05-June-2024: After market close (5:39pm): Outcome-of-First-Court-Hearing.PDF

Good-o, all going to plan so far. Here's the indicative timetable from the second page of today's announcement.

Looking forward to getting the cash for this one - average price paid was $27.20 over various buys - and the takeover is at $68.50, so there's not too much Arb up here (they closed at $67.00 today), but a decent outcome for longer term holders considering we've seen the odd approach knocked back by the ALU Board over the journey - they clearly held out for something better - and they got it in the end.

18-Nov-2021: Altium are holding their AGM today, and their AGM Presentations look and sound excellent. Normally you could locate links to those from the following webpage: Investor Presentations | Investor News | Altium

As of now (10:56am Adelaide time) they have not yet uploaded today's presso's to that page.

However, using the ASX site, you can view their main AGM Presso here and their AGM Management Presso here.

The market reaction has been quite positive so far, with ALU trading over +3% higher today, so now at over $41/share.

I strongly recommend reading through the Management Presso if you're an ALU shareholder or are interested in the company as a possible investment. I have never read a more positive overview of a company by their own management.

Disclosure: I hold ALU shares.

30-Aug-2021:  Altium have reported this morning, and the numbers look reasonably good.  The dividend has been increased once again, this time to 21 cps, and 15% franked (previously 0% franked).  In their results announcement, they start with the title, "Altium Returns to Double-Digit Growth in the Second Half with a Positive Outlook for Fiscal 2022"

However, "Due to unforeseen delays in the finalisation of the annual audit process amplified by the impact of the COVID-19 pandemic in NSW, the release of Altium’s audited accounts has been delayed.  Altium expects the audit process to be completed and its audited results to be released within a week.  Altium does not expect there to be any material difference between today’s release of unaudited financial statements and the audited financial statements to be released shortly.

Altium delivered strong revenue growth in the second half of fiscal 2021 of 16% to achieve full year guidance at US$191.1 million. The Group delivered an underlying EBITDA margin of 36.1% for the full year. Highlights include:

• Strong growth in annual recurring revenue (ARR) of 29%.
• Recurring revenue of 65% up from 59% one year earlier, with strong growth in term-based licenses, a positive for future recurring revenue.
• Second half continuing business revenue increase of 16%.
• Strong Altium 365 adoption with almost 13,000 monthly active users and over 6,000 monthly active accounts.
• Record revenue growth of 42% by Octopart to US$27.0 million for the full year.
• Strong second half growth in China of 47% to deliver full year double-digit growth.
• Solid growth of 7% in the subscription base to 54,394 subscribers.
• 100% increase in cash balance of US$191.5 million as a consequence of improved operating cash flow and sale of TASKING.
• Final partially franked (15%) dividend of AU 21 cents (AU 40 cents for the financial year up 3%)"

Their results presentation can be accessed from here:  https://d2ns91cgb08z5o.cloudfront.net/sites/default/files/2021-08/Investor%20Presentation%20Full%20Year%20FY21%20-%20FINAL.pdf

Disclosure:  I hold ALU shares, in RL and also in SM.  Happy with this result.  Progress seems positive.  They are still on track to meet their stated target of $500m in revenue by FY26, although they have noted today that, "The target revenue of $500M may include 10-20% from future acquisitions."

They have also clarified that their target of $200m in revenue that they set in 2016 and have just achieved - in FY21 - "...includes the annualized revenue of TASKING based on the achievement of earnout."

One of the reasons Altium was sold down last year was that they missed their $200m revenue target, mostly due to Covid-19 impacts, however they have achieved that target this year and still have that ambitious $500m revenue target by CY2025 or FY2026.  If they can hit that target, I expect they will be trading at higher prices than they are today.  It's a big ask, but they have the track record that suggests that they CAN achieve that $500m revenue target.

