Audinate Earnings: No Signs of Improvement Yet

We maintain our AUD 18.50 per share fair value estimate for narrow-moat Audinate following its first-quarter fiscal 2025 update. The company indicated that it does not expect to meet its previously issued guidance for the full year, which it issued in August. Specifically, the company no longer expects to generate “slightly lower USD gross profit compared to fiscal 2024.” The company did not update its guidance but will update the market after the completion of second-quarter fiscal 2025 trading. Although the update is a further disappointment, we, like management, expect fiscal 2025 to be a transition year for the company and expect growth to reaccelerate from fiscal 2026. At current prices, Audinate shares screen as materially undervalued, as the market appears to believe the company’s current slowdown may signal a loss of competitive position or exhaustion of its addressable market.