Shares hit as revenue slides at Altium

Printed circuit board software maker Altium slipped 2pc after a Covid-related revenue hit.

L to R..Richard White, WiseTech Global, Anthony Eisen, Afterpay, Chris Vonwiller, Appen, Aram Mirkazemi, Altium and Kirsty Godfrey- Billy from Xero at the ASX New Technology Index Launch. John Feder/The Australian.

Shares in ASX-listed printed circuit board (PCB) software maker Altium slipped 2 per cent after the company said it had copped a COVID-19 related revenue hit, in a tough start to the financial year for the so-called “WAAAX” stock.

Altium, whose technology helps power a host of electronic devices from smartphones to aeroplanes, maintained full-year guidance however and said there were signs of positive momentum after a torrid 2020.

The San Diego-based company on Tuesday said unaudited revenue for the first half of the 2021 financial year fell by 3 per cent to $US89.6m ($116.3m) on the impact of the COVID-19 pandemic, and that its revenue in the Americas had taken a 10 per cent hit.

Revenue from China declined 15 per cent amid uncertain post-coronavirus economic conditions.

Chief executive Aram Mirkazemi said that despite the pain, he was confident that Altium was on track for “PCB market dominance”.

Altium maintained its 2025 targets of $US500m and 100,000 subscribers, and maintained guidance adjusted for the sale of its non-core Tasking business. The company has lost 25 per cent of its value since October, and its shares fell more than 3 per cent in morning trade.

Shares in Altium pared early losses to close down 2.1 per cent at $30.13.

“Despite a challenging first half, we saw signs of recovery in the second quarter,” Mr Mirkazemi said. “This result was achieved despite extreme conditions in the US and the restructuring of our sales organisation.

“I am confident that with our pivot to the cloud and our move to digital sales that the second-quarter momentum will continue into the second half.”

Altium in November flagged full-year revenue of $US200m-$U$212m. The company is scheduled to release its audited first-half results in February.

RBC technology analyst Garry Sherriff said in a note that while first-half revenue was in line with analyst consensus, Altium “still had work to do”.

“Altium is relying on a rebound in growth in the Americas, China and Nexus in the second half of the financial year to reach its FY21 guidance, which may be optimistic should COVID-19 impacts continue longer than anticipated,” Mr Sherriff said.

“We estimate new implied first-half/second-half revenue skew to reach guidance is 46/54 – less severe than our original 40/60 assumption but still requires sequential growth of circa 17 per cent. Positive signals, but by no means out of the woods yet.”

In December Altium announced it was selling its Tasking business for $US110m to FSN Capital, in a deal it said would boost profit and earnings per share in the 2021 financial year. That deal is set to close in March 2021.

“The strategic divestment of Tasking, combined with our recent organisational changes and hard pivot to the cloud marks an inflection point for Altium in its pursuit of industry transformation,” Mr Mirkazemi said at the time.

“While Tasking is a great business, it does not play a central role in our design to realisation strategy for the electronics industry, which is being delivered through our new cloud platform Altium 365. The divestment of Tasking will free up organisational capacity and allow Altium leadership to focus on our main game, which is to expand Altium 365 and accelerate its adoption.”