19-July-2021:  I haven't got time to elaborate - have to leave for work, but Altium have just announced that the report in the AFR about the $40 offer from Autodesk is false - they've said, "In response to media speculation today, Altium Limited advises that it has not received any further offer from Autodesk. All details relating to the Autodesk offer have been disclosed by the Company in its ASX announcement released to the market on 7 June 2021."

19-July-2021:  Altium shares fell -10.45% this morning in early trade to $32.73/share before they called a trading halt.  The AFR reports that Autodesk has upped their takeover offer from $38.50 to $40.  Here's a little excerpt from that AFR article (by Anthony Macdonald and Yolanda Redrup):

American software company Autodesk has had another nibble at ASX-listed Altium.

Four weeks after its $38.50 a share indicative bid was rejected, it is understood Autodesk went back to Altium to talk about a deal at $40 with the same set of conditions attached.

Those conditions included customary conditions in Australian M&A - a request for formal due diligence and a board recommendation, should it be able to turn $40 into a binding offer.

However $40 was still not enough for Altium and Autodesk was sent packing, again.

Fund managers will be scratching their heads and wondering at what price Altium would be willing to deal.

--- end of excerpt ---

[Disclosure:  I hold ALU shares.]

18-June-2021:  Altium Investor Presentation and Trading Update

Also:  Investor Presentation-A Winning Strategy for Value Creation

Key Takeaway:  

Trading Update

Altium anticipates revenue for fiscal 2021 to be at the low end of the guidance range of US$190 million to US$195 million and margin to be at the low end of the guidance range of 37-39% on an underlying basis (excluding one-off acquisition costs and write back of the SolidWorks minimum contractual amount due to termination of the agreement with SolidWorks).

Altium CFO, Mr Martin Ive commented “momentum has returned to Altium’s business with double-digit growth in the second half, however, after a slow first half due to the impact of COVID and our pivot to the cloud, the full year is likely to be at, or slightly below, the low end of our guidance”.

Mr Ive further noted, “Altium’s renewal business is strong, Octopart is set for a record performance and China is delivering a solid performance. Demand is growing for Term Based Licences (TBLs), which is a positive for future recurring revenue, however, Altium’s perpetual licence sales have underperformed relative to our expectations in the key markets of the US and EMEA as our sales organization works through its transition of our new sales model”.

Adoption of the Altium 365 cloud platform has increased and there are now more than 13,100 monthly active users and over 6,300 monthly active accounts.

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Could be an interesting market reaction to this guidance downgrade today, right after they knocked back a takeover offer priced at A$38.50/share.

07-June-2021:  Altium (ALU) is up over 33% so far today on the back of a takeover offer from Autodesk Inc priced at A$38.50/share.  ALU management have rejected the offer as they believe it significantly undervalues the company and its prospects.  I hold ALU.

22-Mar-2021:  I bought a position in ALU today.  I missed the lows last year - they got down to $26/share in March 2020 - but I note they got even lower than that earlier this month - to $25.50.  I regard anything under $30 as a good buy zone for Altium, so I pulled the trigger on them today in one of my RL portfolios. 

Their 12-month chart looks ordinary, but their 5 year chart (see below) puts that into some perspective.  They are rising, but with some sell-offs now and then which present buying opportunities.  This latest one was prompted by an underwhelming 1st half report coupled with a big tech sector sell off in the US (including a technical correction with the NASDAQ, the quickest -10%+ drop NASDAQ's history actually) which spilled over into our tiny little tech sector here on the ASX. 

That all seems done and dusted now however, with a new low point appearing (to me at least) to have been made.  So I regard this as a good entry point for me for ALU.  I've always wanted to own ALU shares, but they always looked too expensive.  However - at under $30 - not so much.

03-Mar-2021:  From Marcus Padley's EOD (end of day) newsletter today:

"China has big plans in the Chip market. Beijing had set aside at the start of its last five-year plan around 1 trillion yuan ($155bn) for potential investment in semiconductors over five to 10 years. Taiwan looks interesting then. Big M&A option there."

