and 2022, respectively. Sales to our largest, non-affiliated distributor accounted for 10.2%, 10.8%, and 11.0% of our net sales in fiscal years 2024, 2023 and 2022, respectively.
(“Sanken”), to third-party distributors and direct to end customers in fiscal year 2024, and Sanken represented approximately 16.5% of our net sales in fiscal year 2023. Sales to our largest, non-affiliated distributor accounted for 9.3%, 10.2%, and 10.8% of our net sales in fiscal years 2025, 2024 and 2023, respectively.
We believe our track record of supplying devices for safety applications and experience with supporting ADAS features in high-end vehicles, combined with increased penetration of ADAS as it scales from luxury vehicles to mainstream and economy vehicles, positions us to expand our business to capitalize on this rapidly growing opportunity.
Our proven record of supplying devices for safety applications and experience with supporting ADAS features in high-end vehicles, combined with growing adoption of ADAS from luxury vehicles to mainstream and economy vehicles, positions us to capitalize on this rapidly expanding market opportunity.
See “Risk Factors—Risks Related to our Business and Industry—We face intense competition and may not be able to compete effectively, which could reduce our market share and decrease our net sales and profitability.” Seasonality Our business exhibits some seasonality. Historically, our net sales have generally been higher in the second half of the fiscal year than in the first half.
See “Risk Factors—Risks Related to our Business and Industry—We face intense competition and may not be able to compete effectively, which could reduce our market share and decrease our net sales and profitability.” Seasonality and Market Demand Our business exhibits some seasonality.
As of March 29, 2024, we employed 4,593 full-time employees, including 742 in research and development, 3,347 in operations and quality (the overwhelming majority located at our facility in Manila, Philippines (the “AMPI Facility”)), 230 in sales and marketing and 274 in general and administrative.
As of March 28, 2025, we employed approximately 4,060 full-time employees, including 750 in research and development, 2,800 in operations and quality (the overwhelming majority located at our facility in Manila, Philippines (the “AMPI Facility”)), 230 in sales and marketing and 280 in general and administrative.
By aligning our research and development investments with disruptive technology trends while undergoing a rigorous return on investment (“ROI”) review, we believe we can deliver an attractive combination of growth and profitability. 6 Emphasize our automotive “first” philosophy to align our product development with the most rigorous applications and safety standards We are a leading supplier of magnetic sensor ICs for the automotive market because we have been intentional about incorporating support for the stringent automotive operating voltages, temperature ranges and safety and reliability standards into every part of our operations, from design to manufacturing.
Emphasize our automotive “first” philosophy to align our product development with the most rigorous applications and safety standards We are a leading supplier of magnetic sensor ICs for the automotive market because we have been intentional about incorporating support for the stringent automotive operating voltages, temperature ranges and safety and reliability standards into every part of our operations, from design to manufacturing.
Our Market Within the global semiconductor industry, we focus on the magnetic sensor and power management IC markets. E-Mobility We define e-Mobility as the electrification of vehicles, HEVs and EVs powertrain, and the increasing adoption of advanced safety-related driver assistance systems, known as ADAS.
Our Market Within the global semiconductor industry, we focus on the magnetic sensor and power management IC markets. E-Mobility We define e-Mobility as the electrification of vehicles, including HEV and EV powertrains, and the increasing adoption of safety-focused ADAS.
We believe this allows us to take advantage of the significant semiconductor content increases expected to result from the HEV and EV migration and strong growth of electrified powertrains over the coming years.
We believe this allows us to take advantage of the significant semiconductor content increases expected to result from the HEV and EV migration and strong growth of electrified powertrains over the coming years. TMR technology bolsters our current sensor and position sensor product portfolio and solidifies our leading magnetic sensing market position.
These sensor ICs are used in camshaft/crankshaft and transmission systems and employ proprietary algorithms for high accuracy, leading to reduced CO2 emissions and improved fuel economy of combustion engines. Additionally, xMR wheel speed sensors play an important role in increasing the safety of ADAS braking systems.
These sensor ICs are used in camshaft/crankshaft and transmission systems and employ proprietary algorithms for high accuracy, leading to reduced CO2 emissions and improved fuel economy of combustion engines.
We have a skilled and experienced workforce across research and development, operations and quality, sales and marketing and our general and administrative support functions. Together as “One Allegro,” our employees are instrumental in driving operational execution and quality excellence, delivering strong financial performance, advancing innovation, and building trusted customer relationships to help solve our most complex problems.
Together as “One Allegro,” our employees are instrumental in driving operational execution and quality excellence, delivering strong financial performance, advancing innovation, and building trusted customer relationships to help solve our most complex problems.
The following table sets forth certain information regarding our executive officers as of May 23, 2024: Name Age Position with Company Vineet Nargolwala 51 President and Chief Executive Officer, Director Derek P. D’Antilio 52 Senior Vice President, Chief Financial Officer and Treasurer Sharon S. Briansky 50 Senior Vice President, General Counsel and Secretary Michael C.
The following table sets forth certain information regarding our executive officers as of May 22, 2025: Name Age Position with Company Michael C. Doogue 49 President and Chief Executive Officer, Director Derek P. D’Antilio 53 Executive Vice President, Chief Financial Officer and Treasurer Sharon S.
In Hybrid Electric Vehicles (“HEV”), Electric Vehicles (“EV”) and ADAS applications, these innovations translate to increased driving range for EVs, smaller and more reliable power conversion systems, and improved safety and efficiency of motor and power management systems, as well as safer and more reliable steering and braking systems. In the industrial market, these technologies enable clean energy and automation.
In Hybrid Electric Vehicles (“HEV”) and Electric Vehicles (“EV”) with ADAS, these innovations translate to increased driving range for EVs, smaller and more reliable power conversion systems, and improved safety and efficiency of on-board chargers, DC-DC converters and battery management systems, as well as safer and more reliable steering and braking systems.
Company Overview The Company is a leading global designer, developer, fabless manufacturer and marketer of sensor integrated circuits (“ICs”) and application-specific analog power ICs enabling the most important emerging technologies in the automotive and industrial markets. We are a leading supplier of magnetic sensor IC solutions worldwide based on market share, driven by our market leadership in the automotive market.
Company Overview The Company is a leading global designer, developer, fabless manufacturer and marketer of sensor integrated circuits (“ICs”) and application-specific power ICs, enabling the most important emerging technologies in the automotive and industrial markets.
Prior to joining Allegro, Mr. D’Antilio served as the Chief Financial Officer of a Summit Partners Portfolio Company and helped lead the sale and recapitalization of the company.
D’Antilio has served as our Executive Vice President, Chief Financial Officer and Treasurer since he joined Allegro in January 2022. Prior to joining Allegro, Mr. D’Antilio served as the Chief Financial Officer of a Summit Partners Portfolio Company and helped lead the sale and recapitalization of the company.
Our magnetic speed and position sensor ICs, motor driver ICs, and PMICs are used in advanced, high-efficiency transmission, steering and braking systems in vehicles. For example, our magnetic speed sensor ICs are used to provide precise transmission gear speed and position information, improving engine performance, reducing CO2 emissions, and improving fuel economy.
Our sensor ICs, motor drivers, and power management ICs are used in advanced transmission, steering and braking systems, enhancing the efficiency and sustainability of modern vehicles. For example, our magnetic speed sensor ICs are used to provide precise transmission gear speed and position information, leading to optimized engine performance, reduced CO2 emissions, and improved fuel economy.
We provide a Flex@Allegro program to allow our employees the opportunity to decide where and how work gets accomplished. This flexible work arrangement enables our employees to achieve better work and life balance, and helps us to attract and retain talent. Our retention at the technical, professional and managerial levels is high. Diversity, Equity and Inclusion .
We provide a Flex@Allegro program to allow our employees flexibility as to where and how work gets accomplished. This flexible work arrangement enables our employees to achieve better work and life balance, and helps us to attract and retain talent.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeMoreover, conducting business outside the United States subjects us to a number of additional risks and challenges, including: • changes in a specific country’s or region’s political, regulatory or economic conditions; • a pandemic, epidemic or other outbreak of an infectious disease, which may cause us or our distributors, vendors and/or customers to temporarily suspend operations in the affected city or country; • compliance with a wide variety of domestic and foreign laws and regulations (including those of municipalities or provinces where we have operations) and unexpected changes in those laws and regulatory requirements, including uncertainties regarding taxes, social insurance contributions and other payroll taxes and fees to governmental entities, tariffs, quotas, export controls, export licenses and other trade barriers; • unanticipated restrictions on our ability to sell to foreign customers where sale of products and provision of services may require export licenses or are prohibited by government action, unfavorable foreign exchange controls and currency exchange rates; • the risk of substantial penalties and litigation related to violations of a wide variety of laws, treaties and regulations, including labor regulations and anti-corruption regulations (including the U.S.
Biggest changeMoreover, conducting business outside the United States subjects us to a number of additional risks and challenges, including: • changes in a specific country’s or region’s political, regulatory or economic conditions; • a pandemic, epidemic or other outbreak of an infectious disease, which may cause us or our distributors, vendors and/or customers to temporarily suspend operations in the affected city or country; • compliance with a wide variety of domestic and foreign laws, regulations and policies (including those of municipalities or provinces where we have operations) and unexpected changes in those laws and regulatory requirements, including uncertainties regarding taxes, social insurance contributions and other payroll taxes and fees to governmental entities, tariffs, quotas, export controls, export licenses and other trade barriers or restrictions, and climate-related laws and regulations; • unanticipated restrictions on our ability to sell to foreign customers where sale of products and provision of services may require export licenses or are prohibited by government action, unfavorable foreign exchange controls and currency exchange rates; • the risk of substantial penalties and litigation related to violations of a wide variety of laws, treaties and regulations, including labor regulations and anti-corruption regulations; • difficulties and costs of staffing and managing international operations across different geographic areas and cultures; • potential political, legal and economic instability, armed conflict, and civil unrest in the countries in which we and our customers, suppliers and contract manufacturers are located, such as macroeconomic weakness related to trade and political disputes between the United States and China, tensions across the Taiwan Strait, the current conflict between Russia and Ukraine and the ongoing conflict in the Middle East; • difficulty and costs of maintaining effective data security; • inadequate protection of intellectual property; • transportation and other supply chain delays and disruptions; • nationalization and expropriation; • restrictions on the transfer of funds to and from foreign countries, including withholding taxes and other potentially negative tax consequences; • unfavorable and/or changing foreign tax treaties and policies; and • increased exposure to general market and economic conditions outside of the U.S.
Changing currency exchange rates may adversely affect our business, financial condition, results of operations and cash flows. We have operations and assets in the U.S. as well as foreign jurisdictions and we prepare our consolidated financial statements in U.S. dollars, but a portion of our earnings and expenditures are denominated in other currencies.
Changing currency exchange rates may adversely affect our business, financial condition, results of operations and cash flows. We have operations and assets in the U.S. as well as foreign jurisdictions and prepare our consolidated financial statements in U.S. dollars, but a portion of our earnings and expenditures are denominated in other currencies.
We therefore must translate our foreign assets, liabilities, revenue and expenses into U.S. dollars at applicable exchange rates. Consequently, fluctuations in the value of foreign currencies relative to the U.S. dollar may negatively affect the value of these items in our financial statements.
Therefore, we must translate our foreign assets, liabilities, revenue and expenses into U.S. dollars at applicable exchange rates. Consequently, fluctuations in the value of foreign currencies relative to the U.S. dollar may negatively affect the value of these items in our financial statements.
The loss of one or more of our executive officers or other key personnel or our inability to locate suitable or qualified replacements could be significantly detrimental to our product development efforts and could have a material adverse effect on our business, financial condition and results of operations.
The loss of one or more of our executive officers or other key personnel or our inability to locate suitable or qualified replacements could be significantly detrimental to our operations or product development efforts and could have a material adverse effect on our business, financial condition and results of operations.
Our failure to adjust our supply chain volume, secure sufficient supply from our third-party vendors, including our semiconductor wafer suppliers, or estimate our customers’ demand could have a material adverse effect on our net sales, business, financial condition and results of operations. 19 Shifts in our product mix, customer mix or channel mix may result in declines in gross margin.
Our failure to adjust our supply chain volume, secure sufficient supply from our third-party vendors, including our semiconductor wafer suppliers, or estimate our customers’ demand could have a material adverse effect on our net sales, business, financial condition and results of operations. Shifts in our product mix, customer mix or channel mix may result in declines in gross margin.
