The Altium Limited (ASX: ALU) share price is charging higher on Thursday morning.
At the time of writing, the electronic design platform provider's shares are up 3% to $40.99.
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Why is the Altium share price rising?
Investors have been bidding the Altium share price higher on Thursday following the release of its annual general meeting update.
At the meeting, the company spoke about its performance in FY 2021, current trading conditions, and the future.
In respect to current trading conditions, Altium's CEO, Aram Mirkazemi, revealed that the company is back on form and on track to achieve its guidance in FY 2022.
Mirkazemi commented:
The purpose of this management presentation is to convey our confidence that we are well and truly back and in winning form. We are set to achieve our fiscal 2022 guidance of 16-20% revenue growth and we are powering our growth engines of CAD, Cloud and Digital Bridges to not only dominate but to transform the electronics industry.
What is driving this growth?
Altium's CEO notes that given the challenging operating conditions, investors may be wondering where management's confidence in its growth outlook is coming from.
Mirkazemi explained:
At the highest level, the mega trend that is driving our growth is the Internet of Things which has given rise to the explosion of intelligent products and the proliferation of electronics.
While this trend has been growing over the last ten years, it is now moving to a whole new level. This is largely driven by 5G and edge computing and the mass adoption of intelligent products. This unprecedented and growing demand for electronics combined with a supply chain disruption caused by the global pandemic have resulted in a global electronic parts shortage. These forces are creating favorable conditions for Altium's pursuit of dominance and industry transformation.
But it isn't just the company's core Altium Designer/365 platforms that are driving the growth. The Octopart search engine has also been performing very strongly.
The CEO said: "Specifically, our Octopart electronic parts search business and our cloud platform Altium 365 are the main beneficiaries of these strong industry tailwinds, which in turn, positively impact our electronic design software business."
Altium 365 adoption continues
Altium also provided an update on the transition to the Altium 365 cloud-based platform for its customer base.
It revealed that the adoption of Altium 365 has exceeded expectations and now has more than 17,300 active users (up from 12,800 as reported in August). It also has more than 7,300 active accounts (up from 6,000 as reported in August).
This means that Altium now has 15% of its total seats on cloud subscriptions and a further 40% are in transition to move to the cloud. This translates to 13% of accounts having moved to the cloud, with a further 34% of accounts in transition.
FY 2022 guidance
Finally, management advised that it will review its guidance in February with its half-year results.
However, based on current trading, Altium management is confident that the full-year result is "not likely to be at the low end of the guided range".
The guided range is US$209 million to US$217 million (16% to 20% growth).
