Good day and thank you for standing by. Welcome to the Allegro Microsystems Q4 Fiscal 2022 Financial Results. I will now hand the conference over to your first speaker today, Katie Blye, you may begin.

Good morning and thank you for joining us today for Allegro's fourth quarter and full year results for fiscal year 2022. I'm joined today by Allegro's President and Chief Executive Officer, Ravi Vig; Allegro's Chief Financial Officer, Derek D'Antilio who will review our quarterly and annual financial performance and provide a summary of our outlook. Our earnings release and the accompanying financial tables are available on the Investor Relations page of our website. This call is being webcasted and a recording will be available on our IR page shortly. Please note that comments made during this conference call include forward-looking statements as defined by federal securities laws. These forward-looking statements include projections and other statements about future events that are based on current expectations and assumptions and as a result are subject to risks and uncertainties that could cause actual results to vary materially from our projections. Please refer to the earnings press release we issued yesterday and other documents filed by us with the SEC, including the risk factors discussed in detail in our most recent 10-K filed on May 19, 2021. The company assumes no obligation to update any forward-looking information presented. The non-GAAP financial measures that are discussed today are not intended to replace or be a substitute for the presentation of Allegro's GAAP financial results and may be calculated differently than similar measures used by other companies. We are providing the supplemental information because it may enable investors to make meaningful comparisons of core operating results and more clearly highlight the results of our core ongoing operations. A reconciliation of GAAP to non-GAAP financial measures referenced during today's call can be found in our earnings press release, which has been posted to our IR page. I'll now turn the call over to Allegro's President and CEO, Ravi Vig. Ravi?

Thank you, Katie, and good morning everyone. Before we get started with our commentary on fiscal '22 and fourth quarter results, I'd like to pause here to acknowledge the Ukraine crisis. Our hearts are with our team members in Ukraine and the people of Ukraine, and the world must stand together in support of a resolution to this terrible situation. Allegro delivered outstanding results in fiscal 2022, achieving several new records, including robust annual revenue growth of 30%, resulting in the highest annual revenue in Allegro's history, as well as record profitability, including 410 basis points of non-GAAP gross margin expansion contributing to non-GAAP EPS growth of 70% for the full year. Our earnings growth of over 2x, our revenue growth demonstrates the solid leverage in our operating model as we continue to deliver increasing profitability and shareholder value on incremental topline growth. We capped the year off on a high note with strong fourth-quarter execution to drive revenue records across all product lines and in our automotive and industrial end markets, highlighting key differentiators in the Allegro business model. Our diversification across customers, products and end applications, as well as our alignment to high-growth markets like xEV, ADAS, data center and industrial. Importantly, in fiscal '22, our R&D teams demonstrated our commitment to technology innovation leadership by collaborating globally to further our product roadmap through important advancements in xMR technology, disruptive solutions for ADAS applications and market-leading solutions for xEV and data center. We've seen strong customer acceptance of our solutions with record levels of design win activity and more than 50% of these wins are our new products. Our strategic growth focus areas anchored on key trends in vehicle and infrastructure electrification, autonomous vehicle control and efficient motion control also represented more than half of our total design wins during the year, giving us confidence in our long-term growth trajectory. With a strong alignment to these secular growth trends, large and expanding SAM, design win momentum and record levels and growing backlog, we're off to a great start in fiscal 2023. We continue to navigate through the supply-demand imbalance, and we are raising our full-year revenue growth outlook to the high-teens. Before turning the call over to Derek, I'd like to comment on yesterday's announcement regarding my retirement from Allegro after 38 years. Over the course of my career, I've had the opportunity to lead and transform Allegro into the innovative company that it is today, culminating in our successful IPO in 2020 and now a record fiscal '22 performance. I'm proud of the company we've built, the transformation we've completed, the secular growth vectors that we've aligned to, the growth and profitability trajectory that we have created and the terrific team of people here. Vineet Nargolwala's extensive leadership experience and proven track record in multiple industries makes him a strong choice to succeed me as CEO to lead the company into the next phase of growth. I look forward to assisting both Vineet and Derek in an orderly transition and will continue serving in an advisory role to the company. Allegro's market opportunity has never been greater, and I have a great deal of confidence in the Allegro team's ability to continue delivering on profitable outsized growth. I'll now turn the call over to Derek for color on the financials.

