Audinate Group (AD8) H2 2025 earnings summary

Executive summary

• FY25 was a transitional year with 1M Dante devices shipped, launch of the Dante Director cloud platform, and the strategic acquisition of IRIS/Iris Studio Inc., expanding the ecosystem to over 8M devices and 4,603 products.

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

• Inventory rebalancing by OEMs led to a temporary revenue decline, but recovery signs appeared in 2H FY25 with gross profit up 12% over 1H.

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

Financial highlights

• FY25 revenue was A$62 million (US$40 million), with gross profit of A$51 million (US$32.9 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; reported net loss after tax was A$6.4 million.

• Software revenues grew 11% year-over-year to A$7.1 million (US$17.1 million); hardware revenue (chips, cards, modules) declined 50% due to inventory rebalancing.

• Positive operating cash flow of A$7.5 million; free cash outflow of A$11.3 million after investments.

• Cash position at June 30, 2025, was A$109.9 million, or A$72.8 million pro forma post-IRIS acquisition.

Outlook and guidance

• FY26 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 FY26 due to investments in IRIS and platform development; free cash flow expected to be negative.

• Significant revenue contribution from IRIS expected from FY27 onward; initial FY26 IRIS revenue will be modest.

• Gross margins expected to remain above 80% in FY26, supported by continued software revenue growth.

• Focus on expanding the Dante ecosystem, integrated solutions, and commercial rollout of Iris and Dante Director.