The Atomos Ltd (ASX: AMS) share price has jumped 5.62% higher today despite announcing a 17.6% drop in unaudited FY20 revenue.
Why has the Atomos share price surged?
Atomos is a global video technology company that creates products for the social, pro-video and entertainment markets.
In today's business update, Atomos reported unaudited FY20 revenue of $44.5 million, down from FY19 revenue of $54.0 million. The coronavirus pandemic was understandably cited as a big factor behind the full-year revenue slump.
The pandemic has slowed earnings growth after a bumper 1H20 result saw the company deliver $32.6 million of half-year revenue. In contrast, 2H20 revenue was $11.9 million, largely thanks to the impact of COVID-19.
However, the update cites that the video market in July is "starting to open" and show positive signs, with July revenue up ~50% on 2H20 run rate.
Atomos' current cost base has been reduced by approximately 60% to ~$1.0 million per month, fully implemented from April 2020.
On the balance sheet side, Atomos reported that it is "well-funded". That includes having $19 million of cash on hand as at 30 June, with access to a $5 million debt facility.
It's been a tough start to the year for the Atomos share price, which has fallen 66.4% lower in 2020.
What's happening on the operations side?
Atomos started shipping the AtomX SYNC module during the quarter ended June 2020, which brings "wireless timecode, sync and control technology to the Ninja V".
For those unaware, the Ninja V is a 5" on-camera monitor/recorder that records and plays back DCI 4K, UHD 4K, and HD video from purpose-built mini-SSDs.
Beyond quarter-end, Atomos yesterday announced that the new Sony Alpha 7S III will be able to record the Apple ProRes Raw format via the Ninja V.
Market outlook
There were no specific figures provided in today's market update.
However, Atomos did cite "some initial positive signs" of market recovery from COVID-19 and "cause for optimism".
That includes the strong July revenue figures, which are up 50% on 2H20 run-rate. The company did say it is too early to predict how sustainable that earnings rate will be.
Regardless, the tentative signs of recovery and strong July figures have been reflected in this morning's share price move, with the Atomos share price climbing 5.62% higher to $0.47 per share.
Atomos did note it is "more confident" in its medium to long-term growth profile. That's largely due to the rapid adoption of video technologies, including video streaming, across the globe.