Thank you, Ravi, and good morning everyone. Before I move on to the financials, I'd like to take the opportunity to congratulate Ravi on his incredible career here at Allegro. As CEO, you have successfully led a tremendous strategic transformation of the company and fostered a culture of innovation that has resulted in significant revenue growth and profitability, a very successful IPO and a record fiscal '22. I feel we are well positioned for continued profitable growth. Now I'd like to provide some context on what we see in terms of market conditions. Our products are well aligned to essential features and systems, particularly in our focus areas of xEV, ADAS and industrial. We view our alignment to these focus areas as secular growth drivers for the company. Customer demand remains very strong across our served end markets and is geographically diverse. We ended March with record firm backlog again and extended visibility. Demand continues to exceed available supply, constrained in the near term by tightness in 200 millimeter wafer availability. We have been successful in expanding our supply, especially with our ramp at TSMC and that committed capacity is expected to support our increased fiscal '23 growth outlook. Now turning to the full year fiscal '22 financial results. Revenue for the fiscal year '22 was a record $769 million, an increase of 30% year-over-year. Our team members continue to successfully navigate through wafer capacity and supply chain challenges, and we are pleased to have delivered revenue increases across all of our served markets and geographies. For the full year, our automotive revenue increased by 34%. This compares favorably to automotive semiconductor growth of 30%, indicative of the significant content per vehicle growth we are benefiting from due to the trend towards autonomous and electrified vehicles. In addition, we believe we are still in the early innings of a car production recovery with distributor and customer component inventories at very low levels. Our industrial revenue increased by 40% year-over-year to $133 million and our other revenue increased by 6% year-over-year to $104 million. Our distribution channel represented 37% of fiscal '22 sales, the result of our successful initiative to continue to improve our scale and focus in the broad market. Once again, no single customer represented more than 10% of our revenue in the year. GAAP gross margin for the year was 53% compared to 47.2% in fiscal '21. Non-GAAP gross margin was 54.1% compared to 50% in fiscal '21, an increase of 410 basis points. The improvements in gross margin in the year, a result of our operational transformation, higher ASPs and more feature-rich products increased leverage of our distribution channel and continued efficiency and leverage on higher volumes. For the full year, GAAP operating margin was 17.8% of revenue and non-GAAP operating margin was 23.2% of revenue, an increase of 680 basis points over fiscal '21. The significant improvement in non-GAAP operating margin is a result of both our gross margin improvements and the operating leverage on OpEx in our business model. GAAP diluted earnings per share was $0.62 and non-GAAP diluted earnings per share was $0.78, an increase of 70% year-over-year, more than double the percentage increase in revenue. From a balance sheet and liquidity standpoint, we ended the year with $290 million in cash and equivalents and $25 million in long-term debt. During fiscal '22, we generated $156 million in cash flow from operations, capital expenditures were $70 million and free cash flow was $86 million. Now turning to Q4 results. Revenue in the fourth quarter was a record high $200.3 million, an increase of 7.3% sequentially and above the high end of our guidance range as a result of our continued ramp of our foundry partners. Automotive revenue increased 8% sequentially to $141 million and was up 19% compared to Q4 of the prior year. Industrial revenue also increased by 9% sequentially to nearly $35 million, up 19% year-over-year. Our other business grew 2% sequentially to $24.4 million, down 11% compared to last year. GAAP gross margin for the quarter was 54.7% compared to 54.2% in Q3. Non-GAAP gross margin rose another 77 basis points sequentially to 55.6% above the high end of our guidance range, an all-time high for Allegro. Non-GAAP gross margin in the quarter benefited from the timing of ASP increases versus input costs, favorable foreign exchange and volume leverage in our internal assembly and test facility. We are very pleased with our continued gross margin expansion throughout fiscal '22 leading to record levels last quarter. In Q1 of '23, we expect the ASP versus input costs timing to normalize, and we expect non-GAAP gross margin to be in the 54% to 55% range, consistent with what we had previously stated. We also expect to continue to make progress toward our non-GAAP gross margin target of 55% on a sustainable basis. Total GAAP operating expenses in the quarter was $79.4 million and included stock compensation charges of $14.9 million, certain one-time consulting fees and some minor COVID-related expenses. GAAP R&D expense was $32.4 million and GAAP SG&A expenses were $46.8 million. Non-GAAP operating expenses were $64.8 million in the quarter with 32% of revenue compared to $59.2 million in Q3. The sequential increase is due primarily to higher variable compensation driven by outperformance on the top and bottom line, as well as the timing of certain R&D project-related expenses. Non-GAAP R&D expense was $31.3 million and non-GAAP SG&A was $33.5 million. We do expect non-GAAP operating expenses to revert towards our model of about 30% of revenue in Q1 of fiscal '23, a sequential decline compared to Q4 as we reset variable compensation to new fiscal '23 targets. GAAP operating income for the quarter was $30.2 million and non-GAAP operating income increased to $46.5 million compared to $43.1 million in Q3. The GAAP effective tax rate in the quarter was 14.9% and the non-GAAP effective tax rate in the quarter was 15.4%. For Q1, we expect our non-GAAP tax rate to be approximately 16%. Our Q4 diluted share count was 192.1 million shares, and we expect Q1 diluted shares could be $192.6 million. GAAP net income was $25.7 million or $0.13 per diluted share. Non-GAAP net income was $40.2 million or $0.21 per share. Now moving to the balance sheet and cash flow. We ended Q4 with DSO of 54 days compared to 52 days in Q3. Net inventory increased by $7 million, which represents 87 days compared to 84 days in Q3, still below our target of about 100 to 110 days. In addition, channel inventories remain at historic lows while POS sell-through was at historic highs. We generated $37.6 million in operating cash flow in the quarter. In summary, fiscal '22 was a strong growth year capped by a record Q4, and we continue to make meaningful progress towards our target financial model. We are also entering fiscal '23 with record backlog, alignment to secular growth drivers, great technology and products and a strong financial position.

