Bubs (ASX:BUB) share price rockets 17% on revenue growth

The infant milk and cereal producer saw quarterly revenues surge.

The Bubs Australia Ltd (ASX: BUB) share price is rocketing, up 17% in early trade to 42 cents per share.

This as the All Ordinaries Index (ASX: XAO) is down 0.2%.

Below we take a look at the company's quarterly report for the first quarter of the 2022 financial year (Q1 FY22), which looks to be driving ASX investor interest.

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Bubs share price surges on quarterly revenue leap

The Bubs share price is charging higher after the company reported a 96% year-on-year leap in gross revenue of $18.5 million for the quarter. Revenue was also up 45% from the previous quarter.

Breaking the revenue down, Bubs Infant Formula gross revenue was up 124% over Q1 FY21 and up 64% over the prior quarter. Revenue from its Adult Goat Milk Powder was up 100% year-on-year and up 61% quarter-on-quarter.

Bubs also reported a resurgence in its Chinse business, with a 156% year-on-year increase in revenue.

Overall international revenue was up 489% from Q1 FY21.

The company ended the quarter with a strong balance sheet, holding $28.3 million in cash as at 30 September.

What management said

Commenting on the results Bubs CEO Kristy Carr said:

Bubs has largely put the disruption and challenges of COVID-19 behind us, delivering a turnaround to high growth during the quarter as we revamped our business strategy in response to the rapidly changing market dynamics.

Importantly, there continues to be strong consumer demand for Bubs' quality nutritional products in all key markets with solid performance across our core business segments…

Our global expansion strategy continues to advance with business entities and representation now established in New Zealand, China and North America… The first shipment of Aussie Bubs' products arrived in the USA during the quarter and Bubs is now an official Walmart vendor, with the first online sales expected to be realised in October 2021.

Bubs share price could also be getting a boost from the fairly positive outlook the company provided.

Looking ahead, Bubs executive chair Dennis Lin added:

We are investing in our manufacturing capabilities at our facility in Victoria and have extended the Bubs family to have local representation in New Zealand, China and North America, as we continue to diversify our business model.

Having recovered the ground lost due to COVID-19 disruption, we expect to be able to sustain continued growth momentum, to the extent our go forward approach does not depend on a material improvement in the pandemic setting.

Bubs share price snapshot

The Bubs share price has struggled this year, down 30% in 2021. That compares to a gain of 9% posted by the All Ords.

Over the past month Bubs shares are up 8%.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BUBS AUST 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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