Our tax filings are subject to review or audit by the U.S. Internal Revenue Service (the “IRS”) and state, local and foreign taxing authorities. We exercise significant judgment in determining our worldwide provision for taxes and, in the ordinary course of our 31 business, there may be transactions and calculations where the proper tax treatment is uncertain.
Our tax filings are subject to review or audit by the U.S. Internal Revenue Service (the “IRS”) and state, local and foreign taxing authorities. We exercise significant judgment in determining our worldwide provision for taxes and, in the ordinary course of our business, there may be transactions and calculations where the proper tax treatment is uncertain.
In certain instances, former employees have brought claims against us, and we expect that we will encounter similar actions 29 against us in the future. An adverse outcome in any such litigation could require us to pay damages, attorneys’ fees and costs. These enforcement actions could harm our reputation, business, financial condition and results of operations.
In certain instances, former employees have brought claims against us, and we expect that we will encounter similar actions against us in the future. An adverse outcome in any such litigation could require us to pay damages, attorneys’ fees and costs. These enforcement actions could harm our reputation, business, financial condition and results of operations.
We carry various commercial liability policies, including umbrella/excess policies which provide some protection against product liability exposure. However, a successful warranty or product liability claim against us in excess of our available insurance coverage and established 24 reserves, or a requirement that we participate in a product recall, could have adverse effects on our business results.
We carry various commercial liability policies, including umbrella/excess policies which provide some protection against product liability exposure. However, a successful warranty or product liability claim against us in excess of our available insurance coverage and established reserves, or a requirement that we participate in a product recall, could have adverse effects on our business results.
End-users often rely on these governmental rebates, tax credits and other financial incentives to significantly lower the 25 purchase price of these products. However, these incentives may expire on a particular date, end when the allocated funding is exhausted, or be reduced or terminated as a matter of regulatory or legislative policy.
End-users often rely on these governmental rebates, tax credits and other financial incentives to significantly lower the purchase price of these products. However, these incentives may expire on a particular date, end when the allocated funding is exhausted, or be reduced or terminated as a matter of regulatory or legislative policy.
If we fail to manage our foreign currency exposure adequately, we may suffer losses in the value of our net foreign currency investment, and our business, financial condition, results of operations and cash flows may be negatively affected. Our ability to raise capital in the future may be limited and could prevent us from executing our growth strategy.
If we fail to manage our foreign currency exposure adequately, we may suffer losses in the value of our net foreign currency investment, and our business, financial condition, results of operations and cash flows may be negatively affected. 28 Our ability to raise capital in the future may be limited and could prevent us from executing our growth strategy.
Gross margins on individual products fluctuate over the product’s life cycle. Our overall gross margins have fluctuated from period to period as a result of shifts in product mix, customer mix, channel mix, the introduction of new products, decreases in ASPs for older products and our ability to reduce product costs.
Gross margins on individual products typically fluctuate over the product’s life cycle. Our overall gross margins have fluctuated from period to period as a result of shifts in product mix, customer mix, channel mix, the introduction of new products, decreases in ASPs for older products and our ability to reduce product costs.
Changes to tax laws or regulations in the jurisdictions in which we operate, or in the interpretation of such laws or regulations, could significantly increase our effective tax rate (“ETR”) and reduce our cash flow from operating activities, and otherwise have a material adverse effect on our financial condition.
Changes to tax laws or regulations in the jurisdictions in which we operate, or in the interpretation of such laws or regulations, could significantly increase our effective tax rate and reduce our cash flow from operating activities, and otherwise have a material adverse effect on our financial condition.
Our failure to obtain required import or export approval for our products or limitations on our ability to export or sell our products imposed by these laws may harm our international and domestic revenues. Noncompliance with these laws could have negative consequences, including government investigations, penalties and reputational harm.
Our failure to obtain required import or export approval for our products or limitations on our ability to manufacture or sell our products imposed by these laws may harm our international and domestic revenues. Noncompliance with these laws could have negative consequences, including government investigations, penalties and reputational harm.
In order to sustain profitable operations, we must continually reduce costs for our existing products and also develop and introduce new products with enhanced 20 features on a timely basis that can be sold initially at higher ASPs.
In order to sustain profitable operations, we must continually reduce costs for our existing products and also develop and introduce new products with enhanced features on a timely basis that can be sold initially at higher ASPs.
We rely heavily on the manufacturing operations of the AMPI Facility, which operates as our primary internal assembly and testing facility. We depend on the AMPI Facility for our sensor and power products, and if this facility suspends operations, our ability 21 to assemble and test our products could be materially impaired.
We rely heavily on the manufacturing operations of the AMPI Facility, which operates as our primary internal assembly and testing facility. We depend on the AMPI Facility for our sensor and power products, and if this facility suspends operations, our ability to assemble and test our products could be materially impaired.
Changes in immigration laws, regulations or procedures may adversely affect our ability to hire or retain such workers, increase our operating expenses and negatively impact our ability to deliver our products and services, any of which would adversely affect our business, financial condition and results of operations.
Changes in immigration laws, regulations, policies or procedures may adversely affect our ability to hire or retain such workers, increase our operating expenses and negatively impact our ability to deliver our products and services, any of which would adversely affect our business, financial condition and results of operations.
Existing patents and those that may be 27 issued from any pending or future applications may be subject to challenges, invalidation or circumvention, and the rights granted under our patents may not provide us with meaningful protection or any commercial advantage.
Existing patents and those that may be issued from any pending or future applications may be subject to challenges, invalidation or circumvention, and the rights granted under our patents may not provide us with meaningful protection or any commercial advantage.
To our knowledge, only a few alternative manufacturing facilities have the capability to assemble and test our most advanced and complex products, and if we are forced to engage such alternative manufacturing facilities, we may encounter difficulties and incur additional costs.
Only a few alternative manufacturing facilities have the capability to assemble and test our most advanced and complex products, and if we are forced to engage such alternative manufacturing facilities, we may encounter difficulties and incur additional costs.
The secure processing, maintenance and transmission of this Confidential Information is critical to our operations and business strategy. 28 We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Systems and Confidential Information.
The secure processing, maintenance and transmission of this Confidential Information is critical to our operations and business strategy. We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Systems and Confidential Information.
These laws and regulations impose significant compliance requirements in relation to our IT Systems and Confidential Information, and in some instances, may expose us to private rights of action and statutory damages for certain types of events.
These laws and regulations impose significant compliance requirements in relation to our IT Systems and Confidential Information, and in some instances, expose us to private rights of action and statutory damages for certain types of events.
The U.S. or foreign governments may take administrative, legislative or regulatory action that could materially interfere with our ability to sell products in certain countries and/or to certain customers, particularly in China.
The U.S. or foreign governments may take or threaten to take administrative, legislative or regulatory action that could materially interfere with our ability to sell products in certain countries and/or to certain customers, particularly in China.
Our ability to hire and retain these employees and their ability to remain and work in the U.S. are impacted by laws and regulations, as well as by procedures and enforcement practices of various government agencies.
Our ability to hire and retain these employees and their ability to remain and work in the U.S. are impacted by laws, regulations and policies as well as by procedures and enforcement practices of various government agencies.
To service this indebtedness, and any additional indebtedness or other long-term obligations we may incur in the 26 future, we need to generate sufficient levels of cash from our operating activities.
To service this indebtedness, and any additional indebtedness or other long-term obligations we may incur in the future, we need to generate sufficient levels of cash from our operating activities.
Similarly, if our suppliers face challenges in obtaining credit or other financial difficulties, they may be unable to provide the materials we need to manufacture our products. All of these factors related to global economic conditions, which are beyond our control, could adversely impact our business, financial condition, results of operations and liquidity.
Similarly, if our suppliers or customers face challenges in obtaining credit or other financial difficulties, they may be unable to provide the materials we need to manufacture or purchase our products. All of these factors related to global economic conditions, which are beyond our control, could adversely impact our business, financial condition, results of operations and liquidity.
The institution of export restrictions and trade tariffs both globally and between the United States and China specifically carries the risk of negatively impacting China’s overall economic condition, which could have negative repercussions for our business since Greater China accounted for the highest percentage of the Company’s total net sales in any one country in the fiscal year 2024.
The institution of export restrictions and trade tariffs both globally and between the United States and China specifically carries the risk of negatively impacting China’s overall economic condition, which could have negative repercussions for our business since Greater China accounted for the highest percentage of the Company’s total net sales in any one country in fiscal year 2025.
These laws and regulations include: antitrust regulatory activities; consumer protection laws; data privacy and cybersecurity laws; import/export regulatory activities; product safety regulatory activities; worker health and safety; environmental protection; employment matters; and tax and other regulations in each of the areas in which we conduct business.
These laws and regulations include: antitrust regulatory activities; consumer protection laws; artificial intelligence, data privacy and cybersecurity laws; import/export regulatory activities; product safety regulatory activities; worker health and safety; environmental protection; employment matters; and tax and other regulations in each of the areas in which we conduct business.
Our suppliers have raised their prices and may continue to raise prices, and in the competitive markets in which we operate, we may not be able to make corresponding price increases to preserve our gross margins and profitability.
In response to inflation, our suppliers have raised their prices and may continue to raise prices, and in the competitive markets in which we operate, and we may not be able to make corresponding price increases to preserve our gross margins and profitability.
If inflation rates continue to rise or remain elevated for a sustained period of time, they could have a material adverse effect on our business, financial condition, results of operations and liquidity.
If inflation rates remain elevated or rise for a sustained period of time, they could have a material adverse effect on our business, financial condition, results of operations and liquidity.
In order to respond to new and evolving customer demands, achieve strong market share and keep pace with new technological, processing and other developments, we must constantly introduce new and innovative products into the market.
In order to respond to new and evolving customer demands, achieve strong market share and keep pace with new technological, processing and other developments, we must continually introduce new and innovative products into the market.
Our customers are constantly seeking new products with more features and functionality at a lower cost, and our success relies heavily on our ability to continue to develop and market to our customers new and innovative products and improvements of existing products, including those that may incorporate, or are based or developed using, software or artificial intelligence technologies.
Our customers seek new products with more features and functionality at a lower cost, and our success relies heavily on our ability to continue to develop and market to our customers new and innovative products and improvements of existing products, including those that may incorporate, or are based or developed using, software or artificial intelligence technologies.
Actions by the sales representatives and other employees of our distributors could result in flat or declining sales in a given geographic area, reputational harm to our Company or our products, or legal liability, any of which could have a material adverse effect on our business, financial condition and results of operations.
Actions by sales representatives and other employees of our distributors could result in flat or declining sales in a given geographic area, reputational harm to us or our products, or legal liability, any of which could have a material adverse effect on our business, financial condition and results of operations.
An assessment of additional taxes because of an audit could have a material adverse effect on our business, financial condition, results of operations and cash flows. Failure to comply with requirements to design, implement and maintain effective internal control over financial reporting could have a material adverse effect on our business and stock price.
An assessment of additional taxes because of an audit could have a material adverse effect on our business, financial condition, results of operations and cash flows. 34 Failure to comply with requirements to maintain effective internal control over financial reporting could have a material adverse effect on our business and stock price.
Generally, our employees are not bound by obligations that require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time. Moreover, our employees are generally not subject to non-competition agreements.
Generally, our employees, including executive management are not bound by obligations that require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time. Moreover, our employees, including executive management are generally not subject to non-competition agreements.
Damage or disruption to either our or our key suppliers or manufacturing partners’ supply, manufacturing or distribution capabilities resulting from weather, freight carrier availability, any potential effects of climate change, natural disaster, disease, fire, explosion, cyber-attacks, terrorism, pandemics, epidemics or other outbreaks of infectious disease, strikes, civil unrest, repairs or enhancements at facilities manufacturing or distributing our products or other reasons could impair our ability to manufacture, sell, and deliver products on a timely basis or at all.
Damage or disruption to either our or our key suppliers or manufacturing partners’ supply, manufacturing or distribution capabilities resulting from weather, freight carrier availability, natural disaster, disease, fire, explosion, cyber-attacks, terrorism, pandemics, epidemics or other outbreaks of infectious disease, strikes, civil unrest, repairs or enhancements at facilities manufacturing or distributing our products or other reasons could impair our ability to manufacture, sell, and deliver products on a timely basis or at all.
A fundamental shift in technologies, particularly one that impacts magnetic or power ICs, the regulatory climate or demand patterns and preferences in our existing product markets or the product markets of our customers or end-users could make our current products obsolete, prevent or delay the introduction of new products or enhancements to our existing products or render our products irrelevant to our customers’ needs.
