Yesterday, little known ASX company Atomos Limited (ASX: AMS) released its FY21 results which sent shares up over 17% by the day’s close.
It looks like investors have been shifting their focus towards Atomos recently. Over the past year, its shares have risen more than 150%.
What does Atomos do?
Atomos specialises in hardware and software that facilitates high-quality and accessible video content creation. One of its main products, Ninja V, works by “bolting on” to a user’s existing hardware. It allows the user to record in the latest formats, in particular ProRes, which is being pushed by Apple.
This is production-grade recording technology, but it comes at a fraction of the price of high-end video recording equipment.
FY21 results
Atomos told the market that FY21 revenue came in at $78.6 million, a 77% increase on the prior corresponding period (pcp) of FY20. Management said this was largely the result of higher adoption of ProRes RAW and other product launches.
Its gross margin climbed to 47.6% delivering a gross profit of $37.4 million. This was largely due to decreased marketing spend resulting from the pandemic.
Atomos is now profitable on a net profit basis, reporting $4.2 million in FY21, a significant improvement from its $12.2 million loss the previous year.
By taking FY21’s cash flow from operations ($9.8 million) and subtracting capital expenditure, it looks like Atomos generated around $8 million in free cash flow for FY21.
Atomos finished the year with $26 million cash in the bank and no debt.
Summary
These results could suggest that Atomos is approaching an inflection point towards consistent profitability.
The rise in online high-quality video production is likely to act as a tailwind in the coming years. Given its compelling product offering, Atomos might stand to benefit significantly.
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