Audinate (ASX: AD8) (OTCPK: AUDGF) shares are up 13% this morning. AD8 shares are up on the back of their full year 23 results - which are, as we can guess from that share price reaction, good. It’s also worth noting that at an $800 million market cap this is a near $100 million increase in that capital value - this is not some small cap being moved by some glint of hope.
As to what’s done at Audinate: “Audinate Group Limited develops and sells digital audio visual (AV) networking solutions in Australia and internationally. It provides Dante, a technology platform that distributes digital audio and video signals over computer networks to original equipment manufacturers. The company also offers software products, such as Dante Controller, a real-time network monitoring device;” and so on. Given the network distribution of sound and video these days clearly an interesting sector.
The results: “For the year ended 30 June 2023, the Group reported an increase in revenue of 50.6% to $69.7 million from $46.3 million in the prior year ended 30 June 2022. As the Group invoices its customers in US dollars, this currency is a more relevant measure of sales performance. In US dollars, revenue increased by 40% to US$46.7 million in FY23 from US$33.4 million in the prior year.
Gross profit dollars increased by 45.2% to $50.2 million from $34.6 million in the prior year ended 30 June 2022.” Which is all lovely but of course we’re really interested in net profit, not adjusted EBITDAs and the like: “The Group now expects sufficient Australian taxable profits in future years to use $12.3 million of tax losses generated to date. Therefore, Audinate recognised prior year tax losses resulting in a $9.3 million income tax benefit in the current financial year. Due to the movements described above, the net profit after tax was $10.6 million for the year ended 30 June 2023, compared to a $4.5 million net loss after tax in the prior year.”
Audinate share price from Google Finance
Audinate themselves seem very proud of this: “Audinate delivers record revenue growth and profit” and, well, yes, they have.
The real market here though is that they’ve managed to grow revenue to now cover all costs. They’re cash generative which is indeed an interesting change for a tech company. Now the question becomes how big the market they can capture is.