A fundamental shift in technologies, particularly one that impacts magnetic or power ICs, the regulatory climate or demand patterns and preferences in our existing product markets or the product markets of our customers or end-users could make our current products obsolete or more expensive relative to alternatives, prevent or delay the introduction of new products or enhancements to our existing products or render our products irrelevant to our customers’ needs.
Maintenance of patent portfolios, particularly outside of the U.S. is expensive, and the process of seeking patent protection is lengthy and costly. While we intend to maintain our current portfolio of patents and to continue to prosecute our currently pending patent applications and file future patent applications when appropriate, the value of these actions may not exceed their expense.
Maintenance of patent portfolios, particularly outside of the U.S., is expensive, and the process of seeking patent protection is lengthy and costly. While we intend to maintain our patents supporting our products and to continue to prosecute our currently pending patent applications and file future patent applications when appropriate, the value of these actions may not exceed their expense.
The market for our products is generally characterized by declining ASPs, resulting from factors such as increased competition, overcapacity, the introduction of new products and increased unit volumes. We have in the past experienced, and in the future may experience, substantial period-to-period fluctuations in operating results due to declining ASPs.
The market for our products is generally characterized by declining ASPs, resulting from factors such as increased competition, overcapacity, the amount of inventory held by our customers, the introduction of new products and increased unit volumes. We have in the past experienced, and in the future may experience, substantial period-to-period fluctuations in operating results due to declining ASPs.
Climate change presents physical, transition and litigation risks that could disrupt our business operations and force us to incur increased costs and expenses, which could have a material adverse effect on our business, financial condition, results of operations and liquidity.
Climate change presents risks that could disrupt our business operations and force us to incur increased costs and expenses, which could have a material adverse effect on our business, financial condition, results of operations and liquidity.
A downturn in the automotive market could delay automakers’ plans to introduce new vehicles with these features, which would negatively impact the demand for our products and the ability to grow our business.
A downturn in the automotive market or prolonged disruption could delay automakers’ plans to introduce new vehicles with these features, which would negatively impact the demand for our products and the ability to grow our business.
Exports of certain of our products and other products are subject, or could be subject in the future, to export controls imposed by the U.S. government and administered by the U.S. Departments of State and Commerce. In certain instances, these regulations may require pre-shipment authorization from the administering department.
Exports to certain manufacturers of technology relating to our products are subject, or could be subject in the future, to export controls imposed by the U.S. government and administered by the U.S. Departments of State and Commerce. In certain instances, these regulations may require pre-shipment authorization from the administering department.
As a publicly traded company, we have significant requirements for enhanced financial reporting and internal controls. If we are unable to maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and adversely affect our operating results.
We have significant requirements for financial reporting and internal controls. If we are unable to maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and adversely affect our operating results.
The reasons for this delay include, among other things: changing customer requirements, resulting in an extended development cycle for the product; delay in the ramp-up of volume production of the customer’s products into which our solutions are designed; delay or cancellation of the customer’s product development plans; competitive pressures to reduce our selling price for the product; the discovery of design flaws, defects, errors or bugs in the products; lower than expected customer acceptance of solutions designed for customer’s products; lower than expected market acceptance of customers’ products; and higher manufacturing costs than anticipated.
The reasons for this delay may include: changing customer requirements, resulting in an extended development cycle for the product; delay in the volume production ramp up of customer products into which we design solutions; delay or cancellation of customers’ product development plans; competitive pressures to reduce our product selling price; the discovery of product design flaws, defects, errors or bugs; lower than expected customer acceptance of solutions designed for customers’ products; lower than expected market acceptance of customers’ products; and higher manufacturing costs than anticipated.
Any slowdown in the growth of these end markets could adversely affect our financial results. Our continued success will depend in large part on general economic growth and growth within our target markets in the automotive and industrial sectors.
We depend on growth in the end markets that use our products. Any slowdown in the growth of these end markets could adversely affect our financial results. Our continued success will depend in large part on general economic growth and growth within our target markets in the automotive and industrial sectors.
Security measures that we, our third-party service providers, and our customers have implemented may not detect or prevent such disruptions or security breaches. There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information.
Security measures that we, our third-party service providers, and our customers have implemented cannot detect or prevent all cybersecurity attacks, disruptions or security breaches. There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information.
We will lose sales if we are unable to obtain government authorization to export certain of our products, and we will be subject to legal and regulatory consequences if we do not comply with applicable export control laws and regulations.
We may lose sales if we are unable to obtain government authorization to export certain technology for our products, and we will be subject to legal and regulatory consequences if we do not comply with applicable export control laws and regulations.
Because many of our sales, research and development and manufacturing expenses are relatively fixed, a reduction in customer demand may decrease our gross margins and operating income. In addition, we base operating decisions, and enter into purchase commitments, on the basis of anticipated net sales trends, which are highly unpredictable.
Because many of our sales, research and development and manufacturing expenses are relatively fixed, a reduction in customer demand has resulted, and may continue to result, in a decrease in our gross margins and operating income. 19 In addition, we base operating decisions, and enter into purchase commitments, on the basis of anticipated net sales trends, which are highly unpredictable.
Acquiring companies or technologies, including the recently completed acquisition of Crocus, involves a number of risks, including, but not limited to: the potential disruption of our ongoing business; the increased costs incurred to finance acquisitions and the allocation of capital to fund acquisitions being diverted from other operational priorities, such as research and development; unexpected costs or incurring unknown liabilities; the diversion of management resources from other strategic and operational issues; the inability to retain the key employees of the acquired businesses; difficulties relating to integrating the operations and personnel of the acquired businesses; adverse effects on our existing customer relationships or the existing customer relationships of acquired businesses; the potential incompatibility of the acquired business or their customers; issues not discovered during our due diligence that could impact our assumptions concerning the status of and prospects for the products and technologies of the acquired business; and acquired intangible assets, including goodwill, becoming impaired as a result of technological advancements or worse-than-expected performance of the acquired business.
Acquiring companies or technologies involves a number of risks, including, but not limited to: the potential disruption of our ongoing business; the increased costs incurred to finance acquisitions and the allocation of capital to fund acquisitions being diverted from other operational priorities, such as research and development; unexpected costs or incurring unknown liabilities; the diversion of management resources from other strategic and operational issues; difficulty in developing, manufacturing and marketing the products of a newly acquired company within the anticipated costs and timeframe; the inability to retain key employees of the acquired businesses; difficulties relating to integrating the operations and personnel of the acquired businesses; adverse effects on our existing customer relationships or the existing customer relationships of acquired businesses; the potential incompatibility of the acquired business or their customers; issues not discovered during our due diligence that could impact our assumptions concerning the status of and prospects for the products and technologies of the acquired business; and acquired intangible assets, including goodwill, becoming impaired as a result of technological advancements or worse-than-expected performance of the acquired business.
Further, any integration of artificial intelligence in our or any third party’s operations, products or services could pose new or unknown cybersecurity risks and challenges.
Further, any integration of artificial intelligence in our or any third party’s operations, products or services is expected to pose new or unknown cybersecurity risks and challenges.
Failure to adjust our purchase commitments and inventory management based on changing market conditions or customer demand could result in an inability to meet customer demand or additional charges for obsolete or excess inventories or non-cancellable purchase commitments.
Failure to adjust our purchase commitments and inventory management based on changing market conditions or customer demand could result in an inability to meet customer demand or additional charges for obsolete or excess inventories or non-cancellable purchase commitments or reduced sales in periods when customers digest excess inventory.
Although we supplement the assembly capabilities at the AMPI Facility with other external or independent assembly subcontractors throughout Asia, if our manufacturing operations at the AMPI Facility are obstructed or hampered, it could take a considerable length of time, at an increased cost, for us to resume manufacturing at another location, which could materially harm our manufacturing efficiency and capacity, delay production and shipments and result in costly expenditures to repair or replace this facility.
Although we supplement the assembly capabilities at the AMPI Facility with other external or independent assembly subcontractors throughout Asia, if our manufacturing operations at the AMPI Facility are disrupted, it could take additional time and cost, for us to resume manufacturing at another location, which could materially harm our manufacturing efficiency and capacity, delay production and shipments and result in costly expenditures to repair or replace this facility.
We face intense competition and may not be able to compete effectively, which could reduce our market share and decrease our net sales and profitability. We are in an intensely competitive segment of the global semiconductor industry.
We face intense competition and may not be able to compete effectively, which could reduce our market share and decrease our net sales and profitability. We participate in intensely competitive end markets in the global semiconductor industry.
A significant portion of our net sales are made to distributors, which were approximately 52.9%, 39.3% and 36.8% of our net sales in fiscal years 2024, 2023 and 2022, respectively, excluding our former distribution relationship with Sanken in Japan, which represented approximately 16.5% and 19.4% of our net sales in fiscal years 2023 and 2022, respectively.
A significant portion of our net sales are made to distributors, which were approximately 50.7%, 52.9% and 39.3% of our net sales in fiscal years 2025, 2024 and 2023, respectively, excluding our former distribution relationship with Sanken in Japan, which represented approximately 16.5% of our net sales in fiscal year 2023.
In general, if a jurisdiction has an ETR below the 15%, the Pillar Two Minimum Tax may impute an additional alternative minimum “top-up tax.” The Company will be subject to the Pillar Two Minimum Tax rules starting in fiscal year 2025.
In general, if a jurisdiction has an ETR below the 15%, the Pillar Two Minimum Tax may impute an additional alternative minimum “top-up tax.” The Company is subject to the Pillar Two Minimum Tax rules.
This phenomenon is typical in the automotive market. Failure to achieve initial design wins may also weaken our position in future competitive selection processes because we may not be perceived as an industry leader.
Failure to achieve initial design wins may also weaken our position in future competitive selection processes because we may not be perceived as an industry leader.
For example, the United States and China have imposed export restrictions related to certain semiconductors and a number of tariffs and other restrictions on items imported or exported between the United States and China and have proposed imposing additional tariffs.
For example, the United States and China have imposed export restrictions related to certain semiconductors and a number of tariffs and other restrictions on items imported or exported between the United States and China and may propose or threaten to impose additional tariffs in the future.
If we encounter sustained yield problems or other delays at our third-party wafer fabrication facilities or in the final assembly and test of our products, we may lose sales and damage our customer relationships. The manufacture of our products, including the fabrication of semiconductor wafers, and the assembly and testing of our products, involve highly complex processes.
If we encounter sustained yield problems or other delays at our third-party wafer fabrication facilities or in the final assembly and test of our products, we may lose sales and damage our customer relationships.
In addition, any disruption in the credit markets, including as a result of a recession, could impede our access to capital, which could be further adversely affected if we are unable to obtain or maintain favorable credit ratings.
Conversely, if we underestimate customer demand, we may fail to meet customer needs, which could impair our customer relationships. In addition, any disruption in the credit markets, including as a result of a recession, could impede our access to capital, which could be further adversely affected if we are unable to obtain or maintain favorable credit ratings.
The FASB considers the Pillar Two Minimum Tax an alternative minimum tax (“AMT”); therefore, deferred tax assets and liabilities are not recognized or adjusted for any estimated future effects.
The Financial Accounting Standards Board (“FASB”) considers the Pillar Two Minimum Tax an alternative minimum tax; therefore, deferred tax assets and liabilities are not recognized or adjusted for any estimated future effects.
For example, we have noncancellable purchase commitments with vendors and “take-or-pay” agreements with certain of our third-party wafer fabrication partners, under which we are required to purchase a minimum number of wafers per year or face financial penalties. These types of commitments and agreements could reduce our ability to adjust our inventory to address declining market demands.
For example, we have noncancellable purchase commitments with vendors and “take-or-pay” agreements with certain of our third-party wafer fabrication partners, under which we are required to purchase a minimum number of wafers per year or face financial penalties.
Sustained inflation could have a material adverse effect on our business, financial condition, results of operations and liquidity. Inflation rates in the markets in which we operate have increased and may continue to rise.
Sustained inflation could have a material adverse effect on our business, financial condition, results of operations and liquidity. Inflation rates in the markets in which we operate have remained elevated, and this may continue in the future or inflation rates may increase.
Additionally, if our products fail to perform as expected or such failure of our products results in a recall, our reputation may be damaged, which could make it more difficult for us to sell our products to existing and prospective customers and could materially and adversely affect our business, results of operations and financial condition.
Additionally, if our products fail to perform as expected or such failure of our products results in a recall, our reputation may be damaged, which could make it more difficult for us to sell our products to existing and prospective customers and could materially and adversely affect our business, results of operations and financial condition. 26 Our dependence on international customers and operations also subjects us to a range of other additional regulatory, operational, financial and political risks that could adversely affect our financial results.
