Guess which ASX 300 stock is rocketing 17% after record half

This tech stock is flying high on Monday. Let's find out why.

| More on:
A man wearing glasses and a white t-shirt pumps his fists in the air looking excited and happy about the rising OBX share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Audinate Group Ltd (ASX: AD8) shares are catching the eye on Monday morning.

At the time of writing, the ASX 300 stock is up a sizeable 17% to a record high of $18.75.

This follows the release of the media networking solutions provider's half-year results.

ASX 300 stock delivers record result

  • Revenue up 47.7% to US$30.4 million (A$46.6 million)
  • EBITDA up 137% to A$10.1 million
  • Net profit after tax of A$4.7 million (compared to loss of A$0.4 million)
  • Operating cash flow up 18% to A$11.8 million
  • Cash and equivalents balance of A$111.7 million

What happened during the half?

For the six months ended 31 December, Audinate reported a 47.7% increase in revenue to a record of US$30.4 million.

A key driver of this growth was revenue from Chips, Cards and Modules (CCM), which grew 45.6% to US$22.7 million.

Among the highlights were its Brooklyn modules and Ultimo chips, which grew revenue by 50% and over 200%, respectively. The latter was boosted by easing supply constraints, which allowed the ASX 300 stock to satisfy a backlog of pent-up demand. Management expects Ultimo revenue growth to revert to a lower rate in the second half.

Also performing positively was its Software business, which reported revenue growth of 56.2% to US$7.3 million. The products primarily responsible were IP Core (up ˜100%), Dante Embedded Platform (up ˜75%), and retail software sales (up ˜60%).

Audinate's gross margin percentage increased to 71.8% from 71.2% in the previous corresponding period, held back by the fulfilment of pent-up Ultimo demand. Further improvements in margin are expected in the second half due to cost reduction initiatives and favourable product mix shift.

EBITDA more than doubled during the half and came in at a record of A$10.1 million. This was driven by strong sales growth and an improving EBITDA margin despite an increase in its headcount from 186 to 204.

The company also invested in new products during the half. Management highlights that it achieved significant new product milestones with its Dante Connect product. In addition, momentum has continued to build with its video solutions business, with 50 manufacturers now licensing its offerings (up from 30 a year ago).

Management commentary

Audinate's co-founder and CEO, Aidan Williams, commented:

Our first half results have again been excellent as the business was able to fully satisfy the demand for Dante products free from recent constraints.

It was an outstanding result to achieve our aim of a cumulative ecosystem of >30,000 video products ahead of schedule, and I look forward to further successes over the remainder of FY24.

Outlook

While no guidance was given for the full year, management remains cautiously optimistic on its outlook. It said:

The Company continues to be watchful of potential softening global economic conditions over the rest of FY24. Improving supply chain conditions and shorter lead times for our customers result in a reduced sales order backlog, complicating management of any softening in economic conditions.

The Company continues to explore several M&A opportunities, buoyed by a stronger balance sheet from the capital raise.

This ASX 300 stock is now up over 130% since this time last year.

Motley Fool contributor James Mickleboro 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 Audinate Group. The Motley Fool Australia has positions in and has recommended Audinate Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Earnings Results

ASX 200 stock jumps 10% on strong FY24 results

How did this KFC restaurant operator perform in FY 2024?

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Consumer Staples & Discretionary Shares

Guess which ASX 200 stock just slashed its final dividend by 23%

This retailer had a tough time during the 12 months. Here's how it performed.

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »