Allied Tecnologia S.A. (ALLD3) Q3 2024 earnings summary

Executive summary

• Net revenue for Q3 2024 was R$1.4 billion, down 7.7% year-over-year, mainly due to weaker distribution performance, especially internationally, while retail channels delivered strong double-digit growth.

• Net income for Q3 2024 was R$20.9 million, up 7.3% year-over-year, and for the nine months reached R$85.8 million, a 62.9% increase year-over-year, supported by tax gains and operational efficiency.

• Strategic partnerships, such as with Nubank and Vivo, drove digital retail and trade-in operations, supporting revenue and ticket growth.

• The period included the upstream merger of Soudi Pagamentos Ltda., aiming for operational and financial synergies.

• Dividend distributions over the last 12 months totaled R$312 million, representing a 43% dividend yield.

Financial highlights

• Q3 net revenue: R$1,404.9 million; year-to-date: R$4,134.8 million, both showing declines compared to prior periods.

• Gross profit for Q3 2024 was R$151.6 million, with a gross margin of 10.8%, up 0.4 p.p. year-over-year.

• Adjusted EBITDA for Q3 2024 was R$46.7 million, down 19.5% year-over-year; adjusted EBITDA margin was 3.3%.

• Retail net revenue grew 22.1% in Q3 2024, with B&M Retail up 18.2% and Digital Retail up 24.8% year-over-year.

• Dividend yield reached 43% in the last 12 months, with R$122 million in Interest on Equity approved.

Outlook and guidance

• Management expects continued growth in physical and digital retail, with new partnerships and product launches supporting results.

• Priorities for 2024 include geographic and portfolio expansion, new product categories, and leveraging expertise in strategic B2C partnerships.

• The merger of Soudi Pagamentos Ltda. is expected to generate administrative, economic, and financial benefits through operational integration.

• Market recovery is anticipated, but currency volatility and interest rates may impact demand and costs.