Surely Altium should benefit, as a leading provider of chip design software.  They do not feature in the graphic below, but perhaps they should.

14-Dec-2020:  Altium Divests TASKING for Future Investment in Altium 365

Altium Divests Non-Core TASKING Business to Support and Enable Future Investment in Altium 365

Electronic design software company Altium Limited (ASX:ALU) has entered into a Definitive Agreement with FSN Capital to sell the assets of its TASKING business for US$110 million. The transaction will be settled in cash with US$100 million up front and US$10 million conditional upon achieving revenue targets in Fiscal 2021 post divestment. The transaction is expected to close in the first quarter of calendar 2021, subject to customary closing conditions and regulatory approval.

Altium Chairman Mr Sam Weiss commented, “we are generating real momentum with Altium 365, the world’s first cloud platform for PCB design and realization, and we believe that Altium 365 is critical to enhance long term shareholder value. The divestment of TASKING enables us to singularly focus on our transformative vision and to fast track the building and acquisition of complementary assets.”

Altium CEO Mr Aram Mirkazemi commented, “the strategic divestment of TASKING combined with our recent organizational changes and hard pivot to the cloud marks an inflection point for Altium in its pursuit of industry transformation. While TASKING is a great business, it does not play a central role in our design to realization strategy for the electronics industry, which is being delivered through our new cloud platform Altium 365. The divestment of TASKING will free up organizational capacity and allow Altium leadership to focus on our main game, which is to expand Altium 365 and accelerate its adoption.”

This transaction will have a one-time positive impact on Earnings Per Share (EPS) in Fiscal 2021 reflecting the profit on the sale of the business. First half Fiscal 2021 results will include TASKING as the transaction will close in the second half. Altium’s first half performance remains solid, however, the effect of this transaction combined with ongoing COVID lock-downs in the US, will have a marked impact on our historic first half/second half 45/55 revenue split. Altium remains confident of achieving full year guidance adjusted for the sale of TASKING whose results will not be included in second half revenue and earnings.

FSN Capital is a European private equity firm with a successful track record in software and technology investments. FSN Capital Partner Mr Robin Muerer commented, “TASKING is a market leader in embedded software for the automotive safety space. We are excited to work with TASKING’s management team as we see opportunities to expand TASKING’s product range and continue its strong partnership with Infineon Technologies.”

The full impact of the divestment will be disclosed as part of Altium’s half year results, including the impact on on-going operations.

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About Altium: Altium (ASX:ALU) is a multinational software corporation headquartered in San Diego, California, that focuses on electronics design systems for 3D PCB design and embedded system development. Altium products are found everywhere from world leading electronic design teams to the grassroots electronic design community.

With a unique range of technologies, Altium helps organizations and design communities to innovate, collaborate and create connected products while remaining on time and on budget. Products provided are ACTIVEBOM®, ActiveRoute®, Altium 365® , Altium Concord Pro™, Altium Designer®, Altium NEXUS®, Altium Vault®, Autotrax®, Camtastic®, Ciiva™, CIIVA SMARTPARTS®, CircuitMaker®, CircuitStudio®, Common Parts Library™, Draftsman®, DXP™, Easytrax®, EE Concierge®, NanoBoard®, NATIVE 3D™, OCTOMYZE®, Octopart®, P-CAD®, PCBWORKS®, PDN Analyzer™, Protel®, Situs®, SmartParts™, the TASKING® range of embedded software compilers, Upverter®, X2®, XSignals®, PCB:NG®, and Gumstix®.

Founded in 1985, Altium has offices worldwide, with US locations in San Diego, Boston, Dallas and New York City, European locations in Karlsruhe, Amersfoort, Kiev, St Petersberg, Moscow, Munich, Markelo and Zug, and Asia Pacific locations in Shanghai, Beijing, Shenzhen, Tokyo and Sydney.

