Altium share price on watch after smashing guidance in FY22

Altium has released its full year results for FY 2022…

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Key points

  • Altium has released its full year results after the market close
  • The company has beaten its guidance and market consensus estimates
  • Management is guiding to further strong growth in FY 2023

The Altium Limited (ASX: ALU) share price will be one to watch on Tuesday morning.

This is because the electronic design software company has released its full year results for FY 2022 after the market close.

Altium share price on watch after smashing expectations

  • Revenue up 23% year over year to US$220.8 million
  • Recurring revenue up 31% and now 75% of total revenue
  • EBITDA margin up 2.4 percentage points to 36.7%
  • Net profit after tax up 57% to US$55.5 million
  • Final dividend of 26 Australian cents
  • Outlook: Revenue growth of 15% to 20% in FY 2023

What happened in FY 2022?

For the 12 months ended 30 June, Altium reported a 23% increase in revenue to US$220.8 million. This was driven by a 12% increase in revenue from the Altium PCB business to US$169.3 million and record Octopart revenue growth of 85% to US$50 million.

The Altium PCB business was boosted by strong adoption for its Altium 365 offering. It ended the period with almost 24,700 monthly active users, up from 19,700 at the end of February. Whereas the Octopart search engine business was given a major lift by the global parts shortage.

This ultimately underpinned stronger than expected margins, which, combined with a lower tax rate, led to Altium's profits growing at an impressively quicker rate of 57% to US$55.5 million.

This allowed the company to declare a final dividend of 26 Australian cents per share, bringing its full year dividend to 47 Australian cents per share. This represents an 18% increase year over year.

How does this compare to expectations?

The good news for the Altium share price tomorrow is that this result appears to have smashed expectations.

Altium was guiding to revenue of US$213 million to US$217 million and an EBITDA margin at the lower end of 34% to 36%. Whereas it delivered revenue of US$220.8 million and an EBITDA margin of 36.7%.

Furthermore, according to a note out of Bell Potter, its analysts were expecting a net profit result in line with consensus estimates at US$47.7 million. Altium's profit of US$55.5 million was notably higher than this.

Management commentary

Altium's CEO, Aram Mirkazemi, was rightfully pleased with the company's performance in FY 2022. He said:

Altium delivered a strong financial performance for fiscal 2022 supported by a record performance from our Octopart business and solid growth from our Electronic Design Software business. Octopart is the market leader in electronics parts search and benefitted from the global parts shortage which we expect to continue for some time into the new financial year.

Altium Digital Sales has increased efficiency and has achieved a higher realized price, with minimal discounting. Additionally, we are getting a lift as our higher end enterprise grade capabilities gain mainstream adoption.

Outlook

Also potentially giving the Altium share price a lift tomorrow will be its outlook commentary.

Management appears very positive on its prospects in FY 2023 and is guiding to:

  • Revenue of US$255 million to US$265 million (15% to 20% growth)
  • Underlying EBITDA margin of 35% to 37%

Altium's revenue growth is expected to be driven by strong performances across the business. It expects Electronic Design Software revenue of US$195 million to US$200 million (15% to 18% growth) and Engineering Cloud Platform revenue of US$60 million to US$65 million (20% to 30% growth).

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Altium. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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