Key Takeaways:

The share price of ASX-listed software company Altium Limited (ASX: ALU) jumped 19.746% and settled at AU$35.840 by the end of trading session on 23 August 2022. The sharp rise in the company's share price was seen even though there was no new market-sensitive announcement from its side on the ASX board today. However, on 22 August 2022, the Company released its FY2022 result. It topped the gainers' list on ASX on the next release of the announcement. In this article, we will look at ALU’s results and factors supporting the increase in the share price.

ALU’s FY2022 Highlights:

In its financial results for the year to 30 June 2022, Altium reported its revenue and EBITDA growth of 23% and 33%, respectively. What appears to have pleased Altium's investors the most is the company's decision to declare a fully franked final dividend of AU 26 cents per share (AU 47 cents for the full year, up 18%). The company will likely make this dividend payment to its shareholders on 27 September 2022.

The company's FY2022 results announced yesterday revealed the following:

• Double-digit revenue growth for Altium PCB business of 12% to US$169.3 million. Strong Altium 365 adoption with approximately 24,700 monthly active users at year-end (an increase from 19,700 in February 2022) and more than 9,300 monthly active accounts at year-end (up from 7,700 in February 2022).
• Robust growth in Profit After Tax of 57% to US$55.5 million.
• Earnings Per Share increased 57% to US$42.2 cents.  

The Company’s strong financial results are supported by an impressive performance from Altium's Octopart business and robust growth from its electronic design software business. Octopart, which deals with electronics parts search, has benefitted from the global parts shortage, which is expected to continue as we enter the new financial year.

23% of the company’s Altium Designer subscribers have completely adopted Altium 365, with 30% more in the process of adopting it. The company is accelerating its transformative plan for the world's electronics industry, with intention to bring the business of engineering onto Altium 365 from design to supply chain and manufacturing.

Outlook:

Altium belongs to the Software & Services industry group, which falls under the IT sector. Today, the S&P/ASX 200 Information Technology was up 0.09% at 1,516.5 points.

Based on the result and the progress made by the Company along with the positive outlook for the electronic design automation software industry, we can say that we may see a growth in the Company’s stock.

Experts believe that the global electronic design automation software market size might reach US$22.21 billion by 2030, growing at a CAGR of 9.1% from 2022 to 2030. However, a word of precaution, the rising interest rates and unabated inflation has also increased the valuation pressure on tech companies.

Altium's Guidance for FY23 includes total revenue between US$255 million to US$265 million (15%-20% growth).

In the last year, Altium's share price has increased by nearly 1.51%, while the stock has fallen almost 20% year-to-date (YTD).

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