For more information, visit www.altium.com. You can also follow and engage with Altium via Facebook, Twitter, LinkedIn and YouTube.

17-Aug-2020:  Full Year Results Announced to 30 June 2020   and   FY20 Full Year Investor Presentation

plus  Preliminary Appendix 4E & Final Audited 2020 Annual Report   and   Appendix 4G   and   2020 Corporate Governance Statement

Altium Announces Financial Results for the Full Year to 30 June 2020

Altium Exceeds 50,000 Subscribers, Delivers Solid Revenue Growth and Successfully Launches Altium 365

Sydney, Australia - 17 August 2020 - Electronic design software company Altium Limited (ASX:ALU) has announced its results for the full year ended 30 June 2020. Altium achieved revenue growth of 10% to US$189 million with solid performances in all core business units and key regions. Profit before tax grew by 12% to US$65 million. The company delivered an EBITDA margin of 40.0% for the full year. Other highlights include:

• Record growth of 17% in the subscription base to 51,006 subscribers.
• Strong increase of 15% in new Altium Designer seats sold to 9,251.
• A strong cash balance of US$93 million, up 16% on the same period last year.
• Final dividend of AU19 cents (AU39 cents for the year) up 15% on a yearly basis.

--- click on links above for more ---

14-7-2020:  Unaudited Sales and Revenue for the Full Year Ending 30 June

Altium Achieves 10% Revenue Growth and Exceeds 50,000 Subscriber Target

Sydney, Australia - 14 July 2020 - Electronic design software company Altium Limited (ASX:ALU) updates the market on its unaudited sales and revenue for the full year ended 30 June 2020. Altium achieved revenue growth of 10% to US $189 million with solid performances delivered in core business units and key regions during the challenging COVID-19 environment.

Altium delivered record growth in new Altium Designer seats and subscriptions to exceed its 50,000 subscriber target. Other highlights include:

• Strong increase of 14% in new Altium Designer seats sold.
• Record growth of 17% in the subscription base to well over 50,000 subscribers.
• Cash balance of over US $90 million.

Comments from Altium’s CEO Mr Aram Mirkazemi:

Altium CEO, Mr Aram Mirkazemi commented: “Altium’s strategy of providing attractive pricing and extended payment terms to support our customers during COVID-19 and to drive volume to support our pursuit of market dominance has been rewarded. Altium achieved strong growth in new Altium Designer seats and record growth in our subscription base to reach well over 50,000 seats on subscription”.

Mr Mirkazemi further commented: “Altium has not been immune to the uncertainty and the evolving impact of COVID-19, however, as a global high-tech company, geared to work remotely and with a robust and highly adaptable business model, we were able to deliver a strong performance through COVID-19 conditions - maintaining our unbeaten record of eight consecutive years of double digit revenue growth, and extending it to nine straight years”, stated Mr Mirkazemi.

“While COVID-19 prevented us from reaching our long standing aspirational goal of $200 million in revenue, conditions surrounding COVID-19 have dramatically accelerated our movement towards market dominance and the implementation of our transformative agenda for the industry”, said Mr Mirkazemi.

“We accelerated the roll-out of our new cloud platform Altium 365 from 1 May 2020 to help engineers to work from anywhere and connect with anyone. It is pleasing to see that Altium 365 is gaining traction with over 2,500 companies and nearly 5,000 active users on the platform already”, said Mr Mirkazemi.

“We also launched online selling in May to expand reach, and to grow sales capacity to support our climb to 100,000 subscribers by 2025. While early days, our digital sales are gaining traction and in time will allow our transactional sales to fully focus on value-based selling and higher value deals”, commented Mr Mirkazemi.

“At our full year results, we will share more color on the long-term impact of COVID-19 on the acceleration of our strategy of market dominance and industry transformation. We will also share color about our recurring revenue and pricing model post COVID-19 and based on the impact of Altium 365”, said Mr Mirkazemi.

