Altium lifts profit despite hit from China’s Covid measures

China’s strict Covid measures have weighed on Altium, but the listed Australian software company lifted its dividend after growing interim profit by 30 per cent.

Altium reported particularly strong growth in its cloud product Octopart, a search engine for industrial parts.

China’s strict Covid measures have weighed on Altium, but the listed Australian software company lifted its dividend after growing interim profit by 30 per cent, amid strong demand for its Octopart search engine.

Revenue from the world’s largest country fell $US11.3m ($16.3m), or 14.1 per cent, in the six months to December 31, as Beijing’s anti-Covid measures weighed on business demand.

But design product growth between 21 per cent and 29 per cent across America, Europe, Africa and the Middle East helped drive Altium’s overall revenue up 17 per cent to $US119.5m.

The company lifted its profit by 30.4 per cent to $US29.6, up from $US22.7 in the previous corresponding half.

Altium reported particularly strong growth in its cloud product Octopart, a search engine for industrial parts, which brought in $US27m, up from $US22.1m the previous year.

Altium chief executive Aram Mirkazemi.

Chief executive Aram Mirkazemi affirmed Altium’s 2023 revenue guidance – which is targeting $US255m ($369m) to $US265m – adding he was confident Octopart made up for global pressures.

“Octopart Average Revenue Per Click increased to $US1.96 compensating for a tempering of traffic volume as the supply chain disruption abates,” he said.

Altium’s design business is expected to account for two thirds of revenue, meanwhile its cloud platform is set to account for around 32 per cent.

Earnings before interest, taxes, depreciation and amortisation were up 24 per cent to $US43.3m, from $US34.8m in the previous year.

Interim chief financial officer Richard Leon said Altium’s EBITDA margin – 36.2 per cent – showed a strong return following a period of “restructuring”.

“Our transition to a business model focused on both design software and cloud platform continues to progress well with solid revenue growth driving bottom-line profitability,” he said.

Operating expenses had also increased 13 per cent, up to $US76.2m from $US67.4m in the previous year.

Altium reported cash and cash equivalents rising 5 per cent to $US205.3m and operating cash flow remained steady at $US33.5m up one per cent.

The company saw strong growth in Altium 365, a subscription-based product used to design printed circuit boards, lifting its monthly active users to 33,500 as of February, up 36 per cent over the past six months.

Altium will lift its half-year dividend by 19 per cent to 25c per share.