The most profitable NH-based publicly traded companies share a common characteristic—they serve growth markets with an emphasis on emerging technologies. Allegro Microsystems, headquartered in Manchester, is leading the pack with a 935% increase in profit from 2020, when the company first went public, to the close of its 2022 fiscal year.
Founded in 1990, Allegro Microsystems had annual revenue of $973 million in the fiscal year ending March 31. From its international headquarters in a three-story building on Perimeter Road in Manchester, Allegro operates design and application centers with 3,500-plus employees in 13 countries, including one in nearby Marlborough, Mass.
The company has more than 10,000 customers, including more than 50 original equipment manufacturers (OEMs) for the automotive industry. It designs, develops and markets hardware while outsourcing the manufacturing to its third-party partners.
During a November conference call with financial analysts, President and CEO Vineet Nargolwala attributed much of the company’s growth to its strategic focus on electric vehicles and other growth markets, including clean energy and automation.
According to Nargolwala, sales in those areas constituted 56% of total sales, with a 37% year-over-year increase. The automotive sector, in particular, witnessed a significant surge with 31% year-over-year growth, driven by the electrification of vehicles and the increasing adoption of Advanced Driver Assistance Systems (ADAS).
The company has also been bullish on the Chinese market. Its Asian growth strategy was underscored by the recent opening of a new office in Shanghai. “In September, I traveled to China with several members of my executive team, where we met with our customers, channel partners, suppliers and teams to obtain a comprehensive view of the market dynamics on the ground,” said Nargolwala. “While there are clearly challenges in the broader Chinese economy, we came away even more excited about the opportunities for Allegro, specifically related to e-mobility and clean energy.”
One key factor in Allegro’s success has been its collaboration with leading OEMs. BMW selected Allegro as the sole supplier of a key component for traction inverter systems across its entire fleet of battery electric vehicles. The traction inverter converts a direct current (DC) from the vehicle’s batteries into an alternating current (AC) output.
Nargolwala expressed confidence that, despite challenges in the transition, fully electric vehicles are projected to be a strong growth market. But the company has a hedge. Its components in full hybrid vehicles are also substantial, positioning Allegro favorably regardless of the direction the industry takes.
Beyond e-mobility, Allegro’s industrial markets are growing through innovation in automation and clean energy. Looking ahead, Nargolwala expressed confidence that continued collaborations with industry leaders like BMW will fuel future growth, along with strategic acquisitions.
The company announced in November that it had acquired Crocus Technology, a manufacturer of advanced TMR sensor technology, for $420 million in cash. TMR is a new magnetic sensor technology that is less susceptible to temperature changes, has extremely high magnetic sensitivity and high resistance.
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