Focusrite (TUNE) H2 2025 earnings summary

Executive summary

• Achieved group-wide growth despite challenging macroeconomic conditions and industry-wide overstock issues, with content creation returning to growth and audio reproduction outperforming industry declines.

• Revenue grew 6.6% (8.8% OCC) year-over-year, driven by strong Content Creation sales offsetting a slight decline in Audio Reproduction.

• Strategic focus on diversification, operational efficiency, and new product launches supported resilience and market share gains.

• Adjusted EBITDA decreased 2% to £24.7m, with higher sales offset by inflation and cost normalization.

• Adjusted diluted EPS fell 7.2% to 16.7p, while reported diluted EPS more than doubled to 9.0p due to non-repeat of prior year impairment.

Financial highlights

• Revenue: £168.9m, up from £158.5m year-over-year.

• Gross margin remained broadly flat at 44.5%-44.4% year-over-year, with pricing actions offsetting tariff impacts.

• Adjusted EBITDA margin was 14.6% of sales, slightly lower than last year, but improved in the second half.

• Net debt reduced to £10.8m (0.4x net debt/EBITDA), reflecting strong cash inflow and improved working capital management.

• Adjusted free cash flow: £6.4m, a significant improvement from -£4.5m in FY24.

Outlook and guidance

• Market volatility and tariff uncertainty, especially in the U.S., expected to persist over the next 12 months.

• Medium-term organic growth targeted at mid- to high-single digits, with incremental new products and selective M&A as growth drivers.

• Gross margins expected to remain broadly flat, with further pricing actions possible to offset rising tariffs.

• Ongoing focus on debt reduction and cost control, with stable overheads and gross margins.