At actual rates, adjusted revenues were up 2.6% year-on-year during the third quarter, up from £220.3 million, to £226.0 million. Meanwhile, on an organic basis – excluding acquisitions, disposals, and currency changes – Q3 revenues jumped by 8.6% year-on-year, up from £209.2 million, to £225.1 million.
The year-to-date comparison illustrated pretty much the same trend. While adjusted revenues, on face value, were up by 1.9% from £647.1 million to £659.1 million, organic revenues were up 7.3%, from £613.9 million, to £654.8 million.
Avast said that its customer trends normalised as countries moved out of lockdown, and that adjusted revenue percentage growth overtook adjusted billings percentage growth in Q3.
The company added that its consumer desktop business continues to perform well and in line with pre-pandemic levels. It also said that adjusted EBITDA rose by 3.3%, to $126.0 million, during the third quarter, with adjusted EBITDA also increasing by 2.5% during the year-to-date, up to $367.3 million.
Avast stated that strong cash generation also enabled it to accelerate deleveraging, with a voluntary repayment of $100 million in debt during Q3. It added that its liquid balance sheet will allow it to take advantage of additional development opportunities.
Speaking on the results, company Chief Executive, Ondrej Vlcek, said: “As cyber-attackers have intensified their efforts through the pandemic to exploit digital vulnerabilities, Avast has been on the front line in protecting people’s personal information and privacy. The value of Avast’s services and technologies is reflected in the company’s resilient financial performance, which underpins continued investment in our growth and focus on innovation.”
Looking ahead, the company’s outlook read: “As a result of the strong demand in the second quarter, revenue growth is expected to continue to outpace billings growth in the second half of the year. The Group reaffirms its FY 2020 outlook for Adjusted Revenue to be at the upper end of mid-single digit growth, and a broadly flat Adjusted EBITDA margin percentage.”
Following the update, Avast shares dipped notably, before recovering, to a modest dip of 0.19%, at 512.00p 21/10/20 11:30 BST a share – though it could end up either in the red of green by the day’s end. AT this price, it is currently more than 5% below analysts’ target price of 539.85p, and beneath its six-month peak of 600.00p a share.
At present, analysts have a consensus ‘Buy’ stance on the stock; its p/e ratio of 20.14 is beneath the computer and tech sector average of 66.38; and, the Marketbeat has a 69.18% ‘Outperform’ rating on the stock.