Audinate Group (AD8) H2 2025 earnings summary

Executive summary

• Achieved half-on-half growth with US dollar gross profit up 12% over the first half, despite a transitional year impacted by OEM inventory overhang and a softening AV industry growth rate.

• Shipped another million Dante units, matured the Dante Director cloud platform, and completed the strategic acquisition of IRIS/Iris Studio Inc., expanding the product ecosystem to over 8 million devices.

• Embedded software revenue grew 15% year-over-year, reflecting strong underlying demand and resilience to industry slowdowns.

• Strategic focus on audio, video, and control, with significant investments in platform software and cloud-based solutions.

• IRIS acquisition strengthens video capabilities and accelerates the vision for an interoperable audio, video, and control platform.

Financial highlights

• FY2025 revenue was A$62 million, with gross profit of A$51 million and gross margin of 82.3%, up from 74.3% in the prior year.

• Operating costs increased 6% to A$50.5 million; underlying EBITDA was A$651,000.

• Software revenues grew 11% year-over-year to A$7.1 million; hardware revenue (chips, cards, modules) declined 50% due to inventory rebalancing.

• Free cash outflow of A$11.3 million, reversing a positive A$6.9 million in FY24.

• Cash and term deposits at year-end totaled A$109.9 million, or A$72.8 million pro forma post-IRIS acquisition.

Outlook and guidance

• FY2026 US dollar gross profit growth expected between 13% and 15%, outpacing the industry growth rate of 3.9%.

• Operating costs projected to increase by 25% in FY2026 due to investments in IRIS and platform development.

• Significant revenue contribution from IRIS expected from FY2027 onward; initial FY2026 IRIS revenue will be modest.

• Gross margins expected to remain above 80% in FY2026.

• Iris public launch set for 1H FY26, with ongoing investment in go-to-market and product development.