Altium Limited (ASX: ALU) has given investors a glimpse into its accounts this morning, providing an unaudited update of its revenue and sales results for the year ended 30 June 2015. The stock fell 5.7% shortly after the market opened.
For the 12-month period, Altium said that revenues had grown by 13% compared to the prior corresponding period, ballooning out to US$80.2 million, while sales had grown 8% to US$82 million. The company considers revenue to be a more accurate indicator of performance as it takes into account the impact of transactions irrespective of size and terms of the deal.
Revenue growth was particularly strong in the Americas, which is also the company's largest market. Revenue grew 33% to US$34.2 million (up from US$25.7 million), a trend that management expects will continue into the 2016 financial year (FY16) as it continues to increase its subscriber pool.
Unfortunately, revenues from EMEA were impacted by macroeconomic conditions and foreign exchange fluctuations which did not allow the division to live up to management's expectations. Pleasingly, management said it is confident that the EMEA strategy will deliver stronger returns in FY16.
While the Americas and EMEA are Altium's two largest markets, revenues grew by 9% in Greater China while they fell 4% in the Asia Pacific region. Altium stated that it is still confident it can achieve its aspirational revenue goal of $100 million by fiscal year 2017.
Should you buy?
Altium is a company that provides software for designing printed circuit boards (PCBs) which help power everyday electronic devices. It is a capital light business, meaning that there is little cost involved when new customers are added, while it also enjoys sticky revenues.
Since hitting a high of $5.31 in May, the stock has retreated nearly 20% to trade at just $4.27 (possibly due to the uncertainty currently facing European markets). In my opinion, Altium is a great investment prospect for investors focused on the long-term, and now could be a great time to start building a position in your portfolio.
