Atomos Faces Going Concern Risks Despite Profit Turnaround
Atomos Limited has reported a profitable first half of FY26 with revenue up 28%, driven by strong sales and cost discipline. The company reaffirms its full-year guidance, anticipating further growth and positive cash flow in the second half.
- H1 FY26 revenue rises 28% to $23.7 million
- EBITDA turns positive at $1.9 million after prior losses
- Fixed costs reduced by 29%, boosting operating leverage
- Proceeds from option exercises used to reduce debt
- New product launches and firmware updates support growth
Financial Turnaround
Atomos Limited (ASX:AMS) has delivered a notable turnaround in its half-year results for the six months ended 31 December 2025. The company reported revenue of $23.7 million, a 28% increase compared to the prior corresponding period, and an EBITDA of $1.9 million, swinging from a $5.6 million loss a year earlier. This marks the first time in over three years that Atomos has posted consecutive EBITDA positive quarters, signalling improved operational consistency.
The profit after tax of $0.2 million contrasts sharply with the $6.6 million loss recorded in H1 FY25. While the company still experienced a net operating cash outflow of $1.5 million, this is a significant improvement from the $7.3 million outflow in the previous year, reflecting better cash management and working capital control.
Cost Discipline and Debt Reduction
Central to Atomos’ improved performance has been a rigorous cost reduction program. Fixed costs fell by 29% year-on-year, primarily driven by a 26% reduction in staff expenses, bringing average monthly fixed costs down to $1.1 million. This leaner cost base is enabling the company to leverage higher sales volumes more effectively.
In addition, the company benefited from the exercise of approximately 260 million ASX-listed options prior to their expiry in November 2025, raising $7.8 million. These funds were promptly applied to reduce outstanding debt under a related party loan facility, lowering the balance to $9.9 million as at 31 December 2025. The facility, which matures in February 2027, remains fully drawn with interest capitalised.
Product Innovation Driving Growth
Atomos’ revenue growth was driven by strong demand for its flagship Ninja and Shinobi product ranges, supported by enhanced marketing execution and growth in direct-to-consumer sales. The company launched several new products during the half, including the Ninja TX, Ninja TX GO, and Shinobi 7 RX, each featuring significant technological upgrades such as 12G SDI connectivity, Wi-Fi, Bluetooth, and cloud workflow integration.
Post-period, Atomos introduced the Shogun AV 19 and Ninja RAW, completing its next-generation product lineup. Early pre-orders for the Shogun AV 19 have been strong, reflecting market confidence in the refreshed portfolio. Firmware updates expanding ProRes RAW recording and camera control capabilities further enhance the ecosystem, aligning with industry trends and software compatibility improvements announced by partners like Blackmagic Design.
Outlook and Strategic Focus
Looking ahead, Atomos reaffirmed its FY26 guidance, expecting second half sales and EBITDA to exceed first half results, alongside positive operating cash flow. The company plans multiple new product releases and continues to develop its firmware and ecosystem. It is also exploring white label partnerships and potential acquisitions to broaden its product and technology offerings.
Despite reporting negative net assets of $3.2 million, the board remains confident in the company’s ability to continue as a going concern, supported by positive EBITDA, improved cash flow forecasts, and available mitigating actions such as additional funding or extended supplier terms if necessary.
Bottom Line?
Atomos’ H1 FY26 results mark a clear inflection point, but sustaining momentum will hinge on delivering on product innovation and managing liquidity risks.
Questions in the middle?
- Can Atomos sustain its positive EBITDA trajectory into FY27 amid competitive pressures?
- What impact will new product launches have on market share and gross margins?
- How will the company manage its debt maturity and potential need for additional funding?
