2 small cap ASX shares that are growing quickly

These 2 small cap ASX shares are growing really quickly. Audinate Group Ltd (ASX:AD8) is going through a recovery.

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Small cap ASX shares have the potential to be able to grow quickly.

They're starting from a smaller base and can have a much longer growth runway as they expand into new markets and hopefully grow profit margins.

These two businesses are demonstrating a lot of growth right now:

Audinate Group Ltd (ASX: AD8)

Audinate wants to pioneer the audio sector with its Dante audio-over-IPO networking solution, which it says is a world leader and used extensively in the professional live sound, commercial installation, broadcast, public address and record industries.

How does it work? Dante can replace the analogue audio cables by transmitting synchronised audio signals to multiple locations by using an ethernet cable.

The small cap ASX share recently revealed its FY21 third quarter which showed revenue growth of 31% to US$7 million.

Audinate explained that this latest quarter benefited from channel fill of newly released Bluetooth and USB-C AVIO adaptors, as well as an increase in orders from customers managing global supply chain concerns.

Compared to the first half of FY21, there has been continued strength of chips, cards and modules revenue.

However, there's still potential supply chain problems. Audinate CEO Aidan Williams said:

We are closely watching global supply chains for potential negative impacts on both our customers and Audinate, which may constrain our near-term revenue and growth.

Along with our manufacturing and OEM partners, we are working to mitigate supply chain challenges and expect this near-term uncertainty to resolve itself as CY21 progresses. We remain very confident in the long-term outlook for the business.

Healthia Ltd (ASX: HLA)

Healthia is Australia's largest allied health business and owns 30 brands. It operates across different sectors in healthcare – feet and ankles, bodies and minds, and eyes and ears.

It wants to deploy a minimum of $20 million of capital each year to buy now allied health business acquisitions. Healthia has successfully grown to the size it is through acquisitions, as well as organic growth.

The small cap ASX share is working on new business opportunities through cross-referrals between Healthia's businesses to promote better patient outcomes. It also wants to provide clinicians with industry leading education, tools and support and continue to develop industry leading career opportunities for all team members. This is expected to continue to drive strong organic performance into the future.

In the FY21 half-year result, Healthia generated organic revenue growth of 14.5%, though total revenue went up 38.9%. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew 90.7% to $11 million, partly thanks to the underlying EBITDA margin rising 486 basis points to 17.87%. Underlying earnings per share (EPS) grew by 78.2% to 6.86 cents.

The board are confident on the balance sheet, which is why the business is now paying a dividend. The interim dividend payment to shareholders was 2 cents per share.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia has recommended HEALTHIA FPO. 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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