While we may take steps to mitigate the risks associated with noncompliance by our distributors, there remains a risk that they will not comply with regulatory requirements or our requirements and policies.
Despite our efforts to mitigate risks associated with noncompliance by our distributors, there remains a risk that they will not comply with regulatory requirements or our requirements and policies.
Accordingly, we cannot guarantee that we will be able to manage the risks and challenges associated with our dependence on the AMPI Facility, and any failure to do so could have a material adverse effect on our business, financial condition and results of operations.
Accordingly, we cannot guarantee that we will be able to manage the risks and challenges associated with our dependence on the AMPI Facility, and any failure to do so could have a material adverse effect on our business, financial condition and results of operations. 22 A significant portion of our net sales are generated through distributors, which subjects us to certain risks.
This concentration of sales exposes us to the risks associated with the automotive market and automotive industry. For example, our anticipated future growth is highly dependent on the adoption of automotive technologies and HEV and EV powertrain vehicles, which traditionally have had increased sensor and power product content.
For example, our anticipated future growth is highly dependent on the increased adoption of automotive technologies and HEV and EV powertrain vehicles, which traditionally have had increased sensor and power product content.
We seek to protect our proprietary technology and inventions, particularly those relating to the design of our products, through the use of patents. As of March 29, 2024, we owned 1,910 patents, including 934 active U.S. patents (with expiration dates between 2024 and 2042), with an additional 471 pending patent applications, including 214 U.S. patent applications.
We seek to protect our proprietary technology and inventions, particularly those relating to the design of our products, through the use of patents. As of March 28, 2025, we owned 1,942 active patents, including 966 U.S. patents (with expiration dates between 2025 and 2043), with an additional 487 pending patent applications, including 252 U.S. patent applications.
Any conflict or uncertainty in this region, including public health or safety concerns or natural disasters, could have a material adverse effect on our business, financial condition and results of operations.
We also rely on several other wafer fabrication manufacturing partners located throughout Asia. Any conflict or uncertainty in this region, including public health or safety concerns or natural disasters, could have a material adverse effect on our business, financial condition and results of operations.
Poor manufacturing yields over a prolonged period of time could adversely affect our ability to deliver our products on a timely basis and harm our customer relationships, which could materially and adversely affect our business, financial condition and results of operations.
Poor manufacturing yields over a prolonged period of time could adversely affect our ability to deliver our products on a timely basis and harm our customer relationships, which could materially and adversely affect our business, financial condition and results of operations. 21 Our quarterly net sales and operating results are difficult to predict accurately and may fluctuate significantly from period to period.
Volatile and/or uncertain economic conditions, as well as inflationary pressures, can adversely impact sales, gross margin and profitability and make it difficult for us to accurately forecast and plan our future business activities.
Our net sales, financial condition and results of operations could be negatively affected by such actions. Volatile and/or uncertain economic conditions, as well as inflationary pressures, can adversely impact sales, gross margin and profitability and make it difficult for us to accurately forecast and plan our future business activities.
Often, we compete against larger companies that possess substantial financial, technical, development, engineering, manufacturing and marketing resources. Varying combinations of these resources provide advantages to these competitors, such as the rapid implementation of artificial intelligence strategies for developing products and service offerings, which enable them to influence industry trends and the pace at which they adapt to these trends.
Varying combinations of these resources provide advantages to these competitors, such as the rapid implementation of artificial intelligence strategies for developing products and service offerings, which enable them to influence industry trends and the pace at which they adapt to these trends.
ASPs may decrease in the future in response to the introduction of new products by us or our competitors, or due to other factors, including customer pricing pressures. We typically conduct annual pricing negotiations for our existing products with some of our largest customers.
ASPs may decrease in the future in response to the introduction of new products by us or our competitors, or due to other factors, including customer pricing pressures.
We operate in a highly dynamic industry, and our future operating results could be subject to significant fluctuations, particularly on a quarterly basis. Our quarterly net sales and operating results have fluctuated significantly in the past and may continue to vary from quarter to quarter due to a number of factors, many of which are not within our control.
Our quarterly net sales and operating results have fluctuated significantly in the past and may continue to vary from quarter to quarter due to a number of factors, many of which are not within our control.
Our failure to take adequate steps to reduce the likelihood or mitigate the potential impact of such events, or to effectively manage such events if they occur, particularly when a wafer or packaging component is sourced from a limited number of locations or 22 suppliers, could adversely affect our business, financial condition, results of operations and cash flows and/or require additional resources to restore our supply chain.
Our failure to take adequate steps to reduce the likelihood or mitigate the potential impact of such events, or to effectively manage such events if they occur, particularly when a wafer or packaging component is sourced from a limited number of locations or suppliers, could adversely affect our business, financial condition, results of operations and cash flows and/or require additional resources to restore our supply chain. 23 If we fail in a timely and cost-effective manner to develop new product features or new products that address customer preferences and achieve market acceptance, our operating results could be adversely affected.
As a result, if we fail to secure an initial design win for any of our products to a customer, we may lose the opportunity to make future sales of those products to that customer for a significant period of time or at all and experience an associated decline in net sales relating to those products.
As a result, if we fail to secure an initial design win for any of our products to a customer, we may lose the opportunity to make future sales of those products to that customer.
The short-term nature of the commitments by many of our customers and the possibility of rapid changes in demand for their products reduce our ability to accurately estimate future requirements of our customers. On occasion, our customers may require rapid increases in production, which can challenge our resources.
The short-term nature of the commitments by many of our customers and the possibility of rapid changes in demand for their products reduce our ability to accurately estimate future requirements of our customers. On occasion, our customers may require rapid increases in production, and we may not have sufficient capacity at any given time to meet our customers’ demands.
A significant portion of our net sales are generated through distributors, which subjects us to certain risks. We sell our products worldwide through multiple sales channels, including through our direct sales force, distributors and independent sales representatives, which resell our products to numerous end customers.
We sell our products worldwide through multiple sales channels, including through our direct sales force, distributors and independent sales representatives, which resell our products to numerous end customers.
The difficulty and failure to identify any violations of our intellectual property rights could materially and adversely affect our business, financial condition and result of operations and hurt our competitive advantage. If we are unable to protect our proprietary technology and inventions through trade secrets, our competitive position and financial results could be adversely affected.
The difficulty and failure to identify any violations of our intellectual property rights could materially and adversely affect our business, financial condition and result of operations and hurt our competitive advantage. Additionally, we seek to protect our proprietary technology and inventions, particularly those relating to our manufacturing processes, as trade secrets.
We currently rely on a limited number of third-party wafer fabrication facilities for the fabrication of semiconductor wafers used in the manufacture of our IC products, primarily United Microelectronics Corporation (“UMC”), Polar Semiconductor, LLC (“PSL”), 18 and Taiwan Semiconductor Manufacturing Company (“TSMC”), and we purchase a number of key materials and components used in the manufacture of our products from single or limited sources.
We currently rely on a limited number of third-party wafer fabrication facilities for the fabrication of semiconductor wafers used in the manufacture of our IC products, primarily United Microelectronics Corporation (“UMC”), Polar Semiconductor, LLC (“PSL”), Tower Semiconductor Ltd.
In the United States and other jurisdictions in which we operate, we are subject to various consumer protection, data privacy and information security laws and related regulations.
Our actual or perceived failure to comply with such obligations could harm our business. In the United States and other jurisdictions in which we operate, we are subject to various consumer protection, data privacy and information security laws and related regulations.
Any type of security breach, attack or misuse of data, whether experienced by us or an associated third-party service provider or in our supply chain, could harm our reputation or deter existing or prospective customers from using our products and applications, increase our operating expenses in order to contain and remediate the incident, expose us to unbudgeted or uninsured liability, disrupt our operations, divert management focus away from other priorities, increase our risk of regulatory scrutiny, or result in the imposition of penalties and fines under state, federal and foreign laws.
Any attack, breach or misuse of Confidential Information, whether experienced by us or a third-party service provider or in our supply chain, could materially harm our reputation by deterring existing or prospective customers from using our products and applications, increasing our operating expenses in order to contain and remediate the incident, exposing us to unbudgeted or uninsured liability, disrupting our operations, diverting management focus away from other priorities, increasing our regulatory and litigation (including class action) exposure, and/or resulting in the imposition of material penalties and fines under state, federal and foreign laws.
Recent downturns in the semiconductor industry had been attributed to a variety of factors, including the initial onset of the COVID-19 pandemic, ongoing trade disputes among the United States and China, weakness in demand and pricing for semiconductors across applications and excess inventory.
Downturns have been characterized by diminished product demand, production overcapacity, high inventory levels and accelerated erosion of ASPs. Recent downturns in the semiconductor industry had been attributed to a variety of factors, including weakness in demand and pricing for semiconductors across applications, ongoing trade disputes among the United States and China, and excess inventory.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. 32 Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Biggest changeOur cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
See “Risk Factors—Risks Related to our Information Technology, Intellectual Property, and Data Security and Privacy.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”) oversight of risk assessment and risk management, including cybersecurity and other information technology risks.
See “Risk Factors—Risks Related to our Information Technology, Intellectual Property, and Data Security and Privacy.” 36 Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”) oversight of risk assessment and risk management, including cybersecurity and other information technology risks.
Key elements of our cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems and information; • a formal IT Risk Register documenting and mitigating identified risks, reviewed by management on a quarterly basis; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the regular use of external service providers to independently assess and test security posture, as well as to otherwise assist with aspects of our security processes on an as needed basis; • cybersecurity awareness training of our employees, including incident response personnel and senior management; • a written cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; • tabletop exercises conducted by outside counsel periodically to evaluate our incident response plan and response capabilities; and • a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile.
Key elements of our cybersecurity risk management program include: • risk assessments designed to help identify material cybersecurity risks to our critical systems and information; • a formal IT risk register documenting and mitigating identified risks, reviewed by management on a quarterly basis; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the regular use of external service providers to independently assess and test security posture, as well as to otherwise assist with aspects of our security processes on an as needed basis; • cybersecurity awareness training of our employees, including incident response personnel and senior management; • a written cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; • periodic tabletop exercises conducted by outside counsel to evaluate our incident response plan and response capabilities; and • a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment. 33
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in our IT environment. 37
The full Board also periodically receives briefings from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from our Chief Digital and Information Officer. Our management team, including our Chief Digital and Information Officer and General Counsel, are responsible for assessing and managing our material risks from cybersecurity threats.
The full Board also periodically receives briefings from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from our Chief Digital and Information Officer. Our management team, including our Chief Digital and Information Officer and General Counsel , is responsible for assessing and managing our material risks from cybersecurity threats.
We have a diverse information security team with varying backgrounds, years of experience and levels of information security certification.
We have an information security team with varying backgrounds, years of experience and levels of information security certification.
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Item 1C. Cybersecurity. Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFacility Facility Function Facility Size Status Manila, Philippines Manufacturing - Assembly, Test, Finish Approximately 434,000 square feet Owned Manchester, New Hampshire Corporate Headquarters, Research and Development, Administrative Approximately 125,000 square feet Owned Marlborough, Massachusetts Research and Development, Administrative Approximately 52,000 square feet Leased (10-year lease expires in 2028) We also lease design and applications support centers in the Americas, Asia and Europe.
Biggest changeFacility Facility Function Facility Size Status Manila, Philippines Manufacturing - Assembly, Test, Finish Approximately 434,000 square feet Owned Muntinlupa City, Philippines Research and Development, Administrative Approximately 52,000 square feet Leased (Five-year lease expires in 2028) Manchester, New Hampshire Corporate Headquarters, Research and Development, Administrative Approximately 125,000 square feet Owned Marlborough, Massachusetts Research and Development, Administrative Approximately 52,000 square feet Leased (10-year lease expires in 2028) We also lease design and applications support centers in the Americas, Asia and Europe.
We have a fabless business model that provides us with enhanced security of supply and manufacturing flexibility. Our primary fab partners currently include PSL, UMC and TSMC. We have master service agreements with all primary foundry partners, and some we have also engaged in long-term supply agreements.
We have a fabless business model that provides us with enhanced security of supply and manufacturing flexibility. Our primary fab partners currently include UMC, PSL, Tower and TSMC. We have master service agreements with all primary foundry partners, and we have also engaged in long-term supply agreements with some of our foundry partners.
We also supplement the assembly capabilities of the AMPI Facility with subcontractors throughout Asia, and approximately 47%, 51% and 51% of our assembly was outsourced in fiscal years 2024, 2023 and 2022, respectively.
