Audinate Faces FY26 Cost Surge Amid Strategic Push and Market Recovery

A Year of Transition and Strategic Investment

Audinate Group Limited, the technology leader behind the Dante media networking platform, reported a transformative FY25 characterized by significant operational shifts and strategic expansion. The company shipped one million Dante devices during the year, a milestone underscoring its entrenched position in the professional audio-visual (AV) industry. However, FY25 also saw a 32% decline in revenue, primarily due to customers working through excess inventory, which delayed new orders for Dante hardware components.

Despite these headwinds, Audinate’s embedded software revenue grew by 15%, reflecting strong underlying demand and a successful pivot towards higher-margin software offerings. This shift is part of a broader strategy to evolve from hardware-centric sales to software-driven solutions, which promise greater resilience against inventory cycles and improved profitability.

Expanding the AV Ecosystem with Iris Acquisition

In a move to broaden its platform capabilities, Audinate completed the strategic acquisition of Iris Studio Inc. in July 2025. Iris, a US-based cloud-first platform specializing in AI-driven remote video production and AV control, complements Audinate’s vision of delivering a unified, interoperable audio, video, and control platform. The acquisition brings advanced features such as AI-powered auto-tracking and color correction, positioning Audinate at the forefront of AV-over-IP innovation.

The Iris platform is slated for a public launch in the first half of FY26, with Audinate planning significant investment in go-to-market initiatives and product development to accelerate adoption. This acquisition not only enhances Audinate’s video capabilities but also aligns with its long-term strategy to deepen customer engagement across diverse markets including corporate, entertainment, education, and government sectors.

Financial Performance and Operational Highlights

Audinate’s gross profit in US dollars increased by 12% in the second half of FY25 compared to the first half, signaling a recovery as inventory rebalancing completed. The gross margin improved to 82.3%, driven by the transition to higher-margin software products. While revenue declined 32% year-over-year to A$62.1 million, the company maintained a robust cash position with A$109.9 million in cash and term deposits at period end, providing ample flexibility for strategic investments.

Product innovation continued with the launch of next-generation Dante AVIO adaptors tailored for professional installers, and enhancements to the Dante Director cloud-based management platform. The company also expanded its ecosystem, with 4,603 Dante-enabled products in the market and 725 OEM brands licensing Dante technology, reinforcing its dominant market position with 14 times the adoption of its nearest competitor.

Outlook – Positioned for Growth in FY26

Looking ahead, Audinate is focused on accelerating growth through ecosystem expansion, integrated solutions, and the successful market entry of the Iris platform. The company expects US dollar gross profit growth of 13-15% in FY26, outpacing industry growth rates, while maintaining stable gross margins supported by software revenue. Operating costs are forecast to rise by 25% due to increased investment in strategic initiatives, with free cash flow expected to be negative as the company prioritizes growth and platform development.

Audinate’s strong balance sheet and strategic acquisitions position it well to lead the AV industry’s transition to IP-based, software-driven solutions. The company’s vision to provide a dominant interoperable AV platform is gaining momentum, setting the stage for meaningful revenue contributions in the coming years.