Thank you, Derek. I couldn't be prouder of our team's achievements in fiscal '22 and we have great momentum entering fiscal '23. Looking back on the year from a product perspective, magnetic sensors represented 65% of sales in fiscal '22, up 29% year-over-year, and all our magnetic sensor product lines achieved revenue highs. The business became increasingly diversified as our current sensors and angle sensors won new and high-value sockets in xEV, ADAS and industrial applications, helping cement our market leadership position. Power products represented 35% of sales in fiscal '22, up 32% year-over-year. We saw a rapid adoption of our motion control and power management solutions in automotive, data center and industrial applications with both power product lines achieving record highs. We recently announced that we have shipped our three billionth motor driver IC, a great example of the momentum we have for our motion control solutions. Moving on to markets, automotive represented 69% of revenue in fiscal '22, up 33% year-over-year, benefiting from strong content expansion, advanced driver assistance systems, comfort and convenience and vehicle electrification applications. Within automotive, xEV and ADAS represented 36% of sales in fiscal '22, up from 33% in fiscal '21. In the quarter, our xEV product sales accelerated to new highs, up 75% over the prior year, comparing favorably to xEV car production, which rose 33%. The shift to xEVs continues to benefit Allegro and increases our content per vehicle. A great example of this is in the popular 2022 mid-size sedan where our content grows from $20 in the internal combustion engine model to $30 in the battery electric model. With countless other similar examples at OEMs globally, we really do win with cars electrified. We also win with ADAS adoption. In fiscal '22, our ADAS business reached new highs, up nearly 30% over the prior year. We are now shipping more than 200 million units into ADAS applications annually, and we continue to diversify our ADAS customer base globally at additional leaders in braking and steering. The breadth and depth of these relationships give us the applications know-how to continue to innovate our product roadmap and provide unmatched value to our customers. Beyond braking and steering in ADAS, we're making progress in LiDAR; our first prototype of 1550 nanometer 1X4 photodetector product for automotive applications achieved outstanding performance in lab evaluations. In Q4, we sampled leading LiDAR customers and we're encouraged by the excitement about our up-integrated, easy-to-use solution. This is the first roadmap product in our new Photonics receiver platform, and it's important to validate our technology, serving as a foundation for our future roadmap. We're expecting to have final samples by the end of the summer. As vehicles are being reimagined, we are winning in xEV and ADAS because of three core competencies; our innovative technology, deep applications knowledge, and our close customer collaboration. This was showcased in a recent cross-portfolio ADAS braking win on a new system that facilitates EV regenerative braking and Level 2+ ADAS features. It's a great example of the synergies in our product lines and our ability to innovate to provide best-in-class, future-proof, complete solutions borne out of strategic long-term collaboration with industry leaders. Across automotive, our xMR on silicon technology, which offers significant performance benefits, continues to be adopted as it becomes a meaningful portion of the magnetic sensing market. We're gaining shares globally in transmission and cam sensors with the broadest portfolio of GMR-based solutions in the market today. We are building on our xMR success by expanding our TMR angular sensing offerings with initial products aimed at a variety of applications where high resolution and