We also supplement the assembly capabilities of the AMPI Facility with subcontractors throughout Asia, and approximately 45%, 47% and 51% of our assembly was outsourced in fiscal years 2025, 2024 and 2023, respectively.
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We are also members of the Responsible Business Alliance, the world’s largest industry coalition dedicated to corporate social responsibility in global supply chains and, in conjunction with our sustainability efforts, we participate in the CDP (formerly the Carbon Disclosure Project), a global environmental disclosure system designed to enable companies and governments to disclose and manage their carbon emissions.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not currently party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition. 34 Item 4. Mine Safety Disclosures. Not applicable. PAR T II
Biggest changeThese claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources. We are not currently party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition.
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These claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources.
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Item 4. Mine Safety Disclosures. Not applicable. 38 PAR T II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following line graph compares for the period beginning October 29, 2020, the initial trading date of our common stock on the Nasdaq Global Select Market, and ending on March 29, 2024, the last day of our most recently completed fiscal year, the cumulative total stockholder returns for our common stock, the Nasdaq Composite Index and Philadelphia Semiconductor Index, and assumes reinvestment of any dividends.
Biggest changeThe following line graph compares, for the past five years, the cumulative total stockholder returns for our common stock, the Nasdaq Composite Index and the Philadelphia Semiconductor Index, and assumes reinvestment of any dividends.
The stockholder return in the graph below is not necessarily indicative of, nor it is intended to forecast, the potential future performance of our common stock, and we do not make or endorse any predictions as to future stockholder returns. We selected these comparative groups due to industry similarities and the fact that they include several direct competitors.
The stockholder return in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock, and we do not make or endorse any predictions as to future stockholder returns. We selected these comparative groups due to industry similarities and the fact that they include several direct competitors.
Base Period October 29, 2020 March 26, 2021 March 25, 2022 March 31, 2023 March 29, 2024 Allegro MicroSystems, Inc. $ 100.00 $ 142.77 $ 164.86 $ 271.13 $ 152.32 Nasdaq Composite Index $ 100.00 $ 117.46 $ 126.67 $ 109.26 $ 146.43 Philadelphia Semiconductor Index $ 100.00 $ 136.02 $ 154.37 $ 141.48 $ 214.80 35 Recent Sales of Unregistered Securities and Use of Proceeds None.
Base Period October 29, 2020 March 26, 2021 March 25, 2022 March 31, 2023 March 29, 2024 March 28, 2025 Allegro MicroSystems, Inc. $ 100.00 $ 142.77 $ 164.86 $ 271.13 $ 152.32 $ 140.45 Nasdaq Composite Index $ 100.00 $ 117.46 $ 126.67 $ 109.26 $ 146.43 $ 154.87 Philadelphia Semiconductor Index $ 100.00 $ 136.02 $ 154.37 $ 141.48 $ 214.80 $ 187.63 Recent Sales of Unregistered Securities and Use of Proceeds None. 39 Use of Proceeds from Registered Securities None.
Use of Proceeds from Registered Securities None. Issuer Purchases of Equity Securities None. Item 6. Reserved. 36
Issuer Purchases of Equity Securities None. Item 6. Reserved. 40
As of May 20, 2024, there were 193,748,130 shares of our common stock held by approximately 12 holders of record, which does not include beneficial owners of common stock whose shares are held in the names of various securities brokers, dealers and registered clearing agencies.
Market Information Our common stock is listed on the Nasdaq Global Select Market under the symbol “ALGM.” As of May 19, 2025, there were 184,901,228 shares of our common stock held by approximately 8 holders of record, which does not include beneficial owners of common stock whose shares are held in the names of various securities brokers, dealers and registered clearing agencies.
Item 5. Market for Registrant’s Comm on Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on the Nasdaq Global Select Market under the symbol “ALGM”.
Item 5. Market for Registrant’s Comm on Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFiscal Year Ended Change March 29, 2024 As a % of Net Sales March 31, 2023 As a % of Net Sales $ % (Dollars in thousands) Total net sales (1) $ 1,049,367 100.0 % $ 973,653 100.0 % $ 75,714 7.8 % Cost of goods sold (1) 474,838 45.2 % 427,574 43.9 % 47,264 11.1 % Gross profit 574,529 54.8 % 546,079 56.1 % 28,450 5.2 % Operating expenses: Research and development 176,638 16.8 % 150,850 15.5 % 25,788 17.1 % Selling, general and administrative 188,429 18.0 % 191,922 19.7 % (3,493 ) (1.8 )% Impairment of long-lived assets 13,218 1.3 % — — % 13,218 — % Total operating expenses 378,285 36.0 % 342,772 35.2 % 35,513 10.4 % Operating income 196,244 18.7 % 203,307 20.9 % (7,063 ) (3.5 )% Other income (expense), net: Interest expense (10,763 ) (1.0 )% (2,336 ) (0.2 )% (8,427 ) 360.7 % Interest income 3,144 0.3 % 1,724 0.2 % 1,420 82.4 % Foreign currency transaction gain 5,064 0.5 % 980 0.1 % 4,084 416.7 % Loss in earnings of equity investment (538 ) (0.1 )% (406 ) (0.0 )% (132 ) 32.5 % Other Income, net 1,646 0.2 % 8,077 0.8 % (6,431 ) (79.6 )% Total other income (expense), net (1,447 ) (0.1 )% 8,039 0.8 % (9,486 ) (118.0 )% Income before income tax provision 194,797 18.6 % 211,346 21.7 % (16,549 ) (7.8 )% Income tax provision 41,909 4.0 % 23,852 2.4 % 18,057 75.7 % Net income 152,888 14.6 % 187,494 19.3 % (34,606 ) (18.5 )% Net income attributable to non-controlling interests 191 0.0 % 137 0.0 % 54 39.4 % Net income attributable to Allegro MicroSystems, Inc. $ 152,697 14.6 % $ 187,357 19.2 % $ (34,660 ) (18.5 )% (1) Our total net sales and cost of goods sold for the periods presented above include related party net sales generated through our distribution agreement with Sanken and costs of goods sold related thereto.
Biggest changeFiscal Year Ended Change March 28, 2025 As a % of Net Sales March 29, 2024 As a % of Net Sales $ % (Dollars in thousands) Total net sales (1) $ 725,006 100.0 % $ 1,049,367 100.0 % $ (324,361 ) (30.9 )% Cost of goods sold (1) 403,479 55.7 % 474,838 45.2 % (71,359 ) (15.0 )% Gross profit 321,527 44.3 % 574,529 54.8 % (253,002 ) (44.0 )% Operating expenses: Research and development 179,649 24.8 % 176,638 16.8 % 3,011 1.7 % Selling, general and administrative 161,680 22.3 % 188,429 18.0 % (26,749 ) (14.2 )% Impairment of long-lived assets — — % 13,218 1.3 % (13,218 ) (100.0 )% Total operating expenses 341,329 47.1 % 378,285 36.0 % (36,956 ) (9.8 )% Operating (loss) income (19,802 ) (2.7 )% 196,244 18.7 % (216,046 ) (110.1 )% Other (expense) income, net: Interest expense (30,366 ) (4.2 )% (10,763 ) (1.0 )% (19,603 ) 182.1 % Interest income 1,524 0.2 % 3,144 0.3 % (1,620 ) (51.5 )% Foreign currency transaction (loss) gain (2,172 ) (0.3 )% 5,064 0.5 % (7,236 ) (142.9 )% Income (loss) in earnings of equity investment 1,176 0.2 % (538 ) (0.1 )% 1,714 (318.6 )% Loss on change in fair value of forward repurchase contract (34,752 ) (4.8 )% — — % (34,752 ) — % Other (expense) income, net (1,304 ) (0.2 )% 1,646 0.2 % (2,950 ) (179.2 )% (Loss) income before income taxes (85,696 ) (11.8 )% 194,797 18.6 % (280,493 ) (144.0 )% Income tax (benefit) provision (12,933 ) (1.8 )% 41,909 4.0 % (54,842 ) (130.9 )% Net (loss) income (72,763 ) (10.0 )% 152,888 14.6 % (225,651 ) (147.6 )% Net income attributable to non-controlling interests 247 0.0 % 191 0.0 % 56 29.3 % Net (loss) income attributable to Allegro MicroSystems, Inc. $ (73,010 ) (10.1 )% $ 152,697 14.6 % $ (225,707 ) (147.8 )% (1) Our total net sales and cost of goods sold for the periods presented above include related party net sales generated through our distribution agreement with Sanken and costs of goods sold related thereto.
As a result, the loss of any key design win or any significant delay in the ramp-up of volume production of the customer’s products into which our product is designed could adversely affect our business.
As a result, the loss of any key design win or any significant delay in the ramp-up of volume production of a customer’s products into which our product is designed could adversely affect our business.
Foreign currency transaction gain (loss) We incur transaction gains and losses resulting from intercompany transactions, as well as transactions with customers or vendors, denominated in currencies other than the functional currency of the legal entity in which the transaction is recorded.
Foreign currency transaction (loss) gain We incur transaction gains and losses resulting from intercompany transactions, as well as transactions with customers or vendors, denominated in currencies other than the functional currency of the legal entity in which the transaction is recorded.
Investing Activities Net cash used in investing activities was $516.7 million in fiscal year 2024, consisting of payments related to the acquisition of Crocus of $408.1 million and $124.8 million of purchases of property, plant and equipment, partially offset by $16.2 million of proceeds from sale of marketable securities.
Net cash used in investing activities was $516.7 million in fiscal year 2024, consisting of payments related to the acquisition of Crocus of $408.1 million and $124.8 million of purchases of property, plant and equipment, partially offset by $16.2 million of proceeds from the sale of marketable securities.
Financing Activities Net cash provided by financing activities was $198.9 million in fiscal year 2024, consisting of $245.5 million of borrowing of 2023 Term Loan Facility, net of deferred financing costs, proceeds received related to the quarterly payment from PSL on our related party loan and proceeds received in connection with the issuance of common stock under our employee stock purchase plan, partially 46 offset by payments on the 2020 Term Loan Facility and 2023 Term Loan Facility, taxes related to the net settlement of equity awards, and payments of debt issuance costs in connection with the 2023 Revolving Credit Facility and 2023 Term Loan Facility.
Net cash provided by financing activities was $198.9 million in fiscal year 2024, consisting of $245.5 million of borrowing under the 2023 Term Loan Facility, net of deferred financing costs, proceeds received related to the quarterly payment from PSL on our related party loan and proceeds received in connection with the issuance of common stock under our employee stock purchase plan, partially offset by payments on the 2020 Term Loan Facility and 2023 Term Loan Facility, taxes related to the net settlement of equity awards, and payments of debt issuance costs in connection with the 2023 Revolving Credit Facility and 2023 Term Loan Facility.
Fair values are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk. The impairment assessment of goodwill, other intangible assets and other long-lived assets involves significant estimates and assumptions, which may be unpredictable and inherently uncertain.
Fair values are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk. 53 The impairment assessment of goodwill, other intangible assets and other long-lived assets involves significant estimates and assumptions, which may be unpredictable and inherently uncertain.
When indicators of impairment are present, the carrying values of the asset group are evaluated in relation to the future undiscounted cash flows of the underlying business. The net book value of the underlying asset is adjusted to fair value if the sum of the expected 47 discounted cash flows is less than book value.
When indicators of impairment are present, the carrying values of the asset group are evaluated in relation to the future undiscounted cash flows of the underlying business. The net book value of the underlying asset is adjusted to fair value if the sum of the expected discounted cash flows is less than book value.
Debt financing, if available, may contain covenants that significantly 45 restrict our operations or our ability to obtain additional debt financing in the future. Any additional financing that we raise may contain terms that are not favorable to us or our stockholders.
Debt financing, if available, may contain covenants that significantly restrict our operations or our ability to obtain additional debt financing in the future. Any additional financing that we raise may contain terms that are not favorable to us or our stockholders.
During an expansion cycle, we may increase capital spending and hiring to add to our production capacity. During periods of slower growth or industry contractions, our sales, production and productivity and margins generally decline. 39 Components of Our Results of Operations Net sales Our total net sales are derived from product sales to direct customers and distributors.
During an expansion cycle, we may increase capital spending and hiring to add to our production capacity. During periods of slower growth or industry contractions, our sales, production and productivity and margins generally decline. Components of Our Results of Operations Net sales Our total net sales are primarily derived from product sales to direct customers and distributors.
Gross profit is calculated as total net sales less cost of goods sold. Gross profit is affected by numerous factors, including average selling price, revenue mix by product, channel and customer, foreign exchange rates, seasonality, manufacturing costs and the effective utilization of our facilities.
