The Altium Limited (ASX: ALU) share price could be on the move on Tuesday after the release of a sales update for FY 2020.
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How did Altium perform in FY 2020?
As per its prior updates, Altium fell short of its aspirational revenue target of US$200 million in FY 2020. This was due to the negative impact of the pandemic on its sales performance at the end of the financial year.
According to the release, for the 12 months ended 30 June 2020, the electronic design software company delivered a 10% increase in revenue to US$189 million. This means Altium has now recorded eight consecutive years of double digit revenue growth.
Altium's solid top line growth was driven by robust performances across core business units and key regions during the challenging COVID-19 environment.
The key Altium Designer platform recorded a 14% increase in new seats sold and a 17% lift in its subscription base to well over 50,000 subscribers.
At the end of the period Altium had a cash balance of over US$90 million. This compares to US$80.5 million a year earlier.
Management commentary.
Altium's CEO, Aram Mirkazemi, was pleased with the company's performance in these difficult trading conditions.
He commented: "Altium's strategy of providing attractive pricing and extended payment terms to support our customers during COVID-19 and to drive volume to support our pursuit of market dominance has been rewarded. Altium achieved strong growth in new Altium Designer seats and record growth in our subscription base to reach well over 50,000 seats on subscription."
And although the chief executive was disappointed that Altium didn't achieve its aspirational revenue target, he believes a lot of progress has been made towards future goals.
"While COVID-19 prevented us from reaching our long standing aspirational goal of $200 million in revenue, conditions surrounding COVID-19 have dramatically accelerated our movement towards market dominance and the implementation of our transformative agenda for the industry," explained Mr Mirkazemi.
This was thanks largely to its launch of the new cloud platform Altium 365, which allows engineers to work from anywhere and connect with anyone. At the end of the period, there were 2,500 companies using Altium 365 and almost 5,000 active users.
Outlook.
No guidance was given for FY 2021. However, the company continues to target 100,000 subscribers and market dominance by 2025.
Further details will be provided with the release of its full year results in August.
Mr Mirkazemi commented: "At our full year results, we will share more color on the long-term impact of COVID-19 on the acceleration of our strategy of market dominance and industry transformation. We will also share color about our recurring revenue and pricing model post COVID-19 and based on the impact of Altium 365."