reliability is valued by our customers from ADAS to industrial automation. Let me next turn to the industrial market. Industrial represented 17% of our revenue in fiscal '22, up 40% year-over-year. Coming into the year, we expected that all major industrial categories would grow year-over-year and our teams executed on that mission. Our products are well aligned to multiple growth vectors within industrial – in areas like industrial automation where our sensing and motion control products help make factories more energy efficient, more productive and safer. We believe the tailwinds in automation have longevity, fueled by productivity needs and long sustainability goals. Enabling the next generation EV charging infrastructure is another bright spot for Allegro. We're seeing rapid adoption of our products in EV charging systems with revenue more than doubling year-over-year in fiscal '22. We had significant design wins in this space last quarter contributing to 10 significant design wins in Europe alone over the past 18 months. Our data center business also continues to accelerate in Q4 and more than doubled over the prior year, and we believe the business will approach 7% of our sales by the end of this year, becoming our fastest-growing application in both revenue and percentage basis. The market for our data center cooling solution is strong, and we estimate that our SAM will grow at the mid-teens CAGR over the next three years, surpassing $300 million. In support of the growth that we're seeing in data center, xEV, ADAS and industrial, we continue to expand our manufacturing capabilities and capacity by our asset-light strategy. With 200 millimeter capacity expected to remain tight and underserved industry-wide, we continue to expect that the industry will face a supply-demand imbalance through this year. We have pursued extended, long-term commitments with our three foundry partners, securing capacity to support our current business outlook. We're also expanding our back-end supply base and our operations team continues to take a long view to foster relationships with our partners in order to expand production capacity to support our growth in strategic areas. Certainly, our ongoing success is powered by our innovative global team and anchored on our winning culture. Our recently launched hybrid working model, Flex@Allegro is an important cornerstone of our culture, giving us a competitive edge in the talent market while also striking a balance that's good for our business, our customers and our planet. Programs like this help us foster a culture that drives innovation evidenced by a strong IP portfolio which now exceeds 1250 active patents. Our winning culture has displayed a significant role in driving our results aligned to our broader vision to move technology and the world to a safer and more sustainable future. Now turning to our Q1 outlook. We expect sales to be in the range of $205 million to $210 million. We expect automotive and industrial to be up low-single digits sequentially, while other will be flat. We expect non-GAAP gross margin to be in the range of 54% to 55%. We anticipate non-GAAP earnings per share will be in the range of $0.22 to $0.23. As we enter a new fiscal year, we expect our alignment to secular growth trends and strong design win momentum will continue to serve as strong growth drivers, contributing to an increase in our full-year revenue outlook to the high-teens. We anticipate continued market expansion towards our operating model and continued OpEx leverage, resulting in targeted EPS growth of 2x revenue growth. I believe we're extraordinarily well positioned to seize the opportunities ahead of us to provide innovations that offer unique value to our customers to advance safety and energy efficiency for the world and to deliver shareholder value. We'll be now happy to take your questions. Katie?

