Company Reports

Audinate shares jumped more than 10% after it reported 15% growth in USD-denominated revenue and gross profit. The company reported an underlying EBITDA loss of AUD 4 million and negative free cash flow of AUD 17 million.

We expect Audinate’s strategy to primarily focus on accelerating the secular transition toward digital audio networking. Secondarily, we expect Audinate to focus on building out its nascent business for digital video networking.

We expect Audinate’s strategy to primarily focus on accelerating the secular transition toward digital audio networking. Secondarily, we expect Audinate to focus on building out its nascent business for digital video networking.

The Pro AV Business Index, provided by the Audiovisual and Integrated Experience Association, reflects softening AV demand for the second half of fiscal 2026, following the start of the Iran war. However, the AV industry has remained in net growth territory.

We expect Audinate’s strategy to primarily focus on accelerating the secular transition toward digital audio networking. Secondarily, we expect Audinate to focus on building out its nascent business for digital video networking.

Audinate's first-half gross profit grew 12%, as chips, cards, and modules, and software each grew by double digits. Free cash flow was negative AUD 7 million. Shares fell sharply on the result.

The S&/ASX 200 technology sector has fallen 20% in the past month, with investors re-evaluating the sector's lofty return and earnings expectations. We take this opportunity to evaluate long-term returns across our Australian tech coverage through the lens of a company's reinvestment runway.

We expect Audinate’s strategy to primarily focus on accelerating the secular transition toward digital audio networking. Secondarily, we expect Audinate to focus on building out its nascent business for digital video networking.

Audinate's fiscal 2025 revenue fell by a third, gross profit declined by 25%, and EBITDA turned to zero. Fiscal 2026 guidance is for losses to deepen, with gross profit to increase by 14% but operating costs to rise by 25%. Shares fell 20% with the result.

We expect Audinate’s strategy to primarily focus on accelerating the secular transition toward digital audio networking. Secondarily, we expect Audinate to focus on building out its nascent business for digital video networking.

Audinate is set to acquire US-based cloud video platform Iris Studio for up to USD 28 million, comprising USD 20 million upfront in cash and USD 8 million in service contingent cash and scrip over three years. The transaction is expected to close mid-July 2025.

US President Donald Trump's tariffs have rattled global markets. Tariff rates have been raised to levels not seen in a century, which may set in motion a cascade of supply/demand side shocks, depending on how long and high these tariffs stay.

We expect Audinate’s strategy to primarily focus on accelerating the secular transition toward digital audio networking. Secondarily, we expect Audinate to focus on building out its nascent business for digital video networking.

We raise our fair value estimate for narrow-moat Audinate to AUD 19 per share from AUD 18.50 with first-half results. The company’s results aligned with fiscal 2025 being a transition year for the company, and growth resuming in fiscal 2026. Share prices jumped on the result but still screen as undervalued.

We expect Audinate’s strategy to primarily focus on accelerating the secular transition toward digital audio networking. Secondarily, we expect Audinate to focus on building out its nascent business for digital video networking.

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.

We expect Audinate’s strategy to primarily focus on accelerating the secular transition toward digital audio networking. Secondarily, we expect Audinate to focus on building out its nascent business for digital video networking.

We maintain our AUD 18.50 per share fair value estimate for narrow-moat Audinate following the release of its fiscal 2024 results. The company released fiscal 2024 results on Aug. 6, 2024, including its outlook for fiscal 2025, which shocked markets. The company guided for a decrease in revenue in fiscal 2025 and flat to slightly negative gross profit growth, compared with market expectations for more than 20% growth for both. The current release provides more detail and shows that the company and industry are transitioning from hardware-based to software-based sales, which come with lower per-unit revenue and gross profits.

We expect Audinate’s strategy to primarily focus on accelerating the secular transition toward digital audio networking. Secondarily, we expect Audinate to focus on building out its nascent business for digital video networking.

We lower our fair value estimate for narrow-moat Audinate by 20% to AUD 18.50 per share after the disappointing prerelease of fiscal 2024 results. While the fiscal 2024 result is in line with our revenue and profit forecasts, guidance for fiscal 2025 signifies a dramatic, unexpected slowdown. The share price nearly halved at the open, before recovering to trade down around a third. We view Audinate shares as materially undervalued as fiscal 2025 is likely a transition year, after which growth will reaccelerate and margins will expand again.