Audinate Reports US$46 Million Revenue and Underlying EBITDA Loss of A$3.6 Million in FY26

Revenue Growth Masks Rising Losses

Audinate Group Limited (ASX:AD8) delivered a solid 15% increase in US dollar revenue to US$46 million for FY26, marking a return to growth after a challenging prior year. The company’s Dante platform, the industry standard for digital audio networking, now powers over 8 million shipped devices across 5,158 products from 542 OEM partners worldwide.

However, this topline momentum belies a widening underlying EBITDA loss of A$3.6 million, compared to a modest profit of A$0.7 million in FY25. The loss reflects significant ongoing investment in new growth initiatives, including the integration and commercial ramp of Iris Studio Inc., a US-based AI-driven SaaS video production platform acquired in July 2025 for approximately A$31 million in cash.

Expanding the Dante Ecosystem Beyond Audio

Audinate’s strategy is clearly evolving beyond its audio networking roots. The acquisition of Iris has extended its product portfolio into intelligent camera control and cloud-enabled video workflows, areas that complement Dante’s existing audio and control offerings. Iris now supports 20 OEM camera partners and contributes early-stage subscription revenue, although its financial impact remains modest at A$0.3 million revenue and a loss of A$3 million post-acquisition.

The company also broadened its adaptor product range with the launch of 'AVIOs for Installation,' targeting corporate meeting rooms, education, and boardrooms. Software offerings like Dante Director and DVS Pro continue to gain traction, underpinning recurring revenue opportunities and platform monetisation.

Cost Restructure Sets Stage for FY27 Profitability

In FY26, Audinate undertook a significant cost realignment, reducing workforce and overheads in areas where major build programs have completed, while preserving investment in R&D critical for future growth. This leaner operating model is expected to deliver improved operating leverage and cash flow in FY27, as revenue scales and restructuring benefits fully materialise.

Despite a 9% increase in Australian dollar revenue to A$67.8 million, operating expenses rose 17% to A$59.1 million, driven by higher employment costs including acquisition-related share-based payments and variable incentives. Sales and marketing spend was reduced by 15%, reflecting a more disciplined approach post-Dante Director launch.

Robust Balance Sheet Supports Strategic Flexibility

Audinate ended FY26 with a strong cash and term deposit position of A$65.1 million, down from A$109.9 million the prior year primarily due to the Iris acquisition and ongoing platform investments. The company carries no external debt, providing financial flexibility to support its strategic priorities.

Intangible assets nearly doubled to A$65.7 million, reflecting capitalised development costs and goodwill from the Iris acquisition. Deferred tax assets include A$16.4 million in Australian tax losses, indicating potential future tax benefits.

Executive Pay Reflects Strategic and Financial Performance

The FY26 remuneration report reveals that CEO Aidan Williams and CFO Chris Rollinson received short-term incentives at 99% of target, reduced by board discretion in light of shareholder returns. The FY24 long-term incentive plan lapsed in full due to unmet performance thresholds. Both executives saw increases in fixed remuneration, with Williams’ total fixed pay rising to $650,000 and his long-term incentive opportunity increased to 200% of fixed pay.

Board composition changed with Alison Ledger appointed Chair in August 2025, succeeding David Krall. The Remuneration and Nomination Committee continues to oversee alignment of pay with strategy execution and shareholder value creation.

ESG and AI Governance Embedded in Operations

Audinate continues to develop its environmental, social, and governance framework, reporting on diversity, inclusion, and sustainability metrics. The company has ISO/IEC 27001:2022 certification for information security and is building AI governance practices as it integrates AI-enabled workflows into its products, notably through the Iris platform.

While Audinate’s core revenue remains linked to physical hardware installed in professional AV systems, its platform and APIs provide a foundation for AI-driven workflow automation, positioning the company to benefit from industry digitisation trends.

What to Watch in FY27

Investors will be watching how effectively Audinate converts its expanded product portfolio and ecosystem growth into improved profitability and cash flow. The full benefits of the FY26 cost restructure are expected to emerge in FY27, alongside sustained gross profit growth at around 82%. The commercial ramp of Iris and software subscription revenues will be critical to diversifying revenue streams beyond hardware licensing.

Execution risks remain around integrating video and control offerings into a traditionally audio-focused platform and competing in markets with established players. The company’s ability to maintain its dominant position amid evolving AV networking standards and to leverage AI-enabled workflows will shape its medium-term trajectory.