Gross profit is calculated as total net sales less cost of goods sold, and gross margin is calculated as gross profit divided by net sales. Gross profit is affected by numerous factors, including average selling price, revenue mix by product, channel and customer, foreign exchange rates, seasonality, manufacturing costs and the effective utilization of our facilities.
For information regarding the Company’s expected cash requirements and timing of payments related to leases and noncancellable purchase commitments, see Note 12, “Leases” and Note 16, “Commitments and Contingencies” to the audited consolidated financial statements. Additionally, refer to Note 15, “Retirement Plans” to the audited consolidated financial statements for more information related to the Company’s pension and defined contribution plans.
For information regarding the Company’s expected cash requirements and timing of payments related to leases and noncancellable purchase commitments, see Note 12, “Leases” and Note 16, “Commitments and Contingencies” to the audited consolidated financial statements. See Note 15, “Retirement Plans” to the audited consolidated financial statements for more information related to the Company’s pension and defined contribution plans.
Pursuant to the 2017 Tax Cuts and Jobs Act (the “Jobs Act”), U.S. tax law began requiring us to capitalize and amortize domestic and foreign research and development expenditures over five and 15 years, for domestic and foreign research, respectively (“174 Capitalization”).
Pursuant to the 2017 Tax Cuts and Jobs Act, U.S. tax law began requiring us to capitalize and amortize domestic and foreign research and development expenditures over five and 15 years, for domestic and foreign research, respectively (“174 Capitalization”).
Pursuant to the terms and conditions of the Merger Agreement, on October 31, 2023 (the “Closing Date”), Merger Sub merged with and into Crocus, with Crocus continuing as the surviving corporation and as a wholly owned subsidiary of AML (the “Transaction”).
Pursuant to the terms and conditions of the Merger Agreement, on October 31, 2023, Merger Sub merged with and into Crocus, with Crocus continuing as the surviving corporation and as a wholly owned subsidiary of AML (the “Transaction”).
Sales Trends by Geographic Location The following table summarizes net sales by geographic location based on ship-to location.
Net Sales by Geographic Location The following table summarizes net sales by geographic location based on ship-to location.
We are headquartered in Manchester, New Hampshire and have a global footprint with 29 locations across four continents. Our portfolio includes more than 1,000 products, and we ship over 1.5 billion units annually to more than 10,000 customers worldwide.
We are headquartered in Manchester, New Hampshire and have a global footprint with 29 locations across four continents. Our portfolio includes more than 1,500 products, and we ship approximately 1.5 billion units annually to more than 10,000 customers worldwide.
As a result of the change in strategy, the Company recorded impairment charges of $11.6 million in the fourth quarter of fiscal year 2024 related to intangible, and long-lived assets from our 2021 acquisition of Voxtel, Inc. (“Voxtel”).
As a result of the change in strategy, we recorded impairment charges of $11.6 million in the fourth quarter of fiscal year 2024 related to intangible, and long-lived assets from our 2021 acquisition of Voxtel, Inc.
As of March 29, 2024, the Company was not party to any off-balance sheet arrangements that have had or are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.
As of March 28, 2025, the Company was not party to any off-balance sheet arrangements that have had or are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.
On August 7, 2023, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Allegro MicroSystems, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“AML”), Silicon Structures LLC, a Delaware limited liability company and wholly owned subsidiary of AML (“Merger Sub”), Crocus Technology International Corp., a Delaware corporation (“Crocus”), and NanoDimension Management Limited, as the representative of the Crocus shareholders.
On August 7, 2023, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Allegro MicroSystems, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“AML”), Silicon Structures LLC, a Delaware limited liability company and wholly owned subsidiary of AML (“Merger Sub”), Crocus, and NanoDimension Management Limited, as the representative of the Crocus shareholders.
In February 2024, the Company initiated a realignment of resources associated with our photonics and advanced 3D imaging solutions business to refocus spending on other technologies.
In February 2024, we initiated a realignment of resources associated with our photonics and advanced 3D imaging solutions business to refocus spending on other technologies.
While we have generally been able to offset increases in these costs through 38 various productivity and cost reduction initiatives, as well as adjusting our selling prices and releasing new products with improved gross margins, our ability to increase our average selling prices depends on market conditions and competitive dynamics.
While we have attempted to offset increases in these costs through various productivity and cost reduction initiatives, as well as adjusting our selling prices and releasing new products with improved gross margins, our ability to increase our average selling prices depends on market conditions and competitive dynamics.
A discussion of 2022 items and comparisons between 2023 and 2022 financial results can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7. of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023, filed with the SEC on May 25, 2023.
A discussion of 2023 items and comparisons between 2024 and 2023 financial results can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7. of the Company’s Annual Report on Form 10-K for the fiscal year ended March 29, 2024, filed with the SEC on May 23, 2024.
The 2023 Term Loan Facility amortizes at a rate of 0.25% per quarter, and the initial margin applicable to the 2023 Term Loan Facility is 2.75% for term SOFR-based loans and 1.75% for base rate loans.
The 2023 Term Loan Facility amortized at a rate of 0.25% per quarter, and the initial margin applicable to the 2023 Term Loan Facility was 2.75% for term SOFR-based loans and 1.75% for base rate loans.
See our consolidated financial statements included elsewhere in this Annual Report for additional information regarding our related party net sales and cost of goods sold for the periods set forth above. Total net sales Total net sales increased in the fiscal year ended March 29, 2024 compared to the fiscal year ended March 31, 2023.
See our consolidated financial statements included elsewhere in this Annual Report for additional information regarding our related party net sales and cost of goods sold for the periods set forth above. Total net sales Total net sales decreased in the fiscal year ended March 28, 2025 compared to the fiscal year ended March 29, 2024.
Further, despite current inflationary and pricing conditions, we expect the ASPs of our products to decline over time, and we consider design wins to be critical to our future success. We anticipate being increasingly dependent on revenue from newer design wins for our newer products.
Further, despite current inflationary and pricing conditions, we expect the ASPs of our products to decline over time, and we consider design wins to be critical to our future success as they help mitigate declines in ASPs. We anticipate being increasingly dependent on revenue from newer design wins for our newer products.
Any such adjustments could have a significant effect on our results of operations. 41 Results of Operations Fiscal Year 2024 Compared to Fiscal Year 2023 The following table summarizes our results of operations and our results of operations as a percentage of total net sales for the fiscal years ended March 29, 2024 and March 31, 2023.
Any such adjustments could have a significant effect on our results of operations. 47 Results of Operations Fiscal Year 2025 Compared to Fiscal Year 2024 The following table summarizes our results of operations and our results of operations as a percentage of total net sales for the fiscal years ended March 28, 2025 and March 29, 2024.
If these resources are not sufficient to satisfy our liquidity requirements due to changes in circumstances, we may be required to borrow under our 2023 Revolving Credit Facility or seek additional financing. If we raise additional funds by issuing equity securities, our stockholders will experience dilution.
If these resources are not sufficient to satisfy our liquidity requirements due to changes in circumstances, we may be required to borrow under our revolving credit facility or seek additional financing. If we raise additional funds by issuing equity securities that are not used to repurchase existing shares outstanding, our stockholders will experience dilution.
Gross margin generally increases when the opposite occurs. Cyclical Nature of the Semiconductor Industry The semiconductor industry has historically been highly cyclical and is characterized by increasingly rapid technological change, product obsolescence, competitive pricing pressures, evolving standards, short product life cycles in consumer and other rapidly changing markets and fluctuations in product supply and demand.
Cyclical Nature of the Semiconductor Industry The semiconductor industry has historically been highly cyclical and is characterized by increasingly rapid technological change, product obsolescence, competitive pricing pressures, evolving standards, short product life cycles in consumer and other rapidly changing markets and fluctuations in product supply and demand.
Foreign currency transaction gain (loss) We recorded a foreign currency transaction gain in both the fiscal year ended March 29, 2024 and March 31, 2023. The foreign currency transaction gain recorded in the fiscal year ended March 29, 2024 was related to a transaction between the U.S. and French subsidiaries.
The foreign currency transaction gain recorded in the fiscal year ended March 29, 2024 was related to a transaction between the U.S. and French subsidiaries.
We operate on a 52- or 53-week fiscal year ending on the last Friday of March. Each fiscal quarter has 13 weeks, except in a 53-week year, when the fourth fiscal quarter has 14 weeks. All references to “2024,” “fiscal year 2024” or similar references relate to the 52-week period ended March 29, 2024.
We operate on a 52- or 53-week fiscal year ending on the last Friday of March. Each fiscal quarter has 13 weeks, except in a 53-week year, when the fourth fiscal quarter has 14 weeks. All references to “2025,” “fiscal year 2025” or similar references relate to the 52-week period ended March 28, 2025.
On October 31, 2023, we entered into a $250 million term loan maturing in 2030 (the “2023 Term Loan Facility”), the proceeds of which were used to repay all outstanding term loans under the term loan agreement dated September 30, 2020, with Credit Suisse AG, Cayman Islands Branch, as administrative agent, collateral agent, and the other agents, arrangers and lenders parties thereto and to finance, in part, the Transaction.
The aggregate purchase price paid by the Company was $411.8 million in cash. 41 On October 31, 2023, we entered into a $250.0 million term loan maturing in 2030 (the “2023 Term Loan Facility”), the proceeds of which were used to repay all outstanding term loans under our prior term loan agreement dated September 30, 2020, with Credit Suisse AG, Cayman Islands Branch, as administrative agent, collateral agent, and the other agents, arrangers and lenders parties thereto and to finance, in part, the Transaction.
Our products are foundational to automotive and industrial electronic systems. Our sensor ICs enable our customers to precisely measure motion, speed, position and current, while our power ICs include high-temperature and high-voltage capable motor drivers, power management ICs, LED driver ICs and isolated gate drivers.
Our sensor ICs enable our customers to precisely measure motion, speed, position and current, while our power ICs include high-temperature and high-voltage capable motor drivers, power management ICs, LED driver ICs and isolated gate drivers.
Inflation over the last several quarters has led us to experience higher costs, including higher labor costs, wafer and other costs for materials from suppliers, and transportation and energy costs.
Inflation in recent quarters has led us to experience higher costs, including higher labor costs, wafer and other costs for materials from suppliers, and transportation and energy costs.
Income tax provision Our provision, or benefit, for income taxes is based on an estimate of the annual effective tax rate plus the tax impact of discrete items. We are subject to tax in the U.S. and various foreign jurisdictions.
Miscellaneous income and expense items unrelated to our core operations are also within other (expense) income, net. 46 Income tax (benefit) provision Our provision for or benefit from income taxes is based on an estimate of the annual effective tax rate plus the tax impact of discrete items. We are subject to tax in the U.S. and various foreign jurisdictions.
We continually monitor and work to reduce the cost of our products and improve the potential value our solutions provide to our customers, as we target new design win opportunities and manage the product life cycles of our existing customer designs.
As our products mature and unit volumes increase, we expect their ASPs to decline in the long term. We continually monitor and work to reduce the cost of our products and improve the potential value our solutions provide to our customers, as we target new design win opportunities and manage the product life cycles of our existing customer designs.
Although these initiatives have resulted in gross margin and operating income improvements over the previous quarters, we cannot ensure that these trends will continue over the long-term.
Although these initiatives can result in gross margin and operating income improvements, we cannot ensure that these trends will occur or continue over the long-term.
All references to “2023,” “fiscal year 2023” or similar references relate to the 53-week period ended March 31, 2023. This section discusses items pertaining to and comparisons of financial results between 2024 and 2023.
All references to “2024,” “fiscal year 2024” or similar references relate to the 52-week period ended March 29, 2024. This section discusses items pertaining to and comparisons of financial results between 2025 and 2024.
Debt Obligations See Note 13, “Debt and Other Borrowings” in the consolidated financial statements included elsewhere in this Annual Report for information regarding our debt obligations, including our term loans and credit facilities.
Debt Obligations See Note 13, “Debt and Other Borrowings” in the consolidated financial statements included elsewhere in this Annual Report for information regarding our debt obligations, including our term loans and credit facilities. 52 Recent Accounting Pronouncements Refer to Note 2, “Summary of Significant Accounting Policies” to the consolidated financial statements included elsewhere in this Annual Report for information regarding recent accounting pronouncements.
We periodically evaluate the recoverability of other long-lived assets whenever events and changes in circumstances, such as reductions in demand or significant economic slowdowns in the industry, indicate that the carrying amount of an asset may not be fully recoverable.
