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Audinate Group Limited (ASX:AD8) has published its 1H19 results presentation. AD8 is a world-leading supplier of digital audio networking for the Professional AV industry. It has a growing network effect with the number of Dante-enabled products in the market. Audinateâs core technology, called Dante, distributes audio signals across computer networks. Dante comprises software and hardware that resides inside the audio products of Audinateâs Original Equipment Manufacturers (OEM) customers.
Operational Highlights:
There was a 59% growth in CCM (chips, cards, modules & adapters) units shipped to 181k, 22% growth in Dante software units shipped to 88k and 125% more people were trained on Dante (18,000). The expansion in the business happened because of the Robust core audio networking business which included market leadership position in digital audio networking. Also, 1,751 products were shipped from 228 manufacturers, which is still growing. The continued conversion from analogue connected systems to digital, expansion of Dante core networking offerings including software-based solutions and plenty of runway for growth with management estimate digital penetration being 7-8% were other drivers for growth.Â
Dante AV was launched in February 2019 at Integrated Systems Europe and has complete HDMI-over-IP product design which enables rapid time to market. Dante AVIO Adaptors 1H19 sales were ahead of budget. It established a global distribution channel of online retailers and country distributors and 77 resellers in 45+ countries and grew more than 50% on 2H18. Dante Domain Manager â System Management Software 1H19 sales were on the budget. The company stays focussed on expanding and educating the sales channel of the product with 133 resellers (System Integrators) signed to date (33% in 1H19) and additional staff in Germany, Japan, China & existing geographies.
The core business growth strategy includes increasing market awareness of Dante products, increasing penetration of Dante throughout each OEM brandâs product portfolio and Increase the number of OEMs adopting Dante.
Financial Highlights:
For the half-year period ended 31 December 2018, the Group reported an increase in revenue of 60% to A$14.2 million from A$8.8 million in the previous comparable period. In US dollars, revenue increased by 51% to US$10.3 million for the current period, compared to US$6.8 million for the half-year ended 31 December 2017. The Group has grown its OEM base by 31 manufacturer brands over the six months ended 31 December 2018 (31 added in the previous comparable period). Dante chips, cards and modules shipped in the period increased to approximately 181,000 units, about 59% up from the prior comparable period. Audinate revenue from software included royalties, consumer software and Dante Domain Manager. During the period, units of software sold increased to approximately 88,000 for the six months, up by 22% from the same period in the prior year.
The impact of revenue growth in excess of operating costs resulted in earnings before interest, tax, depreciation and amortisation ('EBITDA') increasing to approximately A$1.7 million, up from A$0.1 million for the six months ended 31 December 2017. The Group recorded a profit after tax of A$844,844 for the half-year ended 31 December 2018 compared to A$2,186,910 for the previous comparable period, which included the non-recurring benefit of tax consolidation.
The stock of the company is currently trading at A$4.830 (as at 20 February 2019, 3:05 PM AEST), up by 10.274% from the previous close.
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