Audinate Group (AD8) H1 2025 earnings summary

Executive summary

• 1H25 results exceeded guidance, but revenue declined 38% year-over-year as customers worked through inventory backlogs; FY25 is positioned as a transition year with normalization expected in FY26.

• Software revenue grew 13% year-over-year, offsetting declines in chips, cards, and modules, and design wins increased 15%, supporting future growth.

• Gross margin improved to 82.5% from 71.8% year-over-year, driven by a higher proportion of software sales.

• Strategic investments continue in audio, video, and platform software to drive long-term growth.

• Audinate maintains a strong balance sheet with over $111 million in cash and term deposits, supporting ongoing investment in R&D and new product development.

Financial highlights

• Revenue for 1H25 was A$28.7m (US$18.9m), down 38% year-over-year.

• Gross profit for H1 FY25 was AUD 24 million, down 29% year-over-year, with gross margin percentage rising to 83% from 72%.

• EBITDA for the half was $0.8 million, compared to $9.9 million in the prior period.

• Free cash flow was negative A$8.1m, compared to positive A$3.4m in 1H24.

• Cash and term deposits at period end totaled over $111 million, with no debt.

Outlook and guidance

• FY25 is a transition year; moderate gross profit growth expected in H2 FY25, with normal order patterns and growth anticipated by FY26.

• Q2 FY25 gross profit exceeded Q1, with further strengthening expected in the second half.

• New product launches in 2H25 (AVIO adaptors, premium Virtual Soundcard) are expected to positively impact earnings.

• Operating expenses expected to grow moderately in H2, at the lower end of previous guidance.