Thanks, Ravi. That concludes our prepared remarks and now we'll open the call for questions, Peter, will you please review the question and answer instructions with our participants?

Your first question will come from Gary Mobley with Wells Fargo Securities. Your line is open.

Good morning, everybody. I guess, changes are in the wind at Allegro Micro for many of you for different reasons, and let me extend my congratulations on a strong finish to the year. And with respect to changes, Ravi, if we can start there and maybe if you can give us a little background on how you were approaching your retirement, I presume that since you have a name replacement, this has been months in the making, am I reading that right?

Yes, the Board and I have been discussing my retirement objectives for quite a while, and in parallel, the Board conducted a search looking to see on alternatives. My date was flexible based on when they found the appropriate candidate. They used an extraordinarily disciplined search methodology to look for the best available candidate, and I think in Vineet, they found a worthy successor, someone who will drive the company and take us to the next level.

I appreciate that. And with respect to your fiscal year 23 revenue outlook of high-teens percent, I would presume that once you get beyond the first quarter, you're expecting acceleration in the top line in increments of maybe $10 million sequentially and maybe you could give a little background on the ramp that you're seeing at TSMC as a foundry partner and the support of that revenue acceleration?

And so, as previously discussed, we have been on a long-term path with TSMC to grow our capacity. As again, as previously discussed, we're expecting revenue to constantly accelerate quarter-over-quarter with the most impactful acceleration occurring in Q3 and our fiscal Q4. So you will see quarter-over-quarter growth as we have guided and will continue to see the growth as capacity comes on, as wafers come out and as we continue to turn them into products and into shipments. The demand certainly is there for us in the specialty anchored with our secular growth vectors; industrial, ADAS, xEV, all three areas are driving our demand.

Your next question will come from Blayne Curtis with Barclays. Your line is open.

Thanks for taking my question and I'll echo the congrats to all. I guess, maybe just follow up on that question, as you think about fiscal '23, if you kind of think about it between auto and industrial as you pointed out, if there's any difference in your forecast between those segments? I mean, I just want to understand the raise, just was that your ability to get better supply or did you always have this delta and I guess you are just feeling more confident in the demand profile?

Yes, so we are a pretty deliberate company and we had aligned our demand commitments to our customers along with the supply commitments that we receive from our foundry partners. So we are pretty well aligned and customers have adjusted their ramps appropriately to align with supply availability. We expect that industrial will modestly outgrow our automotive business, but our automotive business also has great secular trends. The growth is really being led by the ADAS, xEV area where you see level 2 ADAS systems, the adoption rate of them continuing to increase and you see xEV growth year-over-year quite dramatically despite anemic car production levels.

It's actually a great lead into my second question. I wanted to ask a little bit more about that xEV pipeline. You've clearly seen a shift to xEV; I think projections have been getting to at least 50% of vehicles and then obviously further beyond that. I'm just curious, from your perspective, as you look at, it's either share content or adoption of xEV, what do you think is the biggest driver for your business over the next couple of years?

Yes, so in prior calls, we had provided a pretty simple stat, which was one out of every two inverters were using Allegro products, and in an inverter, you could have anywhere between six to 12 of our current sensors in them. So we are extraordinarily well positioned globally. We're not regionally anchored. Our xEV customers are global, but we also see secondary applications like on-board chargers for our products, wall chargers, we see the DC-to-DC converters as being an area and then we see in the power area, we see battery cooling fans, etc. This is a major growth area and the xEV year-over-year, our production rate is up 44% on a fiscal year basis when the total car production on a fiscal year basis is only up 9%. So you can see the acceleration of xEV from an adoption perspective, and that's really what's giving us our secular tailwinds.

