Atomos FY25 Revenue Falls 9% as Cost Cuts and New Launches Aim to Drive Growth

FY25 Performance, Challenges and Realignment

Atomos Ltd (ASX, AMS), a leader in video production equipment, reported a 9% decline in revenue for FY25, falling to A$32.7 million. The downturn was primarily driven by increased US tariffs that disrupted sales in the critical fourth quarter, alongside disappointing market reception for new products like the Ninja Phone and SunDragon. Despite these setbacks, the company maintained gross margins around 34.5%, though these are expected to face pressure moving forward due to ongoing tariff impacts and competitive pricing dynamics.

Operationally, Atomos undertook a significant restructuring, reducing its fixed cost base by more than 40% and trimming headcount from 94 to approximately 55 employees. This leaner cost structure, combined with the surrender of several office leases and a focus on digital marketing over costly trade shows, positions the company for improved financial discipline.

Strategic Shift, Product and Market Expansion

Looking ahead to FY26, Atomos is betting on a refreshed product suite and an expanded go-to-market strategy to reverse the revenue decline. The company plans to launch next-generation core products, including the Shinobi GO and Ninja TX monitors, alongside new value-add offerings such as headphones, PTZ cameras, and wireless video transmission units. These products aim to broaden Atomos’ appeal beyond professional videographers to the rapidly growing social media influencer and amateur content creator segments.

Complementing product innovation is a modernized sales approach that integrates traditional wholesale channels with a growing direct-to-consumer (D2C) presence. Early results from the D2C channel are promising, showing steady growth in website traffic and sales, supported by targeted digital marketing and retail media strategies. This omni-channel approach is designed to build stronger, stickier customer relationships and capture a larger share of the expanding content creation market.

Leadership and Financial Stability

Atomos has refreshed its leadership team to align with its new strategic direction. CEO Peter Barber, co-founder of Blackmagic Design and a major shareholder, leads the company with a hands-on approach, including providing a $13.7 million debt facility to support growth initiatives. The addition of Adam Kron as Chief Digital & Strategy Officer brings extensive experience in e-commerce and digital marketing, critical for scaling the D2C channel. CTO Daniel Moore, with a strong background in software engineering, is spearheading product innovation.

Financially, the company expects to stabilize gross margins around 35% in the medium term, despite tariff pressures, aided by price adjustments in the US market. Legacy payment plans and non-recurring expenses are expected to be fully settled by Q1 FY26, improving cash flow. Inventory levels remain healthy, with over $3 million in components ready for new product manufacturing.

Outlook, Positioned for Scalable Growth

Atomos’ FY26 outlook is cautiously optimistic. The company aims to return to sales growth driven by new product launches and an expanded product ecosystem, supported by a modernized sales and marketing strategy. The focus on digital channels and direct consumer engagement reflects a broader industry trend towards democratized content creation. However, the company remains mindful of ongoing tariff uncertainties and competitive pressures that could impact margins and sales momentum.

Overall, Atomos appears to be navigating a challenging environment with a clear plan to leverage innovation, operational efficiency, and market expansion to regain growth and profitability.