Audinate shelves revenue targets for 2025 fiscal year due to weaker customer demand

Audiovisual company Audinate has told investors it’s had weaker-than-expected demand from customers and that’s led to revised financial targets.

Audinate says 2025 will now be a transitional year after its revenue slump. Picture: Dave Cronin

Audiovisual company Audinate has downgraded its revenue targets for the 2025 financial year and told investors demand from customers had been weaker than expected .

The group blamed the weak performance on a challenging operating environment driven by shorter order lead times, increased inventory across the industry and softer-than-expected demand from end users.

Audinate expected headwinds to continue in the second quarter, on par with the first quarter, during which it delivered an unaudited gross profit of $US7.2m ($10.6m) – 67 per cent less than the $US21.8m it recorded in the same period a year ago.

Previously, Audinate had said it expected to generate a slightly lower gross profit in the financial year, but yesterday it said that due to the performance in the first half it was unlikely to achieve that and would update the market later on its revised expectations.

Audinate chair David Krall told investors at the annual meeting on Tuesday that the group was committed to addressing the challenging operating environment and would continue to build on its foundations for sustained business growth.

“The outlook was somewhat of a disappointment for us, because we had become accustomed to much higher growth rates year after year. But it’s here that there is also a good news/bad news message in our findings,” he said.

“We expect 2025 to be a transitional year, as our OEM customers continue to work through their backlog, and we wait for end-user demand to pick up the slack and re-accelerate future orders.

“As of right now we are expecting this to only take a year, but obviously that’s a projection that could change in the future.”

With more than six million Dante devices in the field, Audinate said growth would continue to be driven by the increasing adoption of Dante technology across a wide range of audio and video products.

During the second half the company plans to launch new AVIO adaptor products and a premium version of Dante Virtual Soundcard, which Audinate has forecast will contribute to earnings. It said demand for Dante continued to grow as manufacturers developed new Dante products, and AV system designers and installers increasingly chose Dante solutions.

Mr Krall said that product development would continue over the current year, but at a moderate pace as Audinate pursued positive earnings before interest, tax, depreciation, amortisation and operating cashflow.

Cost growth is expected to be 7-9 per cent for the fiscal year compared with the historical annual cost growth of 28.5 per cent over the past three years.

“We will also continue to seek out profitable and strategically important ways to deploy our cash balance, to further enhance our product offerings and to accelerate the rate of conversion of our market,” Mr Krall said.

“These efforts are ongoing, and with any luck we may find such an opportunity this fiscal year.”

Shares in Audinate closed down 6.1 per cent at $8.96 on Tuesday, taking total falls since January to 45 per cent.