The Altium Limited (ASX: ALU) share price has jumped 27% after the ASX tech share revealed a very impressive FY23 result.
Altium is the provider of software for designing electronic PCBs. Octopart is an electrical parts search engine.
Altium share price
FY23 result
Here are some of the highlights for the year to 30 June 2023:
- Revenue rose 19.2% to US$263.3 million
- EBITDA (EBITDA explained) went up 20.3% to US$96 million
- Underlying EBITDA margin worsened by 0.5 percentage points to 36.2%
- Net profit before tax increased 29.3% to $87.8 million
- Net profit after tax (NPAT) rose 19.6% to US$66.3 million
- Full year dividend up 14.9% to AU$0.54 per share
Looking at some of the individual areas – Octopart revenue increased 12.4% to US$56.2 million, Chinese revenue declined 8% to US$19.5 million and smart manufacturing revenue jumped 156.2% to US$4.1 million. The percentage of recurring revenue increased to 77%, up from 75% in FY22. These areas of growth can help the Altium share price.
Altium said it is connecting Octopart to Altium Designer to create a “transformative outcome for the industry.” It talked about making both ‘make’ and ‘buy’ bolt-on acquisitions that will “deepen the value proposition and reach of Octopart.”
Adoption of the cloud platform Altium 365 continues to grow. Monthly active users have grown to 36,741, up from 23,560. Monthly active accounts has risen to 12,515, up from 9,224.
Outlook
The outlook can have a key effect on the Altium share price.
For FY24, the company is guiding for total revenue of between US$315 million to US$325 million, which would be growth of 20% to 23%.
Design software is expected to see 23% to 26% growth to a range of US$250 million to US$255 million. Altium’s cloud platform (Octopart and ‘smart manufacturing’) is expected to grow revenue by between 8% to 16% to between US$65 million to US$70 million.
The underlying EBITDA margin is predicted to come between 35% to 37%, which suggests it could rise or fall, but the mid-point would imply a reduction of 0.5 percentage points to 36%.
Altium is for US$500 million of revenue by FY26. This is a great target, but it seems as though the business may need to make an acquisition or two to get to the goal.
Final thoughts on the Altium share price
I think Altium is a great business and it’s delivering excellent operational growth. It’s investing in the right areas to deliver on its targets and grow market share.
I’m not sure I could say that it’s good value to buy today after its big rise, but in five years it may have delivered some good returns as profit continues to compound.
