Audinate Group (ASX:AD8) FY18 results


by Rachael Jones

Audinate Group Limited (ASX:AD8) CEO Lee Ellison talks through the company's FY18 results and new product launches to revolutionise audio-visual systems.

Rachael Jones:
Hello I’m Rachael Jones for the Finance News Network. Joining me today from the Audinate Group Limited (ASX:AD8) is CEO, Lee Ellison. Lee, welcome back to FNN.

Lee Ellison: Hi Rachael, it’s good to be back.

Rachael Jones: First of all, could you start by reminding our viewers what Audinate does?

Lee Ellison: Audinate is the leading provider of audio networking technology and has become the de facto standard, for the professional audio industry. Our customers are the global customers around the world, companies like Yahama (TYO:7272), Shaw (TSE:SJR.B), Bosch (NSE:BOSCHLTD), Harman (NYSE:HAR) and they all use our technology inside their products.

So in the past, the way that professional audio systems were connected was using analog cabling. And it was point-to-point cabling, it was expensive, it was cumbersome. But in today’s new world Audinate is leading this technology convergence, moving the professional audio industry into the IT world. As a result you can put hundreds of signals, of audio signals, just over a standard computer data network. That saves our customers time, that saves them money.

Rachael Jones: Now could we talk about your financial year 2018 results. What were the highlights for your first year as a listed company?

Lee Ellison: We actually listed on the Australian Stock Exchange 30 June 2017, so this is our first full year. And once again, we exceeded the prospectus forecast, very very happy with the results as I think our shareholders are as well. The revenues grew in terms of US dollars 35 per cent, in terms of Australian dollars that grew to $19.7 million. EBITDA was $600,000 versus prospectus forecast of a loss of $1.2 million.

Rachael Jones: Could we talk about your products and the progress they’re making, starting with the Dante Domain Manager?

Lee Ellison: The Dante Domain Manager was one of the new product growth initiatives that we embarked upon, as part of the initial fund raising that we did. Dante Domain Manager sits on top of the existing Dante echo system that we have in place, providing better management, better security, better control over the system. We launched that in the Q3 of this past year and to date, we’ve signed up almost 100 resellers to sell our product out into the market. Those resellers are typically system integrators, who are already selling Dante enabled equipment.

Rachael Jones: What can you tell me about the Dante AVIO?

Lee Ellison: Dante AVIO is our problem-solving device that we launched as an adapter family, just in Q4 of this year. They’re a series of six different products with different connectors that allow you to take advantage of existing installations, and add Dante to them. And so that really just opens up the opportunity to expand Dante broader into the ecosystem, creating this network affect that we’re trying to do. As I said, we’ve just launched them in May and they’ve been a very successful product. Combined, the Dante Domain Manager and Dante AVIO products exceeded the prospectus forecast, in terms of new product revenues for the year.

Rachael Jones: How about Dante Video?

Lee Ellison: That’s the next thing we’ve been embarking upon. So as part of the prospectus, we had committed that we would show a video prototype by the end of the year, which we did at a recent trade show. Over the next 12 months, we’ll be commercialising that product. And that will allow you to take HDMI signals and put those on the IT network as well. So we’re very excited about the future of video.

Rachael Jones: Audinate is an Australian company. Can you tell me about your global footprint?

Lee Ellison: Audinate started out here in Australia 10 years ago, but from the beginning, we recognised that the market was global. And so we’ve had offices for sometime in the US, in the UK and a couple of years ago, we expanded into Hong Kong. This past year, we opened up operations in Japan and this year part of the growth initiatives that we have, will be expanding into Germany as well as Mainland China.

Rachael Jones: Your share price has had a stellar run. Could you give me a comment on that?

Lee Ellison: We’re obviously focused on the business. And from our perspective, if we continue to do what we said we’re going to do, the share price will take care of itself. But yes, we listed, we were a market cap of around $70 million, today it’s a market cap of $225 million.

Rachael Jones: Now to the last question. What are your priorities for the financial year 2019?

Lee Ellison: Our priorities for this coming year are to expand our geographic footprint, adding sales and support to help expand the Dante Domain Manager and Dante AVIO products, we just talked about. Focus on the Video solution to bring the V and AV, to a professional audio video. Expand our product portfolio to enable our OEM partners, to put Dante in a deeper penetration of their products. And continue to focus on the business and perform as we said we’d do.

Rachael Jones: Lee Ellison, thanks for the update and congratulations on your results.

Lee Ellison: Thank you Rachael.


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