Your next question will come from Srini Pajjuri with SMBC Nikko Securities. Your line is open.

Good morning, Ravi and Derek and Ravi, let me echo my congrats. So, question on the supply side, Ravi, so as more supply comes online from your foundry partners, when do you see your own balance sheet inventory normalizing and also when do you see channel inventory normalizing? I guess, what does your high-teens guidance contemplate in terms of your own balance sheet inventory and channel inventory?

We don't see any material change in either one of those areas. So we continue to ship our products to these growth vectors that are supported by design wins and as we said earlier, the supply-demand imbalance continues, 200 millimeter continues to be the constraint. So we won't see at least in the near future any significant or material change in our inventory.

Okay, got it. And then in terms of the gross margins, Derek, so you talked about the time lag between the price increases and the cost increases. I'm just curious as you look out beyond the next quarter, what are some of the puts and takes; are the price increases pretty much behind us? Or are there more opportunities and then what do you see the potential tailwinds or headwinds as we go through the year?

Yes, hi Srini, this is Derek. So going from Q3 to Q4, the gross margin improvement was really split between some of that, about half and half between that, pricing ahead of input costs and the other half was foreign exchange. So the foreign exchange, of course, we don't predict going forward. But in terms of going forward, right now, we expect the ASP and the cost inputs to normalize and that's baked into our forecast for Q1 and for the rest of the year. We will continue to look at strategic price increases, we will also continue to look at ways to improve that gross margin with internal efficiencies. So when I say that we got the 55.6% in Q4, we're happy about that, but we want to be there on a sustainable basis. And we'll continue to look for efficiencies and offsetting any input cost with pricing.

Your next question will come from Quinn Bolton with Needham and Company.

Let me extend my congratulations, especially to you, Ravi, on your retirement. I wanted to begin by discussing the high-teens growth in fiscal '23 in the automotive sector. Could you provide an overview of the balance between vehicle production gains and content increase from fiscal '23 compared to fiscal '22?

Good question. I believe our fiscal '23 car production model indicates around a 9% year-over-year growth, and we anticipate our capital content growth to be an additional 9%. This shows a significant acceleration. As you are aware, we still expect the internal combustion business to remain weak. However, we do foresee that ADAS Level 2 and our xEV business will continue to excel.

Great. And I just wanted to ask, we talked a lot about TSMC and increasing wafer capacity from TSMC over time. Can you give us some sense; are you seeing increases also from UMC and Polar?

Yes, we see increases from all partners and as you know with wafer fab capacity, it's lumpy, it's not incremental. So we've received an increased amount of wafers from Polar, we've increased from UMC, we've increased from TSMC and we continue to expect further increases from our supply chain going into the next year or two.

Great. And then my last question, just sort of really a clarification. It sounds like at least over the next few quarters, revenue growth is primarily limited by a wafer capacity or wafer availability, so seasonality that you've seen in past years for the December quarter maybe slower seasonally, that's not what you're expecting in fiscal '23?

Yes, we will expect a mild effect of basically the Christmas factory shutdowns, but we do expect that the availability of wafers and material from TSMC will far outsize the slowdown that we get from the Christmas-New Year break. So that particular seasonality is not particularly impactful for our fiscal Q3 period or the early fiscal Q4 period.

And I’m showing no further questions at this time, I will now hand it back over to Ravi for closing remarks.

Thank you, operator. With this being my last earnings call, I'd like to take this time to thank all of our shareholders and covering analysts as well as our employees, customers, and the Board for their thoughtful support throughout the years. The relationships I have developed with each one of you have been rewarding and a highlight of my time at Allegro. Thank you again to all of you who have joined us today. This will conclude today's call. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.