August reporting season is coming to an end and investors should pay close attention to the companies that have not only reported strong results, but also expect their earnings momentum to continue.
Here are 3 ASX growth shares that fit the bill.
1. EML Payments Ltd (ASX: EML)
EML is a financial services company that specialises in prepaid mobile, virtual and physical card solutions. The company announced its full year results on Wednesday 21 August, smashing expectations with revenue rising 37% to $97.2 million and EBITDA up 40% to $29.1 million. EML continues to drive strong earnings momentum through key sectors such as gaming and sports betting, retail and shopping malls, salary packaging and consumer finance. The company boasts an 82% EBITDA compound annual growth rate driven by both organic growth and acquisition.
2. Audinate Group Ltd (ASX: AD8)
Audinate develops the professional AV industry-leading Dante media networking solution, which distributes digital audio signals over computer networks. The Audinate share price has been priced to perfection and run over 100% this calendar year. In its full year earnings result on Friday 23 August, Audinate delivered a 34% increase in revenue to US$20.3 million and 395% rise in EBITDA to A$2.8 million. The report cited concerns that "economic conditions and US tariffs may impact the near-term results" but reaffirms US dollar revenue growth in the range between 26% to 31%. There appears to be a renewed focus on investment into engineering and R&D functions of the business to support further Dante audio and video software capabilities.
3. Jumbo Interactive (ASX: JIN)
Jumbo was an interesting one to watch during its full year announcement. The company delivered a 64% rise in revenue, 124% increase in net profit and hiked its dividend up by 97%. Despite the company highlighting record financial results, the shares fell more than 10% on the day of the announcement. There was nothing wrong with Jumbo besides its hefty valuation. The shares have since bounced in a "V" like fashion and made a full recovery.
While the massive earnings dip was a concern, the swift recovery is a bullish sign. Jumbo is riding the digital momentum of online lottery sales, while diversifying its revenues to include its own software as a service and charitable lottery reseller services. The company has announced that it aims to achieve $1 billion in ticket sales on the Jumbo platform by FY22.
Foolish takeaway
While the continuing escalation of the US–China trade war will rock global equity markets, it also provides investors with ample opportunities to pick up quality shares that have consistent and reliable earnings growth for many years to come. I'm putting these 3 growth shares on my watchlist.