We engage third-party valuation specialists to assist us with the initial measurement of the fair value of acquired intangible assets. We periodically evaluate the recoverability of other long-lived assets whenever events and changes in circumstances, such as reductions in demand or significant economic slowdowns in the industry, indicate that the carrying amount of an asset may not be fully recoverable.
Operating Expenses Research and development (“R&D”) expenses R&D expenses consist primarily of personnel-related costs of our research and development organization, including stock-based compensation, costs of development of wafers and masks, license fees for computer-aided design software, costs of development testing and evaluation, costs of developing automated test programs, equipment depreciation and related occupancy and equipment costs.
If we expand capacity faster than required by our sales growth, our gross margin could be negatively affected. 45 Operating Expenses Research and development (“R&D”) expenses R&D expenses consist primarily of personnel-related costs of our research and development organization, including stock-based compensation, costs of development of wafers and masks, license fees for computer-aided design software, costs of development testing and evaluation, costs of developing automated test programs, equipment depreciation and related occupancy and equipment costs.
A significant portion of our costs are fixed, and as a result, costs are generally difficult to adjust or may take time to adjust in response to changes in demand. In addition, our fixed costs increase as we expand our capacity. If we expand capacity faster than required by our sales growth, our gross margin could be negatively affected.
A significant portion of our costs are fixed, and as a result, costs are generally difficult to adjust or may take time to adjust in response to changes in demand. In addition, our fixed costs increase as we expand our capacity.
These estimates and assumptions include identification of reporting units and asset groups, long-term growth rates, profitability, estimated useful lives, comparable market multiples, and discount rates. Any changes in these assumptions could impact the result of the impairment assessment.
These estimates and assumptions may include identification of reporting units and asset groups, long-term growth rates, profitability, estimated useful lives, comparable market multiples, and discount rates. Any changes in these assumptions could impact the result of the impairment assessment. Impairment assessments are performed in the fourth quarter of each fiscal year. No impairments were identified for fiscal year 2025.
However, we expect our gross margin to fluctuate on a quarterly basis as a result of changes in ASPs due to product mix, new product introductions, transitions into volume manufacturing and manufacturing costs. Gross margin generally decreases if production volumes are lower as a result of decreased demand, which leads to a reduced absorption of our fixed manufacturing costs.
However, we expect our gross margin to fluctuate on a quarterly basis as a result of changes in ASPs due to product mix, new product introductions, transitions into volume manufacturing and manufacturing costs.
This decrease was attributable to $11.8 million of gains related to sales of our investment in marketable securities and earnings in our money market fund deposits in the fiscal year March 29, 2024, offset by unrealized losses of $11.2 million related to our investment in 44 marketable securities during the same year, compared to unrealized gains of $7.5 million related to our investment in marketable securities in the fiscal year ended March 31, 2023.
We recorded $11.8 million of gains related to sales of our investment in marketable securities and earnings in our money market fund deposits, partially offset by unrealized losses of $11.2 million related to our investment in marketable securities in the fiscal year ended March 29, 2024.
Our current capital deployment strategy for 2025 is to utilize cash on hand and capacity under our 2023 Revolving Credit Facility to support our continued growth initiatives into select markets and planned capital expenditures, as well as consider potential acquisitions.
Historically, these cash requirements have been met through cash provided by operating activities and cash and cash equivalents. Our current capital deployment strategy for fiscal year 2026 is to utilize cash on hand and capacity under our revolving credit facility to support our continued growth initiatives into select markets and planned capital expenditures, as well as consider potential acquisitions.
All prior period amounts have been revised in our accompanying Financial Statements and Supplementary Data. 42 The following table summarizes total net sales by market. The categorization of net sales by market is based on the characteristics of the end product and application into which our product will be designed.
Net Sales by Market The following table summarizes total net sales by market. The categorization of net sales by market is based on the characteristics of the end product and application into which our product will be designed.
Impairment of long-lived assets Impairment of long-lived assets consists primarily of impairment charges related to intangibles assets and other long-lived assets when factors exist that indicate the carrying amounts of these assets may not be recoverable.
Impairment of long-lived assets Impairment of long-lived assets consists primarily of impairment charges related to intangibles assets and other long-lived assets when factors exist that indicate the carrying amounts of these assets may not be recoverable. Interest expense Interest expense is from term loan debt and credit facilities that we maintain with various financial institutions.
Interest expense Interest expense comprises of interest expense from term loan debt and credit facilities that we maintain with various financial institutions. 40 Interest income Interest income comprises of income earned on our cash and cash equivalents, consisting primarily of certain investments that have contractual maturities no greater than three months at the time of purchase.
Interest income Interest income is earned on our cash and cash equivalents, consisting primarily of certain investments that have contractual maturities no greater than three months at the time of purchase.
With our efforts to leverage our fixed costs and operating margin improvements, we have attained efficiencies through cost structure improvements, streamlining of manufacturing and support processes, and further utilization of excess capacity. These manufacturing efficiencies allowed us to leverage higher volumes with increasing demand across most of our applications, while increasing the absorption of fixed costs.
Efficiencies may be achieved through cost structure improvements, streamlining of manufacturing and support processes, and further utilization of excess capacity. These manufacturing efficiencies may allow us to leverage higher volumes when demand increases across most of our applications, which would increase the absorption of our fixed costs.
Net changes in operating assets and liabilities consisted mostly of a $75.2 million increase in inventories, a $23.3 million increase in prepaid expenses and other assets, and a $12.5 million increase in trade accounts receivable, net, partially offset by a $22.9 million increase in accrued expenses and other current and long-term liabilities, an $18.3 million increase in net amounts due from related parties and a $12.0 million increase in trade accounts payable.
The net increase in operating assets and liabilities consisted of a $30.2 million increase in inventories, $16.3 million decrease in accrued expenses and other current and long-term liabilities and $4.8 increase in prepaid expenses and other assets, partially offset by a $33.1 million decrease in trade accounts receivable, net, a $4.0 million increase in trade accounts payable and a $5.1 million increase in net amounts due to related party.
Customer Demand, Orders and Forecasts Demand for our products is highly dependent on market conditions in the end markets in which our customers operate, which are generally subject to seasonality, cyclicality and competitive conditions. In addition, a substantial portion of our total net sales is derived from sales to customers that purchase large volumes of our products.
Customer Demand, Orders and Forecasts Demand for our products is highly dependent on market conditions in the end markets in which our customers operate, which are generally subject to seasonality, cyclicality, tariffs and other pricing increases and competitive conditions.
Net cash provided by operating activities was $193.2 million in fiscal year 2023, resulting primarily from our net income of $187.5 million and non-cash charges of $61.2 million, partially offset by a net decrease in operating assets and liabilities of $55.5 million.
Net cash provided by operating activities was $181.7 million in fiscal year 2024, resulting primarily from our net income of $152.9 million and non-cash charges of $122.9 million, partially offset by a net decrease in cash from an increase in net operating assets and liabilities of $94.1 million.
(Loss) income in earnings of equity investment (Loss) income in earnings of equity investment is related to our equity investment in PSL. Other Income, net Other Income, net includes unrealized (loss) gains on marketable securities from changes in the fair value of equity securities with readily determinable fair values.
Other (expense) income, net Other (expense) income, net includes unrealized (loss) gains on marketable securities from changes in the fair value of equity securities with readily determinable fair values. These investments are measured at fair value with unrealized gains and losses related to changes in the entity’s stock price.
Overview Allegro MicroSystems, Inc. is a leading global designer, developer, fabless manufacturer and marketer of sensor ICs and application-specific analog power ICs enabling the most critical technologies in the automotive and industrial markets. We are a leading supplier of magnetic sensor IC solutions worldwide based on market share, driven by our market leadership in the automotive market.
Overview Allegro MicroSystems, Inc. is a leading global designer, developer, fabless manufacturer and marketer of sensor ICs and application-specific power ICs enabling the most important emerging technologies in the automotive and industrial markets.
Other Key Factors and Trends Affecting our Operating Results Our financial condition and results of operations have been, and will continue to be, affected by numerous other factors and trends, including the following: Inflation Inflation rates in the markets in which we operate have increased and may continue to rise.
The restructuring is expected to be substantially completed during fiscal year 2026. 43 Other Key Factors and Trends Affecting our Operating Results Our financial condition and results of operations have been, and will continue to be, affected by numerous other factors and trends, including the following: Inflation Although inflation has moderated in recent periods, inflation rates in the markets in which we operate have increased and may continue to rise as a result of cost increases attributable to global tariff policies.
Net cash used in financing activities was $20.0 million in fiscal year 2023, consisting of funds loaned to PSL of $7.5 million and $18.1 million of payments for taxes related to net share settlement of equity awards, partially offset by $2.8 million of proceeds received related to the quarterly payments from PSL on our related party loan and proceeds received in connection with the issuance of common stock under our employee stock purchase plan totaling $2.8 million.
Financing Activities Net cash used in financing activities was $112.1 million in fiscal year 2025, consisting of $853.9 million used to repurchase our common stock, $105.0 million of payments on our indebtedness under the 2023 Revolving Credit Agreement and $16.2 million of taxes related to the net settlement of equity awards, partially offset by the issuance of common stock of $665.9 million, net proceeds of $193.1 million from our financing activities under the 2023 Revolving Credit Agreement, proceeds received in connection with the issuance of common stock under our employee stock purchase plan and proceeds received related to the quarterly payment on the PSL Promissory Note (prior to being discharged).
Our primary requirements for liquidity and capital resources besides our growth initiatives, are working capital, capital expenditures, principal and interest payments on our outstanding debt, and other general corporate needs. Historically, these cash requirements have been met through cash provided by operating activities and cash and cash equivalents.
Working capital is impacted by the timing and extent of our business needs. Our primary requirements for liquidity and capital resources besides our growth initiatives, are working capital, capital expenditures, principal and interest payments on our outstanding debt, and other general corporate needs.
An impairment loss is recognized in an amount equal to the excess of the reporting unit’s carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit. We assess indefinite-lived intangible assets for impairment on an annual basis, and more frequently if impairment indicators are identified.
An impairment loss is recognized in an amount equal to the excess of the reporting unit’s carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit.
Other long-lived assets primarily consist of property and equipment, operating lease right-of-use assets and intangible assets. Acquired intangible assets consist of completed technologies, customer relationships, trademarks and trade names, and patents. We engage third-party valuation specialists to assist us with the initial measurement of the fair value of acquired intangible assets.
An impairment charge equal to the difference is recorded to reduce the carrying value to its fair value. Other long-lived assets primarily consist of property and equipment, operating lease right-of-use assets and intangible assets. Acquired intangible assets consist of completed technologies, customer relationships, trademarks and trade names, and patents.
The impairment was related to our decision to refocus resources away from our photonic and advanced 3D imaging solutions. Interest expense Interest expense increased in the fiscal year ended March 29, 2024 compared to the fiscal year ended March 31, 2023.
Impairment of long-lived assets We recorded an impairment of long-lived assets of $13.2 million in the fiscal year ended March 29, 2024. The impairment was related to our decision to refocus resources away from our photonics and advanced 3D imaging solutions.
Interest income Interest income increased increased in the fiscal year ended March 29, 2024 compared to the fiscal year ended March 31, 2023, primarily due to higher cash balances maintained throughout the comparable period and higher interest rates.
Interest income Interest income decreased in the fiscal year ended March 28, 2025 compared to the fiscal year ended March 29, 2024, primarily due to lower cash and cash equivalent balances.
R&D expenses represented 16.8% of our total net sales for the fiscal year ended March 29, 2024, an increase from 15.5% of our total net sales for the fiscal year ended March 31, 2023. This percentage increase was primarily due to investments in personnel to fund new product development.
This increase was primarily due to an increase in R&D supplies, partially offset by a reduction from personnel costs, depreciation and R&D tax credits. R&D expenses represented 24.8% of our total net sales for the fiscal year ended March 28, 2025, an increase from 16.8% of our total net sales for the fiscal year ended March 29, 2024.
Net cash used in investing activities was $99.7 million in fiscal year 2023, consisting of $79.8 million of purchases of property, plant and equipment and payments related to the acquisition of Heyday of $19.9 million.
Investing Activities Net cash used in investing activities was $40.8 million in fiscal year 2025, primarily consisting of purchases of property, plant and equipment.
These customers generally provide periodic forecasts of their requirements. However, these forecasts do not commit such customers to minimum purchases, and customers can revise these forecasts without penalty. In addition, as is customary in the semiconductor industry, customers are generally permitted to cancel orders for our products within a specified period.
