Key Takeaways:
- Revenue rose 9% in AUD terms to AUD 68 million, up 15% in USD
- Gross margin held at 81.9% with second-half gross profit growth at 17%
- FY 2027 guidance: flat operating costs, free cash flow breakeven targeted for FY 2028
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Audinate shares jump 13% as FY 2026 revenue returns to growth
Audinate reported FY 2026 revenue of AUD 68 million, up 15 percent in USD, as the Dante networking company returned to growth.
"The acquisition of Iris actually represents a pretty significant strategic shift for Audinate in how we think about monetizing our networking technology and how we think about monetizing audiovisual installations as a whole," Chief Executive Aidan Williams said.
Gross margin held at 81.9 percent, down from 82.3 percent in FY 2025. Second-half gross profit growth accelerated to 17 percent from 12 percent in the first half. Underlying EBITDA swung to a loss of AUD 3.6 million from a profit of AUD 0.7 million a year earlier, reflecting investment ahead of revenue in Iris, Dante Director and the broader platform. Operating cash flow fell to AUD 1.2 million from AUD 7.4 million. The company ended the year with AUD 65 million in cash and term deposits. EPS figures were not disclosed.
Shares rose 13.33 percent to $2.38 after the results, though the stock remains well below its 52-week high of $7.18. Management guided for flat operating costs in FY 2027 and expects free cash flow breakeven in FY 2028.
The company recorded 137 design wins during the year, a leading indicator of future revenue, while 555 new Dante-enabled products came to market, bringing the total to 5,158. The Dante ecosystem now spans 771 OEM manufacturers, with 542 shipping products and 229 developing new ones. More than 8 million devices are in the field.
Iris, the video-control platform acquired during the year, generated AUD 200,000 in revenue. Management said the earn-out target of AUD 10 million to AUD 15 million in revenue after three years is not on track. The company restructured operations during the year, cutting 10 percent of roles across the group.
Chief Financial Officer Chris Rollinson said the company invested ahead of revenue in new initiatives. "We invested ahead of revenue for Iris, Dante Director, and the broader platform because we believe the market opportunity in front of us justifies this," he said.
For FY 2027, management expects gross profit growth in line with or slightly ahead of FY 2026, with gross margin around 82 percent. Operating costs are guided flat, with about AUD 1.8 million in non-cash Iris acquisition-related amortization and no restructuring costs. Capital expenditure is expected at about AUD 13 million.
Supply chain pressures remain a live issue. Management said RAM prices are elevated and FPGA supply is tightening, though the company has implemented price increases to offset higher component costs. Corporate office and higher education end markets remain soft, and AVIXA data shows the broader AV industry has cooled from post-pandemic growth rates.
The guidance implies the core embedded components business will drive most of FY 2027 growth rather than new revenue lines. The path to profitability hinges on Iris scaling subscribers and the broader platform gaining traction, with management targeting free cash flow breakeven in FY 2028. Investors will watch the company's next quarterly update for progress on Iris adoption and margin trends.
This article is for informational purposes only and does not constitute investment advice.
