Revenue Analysis
Total and Operating Revenue: ALGM has shown an increasing trend in operating revenue over the last three quarters, moving from $269.445 million in Q1 2023 to $278.293 million in Q2 2023, and seeing a slight decrease to $275.509 million by Q3 2023. This indicates a general growth trajectory in operating revenue.
Gross Profit Margins: The gross profit followed a similar trend as revenue, with an increase from $153.089 million in Q1 2023 to a peak of $159.503 million in Q3 2023, demonstrating an improving margin over the period.
Cost Management
Cost of Revenue: ALGM’s cost of revenue has been relatively stable, ranging from $116.006 million to $121.156 million in 2023. This stability suggests effective cost control in direct costs associated with the revenue.
Operating Expense: Operating expenses have slightly varied, with a peak in Q1 2023 at $90.085 million and a lower boundary of $86.588 million by Q3 2023. This indicates effective management of general business operating costs.
Total Expenses: Total expenses escalated from $206.441 million in Q1 2023 to $218.298 million by Q3 2023, reflecting an upward trend in overall spending.
Profitability Analysis
EBITDA: EBITDA has shown fluctuations, beginning at $82.779 million in Q1 2023 and rising to $88.909 million by Q3 2023, indicating variability but overall strong earnings before interest, taxes, depreciation, and amortization.
Operating Income: Operating income similarly increased from $63.104 million in Q1 2023 to $72.915 million by Q3 2023. This growth reflects effective operational management leading to higher profitability.
Pretax Income: Pretax income was notably consistent, peaking slightly in Q3 2023 at $73.071 million from $67.904 million in Q1 2023.
Net Income: Net income has been robust, showing significant growth, especially from Q1 2023’s $61.977 million to Q3 2023’s $65.617 million.
Cash Flow Indicators
Reconciled Depreciation: Depreciation has shown minor variations and an overall increase from $14.103 million in Q1 2023 to $20.195 million in Q3 2023, affecting cash flow from operations.
Interest Expense: Interest expense maintained a relatively stable range, from $755,000 in Q1 2023 to $758,000 by Q3 2023, signifying controlled finance costs.
Taxation
Tax Rate: The effective tax rate fluctuated slightly, with 10.1% in Q3 2023 being the highest, indicating variations in tax liabilities relative to the income before tax.
Tax Provision: Tax provisions rose from $5.909 million in Q1 2023 to $7.4 million in Q3 2023, reflecting the increased earnings and corresponding tax responsibilities.
Tax Effect of Unusual Items: There was a noted tax effect of unusual items amounting to approximately $518,000 in the first quarter but absent in subsequent quarters.
Shareholder Metrics
Diluted and Basic EPS: Earnings per share (EPS) showed slight improvement, with diluted EPS increasing from $0.32 in Q1 2023 to $0.34 in Q3 2023 and basic EPS exhibiting similar trends.
Average Shares: The number of average diluted shares remained fairly consistent, at around 194.9 million to 195.1 million shares throughout the year.
Net Income Available to Common Stockholders: This metric closely tracked net income, increasing from $61.977 million in Q1 2023 to $65.617 million by Q3 2023, directly benefiting shareholders.
Conclusion
ALGM has demonstrated a capacity for revenue growth and profitability improvement throughout 2023. The control over operating and total expenses combined with effective tax management and stable cash flow indicators all contribute to a robust financial position. Based on this performance, continuing to focus on operational efficiency and market expansion could further enhance shareholder value.