Avast sees decent organic growth in first quarter

Avast reported a 10.4% organic rise in revenue year-on-year in its first quarter on Tuesday, to $237.1m (£169.35m), with growth coming in at 10.5% at actual rates.

The FTSE 100 cybersecurity software company said its consumer direct business continued to deliver good growth, while the SMB business also sustained its positive momentum.

In March, Avast renewed its contract to promote the Chrome web browser with distribution of its consumer antivirus products and CCleaner utility application through to March 2022.

For the first quarter, adjusted EBITDA was ahead 10.3% at $133.7m, resulting in an adjusted EBITDA margin of 56.4%.

At period end on 31 March, net debt-to-last 12 months adjusted EBITDA per its banking covenant was 1.1x.

In March, Avast completed a $480m and a €300m senior secured term loan to refinance prior facilities, which extended the group's loan maturity to March 2028, and further reduced its interest costs.

Avast completed the disposal of the Family Safety mobile business on 16 April, which it said would be “modestly” earnings dilutive, but would benefit reported growth rates over the rest of the year.

As a result, for the full 2021 year the group said it now expected to deliver at the upper end of the 6% to 8% organic revenue growth guidance, with the consumer indirect segment likewise revised to low single-digit percent growth.

Due to continued research and development and marketing investment, which was second-half weighted, guidance for the group's adjusted EBITDA margin percent remained “broadly flat” compared to the 2020 financial year.

Avast’s board recommended the payment of a final 2020 dividend of 11.2 US cents per share, with a scheduled ex-dividend date of 13 May, and a scheduled payment date of 18 June.

“Avast has made a good start to the year with continued demand for the company's security, privacy and performance solutions,” said chief executive officer Ondrej Vlcek.

“The business is trading in line with expectations as we successfully execute on our stated goals to drive customer engagement and monetisation.

“We look forward to the remainder of the year with confidence.”

At 0808 BST, shares in Avast were up 4.6% at 493.3p.