Comments from Altium’s CFO Mr Joe Bedewi:

Altium CFO, Mr Joe Bedewi commented: “Altium’s achievement of 10% revenue growth during COVID-19 is an impressive result. Moreover, Altium achieved strong growth in new Altium Designer seats sold of over 9,100 (up 14%) and delivered 17% growth in the subscription base to well over 50,000. This result places Altium in a strong position to drive further adoption of its new cloud platform Altium 365”.

“Altium also delivered over 3,000 upgrades of Altium Designer, up 47%, demonstrating the attractiveness of Altium 365 to existing customers. Altium 365 is moving our subscription business from being maintenance driven to capability driven”, commented Mr Bedewi.

Altium will release its fiscal 2020 results on Monday 17 August 2020 with an investor call to be hosted by Altium’s CEO and CFO at 9.30am that same day.

Participants can pre-register for the investor call using the following link to receive dial in details:

http://apac.directeventreg.com/registration/event/2362368

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[click on link above for the full announcement] 

[I hold ALU shares]

22-June-2020:  Altium Announces Business and Market Update

Altium Drives Strong Seat and Revenue Growth But is Likely to be Below Analyst Consensus in COVID Environment

Sydney, Australia - 22 June 2020 - Electronic design software company Altium Limited (ASX:ALU) advises that while its attractive pricing and extended payment terms to support its customers during COVID-19 are driving strong seat growth, its increase in revenue for the full year, while likely to be solid, will be below latest analyst consensus. New lock-downs in Beijing, China and an increase in COVID-19 cases in parts of the US are having some impact on Altium’s final sprint to the close of fiscal 2020.

Business and Market Update

Historically, Altium closes a significant amount of its second half business in the last two weeks of June. This June, Altium’s run-rate has begun to fall behind current analyst consensus and additionally we will be impacted by the recent lock-down in Beijing and increased COVID-19 infection rates in the US. Altium has temporarily closed its Beijing office, while staff continue to close sales from their remote working environments.

Globally, Altium is aggressively closing sales, with larger deals still in the pipeline, and seat growth is up 7% on the same period last year. However, the pricing strategy adopted in response to COVID-19 for Altium Designer is impacting revenue potential for the full year.

Altium CEO, Aram Mirkazemi noted that in response to COVID-19, “our strategy to support our customers and to increase volume under COVID-19 conditions through attractive pricing and extended payment terms is driving strong seat growth and will get us close to or just surpass our key target of 50,000 subscribers. However, we are feeling the revenue impact of this strategy. While we are likely to deliver solid revenue growth this will land marginally behind latest analyst consensus for the full year”.

Mr Mirkazemi further commented, “we see Altium’s approach to COVID-19 pricing and extended payment terms as the right thing to do to support our customers in this challenging environment and to not lose momentum as we enter the next phase of growth. As the world restarts we will assume new pricing effective 1 July 2020 as published on our website. We will return to full Altium Designer pricing with no extended payment terms from 1 September 2020”.

Altium will provide a final market update of its headline sales and revenue results for fiscal 2020 in early July.

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It will be interesting to see how the market responds to this update today.

06-May-2020:  DDD20 Day 1

That presso, which is Day 1 of Digital Design Days 2020 (DDD20, held last week) is not specifically about Altium, but Altium is one of the companies that enable people to design the chips to make all of this tech work.  The intro is pretty amazing and some of the companies presenting on Day 1 include PayPal, Dotlung.com (Mother of Social Media Dragons), LinkedIn, Airbnb & Amazon's Alexa, as well as the founder of DDD and a few journos. 

Magellan (MFG) is one of the companies that invests in these sorts of companies, like eBay - who owns PayPal, Alphabet - who owns Google, Microsoft Corporation - who own LinkedIn, Tencent - who own WeChat and WeChat Pay, Alibaba - who own AliPay and many other businesses, and Facebook - who own WhatsApp and Instagram.

