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The Atomos (ASX:AMS) share price is up 15% in a week

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The Atomos Limited (ASX: AMS) share price has been on a tear this past week, rising 15% on the back of positive financial results released to the market on Monday.

The ASX video technology company, which specialises in the development of monitor recorders for video content creators, has seen its share price surge from 93.5 cents at the beginning of this week to $1.08 at the time of writing.

These most recent gains add to a solid period of growth for shareholders. While not quite back to pre-COVID levels yet, the Atomos share price has soared more than 85% higher since the beginning of November.

What does the company do?

Atomos develops recording equipment for video professionals and digital content creators. It aims to create high quality, affordable products to help users easily create and edit high-resolution video. Its products are used on all sorts of projects, from wedding videos and web and TV commercials all the way up to feature films.

Atomos’ video monitors are currently the only ones in the world capable of recording in Apple’s ProRes RAW codec. A ‘codec’ is essentially a program that allows for faster file transmission through data compression. This technology gives small-time content creators the ability to easily record and share video in up to 8K quality.  

What was in the company’s financial results?

Atomos reported record half-yearly sales of $32.8 million for the first half of FY21. Although this was only an increase of 1% over the prior comparative period, it was a significant uplift versus the second half of FY20, when the company only generated $11.8 million in sales.

Earnings before interest, tax, depreciation and amortisation (EBITDA) also came in at a record $3 million, an increase of 210% over the prior comparative period. This was due to disciplined cost savings during COVID-19, particularly from general administration and marketing expenses.

What’s the outlook for the rest of FY21?

Like many companies operating in this current uncertain business climate, Atomos was hesitant to commit to firm earnings guidance for the remainder of FY21. However, the company said it expected “good progress” in the second half, building on the positive momentum already generated this year.

Commenting on the first-half results, Atomos executive chair Christ Tait said:

The record results that we have delivered across all financial metrics, highlight the fact that we have emerged from COVID-19 as a leaner and more efficient business.

Heading into 2H’21, we have a solid tailwind of sales momentum which will be further enhanced by new RAW enabled cameras coming to market, the result of substantial work by our product and development team, along with the roll-out of several new products including our streaming range.

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Rhys Brock owns shares of Atomos Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Atomos Ltd. The Motley Fool Australia has recommended Atomos Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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