The Altium Limited (ASX: ALU) share price is on the move on Thursday following the release of its annual general meeting update.
At the time of writing, the electronic software design platform provider's shares are up 2.5% to $37.03.
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What happened at the annual general meeting?
At the event, the company's CEO and Chair spoke about its performance in FY 2020, its plans for the future, and trading so far in FY 2021.
In respect to the future, the company's CEO, Aram Mirkazemi, spoke about the shift to the cloud through its Altium 365 platform. He believes this shift is all positive with no negatives thanks to its unique strategy of transformation through dominance.
He commented: "This strategy de-risks Altium's move to the Cloud by extending our current value proposition to our customers and, at the same time, this strategy raises the bar and reinforces Altium's position of absolute market dominance in PCB design. This combination will set a resonance that has the potential to bring about industry transformation."
"While dominance and transformation are part of one journey, this strategy sets up two engines of growth for value creation. Our strong software business drives our dominance engine, and our new cloud platform Altium 365, is the basis of our transformation engine. From a business perspective, these two engines provide independent drive, and at the same time are complementary and reinforce each other," he added.
The chief executive expects the shift to significantly increase renewal rates for maintenance subscription and reduce churn. He feels this should have the most dramatic impact on its revenue and its climb to 100,000 subscribers by 2025.
What about FY 2021?
Altium revealed that it is continuing to be impacted by COVID-19. However, it has been seeing positive signs in the last two months and is gaining confidence about the strength of its second half performance.
In light of this and based on its historic 45/55 revenue split between the halves, management has reaffirmed its guidance for FY 2021.
FY 2021 revenue is expected in the range of $US200 million to US$212 million (6% to 12% growth) and earnings before interest tax, depreciation and amortisation (EBITDA) is forecast to be US$76 million to US$89 million. This compares to US$76.63 million in FY 2020.
Mr Mirkazemi commented: "Traditionally, our first half EBITDA margin is always lower than our second half as a stronger second half revenue positively impacts our EBITDA. I expect this to be exaggerated this year by COVID but confident that full year EBITDA margin will remain well within the range."
