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Why these exciting ASX tech shares are storming higher

The Audinate Group Ltd (ASX: AD8) share price and the Megaport Ltd (ASX: MP1) share price are storming higher today.

Both exciting tech shares are outperforming the S&P/ASX 200 Index (ASX: XJO) with strong gains this afternoon.

Why is the Audinate share price surging higher?

In afternoon trade the leading audio-visual networking technologies provider’s shares are up 11% to $4.45.

Investors have been buying Audinate’s shares on Monday after the release of an update regarding the impact of the global COVID-19 coronavirus pandemic.

According to the release, the company remains well-positioned with a strong balance sheet and delivered solid revenue growth in the recently completed March quarter. Unaudited revenue for the quarter was up 14% on the prior corresponding period to US$5.3 million.

However, it has warned that its customers could revise their ordering patterns during the fourth quarter in light of reduced demand and world events. This is because its software is used in markets which have been impacted greatly by the coronavirus such as live concerts, theatre, and sports.

As a result, the Audinate board believes it is prudent to withdraw its previous FY 2020 guidance commentary given in February. That was for the company “to deliver further revenue growth in 2H20.”

Pleasingly, management believes it is strongly positioned to withstand the significant changes in sector and economic conditions. At the end of March, the company had over $30.9 million cash on hand at and no debt.

Why is the Megaport share price storming higher?

At the time of writing the shares of the global leading provider of Elastic Interconnection services are up over 4.5% to $10.03.

This follows the release of its third quarter update this morning. According to the release, Megaport has continued to execute on its expansion plan and accelerated its growth trajectory during the quarter.

At the end of the period Megaport’s customer numbers had reached 1,777, its monthly recurring revenue (MRR) was up 74% year on year to $5.4 million, and its services were available in 601 data centres globally.

Megaport’s Chief Executive Officer, Vincent English, commented, “Megaport has continued its strong growth momentum, with solid revenue results throughout the third quarter of Fiscal Year 2020. Monthly Recurring Revenue (MRR) was up 19% on the previous quarter to $5.4M, with strong demand for our interconnection platform as businesses increasingly shift their IT systems to public and hybrid cloud services.”

“As a result of our strong services growth and aided by the strong US Dollar, we have achieved our highest MRR to date,” he concluded.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of MEGAPORT FPO. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia has recommended MEGAPORT FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.