Allied Tecnologia (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 declines in Distribution, especially internationally, while Retail channels (B&M and Digital) posted strong double-digit growth.

• Net income for Q3 2024 was R$20.9 million, up 7.3% year-over-year, and R$85.8 million for 9M24, up 62.9% year-over-year, supported by tax credits and operational efficiency.

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

• Dividend distributions reached R$312 million over the last 12 months, with a 43% dividend yield and R$122 million in Interest on Equity approved.

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

Financial highlights

• Net revenue for 3Q24 was R$1,404.9 million, down 7.7% year-over-year; YTD net revenue was R$4,134.8 million, down 6.6%.

• Gross profit for 3Q24 was R$151.6 million, with a gross margin of 10.8%, up 0.4 p.p. year-over-year.

• Adjusted EBITDA for 3Q24 was R$46.7 million, down 19.5% year-over-year; LTM EBITDA was R$221.8 million.

• Net debt at 3Q24 was R$240.3 million, with net debt/EBITDA at 1.1x and cash of R$315.8 million.

• Dividend yield reached 43% LTM.

Outlook and guidance

• Growth drivers for 2024 include expansion of refurbished product sales, international expansion, and deepening strategic B2C partnerships.

• Management expects realization of deferred tax assets within nine years, based on projected future taxable income.

• Black Friday is anticipated to be weaker due to higher interest rates and currency impacts, but recent months show signs of market recovery.