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UPDATE - Telit Communications' platform as a service offering growing rapidly

Published: 21:22 17 Oct 2014 AEDT

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The Telit Communications (LON:TCM) growth story continued in the third quarter, driven by its m2mAir division.

The global leader in machine-to-machine (m2m) communications continues to ride the wave of the development of the (industrial) "Internet of Things", posting a 20% increase in revenues in the first nine months of the year.

Revenues rose to US$205.2mln from US$171mln in the same period of 2013.

The company said revenues for the nine month period include a sharply improved contribution, expected to be in the region of US$13.5mln (2013: US$4.8mln) from the company's platform as a service offering.

Trading for the full-year is expected to be in line with market expectations, the company said.

Chief executive Oozi Cats said the company is on course to achieve top-line growth of 25% in 2014.

"We continue to see robust performance from the automotive product line and the Platform as a Service (PaaS). Both offerings are making good progress and I expect they will widen our addressable market and increase our opportunities for growth in future years," Cats said.

Canaccord Genuity said the update was reassuring, and with the shares having fallen 21% over the last month, the broker believes now is a good time to buy.

Management has visibility into accelerating growth in Q4, analysts Bob Liao and Arun George said.

"Management does not anticipate any impact from the macroeconomic slowdown in Q4 2014 and continues to sees strong demand across its diversified customer base," the broker said, as it reiterated its 325p price target.

Shares were up 3.6% at 208.5p in late morning trading.

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