Altium maintains guidance amid rocky start to 2021
- Altium has maintained full-year guidance for FY21 despite ongoing challenges
- Revenues fell in the US and China by 10 and 15 per cent respectively
- COVID-19 has been targeted as the major influence
Altium (ASX: ALU) has retained their guidance for the full year of FY21 and released unaudited sales and revenues for the half-year ended the 31st of December 2020. The Electronic Design and Software company has cited how the maintenance of guidance was after a ‘challenging first half that had just enough positive signs.’ Unaudited revenue for the first half fell by three per cent to $89.6 million due to worsening COVID-19 conditions in US and China. Altium does a large majority of their business with big tech companies such as Apple, Microsoft and Tesla in the US $1 trillion electronic distribution and manufacturing industry.
Altium is involved in the production and development of computer software for the design of electronic products. One of the company’s core products is the enterprise Printed Circuit Board (PCB’s) which are used but engineers and found in a variety of commercial electronic workings. During FY20, Altium saw strong increases in revenues and subscribers and in particular, profits before tax rose 12 per cent to $65 million.
The fall in revenues for the first half of FY21 was attributed to a decline of 10 per cent in revenues coming from America's. The unprecedented impact of COVID-19 has directly impacted sales performance. In addition to this, revenues from China saw a decline of 15 per cent with license compliance activities becoming increasingly challenging in the current macroeconomic climate. The impact in falling revenues can also be directed towards the companies NEXUS product which saw a 14 per cent decline. It is recognized however that the majority of NEXUS deals are expected in the second half.
Altium is still however very positive as Board and Systems revenues grew into the second quarter of FY21 after falling 11 per cent in the first. This is despite a major restructuring of the company as Altium transitions to greater integration of the cloud. Furthermore, electronic manufacturing of Octopart great revenues by 19 per cent, a leading indicator within the companies business model. The companies asserted that is a “positive leading indicator for PCB design growth that should drive Altium Designer sales in the second half.”
“Despite a challenging first half we saw signs of recovery in Q2. This result was achieved despite extreme conditions in the US and the restructuring of our sales organization,” said Altium Chief Executive Officer Mr Aram Mirkazemi.
As of the 12th of January 2021, Altium is trading at $29.95 (1:45 pm) down 13 per cent for the year and 30 per cent off 2020 highs. Altium will release it's official half-year results on the 15th of February 2021.
More for you
ARB Corporation Releases Positive Trading Update
- 12 January 2021