In addition, a substantial portion of our total net sales is derived from sales to customers that purchase large volumes of our products. These customers generally provide periodic forecasts of their requirements. However, these forecasts do not commit such customers to minimum purchases, and customers can revise these forecasts without penalty.
Income tax provision Income tax provision and the effective income tax rate were $41.9 million and 21.5%, respectively, for the fiscal year ended March 29, 2024, and $23.9 million and 11.3%, respectively, for the fiscal year ended March 31, 2023.
Income tax (benefit) provision For the fiscal years ended March 28, 2025 and March 29, 2024, our income tax (benefit) provision and the effective income tax rate (“ETR”) was $(12.9) million and 15.1%, and $41.9 million and 21.5%, respectively.
We also periodically reassess their continuing classification as indefinite-lived intangible assets. Impairment exists if the fair value of the intangible asset is less than its carrying value. An impairment charge equal to the difference is recorded to reduce the carrying value to its fair value.
However, if we conclude otherwise, quantitative impairment testing is not required. We assess indefinite-lived intangible assets for impairment on an annual basis, and more frequently if impairment indicators are identified. We also periodically reassess their continuing classification as indefinite-lived intangible assets. Impairment exists if the fair value of the intangible asset is less than its carrying value.
The foreign currency transaction gain recorded in the fiscal year ended March 31, 2023 was primarily due to realized and unrealized gains from our United Kingdom location, partially offset by realized and unrealized losses from our Philippines location.
Foreign currency transaction (loss) gain We recorded a foreign currency transaction loss in the fiscal year ended March 28, 2025, compared to a gain in the fiscal year ended March 29, 2024. The foreign currency transaction loss recorded in the fiscal year ended March 28, 2025 was primarily due to realized and unrealized losses from our Philippine locations.
Cancellations of orders could result in the loss of anticipated sales without allowing us sufficient time to reduce our inventory and operating expenses. In addition, changes in forecasts or the timing of orders from customers expose us to the risks of inventory shortages or excess inventory. We are currently operating in an inflationary environment.
In addition, changes in forecasts or the timing of orders from customers expose us to the risks of inventory shortages or excess inventory. We are currently operating in an inflationary environment for our products as a result of global tariff policies, which also have the potential to reduce end market demand in certain markets.
See “Risk Factors —Risks Related to Our Business and Industry—Our ability to raise capital in the future may be limited and could prevent us from executing our growth strategy.” Cash Flows from Operating, Investing and Financing Activities The following table summarizes our cash flows for the fiscal years ended 2024 and 2023: Fiscal Year Ended March 29, 2024 March 31, 2023 (dollars in thousands) Net cash provided by operating activities $ 181,715 $ 193,206 Net cash used in investing activities (516,716 ) (99,696 ) Net cash provided by (used in) financing activities 198,878 (19,998 ) Effect of exchange rate changes on cash and cash equivalents (421 ) (4,606 ) Net (decrease) increase in cash and cash equivalents and restricted cash $ (136,544 ) $ 68,906 Operating Activities Net cash provided by operating activities was $181.7 million in fiscal year 2024, resulting primarily from our net income of $152.9 million and non-cash charges of $122.9 million, partially offset by a net decrease in cash from an increase in net operating assets and liabilities of $94.1 million.
Cash Flows from Operating, Investing and Financing Activities The following table summarizes our cash flows for the fiscal years ended 2025 and 2024: Fiscal Year Ended March 28, 2025 March 29, 2024 (dollars in thousands) Net cash provided by operating activities $ 61,913 $ 181,715 Net cash used in investing activities (40,816 ) (516,716 ) Net cash (used in) provided by financing activities (112,062 ) 198,878 Effect of exchange rate changes on cash and cash equivalents (89 ) (421 ) Net decrease in cash and cash equivalents and restricted cash $ (91,054 ) $ (136,544 ) 51 Operating Activities Net cash provided by operating activities was $61.9 million in the fiscal year 2025, resulting primarily from a net loss of $72.8 million and non-cash charges of $143.5 million, further adjusted by a net decrease in cash from an increase in net operating assets and liabilities of $8.9 million.
This increase was primarily attributable to higher demand related to e-Mobility products, safety comfort and convenience applications, and broad-based and other industrial applications, including clean energy and automation, partially offset by decline in our data center applications and consumer and smart home products.
The decrease was primarily driven by an overall reduction in customer-held inventory resulting in a decline in shipments across all end markets. The decline in shipments impacted all applications including e-Mobility products, safety comfort and convenience applications, ICE, and broad-based and other industrial applications, including data center applications, clean energy and automation, and consumer and smart home products.
On October 31, 2023, the 2020 Term Loan Facility was paid in full in connection with the 2023 Term Loan Facility. We believe that our existing cash will be sufficient to finance our continued operations, growth strategy, planned capital expenditures and the additional expenses that we expect to incur during the next 12 months.
Additionally, refer to Note 13, “Debt and Other Borrowings” for information regarding the Company’s management of our third-party debt capacity. We believe that our existing cash will be sufficient to finance our continued operations, growth strategy, planned capital expenditures and the additional expenses that we expect to incur during the next 12 months.
During fiscal years 2024 and 2023, we generated $1,049.4 million and $973.7 million in total net sales, respectively, with $152.9 million and $187.5 million in net income, respectively. Recent Initiatives to Improve Results of Operations We implemented several initiatives during fiscal years 2023 and 2024 that were designed to improve our operating results during those fiscal years and going forward.
Recent Initiatives to Improve Results of Operations We implemented several initiatives during fiscal years 2024 and 2025 that were designed to improve our operating results during those fiscal years and going forward. We continue our efforts to leverage our fixed costs and operating margin improvements.
The increase in trade accounts receivable, net was primarily a result of increased sales year-over-year, as well as the timing of receipts.
The decrease in trade accounts receivable, net was primarily a result of decreased sales year-over-year. Trade accounts payable increased primarily due to the timing of payments to suppliers and vendors, including unpaid capital expenditures of $2.2 million.
The increase in gross profit was driven by the increase in net sales as discussed above, partially offset by increase of cost of goods sold, as discussed above. R&D expenses R&D expenses increased in the fiscal year ended March 29, 2024 compared to the fiscal year ended March 31, 2023.
Japan net sales declined across all auto applications primarily driven by safety, comfort and convenience applications, partially offset by an increase in broad-based applications. Cost of goods sold, gross profit and gross margin Cost of goods sold decreased in the fiscal year ended March 28, 2025 compared to the fiscal year ended March 29, 2024.
Manufacturing Costs and Product Mix Gross margin has been, and will continue to be, affected by a variety of factors, including the ASPs of our products, product mix in a given period, material costs, yields, manufacturing costs and efficiencies.
In addition, factors that cause a reduction in the demand from end users of our OEMs’ or other customers’ products, including as a result of increased prices resulting from global trade policies, tariffs or a recessionary environment in the markets in which we operate, may in the future continue to cause our direct customers to significantly reduce the number of products ordered from us. 44 Manufacturing Costs and Product Mix Gross margin has been, and will continue to be, affected by a variety of factors, including the ASPs of our products, product mix in a given period, material costs, yields, manufacturing costs and efficiencies.
The increase in cost of goods sold was primarily due to high production volume and product mix, as well as the amortization of intangible assets in relation to the acquisition of Crocus. Gross profit increased in the fiscal year ended March 29, 2024 compared to the fiscal year ended March 31, 2023.
The decrease in cost of goods sold was primarily due to a reduction in shipped volume, as well as a change in product mix, partially offset by an increase in amortization of intangible assets related to the acquisition of Crocus.
These costs are partially offset by increased professional fees, outside service costs and personnel increases in the fiscal year ended March 29, 2024. SG&A expenses represented 18.0% of our total net sales for the fiscal year ended March 29, 2024, representing a decrease from 19.7% of our total net sales for the fiscal year ended March 31, 2023.
SG&A expenses represented 22.3% of our total net sales for the fiscal year ended March 28, 2025, representing an increase from 18.0% of our total net sales for the fiscal year ended March 29, 2024.
Loss in earnings of equity investment Loss in earnings of equity investment in both fiscal years ended March 29, 2024 and March 31, 2023, represented the loss in earnings on our 30% investment in PSL. Other Income, net Other Income, net decreased in the fiscal year ended March 29, 2024 compared to the fiscal year ended March 31, 2023.
Income (loss) in earnings of equity investment Income (loss) in earnings of equity investment reflected income of $1.2 million and loss of $0.5 million in the fiscal years ended March 28, 2025 and March 29, 2024, respectively, representing the earnings on our 30% investment in PSL (and approximately 10.2% investment in PSL Parent following PSL’s recapitalization in September 2024).
This increase was primarily due to a combined increase in personnel, stock-based compensation and outside service costs, in addition to a general increase in operating expenses to fund new product development, partially offset by reduced variable compensation expense.
This decrease was primarily due to a decrease in funding of the Company’s annual incentive bonus program and outside service costs, partially offset by an increase in personnel and severance expenses.
The increase was primarily due to higher interest payments on the 2023 Term Loan Facility, which was used to finance the acquisition of Crocus.
Interest expense Interest expense increased in the fiscal year ended March 28, 2025 compared to the fiscal year ended March 29, 2024. The increase was primarily due to higher interest payments on the Refinanced 2023 Term Loan Facility, which increased our total outstanding debt balance.
Other net sales decreased in the fiscal year ended March 29, 2024 compared to the fiscal year ended March 31, 2023, primarily due to lower demand for our consumer and smart home products. Sales Trends by Product The following table summarizes net sales by product.
Industrial and other net sales decreased primarily due to a decrease in demand for our data center applications and our broad-based and other industrial applications, in addition to distributor inventory reductions. 48 Net Sales by Product The following table summarizes net sales by product.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs a result, our international operations give rise to transactional market risk associated with exchange rate movements of the U.S. dollar, the Euro and the Philippine peso. We reflected foreign exchange gains of $5.1 million and of $1.0 million for fiscal years 2024 and 2023, respectively.
Biggest changeAs a result, our international operations give rise to transactional market risk associated with exchange rate movements of the U.S. dollar, the Euro and the Philippine peso. We reflected foreign exchange losses of $2.2 million and foreign exchange gains of $5.1 million for fiscal years 2025 and 2024, respectively.
Based on fiscal year 2024 performance, a hypothetical appreciation (decline) in the value of the Euro in relation to the U.S. dollar of 10% would favorably (negatively) impact operating income by immaterial amounts. A hypothetical 10% appreciation (decline) in the value of the Philippine peso in relation to the U.S. dollar would negatively (favorably) impact operating income by immaterial amounts.
Based on fiscal year 2025 performance, a hypothetical appreciation (decline) in the value of the Euro in relation to the U.S. dollar of 10% would favorably (negatively) impact operating income by immaterial amounts. A hypothetical 10% appreciation (decline) in the value of the Philippine peso in relation to the U.S. dollar would negatively (favorably) impact operating income by immaterial amounts.
The following analysis provides additional information regarding these risks. Interest Rate Risk Our investments have limited exposure to market risk. At March 29, 2024, we maintained a portfolio of cash and cash equivalents, consisting primarily of money market fund deposits. None of these investments have a maturity date in excess of one year.
The following analysis provides additional information regarding these risks. Interest Rate Risk Our investments have limited exposure to market risk. At March 28, 2025, we maintained a portfolio of cash and cash equivalents, consisting primarily of money market fund deposits. None of these investments have a maturity date in excess of one year.
Foreign currency derivative instruments can be used to hedge exposures and reduce the risks of certain foreign currency transactions; however, these instruments provide only limited protection and can carry significant cost. We have no foreign currency derivative instrument hedges as of March 29, 2024.
Foreign currency derivative instruments can be used to hedge exposures and reduce the risks of certain foreign currency transactions; however, these instruments provide only limited protection and can carry significant cost. We have no foreign currency derivative instrument hedges as of March 28, 2025.
We are also exposed to market risk as a result of increases or decreases in the amount of interest expense we must pay on our 2023 Term Loan Facility and borrowings on our bank credit facilities.
We are also exposed to market risk as a result of increases or decreases in the amount of interest expense we must pay on our 2025 Refinanced Loans and borrowings on our bank credit facilities.
Although our 2023 Term Loan Facility and credit facilities have variable rates, as of March 29, 2024, we do not believe that a 10% change in market interest rates would have a material impact on our financial position or results of operations.
Although our 2025 Refinanced Loans and credit facilities have variable rates, as of March 28, 2025, we do not believe that a 10% change in market interest rates would have a material impact on our financial position or results of operations.

Other ALGM 10-K year-over-year comparisons