Altair Engineering Inc (ALTR)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	34,654	47,175	31,355	23,434	11,153	-7,704	-25,433	-42,534	-30,622	-30,920	-5,867	14,009	14,807	17,548	16,957	21,644	12,240	8,001	723	2,638
Interest expense (ttm)	US$ in thousands	5,836	6,030	6,242	6,166	6,116	6,109	6,146	5,318	4,377	5,918	7,389	9,677	12,065	12,006	11,903	11,758	11,598	11,375	11,167	8,914
Interest coverage		5.94	7.82	5.02	3.80	1.82	-1.26	-4.14	-8.00	-7.00	-5.22	-0.79	1.45	1.23	1.46	1.42	1.84	1.06	0.70	0.06	0.30

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $34,654K ÷ $5,836K
= 5.94

Altair Engineering Inc's interest coverage ratio has shown significant variability over the periods from March 31, 2020, to December 31, 2024. The interest coverage ratio represents the company's ability to meet its interest obligations with its operating income.

From March 31, 2020, to June 30, 2022, Altair Engineering Inc experienced declining interest coverage ratios, with values ranging from 0.30 to -7.00. These low or negative ratios indicate that the company may have been struggling to cover its interest expenses with its operating income during these periods.

However, starting from March 31, 2023, there was a notable improvement in the interest coverage ratio, with values increasing steadily over subsequent periods. By December 31, 2024, the interest coverage ratio had improved to 5.94, indicating a healthier ability to cover interest expenses with operating income.

Overall, Altair Engineering Inc's interest coverage ratio has shown a turnaround from challenging financial conditions to a more stable position, reflective of an improved ability to meet its interest obligations. It is essential for the company to maintain this positive trend to ensure financial health and stability in the future.