Consumer cyber security tools supplier Avast said it expects revenue at the upper end of guidance after reporting a rise in first-half profit, driven by higher product demand coming from the work-from-home trend.
The company also upped its half-year interim dividend 9.1% to $0.048 per share.
But the shares fell sharply on Wednesday, down more than 5% to 568.5p to head the FTSE 100 loser board, partly a reaction to the stock’s stunning recovery rally (the share price has more than doubled since mid-March).
LIMITED MOBILE TRACTION
Limited traction in mobile may also have disappointed investors despite the company significantly upping its subscriptions push. Avast’s comments that mobile showed ‘good growth in the direct-to-consumer channel,’ simply does not show through in the numbers, where both billings and revenue declines by about 4.5%.
Mobile remains sub-scale in the revenue mix at just a tenth the size of Desktop, but the use case will take much longer to build given consumer confidence in in-built mobile security solutions.
Adjusted revenue grew 1.5% to $433 million while adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 2.1% to $241 million. Operating cash inflows came in at $233 million.
This was almost solely driven by Consumer Direct Desktop as usual, which accelerated as consumers spent more time on home devices for work and leisure.
Overall, this was a resilient performance and it has allowed management to maintain guidance for mid-single-digit organic growth. Forecasts are asking for headline revenue of $889 million and adjusted EBITDA of $496 million.