The Audinate Group Ltd (ASX: AD8) share price is trading lower for the day after the company released a trading update earlier this morning. Here are some of the highlights from the company's announcement and an outlook for 2020 and beyond.
Highlights from Audinate's trading update
In this morning's trading update, Audinate reported unaudited revenue of $30.3 million for the 12 months to 30 June 2020, with a gross margin of 77%. As a result, Audinate recorded unaudited EBITDA of $2.0 million for FY20 with $29.3 million cash on hand as at 30 June.
Audinate also provided a financial update on its performance in the fourth quarter of FY20 and highlighted the impact of the COVID-19 pandemic and government restrictions on its business. For the fourth quarter, Audinate generated US$4 million in unaudited revenue, with the company's management highlighting a recovery in revenue and sales in June.
The outlook for Audinate
Audinate specialises in hardware and software solutions for the audio-visual (AV) market. The company's flagship and award-winning Dante program is a global leader in AV connectivity. It eliminates the need for traditional analogue connections by transmitting synchronised audio signals across large distances via IP networks. As a result, Audinate's platform is used extensively across the professional live sound, broadcasting and recording industries globally.
Due to the pandemic, Audinate was forced to withdraw its FY20 growth guidance as government lockdowns impacted key markets and large gatherings. The company has contracted manufacturing operations in China and Malaysia which were impacted during the height of the pandemic. In an earlier trading update, Audinate's management assured investors that the company is well positioned with a strong balance sheet.
In response to the pandemic, Audinate launched a range of marketing campaigns to highlight the benefits of the Dante program to industries needing to adapt to remote working conditions. Audinate noted the challenging trading conditions over the next 6 months and expects cash operating costs to be in line with FY20 if exchange rates remain stable.
The Audinate share price was up more than 8% in early trade after hitting an intraday high of $5.82. Since then, the company's shares have been sold down and are currently trading at $5.07 which is nearly 6% lower for the day.