Shares in ASX-listed US design software company Altium Ltd (ASX:ALU) fell by more than 12% in morning trade on Monday after the company said its revenue growth for FY2020 will be behind analyst expectations.
The global multinational, one of the top 5 tech shares in Australia, saw its shares fall below $32 within the first hour of trade after saying that while it historically “closes a significant amount of its second half business in the last two weeks of June” the company’s run-rate “has begun to fall behind current analyst consensus”, with the lock-down in Beijing, where its office is closed, and covid-19 infection rates in the US also having an impact.
Altium’s software for 3D printed circuit board design and embedded system development and includes products such as Altium Designer, Altium Vault, CircuitStudio and Octopart.
The company previously warned in mid-May – it’s the tech stock’s fourth downgrade for the year – that it was encountering headwinds and today said “seat growth” is up 7% on 12 months ago and larger deals are still in the pipeline, but its pricing strategy for Altium Designer in response to covid-19 was impacting revenue potential for the full year.
Altium CEO Aram Mirkazemi said: “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” and revenue growth “will land marginally behind latest analyst consensus for the full year”.
Mirkazemi said the company’s pricing and extended payment terms were “the right thing to do to support our customers” and maintain momentum. New pricing will come in on July 1 and Altium Designer will return to full price with no extended payment terms from September 1.
Altium will provide a final market update of its headline sales and revenue results for fiscal 2020 in early July.
The company has led falls in the ASX’s All Tech Index, which now sits down around 1% at noon Monday.