Audinate share price slides despite record revenue and earnings

The audio-visual company also announced an increase in net loss for FY22.

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Key points

  • Audinate share price is down almost 4% so far on Monday after the company released its FY22 results
  • Audinate reported record venue and EBITDA for the period
  • However, the net loss after tax also increased compared to FY21 

The Audinate Group Ltd (ASX: AD8) share price is dropping in midday trade on Monday amid the company releasing its FY22 results.

The audio-visual networking company's share price is currently $8.79, a 3.72% fall. For perspective, the S&P/ASX 200 Index (ASX: XJO) is down 0.83% today.

Let's take a look at what Audinate reported to the market.

Audinate reports revenue and earnings boost

Highlights of Audinate's FY22 results include:

What else did the company report?

Audinate said the directors consider EBITDA to reflect the "core earnings" of the group. The company said the EBITDA and revenue results were a record for the company.

However, the gross profit margin fell due to higher rare material costs including spot inventories, according to the company.

Operating expenses also jumped 34.9% to $30.3 million while employee costs rose by $6.1 million with 43 more staff being added to the team.

Sales and marketing expenses also lifted $2.6 million on the previous financial year. As COVID-19 restrictions eased, trade shows and business travel increased, the company said.

Meantime, administration and other costs lifted by 28% to $3.8 million. This was largely attributed to the $0.5 million costs related to the company's Silex Insight acquisition.

Also reflected in the result was the loss of government COVID-19 subsidies. In FY21, Audinate received $0.8 million from the government.

However, major revenue drivers, the company's chip cards and modules (CCM) and software segments, experienced growth in FY22. This revenue boost was driven by unit product growth, price increases to preserve margins, and more revenue from the Silex acquisition.

Management comment

Commenting on the results, CEO Aidan Williams said:

We are very pleased that Audinate has been able to deliver compound annual growth (CAGR) in US$ revenue of 28% over the last two years.

During this period the business has experienced COVID related impacts, initially to demand and then to supply chain, but showed resilience, maintained margins, and grew revenue strongly.

What's ahead?

Audinate said the company's headcount of 178 is "the foundation" for doubling revenue in the medium term.

In FY23, Audinate has plans to add 10% more people to its team, with a focus on the Philippines.

Despite record demand, Audinate expects supply chain uncertainty to continue into the first half of FY23.

The company will focus on video and target revenue of US$2 million or more in FY23.

The professional AV industry is forecast to grow 11% to $263 billion in the calendar year 2022, and up to $351 billion by 2027.

Audinate share price snapshot

The Audinate share price has declined 15% in the past year but is holding its own year to date, gaining around 1%.

But in the past month, Audinate shares have climbed about 3%.

For perspective, the benchmark ASX 200 index has lost 6% in the past year.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended AUDINATEGL FPO. The Motley Fool Australia has positions in and has recommended AUDINATEGL FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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