Audinate (ASX:AD8) share price climbs as FY21 revenue surges 22%

Here's how Audinate performed in FY21…

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The Audinate Group Ltd (ASX: AD8) share price is climbing higher this morning. This follows the audio tech company releasing its FY21 full-year results in the early hours.

At the time of writing, Audinate shares are up 2.2% to $10.73. The company's shares have been pushing higher over the past month or so after revealing its FY21 trading update.

Audinate share price jumps following strong revenue growth

  • Revenue up 22.5% to US$25 million (A$33.4 million)
  • Gross profit increased 23.1% to US$19.2 million compared to prior year
  • Earnings before interest, tax, depreciation, and amortisation (EBITDA) of A$3 million, up 50.1%
  • Bottom line losses narrowed to A$3.4 million, a 17% improvement on FY20
  • Expanded into video products with launch of Bolin Technology and Patton Electronics

What happened in FY21 for Audinate

The Audinate share price is rising on Monday after reporting its full-year results. Investors will be thumbing their way through the software and hardware supplier's latest metrics to make up their own minds.

According to the release, Audinate managed to pull in total revenue of US$25 million in FY21 – representing an increase of 22.5% from the previous year. This growth was predominantly driven by software products. In fact, software revenue grew by ~62% thanks to an uptick in Dante software royalties.

Additionally, a positive for the Audinate share price is its narrowing losses on the bottom line. Net losses after tax came in at A$3.4 million, compared to a A$4.1 million loss in FY20. The company noted this improvement was a result of increased revenue, lower income tax expense, and an increase in depreciation and amortisation write-offs.

Audinate made note of its expanded total addressable market, now residing above A$1 billion in total. This reflects the company's entrance into video products in addition to audio. During the year, Audinate successfully launched 6 OEM Dante video products. As a result, it now can offer complete 'Dante AV' solutions.

What did management say?

Commenting on the result, Audinate Co-founder and Chief Executive Officer Aidan Williams said:

The strong demand for our technology as the AV industry recovers from COVID is particularly
encouraging for Audinate's longer-term outlook. In the short term, we expect continued supply chain
uncertainty throughout the remainder of CY21, and whilst this may limit revenue growth in the near
term, we remain confident that Audinate can deliver US$ revenue growth in the historical range for
FY22.

Additionally, regarding the company's video product developments, Mr Williams said:

The launch of Dante video products, record numbers of design wins and the establishment of an
engineering team in Cambridge, UK are significant milestones as we execute our strategy to
revolutionise the AV industry.

What's next for Audinate?

The company currently holds a record level of backlog sale orders for the proceeding months. To support future growth in its video and cloud services, Audinate will be targeting a headcount of 170 employees over FY22. This would be a notable increase on the 135 employees as at 30 June 2021.

Looking ahead, the focus is on driving further design wins for software products, reducing product adoption friction, and improving scalability — among other things.

Finally, Audinate expects revenue growth to return to the historical range in FY22.

Audinate share price snapshot

Shareholders in Audinate would have to be pleased with their returns over the past year. The Audinate share price delivered a significant outperformance of the S&P/ASX 200 Index (ASX: XJO), climbing 97% compared to 21.7%.

Despite impacts from live music being put on ice due to the pandemic, the audiovisual tech company has ascended to new heights.

Audinate now holds a market capitalisation of approximately $800 million.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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