For a LIT that gives you exposure to all of those, Magellan's MGG is one option. You buy/sell units in MGG on the ASX just as you would buy shares in any company, and you have exposure to all of those global IT giants (but not Amazon, because Hamish Douglass regards Amazon as too expensive to buy). 

In the USA, IT (information technology) as a sector represents 25.7% of their entire market (NASDAQ + NYSE) whereas it represents just 3.7% of our Australian market.  IT is the largest sector in the US, followed by Health Care (at 15.4%) and then Communication Services (10.8%).  Our top 3 are Financials (24.4%, thanks mostly to our big 5 banks), Materials (/Mining, 19.1%, thanks mostly to BHP & RIO) and Health Care (12.5%, thanks mostly to CSL, RHC, SHL & COH).  We have our WAAAX stocks, but we don't have the stocks with the global footprints of the FAANGs and the two fast-growing Chinese giants (Alibaba & Tencent). 

I currently hold shares in PAI, WQG, MGG & MHH for that global IT exposure.

08-Apr-2020:  Altium Confirms its Strong Operational and Market Position

Altium Confirms its Strong Operational and Market Position Within COVID-19 Environment 
 
But Prudently Withdraws FY20 Earnings Guidance

Electronic design software company Altium Limited (ASX:ALU) confirms its strong operational and market position in the new COVID-19 environment. However, given the evolving nature of COVID-19 and uncertainty regarding its direction, it prudently withdraws its FY20 earnings guidance.  

Operational and COVID-19 Update  

Despite the uncertainty surrounding COVID-19, Altium is operationally and commercially well positioned, with electronic design anticipated to be relatively resilient to weather the prevailing and unfolding market conditions.  This is, however, dependent on how long and in what future form COVID-19 takes and the rapidly evolving broader business, industry, economic and social impacts that may arise.  

Altium’s CEO Mr Aram Mirkazemi commented, “as a high-tech company, Altium’s global workforce is geared to work digitally and for the past two months we have greatly increased our focus on driving productivity in this new operating environment.  We are fortunate that our operating model is robust and highly adaptable to the new global conditions, as our marketing and direct selling are conducted through the Internet and via telephone.  Moreover, we are well diversified across industry segments and regions worldwide”. 
 
Mr Mirkazemi further stated, “at an industry level, electronic design is holding up relatively well in the new environment as engineers use excess time and capacity from the slowdown in manufacturing and supply chain to revert back to prototype designs”. 
 
“We are accelerating the rollout of our new cloud platform Altium 365, as worldwide demand is growing rapidly for cloud-based collaborative tools across all sectors and all regions.  Altium 365 is a core enabler of our strategy of industry transformation through market dominance and supports our drive to 100,000 subscribers by 2025. Altium 365 is particularly relevant to the circumstances that are unfolding under COVID-19, as it allows engineers to work from anywhere, and connect with anyone.  We are also accelerating the rollout of our online/high volume selling approach, which will dramatically extend our inside sales capacity to support our drive through Q4 and beyond”, said Mr Mirkazemi.

Withdrawing Full Year Earnings Guidance    

Altium’s CFO Mr Joe Bedewi commented “in light of the rapidly evolving COVID-19 environment, whose duration remains uncertain, Altium feels it is prudent to withdraw its formal FY20 earnings guidance. Altium management nevertheless remains firmly committed to its longestablished aspirational market leadership target of US$200 million for FY20”.   

Mr Bedewi further noted, “as a global software company, we are operationally geared to work well in a digital environment, our business model is highly adaptable to the new conditions and the electronic design industry is relatively robust.  Altium is continuing to close sales and our pipeline is looking solid at this point”. 
 
“Moreover, Altium is financially very strong with real earnings and profitability and a strong balance sheet.  Altium’s cash reserves have continued to grow and are expected to remain strong”, concluded Mr Bedewi.  

During this evolving period, Altium will provide further updates on the impact of COVID-19 on the company’s operations and business performance as appropriate. 

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