Focusrite (TUNE) H1 2025 earnings summary

Executive summary

• Revenue grew 5.2% year-over-year to £80.9m, with organic constant currency growth of 7.2%, driven by Content Creation, while Audio Reproduction normalized after post-pandemic strength.

• Gross margin declined by 1.9 percentage points to 43.9%, impacted by product mix, normalization in Audio Reproduction, and higher freight costs.

• Adjusted EBITDA fell 14% to £10.4m, and EPS decreased, reflecting lower gross margin and increased costs, including variable remuneration resets.

• Net debt reduced to £17.9m from £27.3m year-over-year, with interim dividend maintained at 2.1p per share.

Financial highlights

• Revenue: £80.9m (HY25) vs £76.9m (HY24), up 5.2%.

• Gross margin: 43.9% (down from 45.8% in HY24), mainly from normalization in Audio Reproduction and product mix in Content Creation.

• Adjusted EBITDA: £10.4m (HY25) vs £12.1m (HY24), margin 12.9% vs 15.7%.

• Adjusted diluted EPS: 6.6p (HY24: 7.7p), down 14.3% year-over-year; reported diluted EPS: 3.1p, down 26.2%.

• Free cash outflow of £2.3m in H1, mainly from working capital; capitalized R&D investment ongoing.

Outlook and guidance

• Expecting low single-digit growth for the full year, with a slight weighting to the second half due to seasonality and new product launches.

• Gross margins anticipated to improve in H2 outside the US as one-off and freight costs subside.

• Cash flow expected to turn positive in H2, leading to a net inflow for the year and reducing net debt.

• Profit expectations for the year remain unchanged, but US tariff volatility and macroeconomic risks remain key uncertainties.