- Altium (ALU) predicts its fiscal revenue for 2021 will be at the lower end of its guidance, following the impact of COVID-19 and lower than expected sales in US and EMEA markets
- Revenue for fiscal 2021 is anticipated to be at the lower end of US$190 million (approximately A$251.4) to US$195 million (approximately A$258 million)
- Further, Altium’s perpetual licence sales have underperformed in the US and EMEA, as the company’s sales organisation works through its transition of a new sales modelx
- Despite this, CFO Martin Ive said momentum has since returned to Altium’s business with double-digit growth in the second half
- Shares are trading 1.8 per cent higher at $35.15 cents apiece at 10:22am AEST
Altium (ALU) has predicted its fiscal revenue for 2021 will be at the lower end of its guidance, following the impact of COVID-19 and lower than expected sales in US and EMEA markets.
In a trading update the company said revenue for fiscal 2021 will be at the lower end of its guidance range of US$190 million (approximately A$251.4) to US$195 million (approximately A$258 million), with a margin of 37-39 per cent on an underlying basis.
This amount excludes one-off acquisition costs and write back of the SolidWorks minimum contractual amount, due to termination of the agreement with SolidWorks.
The prediction wasn’t unexpected. The company’s revenue slipped by four per cent for the first half revenue to US$89.6 million (approximately A$115.5 million) from US$92.9 million (roughly A$119.7 million) the prior corresponding period.
ALU pins the loss on the negative impact of COVID and the company’s pivot to the cloud which involved a number of significant organisational changes.
Further, Altium’s perpetual licence sales have underperformed in the key markets of the US and EMEA, as the company’s sales organisation works through its transition of a new sales model.
Despite the early setbacks, CFO Martin Ive said momentum has since returned to Altium’s business with double-digit growth in the second half.
“Altium’s renewal business is strong, Octopart is set for a record performance and China is delivering a solid performance,” Mr Ive also said.
“Demand is growing for Term Based Licences, which is a positive for future recurring revenue.”
In a trading update, the company reaffirmed commitments to achieve its 2025 financial goals of US$500 million (approximately A$662.1 million) revenue and 100,000 subscribers.
Shares were trading 1.8 per cent higher at $35.15 cents apiece at 10:22am AEST.